Question

Analyze below case and show your professional strategies of NIKE doing business in CHina.

Case: Show company has done well producing in china.

Jim Weber, CEO of Brooks Sports Inc, said he looks forward to not only making the company's running shoes in China but selling them there.

Brooks CEO Jim Weber is a daily runner and has been running for 37 years. Provided to China Daily

"The running boom happening in China is exciting," he said. "It just reflects the power of sport that came to China with the Beijing Olympics 10 years ago. People have so much enthusiasm for sports."

The Seattle, Washington-based company, an independent subsidiary of Berkshire Hathaway that is also known as Brooks Running, designs and markets high-performance men's and women's running shoes, clothing and accessories.

In the 12 months ended August 2018, the company gained 4.4 percent in market share in the $100 and above (average selling price) segment of the adult performance running footwear category, making it the No. 1 brand in the US.

On Oct 23, Brooks Sports reported a 29 percent increase in global revenue driven by a 32 percent increase in global footwear sales year to date.

In the United States in the last 25 years, there has been a continuing interest in fitness. Running is in the middle of it, as 15 million American jog to stay in shape.

"The market of the US is stabilized. It is OK, but it's not growing that much," Weber said.

Last year, Brooks entered the China market, which is estimated to have at least 200 million "self-defined" runners.

According to a report by the Chinese Athletic Association (CAA), there were 22 marathons co-sponsored by the CAA in 2011. The number reached 328 in 2016, and 1,102 in 2017. More than 5 million runners competed in these events.

In April 2001, when Weber became CEO and president of the company, the brand founded in 1914 was almost an afterthought.

The Brooks team decided to make a complete line of athletic footwear and stop everything else. The company has grown consistently the past 17 years.

"When you look at the athletic footwear and apparel industry, it truly is global," Weber said. "There are large brands like Nike and Adidas. They are global brands and they are full line athletic.

"They are about the athletics and sports. They are inspiring and aspiring: It is about winning, breaking the tape, getting the gold medal, being on the podium," he said.

Weber said "running is unique because it is the biggest category in the athletic footwear industry partly because everybody runs for every sport they are in".

"If you are training for football, or soccer, or baseball, or basketball, you are running. We think probably 140 million people worldwide are running for fitness," Weber said.

Weber said the brand exemplifies a "run happy" philosophy, to celebrate and champion the sport of running and runners.

"They are running for their own health and wellness," he said. "They are running to feel better every day. The fact that people don't watch it but they do it, that makes the sport even more powerful. "

Weber runs daily and has been running for 37 years, he said.

"For me, it became almost a very good mental processing time, just thinking about the day, thinking about the work," Weber said.

"The only focus we have is running is the key to the success. We are reinforcing the reasons people run. And we push our design for what we call craft beauty. We have new technology in running," Weber said.

During the recession, Weber focused on doing a better job of figuring out what runners want and increased Brooks' investment in research and development to design better shoes.

His favorite shoe for long treks is the Brooks Transcend. He also like the Brooks Levitate, launched in 2017, because "it makes him feel faster".

Weber hopes that tariff dispute between the US and China can be solved.

"We are a seller of a global brand, we are sourcing all over the world and selling all over the world," he said.

"We believe that free and fair trade has lifted so many people and so many economies all over the world. A lot of our trade between the US and China had made both countries stronger," Weber said.

He said the company has been producing in China for decades.

"Our best factories have really been China-based factories, in terms of quality, technology and innovation. We do not want to leave our manufactory base in China," Weber said.

"There are a lot of complexities in the trade dispute. It is not a positive thing for our industry," he continued. "In our situation, if tariffs would come to our category, we already pay 25 percent tariffs; if there is another added to that, it would be almost 45 percent on running shoes."

Answer 1

Case Specifics

The countries of the United States of America and that of China have long been at the center of problems which have extended not only the political relationships but also that of trade rrstrictions that have harmed the society at large also.

Tarrifs are imposed to protect the interests of the home country. It aims at increasing the cost of overall imports which has big implications for the companies sice with raised price not all sections of the society would be able to afford the product.

Nike is a company of the United States and faces stiff competition from domestic and international brands. It primarily manufactures sports equipment, appearal and shoes which are primarily used by sports person.

China has emerged as one of the hotspots of global sports investment this is reflected by the fact that the country is one of the top participants in professional sports such as badminton tennis etc and thus all sports companies view it as an aggressive market.

China imposes restrictions primarily on goods that are imported into the country without being peoduced in the country itself.

As a strategy it is recommended that the company implement strategies which allow for products to be made in China itself. Through the help of this the company would not be facing high taxes and as a result can attain success.

It can also aggresively market it's product using best possible social online and offline strategies when sports tournaments are going on to achieve success respectively

To create awareness spoetsmen can be hired as ambassadors by the company to increase sales respectively.

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