2. How are information technology and smart products related to these
strategies? Describe the role of information technology in these products.
According to the case, Nike, Under Armour and Gatorade are developing and
applying technology into their product services that create a close connection
with customers through the product they bought. Apparently, these businesses
are pursuing the Product Differentiation strategy as well as Strengthen
Customer and Supplier Intimacy integrated with the advancement of
information technology and smart products, which enables new products and
services or significantly alters the customer's convenience and the ease of use of
existing products by utilizing an information system.
In the case of Nike, the firm mainly provides sport shoes and gears so that they
put the gadgets built around to measure personal improvement after doing
sports or exercises, as well as health indicators like heart rate or calories burned.
Also, they integrate their computer system to these smart applications on Apple
and Android mobile devices to assist customers in analyzing their performance
through data collected as well as competing with other users in the Nike
community which greatly enhance the users’ training and workout efficiency.
The utility of integrating information technology into products has successfully
engaged users in Nike's ecosystem which accompanied with almost all parts of
users’ wellbeing, minimized their probability of switching to other products. It
not only strengthens the customer-supplier relationship but also turns a normal
customer to a loyal one, who would continuously use their product line. And
obviously, information technology has been a crucial role in this success.
With respect to Under Armour, this enterprise has developed a platform that
delivers them an insight into fitness and health-oriented consumers, while
earning revenue from running ads and ads fees from other companies. In return,
they will increase sales in apparel, footwear and athletic gears. For example,
they made a collaboration in e-commerce with retailer Zappos, sending users a
pop-up notification when their sneakers need replacement, based on the data of
logged-in frequency of MapMyFitness apps. Moreover, Under Armour has also
penetrated the niche market of running-supporting and heath-tracking
segmentations. Specifically, Under Armour developed a smart footwear product
themselves to track a runner's progress without the aid of aggregate devices and
aligned with HTC to launch UA HealthBox which includes preeminent
technologies such as Wi-Fi scale, heart rate chest strap to track workouts and
sleep, collect body indicators and store on the Under Armor Record application
on an iPhone or Android phone. Thanks to the application of information
technology, Under Armour has created a strong bond to its users, witnessed by
the increase in their daily visit and become a strong rival in the niche market of
movement-and-biorhythms tracking products.
In view of Gatorade, it has made a great movement when integrating a
microchip fitted customized “smart cap" bottle with a digital bandage-like sweat
patch that measures how much the athletes should drink due to the difference in
individual hydration needs and sweat loss, and the flashing lights will tell the
users when they need to hydrate. Gatorade has differentiated its products with
different formulas and versions to best fit in different segmentations, illustrated
by their tests conducted with different sport teams. This is a great idea that
meets the demand of every customer and takes the advantage of the sport-drink,
which is considered to be difficult to combine with any technology evolution.
This innovation has put Gatorade to the frontier row of sport-drink industry and
the information system has made a great contribution to this achievement.
In general, information systems have played an important role in their
strategies to differentiate their products and create a strong connection with their
customers by integrating technology in keeping track with fitness and sport consumers.