Brian Leavy suggests two overarching models to “explain how sustainable competitive advantage can be created and maintained…these two contrasting perspectives…are core competence and market position” (2003). In the examination of two running shoe companies, you see market position (Nike), and core competence (ASICS). Nike is the titan of the sports textile, apparel, and shoe market, with a market cap of over $19 billion (Google Finance, 2010). They own the market with “57% share of the running market, says Matt Powell, an analyst at sports-market research firm Sports One Source” (Casey, 2007). ASICS, on the other hand, a privately owned, Orange County based company “is highly regarded as a serious runner’s brand” (O’Loughlin, 2005).
Both companies would like to edge into the other’s market. Dating all the way back to 1993, when ASICS first started ramping up their advertising and shifting their focus somewhat, it was said of them, “though athletes have known for years about ASICS’ shoes, that hasn’t translated into mass sales. Now the company simply wants to be known” (Mouchard, 1993). Nike, who is generally not taken seriously among core runners “is particularly eager to grab more of the consumers who typically buy shoes in specialty running shops – it only has 10% of those customers” (Casey, 2007). Casey goes on to say that Nike is making an “effort to “go deep” into various sports categories – in other words, to use different agencies to pitch products to athletes in specific sports” (2007). The opposite seems true for ASICS as they “want to reach the casual enthusiast who runs in order to be fit and stay in shape” (O’Loughlin, 2005). Apparently, this was met with success as their current ad continues this theme with the aim to inspire, with “The Cleansing Power of Sport” (ASICS, 2010).
***UPDATE*** after 12 years, I still love this 3 minute video. I hope they do not take this one down
Even a comparison of their mission statements seems to underscore these patterns.
For ASICS, “Our mission: is to become the number one brand for the sports enthusiast” (2010).
Nike, on the other hand, has long held the “inspiration” theme with the “Nike Mission Statement: to bring inspiration and innovation to every athlete in the world” (2010).
Oddly enough, Asics was the first to market. One assessment of their history states, “If ASICS had been willing to spend money in the 1970s, they could have easily become Nike. … But they weren’t, and Nike became Nike” (Mouchard, 1993). Nike spent the money, and the rest is history. According to Golder and Tellis, what is required is “vision and persistence over many years…to commit finances to last through this struggle, especially when revenues do not cover costs” (1996). Both ASICS and Nike innovate, both produce high quality products, both inspire, but their paths as organizations hardly resemble one another as a result of early decisions regarding mission and strategic planning.
References:
(2010). About us. ASICS Corporation. Retrieved Feb. 16, 2010, fromhttp://www.asicsamerica.com/about_us/
(2010). ASICS to Launch New Advertising Campaign “The Cleansing Power of Sport.” Asics Corporation. Retrieved Feb. 17, 2010 from http://www.asicsamerica.com/blog/?tag=/press+release
Benezra, K., & Hein, K. (2003). NFL Wrap: Gruden’s Got That GQ Look; ASICS, Nike Broaden Their Reach. Brandweek, 44(5), 14. Retrieved from Academic Search Elite database.
Casey, N. (2007, December 6). Nike, New Coach Chase Serious Runners; ‘Plus’ Sneaker Ads Shift from Usual Track; A Social-Network Link. Wall Street Journal (Eastern Edition), p. B.7. Retrieved February 17, 2010, from ABI/INFORM Global. (Document ID: 1393817441).
(2010). NIKE, Inc. financials. Google Finance. Retrieved Feb. 17, 2010, fromhttp://www.google.com/finance?q=NYSE:NKE&fstype=ii
(2010). Company Overview. Nike. Retrieved Feb. 16, 2010, fromhttp://www.nikebiz.com/company_overview/
Mouchard, A. (1993, April 9). ASICS gets ads up, running – OC-based athletic-shoe maker decides to take on the big boys. The Orange County Register MORNING ed., c01. Retrieved February, 17 2010 from NewsBank on-line database (America’s Newspapers).
O’Loughlin, S. (2005). ASICS Chases Casual Runners. Brandweek, 46(6), 6. Retrieved from Academic Search Elite database.
Brian Leavy. (2003). Assessing your strategic alternatives from both a market position and core competence perspective. Strategy & Leadership, 31(6), 29-35. Retrieved February 15, 2010, from ABI/INFORM Global. (Document ID: 524430011).
Tellis, Gerard J, & Golder, Peter N. (1996). First to Market, First to Fail? Real Causes of Enduring Market Leadership. Sloan Management Review, 37(2), 65. Retrieved February 15, 2010, from ABI/INFORM Global. (Document ID: 9173563).