BUSINESS REPORT FOR NIKE

SMARTWATCH
Just tech It

Group Name:
VENI. VIDI. VICI.
Group Members:
Jayson Komajaya, Jessica Elvina, Sinta Wijaya
 1
Business Report for Nike Smartwatch

1. Executive Summary
Nike, Inc is a sports brand company that produces sports equipment, clothing, and accessories.
Currently, the company has nearly 950 outlet stores across major countries around the world which
includes United States, Indonesia, China, and India. Over the 50 years since their establishment, Nike has
always focused on creating the best quality shoes for any athlete. Through the use of bold marketing
strategies and clever decision making, Nike continues to set the bar for athletic sportswear.
Recently, the upcoming trends in the consumer market is the Internet of Things. Nike introduced
Smart Technology into some of their products. Most of which contain chips that analyze and interpret
data from the user and increases connectivity between products and users. By doing this, they are
considered as making a product smart. These products mainly consisted of wristbands (Nike Fuelband)
and shoes. This new innovation provided customers with the opportunity to monitor and manage their
own exercise routines and also to increase connectivity to their products. And with the latest Nike + app,
users are able to monitor their calories, heart rate, and progress in relation to other users across the globe.
Now, Nike plans to release a new line of sportswear and equipment under the name of Smartfit.
This new line hopes to revolutionize the modern athlete by providing them with the latest technologies
available. Like the Nike Fuelband, Nike aims to implement chips and sensors into their products such as
shirts, sneakers, and watches. By implementing this technology into every part of the athletes clothing,
and making Nikes products smart, Nike hopes to provide a more advanced and user-friendly experience
for its customers.
This report will outline..
1. The product analysis
2. The SWOT analysis of the new Nike Smartwatch
3. The target market analysis
4. Creative marketing strategies
It is recommended that..
1. Nike uses Blue Ocean Strategies to market the Smartwatch to consumers.
2. Nike uses Red Ocean Strategies to market the Smartwatch to consumers.
2. Discussion Analysis
2.1 Product Analysis
This report focuses mainly on Nikes Smart watch product. Prior to this, Nike has had some
experience creating wrist accessories through the creation of the Nike Fuelband. The new Nike
Smartwatch aims to take wrist fitness accessories to the next generation by providing connection
capabilities and an increased amount of features. Currently, there are only a few similar products in the
market, giving the Smartwatch the best possible chance to do well when released.
2.2 SWOT Analysis
2.2.1 Internal
2.2.1.1 Strengths
The main strength of Nikes Smartwatch is most obviously its ability to connect to other devices
and users. Other competitor products such as the FitBit Surge, only records personal information and
 2
lacks external connections with other users. The Smartwatch however, comes with the ability to share
information with other users. This allows users to share useful information such as healthy juice recipes,
popular places to exercise, or even tips for their workout.
The ability to be compatible with multiple operating systems is a major benefit for the
Smartwatch. In comparison, the Apple Watch is only compatible with the iOS operating system
(commonly found in iPhones and iPads). This restriction limits the amount of customers who can actually
use the product to its full potential without the use of an iPhone or iPads. Nike could increase their target
market by programming their Smartwatch to be compatible with most of the popular operating systems
such as Android and iOS as well.
2.2.1.2 Weaknesses
Because this technology is still very new, the potential market for these products is relatively
small. To some consumers, the ability to measure your progress on your daily workouts is not sufficient
motivation to start being more athletic. While to others, there has never been that big of a need or want
for this type of product to actually purchase it in the first place.
The price of the product is also an issue. Simply put, the addition of having new, expensive
technology into their products increases their selling price. In the fitness band market, both FitBit
(34.21%) and XiaoMi (24.56%) currently own a large percentage of the market. The estimated price of
the new Nike Smartwatch is relatively higher than its competitors products. With such a difference in
price, most customers might choose to purchase the FitBit Surge or the XiaoMi Band instead. Or they
might prefer to just buy regular apparel and exercise normally as they have done so before.
2.2.2 External
2.2.2.1 Opportunities
Currently, Nike is the first out of the commercial sportswear companies to implement this
technology into a smartwatch format. So far in the worldwide market, a fitness-focused smartwatch does
not exist. This helps the Nike Smartwatch to be the first-of-its-kind when it finally does enter the market
which could give the brand the initial consumer exposure it needs to succeed.
At the moment, smartphone gadgets and accessories (like the Apple Watch) are trending in the
Indonesian market, mainly those that connect to their smartphones. The people here mostly see these
additional accessories as a sign of prestige. Nikes Smartwatch products could be profitable in the market
especially if they can be integrated with both iOS and Android operating systems.
2.2.2.2 Threats
Since the Smartwatch has just entered the market, it might be hard for it to compete with similar
competitor products, in this case, the Apple Watch which has been in the market for a longer time.
Customers have been accustomed to using Apples device, their settings, display, software, etc.
Customers might not want to purchase Nikes watch products since they are not yet familiar with the new
product.
Indonesia as a society is relatively behind the rest of the world in terms of technology. As a result,
the people here prefer to do their activities (such as exercising) without the use of technology. By
introducing something like the Smartwatch, the Indonesian people might be reluctant to try this new
technology due to their culture.
2.3 Target Market Analysis
A primary market research was conducted to determine the ideal target market in the teenager
or young adult demographic. Through the results of the survey, the characteristics of this target market
can be clearly seen. The majority of the responders like doing sports, are within the ages of 13 - 18, and
enjoy using Nike shoes and clothing the most. Along with that, most of the responders claim to use Apple
 3
smartphones over any other phone brand, yet over half of them never notice the Nike+ app. Besides that,
most of the responders enjoy watching television and reading magazines during their free time. They are
also active fans and users of Instagram, YouTube, and Snapchat.
2.4 Creative Strategies
A business needs to have good and creative marketing strategies in order to gain customer
awareness. Written in the year 2005 Blue Ocean Strategy , Professors W. Chan Kim, and Rene
Mauborgne constructed the idea that the market could be differentiated into two categories: Blue Ocean
and Red Ocean. Blue Ocean and Red Ocean are terms used to classify the market in which a business
operates in.
They are not necessarily a new concept but rather an insight and awareness upon the strategies
that a business implements. A Blue Ocean is a market that has no direct competition and a space where
new innovation could rise.When a new type of strategy that has not been used before is used to promote a
product, we are using the Blue Ocean strategy. While, Red Ocean is a market that has many competitors.
In this market, businesses is trying to be the market leader by using the same strategy. Blue ocean strategy
is needed to create customer awareness, to persuade non-customers to create demand and create an
incontestable market space. If a business continues to use red ocean strategies, it will be hard for a
business to dominate the market since there are a lot of competitors.
2.4.1 Blue Ocean Strategy
Some of the blue ocean strategy that Nike could use to promote its products are by using a
Reward System and advertising using Google Doodles.
2.4.1.1 Reward System
Who doesnt like a reward? Many business use reward systems to motivate their employees to
achieve a certain goal. Reward systems can also be used for promotional strategy, such as collecting
stamps in a loyalty card, or collecting points that could be redeemed for a reward. For Nike, a reward
system can be used to make customers more motivated to use the products. By posting a variety of
monthly challenges with a reward for the users who can achieve a certain NikeFuel goal within the
month, more and more customers could become active customers as they buy more products to exercise.
The rewards can be any Nike products such as water bottles, sport equipment, or even a pair of shoes.
These rewards can be claimed by customers through exclusive delivery to the customers
registered mailing address. This strategy might prove to be tedious for the employees since the rewards
and delivery must be conducted every month, adding extra loads to the workers, this strategy would help
promote Nikes products and provide incentives for the customer to exercise and keep on using Nikes
products, which is very beneficial for Nike.

2.4.1.2 Advertising using the Google Doodle Logo

Google. Even though almost all users ignore the standard icon of google, it is always noticed,
especially if there is an event and theres a Google Doodle for that particular day. When Google Doodles
appear very unique, users would be interested to find out more about event that is going on. What if Nike
worked together with Google to announce the release of their new Smartfit line through the use of a
Google Doodle?
This form of advertisement could be very high in cost, and requires a long process in order to get
permission from Google themselves. However, an advertisement in Googles home page could be seen by
a a lot of people. By using a Google Doodle, all users that access Google on that day (which according to
Google Search Statistics is at least 3.5 billion searches), will be aware of the new Smartwatch and might
be interested to be a customer.
 4

2.4.2 Red Ocean Strategy

Some of the red ocean strategies that Nike could use to promote its products are by using
Youtube advertisements and sponsorship to famous icons, youtubers and instagrammers.
2.4.2.1 YouTube Advertisement
YouTube Ads is one of the most common advertising strategy used by businesses. Based on a
Google report announced by Matt Brittin, Googles top-ranking European executive, TV ads are not that
effective compared to YouTube ads, therefore using Youtube ads will be much more beneficial to raise
customers awareness. In addition to this, it was also mentioned before in the target market analysis
section, that YouTube has been one of the platform where people most frequently discover new products.
Therefore, Nike can use YouTube Ads to promote and advertise its new line of product.
2.4.2.2 Sponsorship
Sponsorship has been used by a lot of businesses to promote and advertise their products.
Sponsoring social icons such as singers, actors or actresses, youtubers, and instagrammers by giving them
a certain product to use while they are on screen could help set a trend and persuade viewers to purchase
the same products that they used. Especially if the products seems interesting, customers would be more
interested and want to know more about the products.
Famous singers such as Syahrini, Youtubers such as Raditya Dika and Chandra Liow, actors
Glenn Alinskie and actresses Chelsea Olivia, are all well-known icons and famous users of Instagram
with a large number of followers. They are very popular in social media and very likely to be the icons
that are capable of setting trends among society. It was mentioned before in the target market analysis
section that most teenagers use Instagram to find out about new products. Therefore, Nike can use
sponsorships to promote and advertise its new Smartwatch.
The main advantages of this strategy is the ability to start a trend involving the Smartwatch. As
seen from past history, products that have been the epicenter of major trends to be very successful in the
global market. The additional exposure that the product gets could help it overthrow its competitors in the
long term. The main disadvantage of this strategy is the unpredictability of human opinion. Because each
person has their own individual tastes and preferences, some of the celebrities might say that the product
doesnt meet their expectations and thus reduce the viewers expectations for the product as well.

3. Conclusion and Recommendation

It is concluded that no matter which marketing strategy is implemented, Nike would be able to
increase their market share of the fitness band market with their Smartwatch product. Nike would also be
the first of its competitors to release this kind of product into the market, instantly making them a unique
competitor. There is also an existing opportunity in the Indonesian market for this new products.
It is recommended that..
Nike uses the Blue Ocean Strategies to promote their products
Nike should use a reward system as one of their Blue Ocean Strategies. A Reward
System can act as motivation for customers to exercise while encouraging customers use
Nike products at the same time. By giving a variety of free Nike products as rewards,
customers would be more interested to use the application and the products. This will
help to advertise and promote Nike products to many customers.
Nike should use the Google Doodle Logo to advertise their new products. Since there are
no business that use this method of advertising previously, the amount of potential
 5
customers that can be gained is huge. Especially due to the extremely high traffic of the
Google site, at the very least, users of the site would be aware of the existence of the new
Smartwatch.
If Nike want to compete in the market, Nike can use Red Ocean Strategies
Nike should use Sponsorship to advertise its products. In Indonesia, famous singers,
youtubers, actors and actresses have a lot of influences on trends. By sponsoring them,
they can use the product when they are on screen, and advertise or talk about the
product. This can persuade many people to buy the products. Sponsorship is less
expensive but still have a big impact.

Works Cited
Berry, Sarah. Just do it: Best tagline of the 20th century?. 2015. Photograph.
"Business Strategy: Blue Ocean vs Red Ocean." HEAVY DUTY INSIGHT. N.p., 21 Jan. 2015. Web. 19
Apr. 2016.
"Blue Ocean Strategy." Globalization Entrepreneurship and Small Business. N.p., 13 May 2009. Web. 22
Apr. 2016.
Griffiths, James. "Xiaomi's US$12 Fitness Tracker Becomes World's Second Most Popular Wearable."
South China Morning Post. N.p., 8 June 2015. Web. 21 Apr. 2016.
"Red Oceans VS Blue Oceans." The Official Blue Ocean Strategy Australia Site. N.p., n.d. Web. 19 Apr.
2016.
Sweney, Mark. "Google Claims YouTube Ads Are More Effective than TV."The Guardian. Guardian
News and Media, 20 Apr. 2016. Web. 21 Apr. 2016.
 6
"Train Smarter. Go Farther." Fitbit Surge Fitness Super Watch. N.p., n.d. Web. 22 Apr. 2016.