Nike Inc is a multinational corporation in America which is engaged in designing, manufacturing, development, marketing and sales of apparel, footwear, accessories, equipment, and services. Nike is headquartered in metropolitan area of Portland, Oregon, and Beaverton. It is one of the leading company in supplying the athletic apparel and shoes. It is also one of a major manufacturer of the sports equipment. The mission of Nike is to efficiently use the capacities and expand widely to the human potential. Nike is famous for innovating sports products and make it sustainable (Nike, 2020).
VRIO Analysis of Nike
VRIO analysis is widely used for assessing the current situation of the company. It is used for internal analysis and determine the resources, competitive advantages and improvement potential in the organization. This analysis further helps in strategic management of the company and in decision making about internal and external competitive advantage. VRIO is an acronym of Value, Rarity, Imitability and Organization. Here is the detailed VRIO analysis of Nike Inc.
Value
This component of the analysis deals with the assessment of the resources of the business in terms of availability, worth, usefulness etc. Nike’s financial performance is very strong which gives the company an edge in combating all the threats. Nike has loyal, trained and skilled employees who contribute positively in the company. Nike has successfully achieved the patents in the products it manufactures which helps in eliminating the competition. Nike’s supply chain and distribution network are very efficient. It markets its products wisely and attracts consumers. This helps in maintaining the profit level. It makes sure to provide best customer services and fulfil their needs and demands wisely with the changing pattern (Kevin, 2019).
Rarity
This component deals with the analysis of rarity of the resources company has. Nike is able to achieve some strong and rare financial resources and capabilities which differ it from rivals. The revenue generation of the company is highly appreciative. Moreover, the company takes very good care of its employees who really works for the company. This is rare as Nike also provide best working environment to them with compensation. Nike has able to build strong brand image in the industry among its rivals like Adidas, Under Armor and many others. Nike is able to make very rare and innovative designs for the comfortability of its consumers (Google Site, 2020).
Imitability
This component deals with assessing the imitability of the resources. Nike has make it difficult for the rivals to compete with the company on great financial performance. The company has successfully maintained the profits and revenue of the company. Nike has adopted the technology for manufacturing the products which are costly and hard for the competitors to imitate. The effective and efficient distribution network. The inventory management of the company is very efficient. Nike is able to manufacture to its full capacity in order to maintain the low cost of production and the quality to standard (Pratap, 2018).
Organization
This component deals with how well the resources are being utilized and manage the production and other strategic objectives of the company. Nike is one of the successful company which is able to manage the strategic objectives and goals of the company. The company provides the good working condition to its employees, staff and labours that they are willing to work for the company. Furthermore, Nike is one of the company whose marketing and promotional techniques are very well managed and creative. Nike successfully maintains the figure of the sales every year which helps in reaching to the target goals (Google site, 2020).
Conclusion
In conclusion, VRIO analysis helps the company in analyzing the competitive advantage and resources effectiveness. The framework helps the company in making effective decisions in long run for the future success of the company. Nike is one of the leading company in the athlete footwear and apparel industry along with adidas and Under Armour. The company successfully has achieved the VRIO components for the company. However, the company should work hard in maintaining the position and achieve more competitive advantages.
| Resources/Capabilities | V | R | I | O | |
| Supply Chain | ✓ | ✓ | ✓ | Sustainable Competitive advantage | |
| Bargaining power | ✓ | ✓ | ✓ | Competitive Parity | |
| Financial Resources | ✓ | ✓ | ✓ | ✓ | Sustainable Competitive advantage |
| Brand Equity | ✓ | ✓ | ✓ | ✓ | Sustainable competitive advantage |
| Marketing | ✓ | ✓ | ✓ | ✓ | Sustainable advantage |
| Product quality | ✓ | ✓ | ✓ | ✓ | Sustainable advantage |
| Product range | ✓ | ✓ | ✓ | ✓ | Sustainable advantage |
| Global Presence | ✓ | ✓ | Competitive parity |
References
Google Site, 2020. Resources and capabilities. [Online], Available at: https://sites.google.com/site/nikeandunderarmour/about-us, [Accessed on: 11th March, 2020].
Kevin, E. 2019. The VRIO analysis of Nike. [Online], Available at: https://medium.com/@eyorekon.kevin/the-vrio-analysis-of-nike-891bcec6927f, [Accessed on: 11th March, 2020].
Nike, 2020. About us. [Online], Available at: https://about.nike.com/, [Accessed on: 11th March, 2020].
Pratap, A, 2018. Nike Strategic analysis. [Online], Available at: https://notesmatic.com/nike-strategic-analysis/, [Accessed on: 11th March, 2020].