Essay Sample on Gaining a Sustainable Competitive Advantage: A Comparison of Under Armour and Nike

Introduction

A competitive advantage is dominance over competitors obtained by providing consumers higher value by either means of low prices or through offering better benefits and services that account for high prices. The main challenge for business strategy is to identify a method of attaining a sustainable competitive advantage above other businesses producing similar products (Harrigan, 2017). In this paper, shoe and clothing companies: Under Armour and Nike will be focused on. Different strategies that could be used to gain a competitive advantage between the companies will be the point of focus in this paper.

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Several strategies can be used to gain a competitive advantage. Some of those strategies are usually used in a narrow market (Maillard, 2013). In a broader market, such as that which Under Amour and Nike operates in include differentiation leadership and cost leadership. A company like Under Amour can adopt cost leadership to gain a competitive advantage. In this strategy, the goal of Under Armour is to become the lowest-cost producer in the market. Under Armour would most likely attain this goal through mass production, which would allow the company to make use of economies of scale. Under Armour would most likely get more significant benefits, if the selling price can be near the average market price (Perry, 2019). Usually, Under Amour will often follow-up with discounting its commodities to increase sales, especially if it has an outstanding cost advantage above the competition and though this, Under Armour, can get a larger market share. Under Armour will produce its commodities associating its production methods with excellent levels of productivity, excellent capacity utilization, efficient technology use, and using means to the most successful distribution channel.

Nike, on the other hand, in response would adopt a differentiation strategy where it would choose one or more criteria employed by consumers in a market - and then position the company distinctively to meet those criteria. Nike would charge a premium price for its commodities, usually to indicate the higher production costs and additional value-added attributes offered for the buyers. This strategy would justify the products to the consumers and give them reasons as to why they should prefer the company's goods over other products (Perry, 2019). Nike would employ a branding method to display vital buyer recognition. Also, it would support its products and brands through constant advertisements and endorsements to win market share. Lastly, Nike would employ superior product qualities that use attributes and benefits to reflect durability and quality. This strategy would focus on persuading buyers to become loyal and prefer the company over other companies.

References

Amadeo, K. (2019, December 14). Use These 3 Harvard Business School Strategies to Beat Your Competition. The Balance. https://www.thebalance.com/what-is-competitive-advantage-3-strategies-that-work-3305828

Harrigan, K. R. (2017). Strategic Flexibility and Competitive Advantage. Oxford Research Encyclopedia of Business and Management. doi: 10.1093/acrefore/9780190224851.013.2

Maillard, P. (2013). Competitive Quality Strategies. doi: 10.1002/9781118644454

Perry, J. (2019). Strategies for performing in competition. Performing Under Pressure, 195-226. doi: 10.4324/9780429319150-13