Final answer:
NIKE employs a differentiation strategy with elements of the best-cost provider strategy. Their approach focuses on innovation, distinctive brand image, and quality at reasonable prices, which remains relevant even during the pandemic. In contrast, an example of perfect competition can be seen in the agricultural markets for staple crops.
Step-by-step explanation:
NIKE's Competitive Strategy
When analyzing NIKE's competitive strategy through the lens of Michael Porter's research, NIKE appears to position itself embracing a differentiation strategy. This strategy focuses on developing products with unique attributes or features that provide value to customers, thus allowing the company to charge premium prices. NIKE continuously invests in innovation, technology, and brand marketing to create and maintain a distinctive brand image and performance reputation. An example is their development of specialized sports shoes with proprietary technology.
Moreover, NIKE has also strategically employed elements of the best-cost provider strategy, by offering a combination of reasonable prices and high-quality products, targeting consumers who are price-sensitive but also seek performance-oriented gear. During the pandemic, these strategies remain relevant as consumers' preferences shift towards more casual and comfortable athletic wear known as 'athleisure'. NIKE's robust e-commerce presence and agile supply chain were able to capitalize on this trend, indicating the resilience and adaptability of their strategic approach in the face of market changes.
Perfect Competition in Today's Marketplace
An example of perfect competition today could be seen in the agricultural markets for staple crops. In this industry, many producers sell homogeneous products such as wheat, the market sets the price, and farmers are price-takers. There is free entry and exit in these markets, with no single producer having significant influence over the market price. This aligns with the four conditions of perfect competition: numerous buyers and sellers, homogeneous products, no barriers to entry or exit, and perfect information among buyers and sellers.