It is common knowledge that Nike is the biggest sports wear company in the world, I mean, who does not have a Nike brand shoes or clothes? In resent years, Nike raised their price of the products by average 10%-15% annually, particularly, 20% price increase in sneakers.
In my blog, I am going to talk about why does Nike set their price insanely high, especially in sneakers. First of all, Nike need to come up with a S-T strategy which will profit the company before they decided to increase the price. Nike’s popularity and cutting-edge technology are definitely its strengths. However, the competition between sports wear companies(i.e. Adidas and Under armor) makes Nike losing customers. So the S-T strategy tells Nike that use its strengths to reduce the vulnerability to external treats. In order to let customers more focus on their products, Nike put more advanced technologies to its sneakers before other companies do. Because of this, Nike was able to set their price higher and draw lots of attention from sneaker lovers.
Nike also released many basketball signature shoes and limited editions (i.e. Lebrone James series, Kobe series and MJ series etc), which have great reputation around the world but the price is relatively high, $200-$350 each pair. But people still willing to buy them because the quality of the shoes has been tested and approved by public, more importantly, these brands already became the fashion and symbol in sports circles these days.
In the past few years, Nike donated and helped communities to build sport facilities in many countries for the purpose of letting everyone enjoy the sports. In addition, the companies also shares welfare to employees by giving them discount to any Nike brand products.Therefore, Nike did a successful business that it creates values for clients, suppliers, employees financiers and shareholders. Nike’s decision on raising price did not change people’s opinions because the good reputation and solid business ethics.
