Li Ning Challenges Nike & Adidas by Nadya Hamawy, University of the Philippines Strategic Management

1. CHINA’S LI NING CHALLENGES
NIKE & ADIDAS
Nadya A. Hamawy
BA 190 - Strategic Management
University of the Philippines
Prof. Mita Angela M. Dimalanta

2. Li Ning Company Ltd.
Founded by former star
gymnast Li Ning
Est. 1990
Five core categories:
basketball, running,
badminton, training and
sports life products

4. To overtake Nike &
Adidas
2008 Beijing Olympics
Inventory pile-up

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

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

7. Questions
1. 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.

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

9. The problem of
overexpansion
– Re-strategize and
Rethink
– Downsizing mode of
stores, distributors,
and business
segments

10. 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?

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

12. Strategic Position
Focused
Differentiation

13. Strategic Position
Focused
Differentiation

14. Strategic Position
Cost
Leadership

15. The Link between strategic position
and firm performance

16. 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

18. Nike & Adidas
Global brands
Specialized Marketing strategies

19. The Chinese Consumer
Lack 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

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

21. Recommendations
– Focus and understand a
specific segment and build
on that
– Unleash creativity and add
quality
– Make a Chinese empire
– Advertise and promote

23. Sources
Abillama, 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-aa89-00144feab7de
Zhu, 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