If you don't use a smart product yet, you soon will. Your shoes, your clothing, your watch, your water bottle, and even your toothbrush are being redesigned to incorporate sensors and metering devices connected to the Internet so that their performance can be monitored and analyzed. What difference does that make? Nike, is the world's biggest sports footwear and apparel company. Nike has created a series of information technology-based products and an ecosystem of gadgets and services built around measurable personal improvement through exercise. The Nike + ecosystem links Nike's corporate computer system to smart devices such as the Nike + Sport Watch GPS, the Nike + FuelBand, and the Nike + Running App on Apple and Android mobile devices. This enables Nike to analyze individual performance and activity data collected by the devices to help users train and work out more effectively. It also adds value to Nike products and a reason to stay with the brand. The Nike+ SportWatch GPS keeps track of your location, pace, distance, laps, calories burned, and (with the Polar Wear link+) heart rate. The Nike + Running App tracks your route, distance, pace, calories burned, and time using your phone or another Nike-partnered device, giving you audio feedback as you run. The Nike + FuelBand activity tracker is worn on the wrist and used with an Apple iPhone or iPad. The FuelBand enables wearers to track their physical activity, steps taken daily, and the number of calories burned. The information it collects is integrated into the Nike + online community and phone application, allowing wearers to set their own fitness goals, monitor their progress on the device LED display, and compare themselves to others within the Nike community. Nike's proprietary software turns all tracked movement from Nike's smart devices into NikeFuel points, which can show achievements, can be shared with friends, or can be used to engage others in competition. NikeFuel is Nike's universal way for measuring movement for all kinds of activities using a metric that enables comparisons-no matter what height, weight, gender, or activity-to past performance, another person, or a daily average (which Nike defines as 2,000 Fuel points.) Users of multiple Nike + devices can visit the nikeplus.com site to access all their data-including lifetime NikeFuel points accumulated from all their Nike + devices. Nike is developing other fitness technology products to integrate with Nike +. The more people measure their activity with NikeFuel, the more they are locked into the Nike ecosystem and the harder it will be to switch to other companies products. Nike's integration of information and technology into its products keeps people coming back to Nike's own website and apps. Nike believes technology is revolutionizing its relationship with consumers, turning it into a company that provides services as well as products. In the past, when you bought a product, that was the end of the relationship with the company. Now, the purchase of any Nike product has become the beginning of the company's relationship with the consumer. The deeper the relationship, the more consumers will embrace and stay loyal to the Nike brand. Under Armour, noted for performance clothing using technologically advanced material, is making its products smarter as well. The company has spent $710 million to scoop up mobile apps such as MyFitnessPal, MapMyFitness, and Endomondo, which enable it to tap into the world's largest digital health and fitness community. Under Armour can generate revenue from in-app ads, including ads from other companies, and purchases from app users referred to its products. 

The platform delivers unprecedented depth of information and insight about fitness-and health-oriented consumers, creating numerous opportunities for Under Armour and other brands to engage with potential and existing customers. For example, MapMyFitness collects data about a user's name, e-mail address, birth date, location, performance, and profile if the user connects to the app using social media. Under Armour does not sell identifiable personal data about individuals to third parties but does provide advertisers with aggregate information about app users. Under Armour is hoping that daily use of its smartphone apps will build stronger ties to customers that will lead to stronger sales of its own apparel, footwear, and other athletic gear. Under Armour has teamed up with e-commerce retailer Zappos to send users a pop-up notification when their sneakers need replacement, based on workout data logged in MapMyFitness apps. Under

Armour sees clothes themselves eventually becoming the means to track movement and biorhythms. Under Armour developed its own smart footwear called UA SpeedForm Gemini 2 Record Equipped, which tracks a runner's time and date, duration, distance, and splits without the need for other devices. The company also partnered with HTC to develop UA HealthBox, a $400 red box that includes a Wi-Fi scale (for measuring weight and body fat), a heart rate chest strap and removable sensor, and a shower-proof dimpled fitness band to track workouts and sleep. The data these devices collect are stored on an Under Armor Record app on an iPhone or Android phone. Gatorade, with a 78 percent share of the $7.21 billion sports-drinks markets, is developing a microchip-fitted "smart cap" bottle that communicates digitally with a bandage-like sweat patch to provide athletes and fitness buffs constant updates on how much they should drink. According to Gatorade, individual hydration needs differ, with sweat loss ranging from half a liter to more than two liters per hour of exercise. The company is planning to launch as many as a dozen different formulas for electrolytes and carbohydrates in small pods that snap onto bottles.

CASE STUDY QUESTIONS

1. 1. What competitive strategies are the companies discussed in this case pursuing? 
2. 2. How are information technology and smart products related to these strategies? Describe the role of information technology in these products.
3. 3. Are there any ethical issues raised by these smart products such as their impact on consumer privacy? Explain your answer.

Answer rating: 100% (QA)

1 The competitive strategies being discussed is that of product innovation and creating an ecosystem ... View the full answer