商科公司合作案例分析全英文

Non-competitive Strategic Cooperation/Alliance: Apple and Nike in

Sports Wearable Equipment Field

As the world's most valuable high-tech company, Apple has always been an expert in using diversified development strategies. Methods of development can be classified into internal development methods and external development methods. And the external development methods include mergers, acquisitions and cooperation/alliances. Apple has kept good cooperation relationship with Nike over the past decade and the paper tries to analyze the non-competitive strategic cooperation alliance between these two giants of different fields.

Two independent firms and the cooperation field

NIKE is the world's leading sporting goods manufacturer，Nike has invested a lot of manpower and material resources in new product innovation and development. Apple is known for its innovation among all the worldwide high-tech companies. The cooperation field of Apple and Nike is the field of sports wearable equipment, which can hardly to be completed by either company alone. Apple is a hardware device manufacturer, Nike is a sports equipment manufacturer. As long as Apple is willing to provide application support for Nike, Nike will be very happy to sell its products through Apple.There is no subordinate relationships between them. Remaining independent, they cooperate to undertake actions in the field of sports wearable equipment, The two companies have been together developing sports wearable equipment market for about ten years under the ecological environment of digital products and services, to bring a richer user experience for all people.

Cooperation and non-competitive strategic cooperation

Apple and Nike, the two independent firms, have reached an agreement to share their resources and capabilities (Apple’s hardware and Nike’s sports user group) to reinforce their competitive advantage in the field of sports wearable equipment, which is called the cooperation between Apple and Nike.

In traditional cooperation/alliance, the coordinated firms are in the same or related industries or, in the same upstream and downstream industry chain, thus the firms will face direct competition or will face price competition between the two sides. But there is no direct competition relationship between Apple and Nike, therefore this kind of cooperation is non-competitive strategic cooperation.

Long-term contractual agreements and shareholder agreements

In fact, as early as 10 years ago, Apple began its cooperation with Nike. In 2006, Apple and Nike launched a Nike + iPod sports package. Through the wireless, the built-in chip in the Nike shoes was connected with the iPod, and the users could record their time, distance, speed, heart rate, calorie consumption and other data during their exercise through the iPod. It was the world's first generation of wearable sports equipment as well.

Over the years, Apple and Nike has kept cooperation relationship in the initial Nike + project. In 2011, Nike independently launched the Nike + Fuelband wristband and Apple stores and online stores began to sell FuelBand in the United States, Canada and UK. In September 2016, Apple and Nike launched a new version of iWatch2 --Apple Watch Nike Plus. The device deeply integrated the sports properties and social properties of Nike +, whose interface display information and Siri function has been optimized according to sports characteristics.

These have proved that Apple and Nike’s cooperation in sports wearable equipment field is a long-term cooperation. Started with an innovated idea of the first product of wearable sports equipment, both sides have obtained satisfactory profit, especially the sales volume of iPod in the sports field from 2006 to 2008 increased sharply. Although there were no joint ventures established or shares acquisition ways defined, the two firms still could earn much benefit generated from the products selling of cooperation agreement. In later years, Nike independently launched the Nike + Fuelband, whose market share was not very great while Apple focused on other market segments, so the 2016 iWatch Nike Plus with sports attribute marked that Apple and Nike would continue to enter the wearable sports equipment market

hand in hand. Therefore, although the cooperation between the two sides is a long-term and continuous, the cooperation is also conditional and phased, changing with the aimed business (wearable sports equipment) market environment.

Interorganizational networks

Apple and Nike have deep interorganizational links. In fact, as early as in 2005, before the launch of Nike + iPod, Cook joined the Nike board as Apple's COO has and played an important role. He served as Chairman of the Board of Remuneration Committee and became a member of the Enterprise Management Committee of Nike. In early July of 2016, Apple CEO Cook was appointed as Nike's chief independent director. The senior management mobilization of both sides every time, are in fact paving the way for their cooperation.

Advantages Analysis

1. limiting some risks

The fundamental reason for the cooperation is the huge market potential of sports wearable equipment market. A sports industry report from IDTechEx analyzed that the wearable sports equipment market size of 2015 reached 20 billion US dollars and would reach 70 billion US dollars in 2025. After 10 years of exploration and development, wearable sports equipment market has gone through the preparation period of product life cycle and entered the rapid growth period. With increased public appeal for sports and health and the more developed mobile end App penetrating into people's lives, sports wear equipment will gradually become the main force of electronic products consumption. Apple and Nike of course will not give up the segmented market they have explored long ago.And by using the other side’s brand influence power, the two firms mainly focusing on other markets will certainly limit the commercial risks within the acceptable range.

2.obtaining resources required and learning from partners

As the first to get involved in sports App, Nike + had aggregated 18 million users in 2013 and attracted almost 60 million users relying on supporting sports equipment

products and implanted community interaction concept. In terms to Apple, since the launch of iWatch in April, 2015, its global supplier shipments of the first quarter reached 400 million and the market share climbed to 75.5%. Apple definitely was equipped with enormous influence in the wearable device market.

But in the segmented market of sports wearable equipment, the dominance of iWatch had vanished. Fitbit, the leading brand of all sports wearable equipment brands, had been even more popular in the market than the apple. Apple had to rethink the product development strategy. Compared with fitbit, Nike + only had App, lacking a powerful, perfect matched application hardware. The Apple iWatch lacked more professional and differentiated products to resolve the pain points of the user in sports vertical market.

As a result, Apple and Nike can combine their respective resources to take advantage of the conditions of both sides. They gave birth to Apple Watch Nike Plus to shock the market. The two firms combined with their own brand characteristics and advantages，fitted in innovative ways, learned from each other, bringing the share of market resources and better market effect which can not be achieved by any firm alone.

3.greater balance between efficiency and flexibility

Apple and Nike achieved the innovation in product design and development. The combination of Apple and Nike can not only collect rich sports data, complete more powerful, more accurate professional data analysis, but also can reach the and high functional requirements of hardware equipment. In this market of cross-cutting sports + technology products, Apple and Nike are able to complete the more precise, clear division of labor, making tech future wearable equipment more low-key, stylish, practical and integrated with more features, and thus the two firms can achieve greater balance between efficiency and flexibility.

Disadvantages Analysis

1.Consuming cost: organizational complexity

In 2012, with the increasingly fierce market competition, Nike independently

launched their own Nike+ FuelBand. However, due to its function, pricing and positioning errors, Nike closed the internal wearable equipment sector after launching the second generation of Nike + FuelBand in 2014. One of the team's core R&D personnel, Ben Shaffer, was then quietly hired by Apple.

As the two firms have a degree of resource sharing in this segmented market of sports wear equipment, they need to make decisions jointly at some point. Human and material resources of both firms will be in the exchange and circulation, and sometimes each firm may feel it necessary to take the most critical and most core resources in its own hands. In short, all these will cause kind of loss in total cost.

2.Avoiding undermining the firms’ competitive position

Apple and Nike, the non-competitive strategic cooperation/alliance partners, from different industries, are facing the completely different consumer market, avoiding the direct competition. At the same time they rely on the very different knowledge base, lacking the basic motivation.to learn each other's core competencies and knowledge. The only common strategic goal of both firms is to make the cooperated products occupy the sports wearable equipment market as much as possible. Non-competitive strategic cooperation between Apple and Nike avoids opportunistic behavior and avoids the zero-sum game process of cooperation, which will not undermine the two firms’ competitive position.