opportunities in terms of sponsoring and endorsement contracts that Nike never possessed in
its early years. Furthermore, the importance and variety of advertising tools such as TV
commercials and paper ads were marketing instruments that Nike coined and developed over
time. To illustrate the difference in a more simplistic way, Nike entered a war without having
a wide range of weapons to fight the enemy, whilst Li Ning could choose between several
marketing instruments and distribution channels. However, the battlefield was more complex
and bigger when Li Ning entered the scene. A similarity, though, is that both companies
continuously utilized public sports events as a jump start for new products or marketing
campaigns. This supports scientific papers regarding the importance of sports events in this
industry, as highlighted by Thibault (2009), Smith (2008) and Hollister (2008).
Although having a multiplicity of marketing tools available, Li Ning had to overcome higher
entry barriers, as it was described in the industry profile. These entry barriers were established
over time by the leading companies, which is a classical first mover advantage (Porter 2004).
The industry had already established a set of standards in terms of production efficiency,
pricing as well as product quality that Li Ning had to deal with from the beginning. This
indicates that the company had to be immediately price competitive at all ranges of
competition to successfully enter the industry. Nike, by contrast, started its business in a niche
and thereby avoided costly and hard price competition as outlined by Wilson and Gilligan
(2005). An entry barrier that was evident to both Nike and Li Ning was the access to
traditional distribution channels, as retail stores preferred to offer the shelf space to well
known global brands rather than to a new company without a well recognized brand image.
When it comes to promotion via endorsement contracts, neither Nike nor Li Ning had the
financial resources needed to compete from the beginning for the elite sport athletes.
However, endorsement contracts did not require the same astronomic financial resources in
the 70s as compared with today.
Even though the industry arena has changed and its scope has grown tremendously over the
years, it is hardly possible to draw a conclusion if the circumstances at the point of entry were
more preferential for one company than for the other. Porter (1980; 1998) argues that an
increasing arena implies benefits as well as drawbacks. The benefits can be divided into first
and late mover advantages. In the case of Nike, the most decisive first mover advantage was
clearly the possibility to establish entry barriers such as industry standards and close
relationships as well as connections with key stakeholders and customers through a brand