Li Ning: Brand Growth and Excellence in China
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Case Details:
Case Code : BSTR207
Case Length : 14 Pages
Pages Period : 1989-2206
Organization : Li Ning Company Limited
Pub Date : 2006
Teaching Note :Not Available
Countries : China
Industry : Sports Goods
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Introduction Contd...
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In addition, there was competition from other local players like Anta, Xstep, and other companies. The company's products included sports footwear, apparel, and accessories for sport and leisure and they were sold under the brand 'Li Ning'. The 'Li Ning' brand was named after LNCL's founder Li Ning, a world renowned Chinese gymnast. In an illustrious career spanning 19 years, Li Ning won 106 gold medals at various national and international competitions, which made him a national hero in China. After retiring from sports, Li Ning established the Guangdong Li Ning Sports Goods Company Limited in 1989. The company got its first major break when it sponsored sportswear for the Asian Games torch relay that was held in Beijing in 1990.
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The company's business expanded rapidly in China and by 1992, it was selling its products in the Hong Kong, East European, and American markets. The company diversified its product line into apparel, footwear, and accessory products, for major sports like basketball, soccer, tennis, swimming, fitness training, basic exercise, etc. In 1998, the company's name was changed to Beijing Li-Ning Sports Goods Company Limited and it became one of the top sports products brands in mainland China. The company established an extensive distribution and retail network wherein it directly managed 'Li Ning' retail stores and also supervised franchisee 'Li Ning' retail outlets.
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In addition, it tied up with the France-based AIGLE International SA8 in 2005 and obtained exclusive rights to manufacture, market, distribute, and sell AIGLE products till 2055 in China. With the increase in disposable incomes among the Chinese youth and the growing interest in sports, the Chinese sports goods market was expected to become the largest retail market for sporting goods in the world by 2010.9 International competitors like Nike and Adidas, who mainly targeted the upper premium segment, began to set their sights on the mid-segment where LNCL was the undisputed leader. Local Chinese sports products manufacturers like Double Star, Xstep, and Anta were also renewing their efforts to expand their presence in the Chinese market... |
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