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Nike Inc.’s Marketing In The United Arab Emirates Easy Essay Help

Introduction


The multinational firm has the ability to expand into new markets and attract more customers as a result of its rapid expansion. Given that well-known companies have already captured the majority of U.S. and European markets, entry into the Middle East appears to be rather lucrative. The United Arab Emirates (UAE) is one of the countries with the highest growth rates, making it an ideal location for expansion. This paper intends to develop a marketing review of Nike's probable entry into the UAE, including a SWOT analysis of the company's strengths, weaknesses, opportunities, and threats. In addition, PESTEL, META, and marketing mix studies are offered. It is expected to assess the chances and obstacles Nike will face as well as the most advantageous entrance methods.



Selection of Business



Nike Corporation is a multinational firm established in the United States that offers footwear and apparel for sports. The Beaverton, Oregon-based company employs more than 44,000 people worldwide and generates more than $ 29 billion in yearly revenue (Mahdi, Abbas, Mazar, & George, 2015). The company is named after the Greek god of victory, with the notion that anybody who has a body is an athlete who requires high-quality equipment. Nike was founded in 1964, and it currently has a significant presence in North and South America, Europe, and China. The company strives to continuously revolutionize its products through research and technological advancement-based enhancements. For instance, the collaboration with Apple enabled the development of a monitoring gadget, and lately, shoes with Flywire and Lunarlite Foam were created to aid in weight reduction.



Image 1: the official Nike logo



SWOT Analysis

Strengths

Nike lacks its own factories and a permanent production base, which contributes to the organization's mobility and dynamism. The corporation continually pursues the lowest and highest-quality production: as soon as they identify the best place, they move production there immediately. Nike is able to execute novel ideas and rapidly increase manufacturing and develop new goods due to the great quality of its products (Mahdi et al., 2015). The relationship with Apple fosters the development of technologically superior footwear and products. The second strength relates to the fact that Nike is a global brand with a well-known emblem and an admirable aim. Nike is the most successful sports brand in the world, and its marketing activities are geared toward increasing brand recognition. This company's diverse products are sold through extensive distribution channels to numerous market segments, including football, baseball, running, etc.



Figure 1: A SWOT analysis of Nike.

Weaknesses

Nike's primary drawback is that its profit is highly dependent on competition and pricing in the footwear market. If competitors implement successful new strategies, it may be difficult for the business to compete. Inadequate working conditions and compensation for employees are an additional flaw that damages Nike's reputation (Mahdi et al., 2015). People's attitudes are also characterized by prior occurrences and abuses of employee rights for a suitable work environment. Furthermore, Nike's pricing are greater than those of competitors like Adidas.

Opportunities

The emergence of new industrial technology reduces production costs and timespan. In addition, when a new generation model is introduced that fulfills the most up-to-date technical criteria of athletes, its demand quickly increases, allowing for the expansion of the manufacturing line. As a result of the indicated opportunity, new product lines, including as eyewear, sportswear, and electronics, have been developed (Shank & Lyberger, 2014). The increased segmentation would permit meeting the needs of more client groupings. The sponsorship of international events, such as FIFA or the Olympics, is likely to increase brand recognition and loyalty. In terms of brand enhancement, the introduction of a fashion brand line and future worldwide development are also advantageous.

Threats

An increase in the number of market competitors may deprive the business of certain customers. Increasing demands from government agencies, such as greater import quotas and tighter control over corporate activities, may have an impact on the amount of income taxes). According to Shank and Lyberger (2014), currency swings are an additional risk that may affect a company's earnings. Nike's foreign market success is substantially influenced by its price sensitivity. In addition, the corporation may incur losses as a result of the vast quantity of counterfeit goods that many consumers purchase in order to save money at the expense of quality. Furthermore, it should be emphasized that rivals typically employ more aggressive marketing methods and seek to improve their products.



Target nation



This marketing inquiry will focus on the UAE market because it represents a strong expansion opportunity for Nike in the Middle East. Currently, the Gulf marketing firm has begun collaborating with Nike in order to provide its products to the Emirati populace (Zarrouk, El Ghak, & Abu Al Haija, 2017). In spite of the fact that the interactions between two businesses are in their infancy, it is crucial to investigate the local market in depth in order to determine how to maximize customer pleasure and revenue. The UAE's distribution channels are robust, therefore it is reasonable to assume that potential customers will welcome Nike with enthusiasm. For the preparation of marketing strategies, a PESTEL analysis is conducted, focusing on the political, economic, social, technical, environmental, and legal factors of the UAE market.



Mohammad A. Baker, vice chairman of the Gulf Marketing Group in the United Arab Emirates (Sambidge, 2014).



PESTEL Analysis

Political Condition

Before the expansion, various political considerations must be taken into mind. In general, the UAE's commercial connections with countries that import its goods and services are relatively positive. Through open policies and infrastructure development, the government supports ties between domestic and international businesses to increase trade benefits. The stability of the region's internal politics is one of the most crucial criteria ensuring Nike's long-term cooperation. However, each of the UAE's seven emirates has its own legislation and government agencies that highlight the need for flexible management. In terms of international relations, the country may have issues with its neighbors over territory or oil control.

Economic Aspects

The UAE's economy is highly stable due to its diversification, which fosters a prosperous economic environment. Specifically, the country's Gross Domestic Product (GDP) was assessed at $414.18 billion in 2018, a 14.4 percent increase over 2017's statistics (Al-Shayeb & Hatemi-J, 2016). The country ranks eighth on the 2019 Index of Economic Freedom with a score of 77.6. This score places the UAE at the top of the Middle East and North Africa area and is significantly higher than the worldwide average. It should also be noted that the Emirati government encourages and values Foreign Direct Investment, which is mostly developed in real estate, trade, and banking. Abu Dhabi established the $5 billion Ghadan 21 (Tomorrow 2021) project to encourage business (Zarrouk et al., 2017). The United Arab Emirates' considerable purchasing power and desire to diversify its economy are its greatest assets.



In addition to the positives, it is essential to highlight the significant disadvantages. The mid-2014 decline in oil prices and the broader decline in economic growth rates had a negative impact on UAE stock market indicators. Nevertheless, the increases in oil prices and incentive measures will have a favorable impact on the UAE's economy in 2019. (Zarrouk et al., 2017). Recent economic measures adopted by the Abu Dhabi government are intended to stimulate the commercial sector and generate new jobs. Additionally, a number of steps have been done by the Dubai government to attract greater foreign investment.

Social Environment

When discussing sociocultural concerns in the Emirati environment, it is important to note the presence of both the indigenous population and a large number of expats from various nations. As a result of globalization, a large number of people migrate to the UAE to find employment and better their life. The unemployment rate in the country is roughly three percent, which is rather low. Typically, native residents have a pleasant lifestyle and well-paying employment. A Ministry of Happiness was founded in order to boost employee satisfaction in the workplace and place the country at the top of the list of the happiest nations in the world. Religion is of utmost importance to Emiratis, who adhere to Sharia law, wear particular attire, and live in accordance with Quranic verses, which are mirrored in many facets of life (Al Zaidi & Ahmad, 2019).

Technology Influence

The United Arab Emirates' current rapid development is characterized by the pursuit of the most innovative ideas and solutions. Along with the global purpose to incorporate technology in customer experience, the United States is at the forefront of this movement. The fact that the UAE's population is largely comprised of young people who are digitally knowledgeable and willing to explore new goods with the intention of incorporating them into their everyday lives is one of the most significant indicators of the country's growth potential. The second aspect is the wealth of the UAE, which permits the purchase of equipment and investment in technologies. In other words, this market is able to invest in research and development in order to attract and retain clients. The entry into the Emirati market is likely to generate additional money and contribute to Nike's overall technological growth.

Environmental Conditions

As a result of the country's hot and arid climate, increased air conditioning usage and low farming rates can be observed. Moreover, certain emirates possess coastline holdings that can be used for maritime trade. The ecological footprint, comprising invasive species, limited water supplies, carbon emissions, overfishing, and land degradation, is one of the environmental issues facing the UAE (Al Zaidi & Ahmad, 2019). In the domains of climate change and sustainability, the Emirates conduct crucial research and design environmental projects. In addition, an abundance of rules restrict pollution, waste, and sustainable consumption. The establishment of natural reserves, promotion of ecotourism, and development of policies demonstrate the nation's commitment to conserving its bioresources.

Legal Aspects

While there are laws that apply to the entire nation, each of the seven emirates has its own trade rules and procedures. In the case of legal activities, political leadership must be evaluated because the judiciary is dependent on them. The United Arab Emirates is recognized as one of the least corrupt nations, however nepotism remains an essential aspect of business. Sharia law is an additional important topic that must be explored in terms of Emirati legal factors. Sharia is not merely a collection of regulations, prohibitions, and laws that punish infractions; Emiratis view it as the route to safety and morality, life in line with Allah's Will and Grace. A substantial portion of the legislation are based on Sharia. On the one hand, the country's authorities desire order and compliance with certain requirements. However, severe laws may not appeal to tourists and may hinder the growth of businesses.



Product Categories



Although the majority of Nike's items are geared for athletes, there are some that are suitable for recreational usage by everyone. The company's newest products, such as the Apple Watch Nike, employ cutting-edge technology to enhance the client experience. Entering the UAE market necessitates cultural adaptation; for instance, local women do not wear T-shirts at public gyms or bikinis on beaches. Depending on the country's social and cultural traditions, the products sold to Emiratis should be modified as necessary. The subsequent categories would be added:

Footwear (exercise, jogging, walking, tennis, outdoor sports, volleyball, etc.); Apparel (pullovers, hoodies, T-shirts, tights, women's special swimwear, socks, and purses); Equipment (electronic devices, timepieces, eyewear, and other sports features).

Marketing Mix

Product

This section discusses the product as the composite of the product categories established in the preceding section. Implementation of the product policy must be based on the manufacture and selling of in-demand products on the given market. It will be accomplished through aligning the company with the needs and demands of customers, both current and prospective (Baker, 2014). Emphasis should be made on product customization, as Emiratis cherish their comfortable lifestyles and are receptive to items that make it easier to participate in sports. Consequently, customer pleasure should also be a focus if you want them to purchase your product.



Positive views exist among the residents of the United Arab Emirates towards foreign items that offer obvious advantages. Nike's commitment to innovation is anticipated to generate extra interest. Due of its adaptability to local markets, adaptation is the most viable strategic solution that can be suggested (Khan, 2014). Unlike expansion or creation, adaptation preserves brand authority and its associated benefits, such as customer recognition and cheap production change expenses. Due to the restricted number of stores and significant initial customer demand, it is reasonable to anticipate selling 2 million pairs of shoes and 1.5 million articles of clothing and equipment within the first year of opening.

Price

In the current market environment, price is a crucial component in determining whether the purchase of a product is appropriate or improper. Nike's pricing management process is complex and time-consuming, and while designing a successful pricing plan, a variety of objectives must be considered. First, it must be meticulously planned based on the prospective spending of the target audience. Second, it is vital to consider the peculiarities of the product's manufacturing, such as cost, market position, place and time of sale, pricing policy of rival enterprises, and special buyer characteristics (Khan, 2014). The impact of competitors' marketing strategies on the UAE sports industry is the most important environmental aspect that requires careful consideration. Initial product prices may be slightly higher than those of competitors, but this is justified by superior quality and customization of customer needs. At the same time, the average price of items should not significantly prevail over that of the products sold in the US market. Within a year, the expected total revenue would approximate $3 billion.

Place

The concept of location is of the utmost importance because it is regarded from the consumer's standpoint for covered services. According to Khan (2014), organizations can achieve the most effective coverage of their target audience by strategically locating their branches and providing them with the necessary resources.

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