CHINA’S LI NING CHALLENGES NIKE & ADIDAS

Nadya A. Hamawy BA 190 - Strategic Management

University of the Philippines Prof. Mita Angela M. Dimalanta

Li Ning Company Ltd.Founded by former star gymnast Li NingEst. 1990Five core categories:

basketball, running, badminton, training and sports life

products

To overtake Nike & Adidas

2008 Beijing Olympics

Inventory pile-up

Rothaermel, F. T. (2015). Strategic Managment (2nd ed.). New York, USA: McGraw-Hill Education.

Rothaermel, F. T. (2015). Strategic Managment (2nd ed.). New York, USA: McGraw-Hill Education.

Questions1. At the close of the case, why was Li Ning experiencing a

competitive disadvantage?2. What are the strategic positions of Nike, Adidas, and Li

Ning? Do you see a link between strategic position and firm performance? If so, what explains that link?

3. Why is it so difficult for Li Ning to challenge Nike and adidas even in China? Would you expect that the Chinese consumer would be more loyal to a Chinese brand? What moves could the company make that would build customer loyalty? What recommendations would you give Li Ning to achieve a successful turnaround? Explain.

Rothaermel, F. T. (2015). Strategic Managment (2nd ed.). New York, USA: McGraw-Hill Education.

1. At the close of the case, why was li ning experiencing a competitive disadvantage?

The problem of overexpansion– Re-strategize and

Rethink – Downsizing mode

of stores, distributors, and business segments

2. What are the strategic positions of nike, adidas, and li ning? Do you see a link between strategic position and firm performance? If so, what explains that link?

Strategic Position

Rothaermel, F. T. (2015). Strategic Managment (2nd ed.). New York, USA: McGraw-Hill Education.

Strategic Position

Focused Differentiation

Strategic Position

Focused Differentiation

Strategic Position

Cost Leadership

The Link between strategic position and firm performance

Strategic Position & Firm Performance

There is a link between Strategic Position & Firm Performance A firm’s strategic position contributes to the firm’s

performance and dictates how the firm will work to meet its goals

How they position themselves within the market helps in penetrating a market

A firm’s positioning helps them capture a market

Nike & AdidasGlobal brandsSpecialized Marketing strategies

The Chinese ConsumerLack of loyalty

– Based on a study by Bain & Company, 2014

Goal: To increase penetration of the market *Tier Classification

AP, T. (2014, June 11). Chinese customers' lack of loyalty puts pressure on brands. Retrieved September 18, 2016, from http://www.scmp.com/business/china-business/article/1529584/chinese-customers-lack-loyalty-puts-pressure-brands

Moves –Use media –Continue e-commerce–Be innovative & creative

Recommendations– Focus and understand

a specific segment and build on that

– Unleash creativity and add quality

– Make a Chinese empire– Advertise and promote

SourcesAbillama, B. (2014, August 25). How is Nike Conquering the Challenging China Market? Retrieved

September 18, 2016, from http://fashionbi.com/insights/marketing-analysis/how-is-nike-conquering-the-challenging-china-market

AP, T. (2014, June 11). Chinese customers' lack of loyalty puts pressure on brands. Retrieved September 18, 2016, from http://www.scmp.com/business/china-business/article/1529584/chinese-customers-lack-loyalty-puts-pressure-brands

CKGSB Knowledge. (2014, April 14). Chinese Sportswear Brand Li-Ning's Long Road To Redemption. Retrieved September 18, 2016, from http://www.forbes.com/sites/ckgsb/2014/04/14/chinese-sportswear-brand-li-nings-long-road-to-redemption/#784a38fd2d73

Einhorn, B. (2016, June 15). China's Wealthy Switch to Nike and Adidas for Inconspicuous Consumption. Retrieved September 18, 2016, from http://www.bloomberg.com/news/articles/2016-06-14/nike-adidas-replace-big-name-luxury-as-china-goes-casual

Lee, X. (2013, November 4). Sportswear brand Li-Ning Struggles to Hold it Together. Retrieved September 18, 2016, from http://knowledge.ckgsb.edu.cn/2013/11/04/globalization/sportswear-brand-li-ning-struggles-to-hold-it-together/

Rothaermel, F. T. (2015). Strategic Managment (2nd ed.). New York, USA: McGraw-Hill Education.Waldmeir, P. (2015, January 23). Li Ning’s rise and fall marks a cautionary tale. Retrieved September

18, 2016, from https://www.ft.com/content/0ece54f6-a03d-11e4-aa89-00144feab7deZhu, C., & Kwok, D. (2011, September 21). Analysis: Nike, Adidas trounce China sportswear players.

Retrieved September 18, 2016, from http://www.reuters.com/article/us-china-sportswear-idUSTRE78K0TO20110921

Li Ning’s Website: http://ir.lining.com/en/global/index.php