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Li Ning sports brand was among the leading players in China's sports footwear and apparel domestic market. Its market share has historically decreased since the introduction to global competition through reduction of import tariffs, trade barriers and tightening of grip on counterfeit products. (Tobias 2015). This opened the domestic market to international brands like Nike and Adidas. Due to the recent market analysis, this trend is set to grow in the few coming years.

To start with, the issue of competition should be taken into consideration. For instance, currently, there are major risks to Li Ning's domestic growth in market share. It stems from upsurge in competition from local and niche players like Anta to international brands like Nike and Adidas (Tobias 2015). Li Ning sales have lately weakened in domestic market. For instance, in 2014 sales dropped to $ 562 million comparing to $ 952 million in 2013 (Tobias 2015). This implies that if these hitches continue, it could affect the brand's future growth.

Secondly, one of the aspects to consider in this case is market trends. The growth of China's middle class customers of Western products and other global brands also threatens the growth of Li Ning in domestic market. Increase in Chinese young people's spare time and disposable income growth are set to further drive the demand for international brands. Therefore, the company should enhance its local competitiveness through setting up brand characteristics, positioning and cultivation (Kotler & Keller 2005). Thus, Li Ning needs to reinvent its operational strategies to enhance market competitiveness.

 

Another aspect that explains the company's competitive position is strategy which is expected to drive the growth of domestic market. It includes exposure to global sports on TV and internet as well as the desire to play football among others (Andersson & Svensson 2009). Besides, one more factor is price. There are many local competitors who offer cheap and poor quality products, and this gives Li Ning an edge considering that it sells quality products but, naturally, for higher price. Additionally, the Chinese market has a higher growth potential supported by the fact that only 15 per cent of young people play sports as compared to international markets (Tobias 2015).

Li Ning's Current Competitive Position in the International Market

The international sports footwear and apparel market is extremely fragmented with the existence of various international and local brands like Adidas, Nike, Puma, Li Ning and so on (Johnson & Turner 2010). Rising demands and growing social and economic prosperity in key markets across the world coupled with the tendency towards a healthy and productive lifestyle are the key catalysts for the growth of this market (Andersson & Svensson 2009). Other factors such as increasing drift towards stylish and comfy wear as well as higher disposable income levels in developing countries are set to influence the growth.

From the case, it is clear that Li Ning growth in international market has been underwhelming. To start with, international sales only constitute about 1 per cent of its revenue (Tobias 2015). Besides, its strong domestic market position in China has failed to provide a strong footprint in international markets. While Li Ning has continued to promote the product with equal to international brands standards and quality, it has failed to command a substantial market presence. This is because global brands like Nike and Adidas have succeeded in building their businesses with long-term perspective whereas Li Ning has failed to make emphasis on this.

In addition, Li Ning was unable to build a distinct brand that could differentiate it from competitors at any level. The company's strategy of building an international brand image to protect domestic market share has been ineffective. For instance, its logo which is based on the founder's initials has been perceived to be close to Nike's ‘swosh'. Its current slogan ‘anything is possible' is also considered too close to that of Adidas - ‘impossible is nothing' (Tobias 2015).

The pricing of Li Ning products in international market has also undermined its global competitiveness. With its quality, standards and branding, it should be equally competitive as leading brands. Nike, Puma, Adidas and other global brands dominate the high-end international market. Li Ning mainly occupies the mid-tier market which is less lucrative. The ability to compete lies in the heart of any successful business (Kotler & Keller 2005).This ability is inherent in its aptitude to differentiate itself from competitors (Johnson & Turner 2010). A brand's competency in communicating with customers and embracing innovation sets it apart from competitors. In the case above, Li Ning lost its positioning and focus. It also closed its first store in Holland, chased by the concern of failure to meet the requirement to supply larger European sizes.

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In spite of the before mentioned problems, Li Ning has also succeeded in the international market. Similarly to Nike and Adidas, which have embraced sport sponsorship to support marketing goals and objectives, Li Ning has followed suit with sponsorships such as equipping the Argentina and Spain's basketball team during the 2008 Beijing Olympics. Sporting events greatly enhance brand's visibility and show its competitiveness (Tobias 2015).

Li Ning's Efforts to Grow outside China

Global sports footwear and clothes industry has grown tremendously in the last few years. Besides, in the marketing overwhelming increase in disposable income of the world's population and the tendency towards a healthy and stylish sportswear is observed. This has motivated companies such as Li Ning to implement various strategies in order to grow not only domestically, but also in the international market.

To start with, in 2001, Li Ning made efforts to enter the international market to improve its global competitiveness as well as tighten grip on domestic market (Tobias 2015). It started by exporting unbranded footwear to Europe and the United States. This was followed by hiring European designers to focus on innovation and latest global trends. That was the right decision since, according to the internationalization theory, the capacity to function and compete successfully is determined by such factors as a company level feature - a form of intangible assets.

Secondly, the company developed a multi-channel product accessibility method by selling products online. E-commerce is an important element of business competitiveness as it increases its chances to be reached to a bigger number of and remote markets. Effective use of e-commerce can strengthen the brand's image (Johnson & Turner 2010). Then, compared to finding a physical location, e-commerce is advantageous because respect to the location theory, companies must choose placement that will help them maximize profits. Besides, it can reduce market chain inputs and final product delivery costs. Thus, such step can also be regarded as beneficial for the Li Ning.

Thirdly, for a brand to be successful, strong leadership and ambassadors are compulsory (Zhu 2004). For instance, Nike has effective brand leadership that has proved productive. Personalities like Tiger Woods and Michael Jordan are associated with Nike. In the case of Li Ning, besides sponsoring sporting events and signing corporate deals with NBA stars, it does have a distinct brand leader. Thus, effective use of brand leadership will improve the brand's image, establish a compelling strategy, and create a lasting vision.

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However, for a brand, it is imperative to heavily invest in innovations and focus on core categories to be competitive (Kotler & Keller 2005). If done right, it must drive growth and margins. In the case of Li Ning, this did not reflect on the brand's later developments as it failed to capture the European large size demands, something which global brands comfortably addressed. Li Ning has failed to focus on its heritage and DNA. Its portfolio consists of footwear, apparel, and accessories for sport and leisure. The brand ought to focus on its leading category which is general exercise with 32 per cent (Tobias 2015). In order to become one of the most popular global brands, the company should focus and develop in this direction.

Certainly, Li Ning's effort to grow outside China are evident. The company has focused greatly on innovation, e-commerce and enhancement of strong brand leadership. For Li Ning, it is undeniable that with the advancement of both domestic and global sports undertaking, there is still huge potential for growth.

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