Tuesday, April 22, 2014

Nike Forgoes the FuelBand due to Competition from Apple



As we have read over the past few weeks, businesses must keep up with the evolving trends of consumers, whether that is a new social media channel, new travel/flight expectations, or a new type of ice cream.

The beloved and infamous Nike has recently turned the other cheek to a popular fitness trend/consumer want. “Wearable” fitness equipment has become very popular. So popular that Nike wanted to jump on the bandwagon by producing a Nike Fuelband, that would sync up with one’s sneakers and calculate things like steps taken, calories burned, and intensity of workouts (Nike).  But why stop? Nike claims three key reasons why it should not pursue the Fuelbands, despite aligning with the company’s mission:

1)   Too many qualified competitors. Apple will soon be launching an iWatch (Eadicicco) that will do everything the Fuelband can do PLUS more. Who wants to compete with Apple?

2)   Unknown software experience. Nike does not have experience in software or data management; especially the kind that is required to host a successful Fuelband service.

3)   Not enough brainpower. Nike simply does not have the engineer brainpower to innovate such creative and complex technology (Olson).

This is a prime example of a successful company making a tough decision that is probably the right decision based on the current market. Let’s take the Cola Wars as an example. Both Pepsi and Coke have made business moves that have flopped due to consumer wants and to stay competitive (i.e. New Coke and Crystal Pepsi). Nike has made a difficult decision in forgoing this new emerging trend to complement its shoe clientele. But in the end, I think Nike made the wise decision to stop producing and selling the Nike Fuelband.
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Sources:
 Eadicicco, Lisa. "Here's Even More Evidence That Apple Could Be Working On An IWatch." Business Insider. Business Insider, Inc, 21 Apr. 2014. Web. 22 Apr. 2014. <http://www.businessinsider.com/apple-iwatch-trademark-2014-4>.

Nike. "The Nike+ FuelBand SE Rose Gold." Nike.com. N.p., n.d. Web. 22 Apr. 2014. <http://store.nike.com/us/en_us/pd/fuelband-se-rose-gold/pid-1057886/pgid-1057887>. 

Olson, Parmy. "Why Nike Might Dodge The Wearables War." Forbes. Forbes Magazine, 21 Apr. 2014. Web. 22 Apr. 2014. <http://www.forbes.com/sites/parmyolson/2014/04/21/why-nike-might-dodge-the-wearables-war

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