nike globalization case study

• International Marketing

Decoding Nike’s Global Strategy: A Guide to Market Dominance

• January 16, 2024

Table of Contents

Introduction: decoding nike’s global strategy for market dominance, 1. nike’s international pricing strategy, 2. nike’s global market segmentation and targeting, 3. nike’s global marketing and distribution channels, 4. nike’s global manufacturing and outsourcing strategy, 5. nike’s global human resource management approach, 6. nike’s global social responsibility and sustainability commitments, 7. nike’s global strategy in action: a case study of china, achieving global success with adaptability, cultural sensitivity, and ethical practices, accelingo: your culturally sensitive ally in nike’s footsteps.

Nike, a name synonymous with athletic excellence, has firmly established itself as a global sportswear and apparel giant, boasting a rich history of innovation and success. With a revenue of over $51 billion in 2023, as reported by Statista , Nike’s dominance in the global market is undeniable . This remarkable achievement can be attributed to a combination of strategic approaches, including a well-crafted global pricing strategy, targeted market segmentation, effective marketing and distribution channels, and a commitment to ethical practices.

Nike’s global pricing strategy is a cornerstone of its success. The company employs a premium pricing strategy, positioning its products as high-quality, exclusive items (Hill & McKaig, 2015). This strategy is supported by Nike’s strong brand image, built on years of innovation and association with top athletes (Mahdi et al., 2015).

To cater to a wider audience, Nike employs value-added services, limited edition releases, and tiered pricing (Taylor, 2012). Value-added services such as customization options and personalized shopping experiences further enhance the customer experience and justify the premium pricing (Wang et al., 2016).

Nike’s global market segmentation is another key factor in its success. The company targets major sports markets like North America, China, and Western Europe (Arora & Aggarwal, 2012). This approach allows Nike to tailor its products, marketing campaigns, and distribution channels to the specific needs and preferences of consumers in each market, resulting in a more effective and personalized customer experience (Lund-Thomsen & Coe, 2015).

Nike’s global marketing and distribution channels are extensive and diverse. The company maintains a network of retail stores worldwide, emphasizing its direct-to-consumer approach (Soni, 2014). Additionally, Nike partners with wholesalers and distributors to reach a broader market (Arora & Aggarwal, 2012). The company’s use of digital marketing platforms, such as Nike.com and social media, further expands its reach and engages with consumers on a global scale (Samuels, 2014).

Nike’s commitment to ethical practices is evident in its global manufacturing and outsourcing strategy. The company carefully selects manufacturing locations based on factors such as labor costs, raw material availability, and government policies (Murphy & Mathew, 2012). Nike also maintains a code of conduct for suppliers and factories to ensure fair working conditions and ethical treatment of workers (Kell, 2016).

Nike’s success in the global market is deeply rooted in its well-defined pricing strategy, which effectively balances premium pricing with a touch of versatility to cater to a broad spectrum of consumers. The company’s pricing strategy is characterized by its emphasis on quality, exclusivity, and brand equity , while also incorporating value-added services, limited edition releases, and tiered pricing to attract a wider audience.

Premium Pricing: A Pillar of Brand Image

Nike has established itself as a premium brand, synonymous with innovation, performance, and athletic excellence. This positioning is reflected in its pricing strategy, which consistently places its products at a higher price point compared to competitors . This premium pricing strategy is driven by the company’s strong brand equity, built over decades of delivering high-quality products and associating itself with iconic athletes (Hill & McKaig, 2015).

Cultivating Exclusivity through Limited Edition Releases

To further reinforce its premium positioning and appeal to a discerning clientele, Nike strategically introduces limited edition releases of its products. These exclusive offerings, often collaborations with renowned designers or athletes, create a sense of scarcity and exclusivity, driving demand and justifying the higher prices (Mahdi et al., 2015). Limited edition releases also serve as a marketing tool, generating excitement and buzz around the brand, attracting new customers and enticing existing ones to purchase the coveted items.

Tiered Pricing for Wider Appeal

While maintaining its premium positioning, Nike also incorporates tiered pricing to cater to a broader audience . The company offers a range of products at different price points, from entry-level essentials to high-end performance gear. This tiered pricing strategy allows Nike to reach consumers across various income levels and preferences, expanding its market reach and increasing its overall sales volume.

Value-Added Services for Enhanced Customer Experience

Nike goes beyond traditional pricing strategies by offering value-added services that enhance the overall customer experience and justify the premium pricing. These services include customization options, such as personalized shoe designs, and personalized shopping experiences, providing unique and differentiated offerings to consumers. Customization options allow customers to tailor their products to their specific needs and preferences, increasing their perceived value and willingness to pay the premium price. Personalized shopping experiences, such as exclusive access to limited edition releases or tailored product recommendations based on individual preferences, further enhance the customer experience and create a sense of exclusivity.

Nike’s Pricing Strategy: Achieving Global Success

Nike’s international pricing strategy has played a pivotal role in its global success. The company’s premium pricing, coupled with value-added services, limited edition releases, and tiered pricing, has enabled it to attract a wide range of consumers while maintaining its brand image as a leader in innovation and performance. This strategic approach has allowed Nike to expand its market dominance and become a global icon in the sportswear industry.

Nike’s global success is not solely attributed to its innovative products and premium pricing strategy; it is equally driven by its strategic approach to market segmentation and targeting. The company has effectively identified and targeted major sports markets , such as North America, China, and Western Europe, understanding the specific needs and preferences of consumers in each region.

North America: A Core Market with Diverse Preferences

According to Statista , North America remains Nike’s largest and most established market, accounting for over 44% of its total revenues. This region comprises a diverse population with varying athletic preferences and lifestyles. To cater to this diverse audience, Nike employs localized marketing campaigns that resonate with local trends and cultural nuances . For instance, the company has partnered with prominent NFL and NBA athletes to connect with sports enthusiasts in the United States and Canada.

China: Surging Demand with Cultural Sensitivity

China has emerged as a significant market for Nike, driven by a growing middle class with an increasing interest in fitness and sports (Ko et al., 2012). To penetrate this market, Nike has adapted its products and marketing strategies to align with Chinese cultural preferences . For example, the company has introduced products that incorporate traditional Chinese design elements, such as the use of red and gold colors. Nike has also partnered with Chinese celebrities and influencers to promote its products and connect with local consumers.

Western Europe: A Market of Established Athletics

Western Europe, with its rich sporting heritage and passion for athletic performance, has been a key market for Nike. The company has tailored its products and marketing campaigns to appeal to the region’s discerning consumers. For instance, Nike has partnered with European soccer clubs and athletes to leverage their popularity and enhance brand recognition . The company has also developed products specifically designed for European consumers, considering factors such as weather conditions and athletic preferences.

Localized Marketing for Global Reach

Nike’s success in these diverse markets is attributed to its strategic approach to localization . The company recognizes that simply translating marketing materials and products into different languages is not enough. It actively engages with local communities, understands their cultural nuances, and adapts its messaging and products accordingly. This localized approach enables Nike to connect with consumers on a deeper level and build a strong brand presence in each market.

Product Development Tailored to Local Needs

Nike’s product development process is also guided by market segmentation and targeting. The company recognizes that consumers in different regions have varying needs and preferences. For instance, Nike has developed lightweight and breathable apparel for hot and humid climates, while also offering waterproof and insulated gear for colder regions . This focus on adapting products to local conditions has been instrumental in Nike’s global success.

Nike’s Global Market Segmentation Strategy: Achieving Omnipresence

Nike’s ability to segment and target global markets has been instrumental in its expansion and dominance. By understanding the specific needs and preferences of consumers in each region, the company has tailored its marketing campaigns, products, and distribution strategies accordingly . This localized approach has allowed Nike to connect with consumers on a deeper level, foster brand loyalty, and achieve omnipresence across the globe.

Nike’s global success has been fueled by a sophisticated and multifaceted marketing and distribution strategy that encompasses both physical and digital channels . The company leverages its extensive network of retail stores, strategic partnerships with wholesalers and distributors, and innovative digital marketing tactics to connect with consumers worldwide and drive sales.

Direct-to-Consumer Approach: A Gateway to Customer Connection

Nike’s commitment to a direct-to-consumer (DTC) approach has been instrumental in its global expansion. The company operates over 1,000 retail stores in over 190 countries, as per Statista , providing a direct connection with consumers and allowing for personalized customer experiences . These stores serve as experiential hubs, showcasing Nike’s latest products and engaging with customers through various interactive features.

Partnerships with Wholesalers and Distributors: Reaching a Wider Audience

While Nike’s DTC strategy plays a crucial role, the company also collaborates with wholesalers and distributors to reach a broader market. This partnership enables Nike to expand its reach into smaller towns and cities, particularly in emerging markets . Wholesalers and distributors play a vital role in stocking Nike products in various retail outlets, providing consumers with convenient access to the brand’s offerings.

Leveraging Digital Platforms for Global Reach and Engagement

In today’s digital age, Nike has embraced the power of digital marketing to connect with consumers worldwide. The company utilizes a variety of online platforms, including its website, social media channels, and mobile apps, to reach a global audience and promote its products. Nike’s digital marketing efforts are data-driven , allowing the company to tailor its messaging and campaigns to specific demographics and interests.

Nike App: A Multifaceted Platform for Customer Engagement

Nike’s mobile app serves as a central hub for customer engagement. The app allows users to browse products, make purchases, track their workouts, and access personalized recommendations. Additionally, the app provides exclusive content, such as behind-the-scenes access to Nike athletes and events. This comprehensive platform has been instrumental in fostering brand loyalty and driving sales among Nike’s global customer base.

Nike’s Global Marketing and Distribution Strategy: A Winning Formula

Nike’s combination of direct-to-consumer stores, partnerships with wholesalers and distributors, and innovative digital marketing strategies has been a driving force behind its global success. By leveraging these channels effectively, Nike has been able to connect with consumers worldwide, build brand loyalty, and achieve market dominance in the sportswear industry . The company’s commitment to understanding local markets and adapting its messaging and products accordingly has been key to its success. As Nike continues to expand into new markets, its well-defined marketing and distribution strategy will be instrumental in its continued growth and global reach.

Nike’s global manufacturing strategy has been a cornerstone of its success, enabling the company to produce high-quality products at competitive prices . The company’s decision to outsource most of its manufacturing to overseas countries has been driven by several factors, including labor costs, raw material availability, and government policies.

Outsourcing for Efficiency and Cost-Effectiveness

Nike’s outsourcing strategy stems from the desire to optimize production processes and reduce costs. By manufacturing its products in countries with lower labor costs, such as China and Southeast Asia, Nike can minimize labor expenses and maintain its competitive edge in the global market (Murphy & Mathew, 2012).

Access to Specialized Materials and Infrastructure

Outsourcing also provides Nike with access to specialized materials and infrastructure that may not be readily available in its home country. Many overseas manufacturing centers possess advanced manufacturing capabilities and expertise in producing high-quality athletic footwear and apparel (Lund-Thomsen & Coe, 2015).

Government Policies and Incentives

Government policies and incentives in various countries have also played a role in Nike’s outsourcing decisions. Many governments offer tax breaks, subsidies, and favorable labor regulations to attract foreign investment in their manufacturing sectors (Arora & Aggarwal, 2012).

Addressing Ethical Labor Concerns

Nike’s outsourcing practices have not been without scrutiny. The company has faced accusations of labor abuses, including low wages, excessive working hours, and unsafe working conditions in its overseas factories (Kell, 2016). In response to these concerns, Nike has implemented various initiatives to improve labor standards and ensure ethical practices in its supply chain.

Code of Conduct and Supplier Monitoring

Nike has established a comprehensive Code of Conduct that outlines its expectations for labor practices among its suppliers. The code prohibits forced labor, child labor, discrimination, and unsafe working conditions. Nike also conducts regular audits of its suppliers to monitor compliance with the code.

Fair Labor Association Partnership

In 1999, Nike joined the Fair Labor Association (FLA), an independent monitoring organization that promotes ethical labor practices in global supply chains . The FLA audits Nike’s suppliers and provides recommendations for improvement.

Community Initiatives and Worker Empowerment

Nike has also implemented community initiatives to improve the lives of workers and their families in its supply chain regions. These initiatives focus on education, healthcare, and economic development . Nike also encourages worker participation and empowerment through training programs and feedback mechanisms.

Nike’s Commitment to Ethical Sourcing

Nike remains committed to ethical labor practices and fair working conditions in its global supply chain. The company recognizes that ethical sourcing is not just a matter of legal compliance but also a strategic imperative for building a sustainable and responsible business . Nike’s efforts to enhance labor standards and empower workers are essential for maintaining its brand reputation and ensuring its long-term success in the global market.

Nike’s success as a global leader in the sportswear industry is not solely attributed to its innovative products and marketing strategies; it is also deeply rooted in its commitment to building a strong and talented workforce around the world . The company recognizes that its employees are its most valuable asset, and it invests heavily in their development and empowerment.

Investment in Local Talent

Nike places a high value on building the skills and capabilities of its local employees. The company recognizes that cultural understanding and local expertise are crucial for success in diverse markets . Nike’s global HR approach focuses on providing training, development opportunities, and mentorship programs to its employees worldwide.

Employee Training and Development

Nike invests heavily in training and development programs to equip its employees with the skills they need to excel in their roles. The company offers a variety of training programs, ranging from technical skills training to leadership development courses. Nike also encourages employee participation in professional development activities and encourages networking opportunities.

Empowering Employees for Success

Beyond training and development, Nike also fosters a culture of empowerment among its employees. The company believes in giving employees the autonomy and authority to make decisions and contribute to the company’s success . Nike encourages open communication, feedback mechanisms, and employee participation in decision-making processes.

Standards for Ethical Treatment of Workers

Nike’s commitment to ethical practices extends beyond its direct employees to its suppliers and factories in the global supply chain. The company adheres to a strict Code of Conduct that outlines its expectations for labor practices among its partners. The code prohibits forced labor, child labor, discrimination, and unsafe working conditions. Nike also conducts regular audits of its suppliers to ensure compliance with the code.

Collaboration with Ethical Organizations

In addition to its own Code of Conduct, Nike collaborates with organizations like the Fair Labor Association (FLA) to promote ethical labor practices in its supply chain. The FLA conducts independent audits of Nike’s suppliers and provides recommendations for improvement.

Nike’s Global HR Approach: A Catalyst for Success

Nike’s global HR strategy is a key pillar of its success. By investing in local talent, providing training and development opportunities, and fostering a culture of empowerment, Nike cultivates a workforce that is well-equipped to drive innovation, adapt to local markets, and contribute to the company’s global growth. Nike’s commitment to ethical labor practices and fair working conditions further reinforces its reputation as a responsible and sustainable corporate citizen . As Nike continues to expand its global footprint, its strong HR practices will remain essential for attracting, retaining, and developing the diverse talent required to achieve sustainable success in the ever-evolving global marketplace.

As a global leader in the sportswear industry, Nike recognizes its responsibility to go beyond profit and contribute to a more sustainable and equitable world. The company has made significant strides in integrating social responsibility and sustainability into its business practices, demonstrating its commitment to making a positive impact on the communities and environments it touches .

Minimizing Environmental Impact: A Sustainable Future

Nike has taken concrete steps to reduce its environmental footprint, aligning with its vision of “ Move to Zero ” by 2040. The company has set ambitious goals to achieve zero carbon emissions from its operations and supply chain, zero waste to landfill, and 100% sustainably sourced materials.

• Energy Efficiency: Nike has implemented energy-efficient practices in its facilities, including installing LED lighting, optimizing HVAC systems, and utilizing renewable energy sources.
• Materials Innovation: The company is constantly exploring innovative materials that reduce environmental impact, such as recycled polyester and organic cotton.
• Waste Reduction: Nike has implemented waste reduction initiatives across its operations, including recycling, composting, and reducing packaging.
• Supply Chain Sustainability: Nike is working with its suppliers to implement sustainable practices, such as reducing water consumption and adopting cleaner production processes.

Supporting Social Causes: Impacting Communities

Nike’s commitment to social responsibility extends beyond environmental sustainability to encompass initiatives that empower communities and address social issues. The company supports a range of causes, including education, economic empowerment, and gender equality .

• Education Initiatives: Nike has partnered with organizations like the Nike Foundation to provide educational opportunities for underserved communities, particularly girls in developing countries.
• Economic Empowerment: The company supports initiatives that promote entrepreneurship and job creation in underserved communities, such as microfinance programs and vocational training.
• Gender Equality: Nike is committed to gender equality and has implemented initiatives to promote women’s leadership and economic participation in sports and beyond.

Transparency in Reporting: Accountability and Stewardship

Nike is committed to transparency in reporting its environmental and social performance. The company publishes annual sustainability reports that detail its progress towards its sustainability goals and its efforts to support social causes. Nike also engages with stakeholders, including employees, customers, and investors, to communicate its sustainability commitments and progress.

Nike’s Global Social Responsibility and Sustainability Strategy: A Blueprint for the Future

Nike’s commitment to social responsibility and sustainability is not just a marketing ploy but a fundamental part of its business strategy. The company recognizes that sustainable practices not only benefit the environment but also contribute to long-term profitability, attract talent, and foster a positive brand reputation. As Nike continues to expand its global footprint, its commitment to social responsibility and sustainability will be crucial for maintaining its position as a leader in the sportswear industry and building a more sustainable future for all.

Navigating the Chinese Market: A Success Story of Adaptability

Nike’s expansion into the Chinese market serves as a compelling case study of the company’s ability to adapt its strategy to suit local preferences and cultural nuances. With a population of over 1.4 billion people and a rapidly growing middle class, China represents a significant market opportunity for global brands like Nike . However, entering this complex and diverse market also presents unique challenges and requires a deep understanding of local consumer behavior.

Challenges and Opportunities in the Chinese Market

Nike faced several challenges when entering the Chinese market, including:

• Establishing Brand Recognition: In a market dominated by local brands like Anta and Li-Ning , Nike had to establish its brand identity and gain recognition among Chinese consumers.
• Adapting Products to Local Preferences: Chinese consumers have different tastes and preferences for sportswear than those in Western markets. Nike had to adapt its product offerings to suit local preferences, such as incorporating traditional Chinese design elements.
• Building a Strong Distribution Network: Establishing a robust distribution network in China was crucial to reach a wide audience and provide a seamless shopping experience for Chinese consumers.
• Navigating Cultural Differences: Effective cross-cultural communication was essential for Nike to build relationships with Chinese partners, suppliers, and consumers.

Nike’s Strategies for Successful Market Entry

To overcome these challenges and capture market share in China, Nike implemented a multi-pronged strategy:

• Strategic Partnerships: Nike formed partnerships with local distributors and retailers to gain access to the market and build trust with Chinese consumers.
• Localized Marketing Campaigns: Nike tailored its marketing campaigns to resonate with Chinese consumers, using local celebrities, sporting events, and cultural references.
• Product Innovation: Nike developed products specifically for the Chinese market, incorporating traditional Chinese design elements and catering to local preferences.
• Digital Engagement: Nike embraced digital marketing, leveraging social media platforms and e-commerce channels to reach a wider audience and connect with Chinese consumers.

Nike’s Success in China: A Testament to Adaptability

Nike’s strategy proved to be successful, as the company has become a leading player in the Chinese sportswear market . In 2021, China accounted for over 20% of Nike’s global revenue (Ko & Zhang, 2022). Nike’s success in China highlights the importance of understanding local markets and adapting strategies to suit cultural preferences. The company’s ability to navigate the complexities of the Chinese market and establish a strong brand presence serves as an inspiration for other global brands seeking to expand into emerging markets.

Nike’s journey to becoming a global powerhouse is a testament to the company’s strategic approach to international expansion. By embracing adaptability, cultural sensitivity, and ethical business practices, Nike has successfully navigated the complexities of diverse markets , establishing a strong brand presence and achieving remarkable growth.

Key Takeaways from Nike’s Global Strategy

• Adaptive Pricing Strategy: Nike’s premium pricing strategy has been crucial in maintaining its brand image while also catering to a wider consumer base through tiered pricing and value-added services.
• Targeted Market Segmentation: Nike has effectively segmented global markets, understanding the specific needs and preferences of consumers in each region. This has enabled the company to tailor its marketing campaigns, products, and distribution channels to local tastes.
• Omnichannel Marketing Approach: Nike’s combination of direct-to-consumer stores, partnerships with wholesalers and distributors, and robust digital marketing has ensured a seamless customer experience across various channels.
• Global Manufacturing Strategy with Ethical Sourcing: Nike’s outsourcing approach to manufacturing has allowed for cost-efficiency and access to specialized expertise. However, the company has also prioritized ethical labor practices and fair working conditions, ensuring a sustainable supply chain.
• Commitment to Human Resource Development: Nike invests heavily in developing the skills and capabilities of its local employees, fostering a global talent pool that drives innovation and contributes to the company’s success.
• Global Social Responsibility and Sustainability: Nike’s commitment to environmental sustainability and social responsibility has earned the company a positive reputation and contributed to long-term profitability.
• Effective Cross-Cultural Communication: Nike has demonstrated a deep understanding of cultural differences, building relationships with local partners, suppliers, and consumers through effective cross-cultural communication.

Nike’s remarkable journey to global dominance is a testament to its strategic approach to international expansion , emphasizing adaptability, cultural sensitivity, and ethical business practices. As Nike continues to conquer new markets, Accelingo stands as a trusted partner, providing the professional translation services that are essential for success in diverse cultural landscapes.

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Global Sourcing at Nike

By: Nien-he Hsieh, Michael W. Toffel, Olivia Hull

This case explores the evolution of Nike's global product sourcing strategy, in particular ongoing efforts to improve working conditions at its suppliers' factories. When the case opens in July 2018,…

• Length: 31 page(s)
• Publication Date: Mar 7, 2019
• Discipline: Business Ethics
• Product #: 619008-PDF-ENG

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This case explores the evolution of Nike's global product sourcing strategy, in particular ongoing efforts to improve working conditions at its suppliers' factories. When the case opens in July 2018, Vice President of Sourcing Amanda Tucker and her colleagues in Nike's Global Sourcing and Manufacturing division were focusing on three key supply chain challenges: sourcing from suppliers that meet compliance standards, challenging and encouraging suppliers to improve capabilities, and being responsive to consumer demand across the world.

Mar 7, 2019 (Revised: Jun 11, 2019)

Discipline:

Business Ethics

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Asia, Central America and Caribbean, Oregon

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Sports apparel

Harvard Business School

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• Assignments
• Assignment: RC TOM Challenge 2017

Globalization vs. Isolationism: Finding Nike’s New Competitive Advantage?

How do global brands thrive in an era of isolationism and protectionism? For Nike, the answer is lobbying, automation and reshoring.

Nike is synonymous with globalization. Over the past two decades, Nike has been one of the pioneers in outsourcing production to the developing world. Today, Nike’s contracted factories employ 1.02 million workers in 42 countries to produce all its products, with 29% of product made in China and 44% in Vietnam [1] [2] . While this global supply chain has undoubtedly been a competitive advantage for this international brand, the Trump Administration’s “America First” approach of economic nationalism and the reemergence of protectionist policies globally represent a significant challenge to Nike’s worldwide manufacturing strategy [3] .

Today, Nike faces an average 11% tariff on shoes imported into the US, with the looming threat of an increase to 45% for goods coming from China [4] [5] . While such policies are designed to protect domestic industries, they can have perverse outcomes: import costs passed on to the consumer, drive up prices and leadto cost-push inflation. Lower consumption as wage growth trails price increases, would be a huge hit to Nike, where 48% of its revenue generated in 2016 was in North America [6] . As such, how should Nike respond in an era of protectionism and isolationism?

Strategy to Date

Lobbying: In the short term, the company has ramped up lobbying efforts in support of free trade and open boards. As an example, Nike has been a vocal proponent of the Trans Pacific Partnership. The US brand threw its weight behind the program, promising to create 10,000 jobs in advanced manufacturing domestically should TPP become law [7] . For Nike, TPP would have reduced tariffs on trainers made in countries like Vietnam [8] . However, with the US’ withdrawal from the deal, competitors in countries like Australia are reaping the rewards of trade deals negotiated, which the US might otherwise have won via TPP [9] .

Automation: Nike’s medium-term solution to protectionist pressures is to reduce reliance on cheap foreign labor in its production process through automation. In partnership with Flex, a high-tech manufacturing company, Nike has introduced greater efficiencies into the otherwise labor-intensive process of making shoes, with an estimated 20% of production set to be automated by 2023 [10] .

Pathways to Just Digital Future

Exhibit A: Nike and Adidas are expected to be industry leaders in manufacturing automation and innovation  [10] .

Reshoring: Increase in automation have bolstered the case for reshoring the manufacturing process where high domestic labor costs were previously a barrier to reentry. The benefits of addressing the issue of protectionism through this approach is twofold:

• Tariff Reduction: local manufacturing implies zero tariffs. Nike already has a precedence for employing this strategy. Independent factories in Argentina, India, Brazil and Mexico were established in response to high import tariffs in these geographies [11] [12] .
• Supply chain reinvention : Historically, it can take up to 18 months to develop a new shoe – a sizable dilemma in the era of “fast fashion”. Footwear companies have had to predict trends ahead of time which often results in a mismatch between on-hand inventory and consumer demand. Faster delivery and shorter production cycles through onshore productions present an opportunity to cut costs and increase sales to meet consumer trends [13] .

Is it enough?

Lobbying 2.0: While Trump aims to minimize US involvement in multinational trade agreements, Nike should continue to push for trade agreements even on a bilateral basis, particularly with the Asia Pacific bloc. Although automation allows cost savings and efficiency gains, manufacturing remains largely entrenched in Asia. As Kasper Rorsted, CEO of Adidas notes, complete reshoring is an “illusion” and “[by moving to the US] you are moving into a market where you have no competence…that goes for the entire industry, I’m not speaking just for Adidas.” [14] Moreover, as North America is expected to drive only ~16% of total company growth through to 2022, expanding its global footprint is key to Nike’s growth trajectory [15] .

Vertical Supply Chain : For automation and reshoring to succeed, Nike also needs to consider and innovate on other parts of its supply chain. Today, China’s competitive advantage owes in part to its vertical supply chain, and specifically its extensive material base. For Nike’s onshore strategy to be competitive, R&D in materials manufacturing should also be a priority.

High skilled labor : Over the past two decades, the eclipse of domestic manufacturing brought on by offshoring, has starved the economy of high skilled labor in advance manufacturing. As Rose and Reeves write, “the US suffered a net loss of nearly 19,000 manufacturing firms between 2001 and 2015” [16] . To address this gap, Nike should invest in education, training programs and skill development to develop the talent pool needed to support reshoring and automation efforts, necessitated by protectionism.

Looking Ahead

As we look ahead, two key questions emerge:

• Will protectionism achieve its intended outcome and bring back jobs at scale?
• Is reshoring here to stay? Will renewable energies and lower transportation costs coupled with automation and innovation advances in the developing world, reinvigorate the case for offshoring?

(Word count: 798)

[1] Bissell-Linsk, J. (2017). Nike’s focus on robotics threatens Asia’s low-cost workforce. Financial Times. [online] Available at: https://www.ft.com/content/585866fc-a841-11e7-ab55-27219df83c97 [Accessed 8 Nov. 2017].

[2] Sole, J., Singlehurst, L., Greenberger, K. and Cheng, T. (2017). The Need for Speed Hits Athletic Wear. Brand Apparel & Footwear. Morgan Stanley, pp.11.

[3] Mann, T., Paletta, D. and Tangel, A. (2017). Donald Trump Warns of Penalties If U.S. Firms Take Jobs Abroad. The Wall Street Journal. [online] Available at: https://www.wsj.com/articles/trump-takes-credit-for-saving-indiana-jobs-1480628609 [Accessed 10 Nov. 2017].

[4] Sole, J., Singlehurst, L., Greenberger, K. and Cheng, T. (2017). The Need for Speed Hits Athletic Wear. Brand Apparel & Footwear. Morgan Stanley, pp.12.

[5] Haberman, M. (2016). Donald Trump Says He Favors Big Tariffs on Chinese Exports. New York Times. [online] Available at: https://www.nytimes.com/politics/first-draft/2016/01/07/donald-trump-says-he-favors-big-tariffs-on-chinese-exports/?_r=0 [Accessed 9 Nov. 2017].

[6] Statista. (2017). Nike’s revenue worldwide from 2009 to 2017, by region (in million U.S. dollars). [online] Available at: https://www-statista-com.ezp-prod1.hul.harvard.edu/statistics/241692/nikes-sales-by-region-since-2007/ [Accessed 9 Nov. 2017].

[7] Financial Times (2017). What business thinks of Donald Trump. [online] Available at: https://ig.ft.com/sites/trump-business-reaction/ [Accessed 9 Nov. 2017].

[8] Financial Times (2017). What business thinks of Donald Trump. [online] Available at: https://ig.ft.com/sites/trump-business-reaction/ [Accessed 9 Nov. 2017].

[9] Donnan, S. (2017). Globalisation marches on without Trump. Financial Times. [online] Available at: https://www.ft.com/content/d81ca8cc-bfdd-11e7-b8a3-38a6e068f464 [Accessed 11 Nov. 2017].

[10] Sole, J., Singlehurst, L., Greenberger, K. and Cheng, T. (2017). The Need for Speed Hits Athletic Wear. Brand Apparel & Footwear. Morgan Stanley, pp.7.

[11] Bain, M. (2016). Your sneakers are a case study in why Trump’s America-first trade policy is nonsense. [online] Quartz. Available at: https://qz.com/859628/your-nike-sneakers-are-a-case-study-in-why-trumps-protectionist-america-first-trade-policy-is-nonsense/ [Accessed 13 Nov. 2017].

[12] Sole, J., Singlehurst, L., Greenberger, K. and Cheng, T. (2017). The Need for Speed Hits Athletic Wear. Brand Apparel & Footwear. Morgan Stanley, pp.33.

[13] Sole, J., Singlehurst, L., Greenberger, K. and Cheng, T. (2017). The Need for Speed Hits Athletic Wear. Brand Apparel & Footwear. Morgan Stanley, pp.6.

[14] Hancock, T. (2017). Adidas boss says large-scale reshoring is ‘an illusion’. Financial Times. [online] Available at: https://www.ft.com/content/39b353a6-263c-11e7-8691-d5f7e0cd0a16 [Accessed 12 Nov. 2017].

[15] Sole, J., Ryan, E. and Kessler, M. (2017). Analyst day out in the spotlight, way out of the quagmire. Morgan Stanley, pp.12.

[16] Rose, J. and Reeves, M. (2017). Rethinking Your Supply Chain in an Era of Protectionism. [online] Harvard Business Review. Available at: https://hbr.org/2017/03/rethinking-your-supply-chain-in-an-era-of-protectionism [Accessed 11 Nov. 2017].

Student comments on Globalization vs. Isolationism: Finding Nike’s New Competitive Advantage?

In addition to pioneering production outsourcing, Nike has also increasingly become a pioneer in sustainability; I’m wondering if its sustainability efforts may help to support the kind of vertical supply chain described in the article. For example, recent breakthroughs in Nike’s product design have made the company less dependent upon geographically-specific materials (e.g., cotton); it is instead becoming more advanced at using recycled and synthetic materials, which may be produced just as easily/cheaply in the U.S. as in China. Nike’s R&D in sustainability, not just in manufacturing broadly, may help it competitively should the re-shoring trend continue.

I agreed NIKE’s strategy to go lobbying, integrate supply chain vertically, and the effort of hiring more skillful labors. What NIKE can do more is to extent its sustainable practice. Not only focus on product raw materials but also on how to make overall supply chain more efficient and sustainable, which lower the cost at the same time to cover the complexity post by regulations.

This is a very well thought out analysis of how Nike can mitigate the downsides of isolationism.

Before diving into the solutions more, it’s important to set the current climate Nike is facing. According to its earnings report which was released this past October, quarterly sales were flat company-wide when compared to last year, and sales in North America were “particularly weak.” North American revenues declined 3% because of “an unexpected decline in North America wholesale revenue.”

Given this competitive landscape, Nike cannot afford to lose more customers. I support option “Lobbying 2.0,” and it seems as though Nike is already making strides in this area. According to the Washington Post, “Nike is amping up lobbying efforts in Washington, this month hiring Alpine Group to lobby on the Trans-Pacific Partnership, a free trade agreement that could eliminate tariffs on shoes made abroad.”

Source: https://www.washingtonpost.com/business/capitalbusiness/nike-fights-to-lower-duties-on-foreign-made-shoes-freedom-to-marry-lobbies-to-repeal-doma/2013/02/15/d417750a-7496-11e2-95e4-6148e45d7adb_story.html?utm_term=.b62f5f7aa52b

Great questions, and a big dilemma. To answer your question- I think automation and innovation advances in the developing world will certainly reinvigorate the companies in the developing countries and Nike needs to take advantage of that. I think you touched a key point when you said that North America is expected to drive only ~16% of total company growth through to 2022, this has to be in the back of Nike’s mind when they analyze their financials going forward. The US government should also understand that the US market is not necessarily the biggest and most meaningful to all companies, and thus while they want to “bring businesses back home” when they make harsh demands and high tariffs on imported goods, they may be driving companies away from the US and into competing markets.

This is a really interesting piece and I think representative of what a lot of companies are dealing with now. It reminds me a bit of the Fuyao case discussion we had.

I worry about making any serious, capital-intensive decisions in response to Trump’s isolationist posture. There are two reasons for this: (1) it’s unclear how ideologically com mitted Trump truly is to isolationism (versus it being a policy he will support insofar as his base feels like he’s ‘protecting’ them) and therefore how persistent and comprehensive his opposition to free trade policies will be, (2) there is a significant chance that he will lose the 2020 election and be replaced by someone more open to free trade. Therefore, investments in upskilling domestic labor or high-tech machinery for domestic automated production may not be the best way to allocate resources, particularly since the payoffs in those things are not immediate. Perhaps an alternative or additional area to focus on is getting Trump to offer massive tax breaks for some symbolic amount of on-shoring… the tax breaks would offset uncompetitive production costs while the company waits for the next political administration. Trump actually did this early on in his tenure with United Technologies, brokering a deal that had Indiana offer ridiculous tax benefits to keep a modest number of jobs from being sent elsewhere ( http://fortune.com/2016/12/02/indiana-carrier-jobs-tax-breaks-mexico/ ).

All of the above said, I think a lot of the decision comes down to whether you think this isolationist position is going to be pretty sticky in American politics for the medium term. There’s a good argument to be said that it will be given that both the far left and far right wings of the country’s two parties actually agree on having isolationist trade policies, and both heavily influence federal policymaking.

Nike appears to have a well thought strategy against isolationism by automation and reshoring for the short term. If I were in Nike’s shoe, however, I would be cautious of the merit that automation can actually bring. For instance, would the massive capital investment and depreciation costs of automated factory be more economical compared to the cheap factory and labor in low cost countries ? Is there enough skilled labors to operate the machines and what if the automated factory needs maintenance and renovation every few years ? How would such kind of (unpredictable) operation still benefit Nike and other companies of the supply chain inside Nike’s eco-system ? My point of view is, the beautiful strategy may not be as attractive when actually implemented. That said, a deliberate estimation of the total return on investment and total cost of ownership may be worth a review before going forward. I also believe the same can be said whether advances in developing countries would reinvigorate the case for offshoring in the future.

This is a very interesting topic and well-written article. As a cynic, I am not convinced that Nike would like to bring more jobs to the U.S.

Protectionism is currently en vogue among the world’s politicians but many of the jobs that have been lost to technology are not coming back. We should not be afraid of other countries, in the long run, but robots. [1] Even if I am proven wrong and Nike opens up a few factories in the U.S., the efficiencies gained from automation will not go unnoticed. Nike’s supply chain will eventually have limited dependence on factory workers.

[1] http://fortune.com/2017/04/05/jobs-automation-artificial-intelligence-robotics/

Well detailed piece and an exciting dynamic in the apparel industry! The case for onshoring is driven by the “fast fashion” trend you mentioned and the need for firms to respond to customer demands or preferences at an unprecedented speed. When companies like Nike first brought manufacturing and supply operations overseas it was in an effort to lower labor costs to increase margins on final products. In a digital environment where automated robotics can replace many labor costs and customers are looking for new and improved goods at a faster pace the new efficiency company’s can integrate is flow of information and data [1].

These elements of the design and supply process today essentially necessitate onshoring [2]. If the North American Market is Nike’s largest and most strategic being closer to market is advantageous. Coupled with the savings from tariffs (at their current or elevated levels) and the decreased speed to market, onshoring allows Nike to more effectively serve its customers while decreasing the risks associated with global transportation of raw materials, technology, or finished products.

[1] Paul Page, “Today’s Top Supply Chain and Logistics News From WSJ”, Wall Street Journal, October 31, 2017. [2] Tara Donaldson, “Next Step for Sourcing? Go Where No Supply Chain Has Gone Before”, Sourcing Jounral, October 27, 2017.

I think what makes this issue so interesting, particularly given the company you have chosen to highlight, is the backlash that Nike has faced for decades in light of “sweatshop” allegations. For a company that has such a dubious reputation regarding labor practices to now be pressured to bring these same jobs back to the U.S. via reshoring is truly bewildering. From a lobbying perspective, it will be interesting to see how various political groups shake out in terms of supporting U.S. job creation versus a “not in my backyard” mentality regarding mass apparel manufacturing and the traditional labor conditions associated with the industry. Thanks for such a thoughtful and provocative piece.

Thanks for your engaging post on an important American company during interesting political times. Looking ahead, I think your question of whether or not protectionism will bring jobs back at scale is the right question, and I think that it will only be a sustainable movement if those driving the movement correctly incentivize companies to do so. The potential corporate tax reduction would be a huge step in the direction of protectionist sustainability.

This movement (if it lasts) also seems like an amazing opportunity for a major player like Nike to innovate around its automation and supply chain reinvention. A significant R&D project to reinvent the Nike factory could benefit Nike’s facilities around the world and enable them to decrease costs and decrease lead times for new products. Furthermore, this may also be an opportunity to take advantage of local incentives that may be offered for construction of new facilities (like Tesla was able to capture for building its Gigafactory in NV).

Thanks for sharing this story! I found it striking that only 16% of total company growth through 2022 is expected to come from the U.S. This fact on its own led me to question how significant an issue this actually is for Nike. While much of the strategy, marketing, and finance functions may be housed in the U.S., it seems that Nike could benefit by further diversifying its operations across the globe, not only to avoid the threat of isolationist policies, but also because it may allow the company to more efficiently serve the 84% of total growth coming from outside the U.S. From this perspective, I think Nike should be focused on policies that foster investments in education and support overall business, and it doesn’t seem that there should be as much of a focus on policies that are targeted towards trade and manufacturing in the U.S. I don’t believe reshoring will be entirely necessary, but I do think supporting policies that promote the development of highly skilled labor in the U.S. will ultimately be in Nike’s interest in the long run.

It is so interesting to see that the vicious cycle at work: protectionist trade policy creating import-tariffs, some fraction of which can be passed on to consumers, and then the company must respond in order to minimize the effect of this tariff on their costs (if they need to eat the portion that consumers won’t accept) or on their revenues (if increased costs affect demands). I am fascinated by the idea that companies are responding to isolationist political trends with increased automation, which drives their costs down and makes the tariff more bearable.

I question whether these political trends will stand the test of time, or whether a two-party system (at least in the top office of the US) will always have enough turnover that any forceful isolationist legislation will be overturned within 2-4 years (and vice versa). With this kind of turnover rate, are companies actually incentivized to invest capital in building manufacturing plants, in a geography in which (as you point out) they have no core competencies?

I agree with your proposed next steps for Nike – continue financing lobbyists, driving supply chain efficiencies. If Nike projected more growth from US sales, would they be more willing to consider ‘reshoring’? Would all of the upstream material partners also need to ‘reshore’ (assuming they’re not vertically integrated when they first reshore back to the US) in order to fully benefit from isolationist policies?

American companies outsourced labor work to other countries not only because labor costs are cheaper there but also because many American people do not want to work at a low wage. Protectionism is not a sustainable way to bring jobs back to America. Forcing Nike to move production to onshore will incur large increase in labor cost and production cost for Nike. There is no guarantee that the output and efficiency level in onshore facility can match that of facilities in other countries. Nike can increase automation work, which requires some capital investment, so that it will require less labor and thus lower labor costs. However, if automation work goes up and labor work goes down, this defeats the purpose of bringing jobs back to the U.S. Maybe the facilities in emerging countries and in the U.S. can serve different customers. I think there is no need to shut down the factories overseas as the consumer buying power in emerging markets is increasing.

Great paper, as you discuss and present a very relative and important topic which is broad reaching through the business and political arenas. Nike is one of the most well known global brands that is changing the way it operates due to changing isolationist views by parties both in and outside of the company. It will be interesting to see how global sales and revenues are impacted by the stance Nike is taking, and how it is re-positioning it’s supply chain management and structure as well as general feelings towards free trade. Additionally, I think the automation topic was initially separate and unique from the isolationist stance, but now that companies such as Nike are altering their business model in line with the isolationist view – they are concurrently taking advantage of this opportunity to implement improvements to the production process via automation.

I think this is an interesting subject that many companies are struggling with. I think one of the biggest questions is whether a company is willing to bet that the isolationist trend is a short-term or long-term one. Many of the strategies you’re discussing that Nike is either already doing or will do are based on assumptions that these trends will continue. In my personal opinion, globalization cannot be stopped and in the long-term will overcome isolationist actions we’re seeing now. So should Nike re-shore its production if in the long-term this isn’t the most cost-effective method of competing? I like the fact that they are trying to combat the labor cost issue through automation rather than moving its workforce as this is a strategy that can be successful regardless of regulation or new tariffs. I think Nike has to be careful to implement strategies that can be successful in both a global and isolationist environment since it is something that will constantly be evolving through time and different administrations.

Thank you for the article, Isabel! I’m shocked to learn that Nike may be exposed to a 45% tariff on shoes imported to the US from China. That would be devastating to Nike’s business. As we look ahead, I think Nike needs to prepare for both scenarios you outlined in your questions: (1) train workers in the US and invest R&D in materials manufacturing in the event policy becomes isolationist and (2) identify key countries offshore where it would be advantageous for Nike to have factories. A drastic policy change like increasing tariffs from ~10% to 45% is dichotomist outcome that Nike should be prepared for either way.

This is a very interesting topic and even more interesting as it relates to Nike, the forerunner of footwear importation before it was forced to build its own brand and only outsource production to Japanese manufacturers. I completely agree with the Adidas Chief Executive that it’s illogical and financially nonviable to reshore and I further think that any reshoring that is going to happen will be limited and designed to be just enough to appease the politicians.

More than 90% of Nike’s operations are located outside of the USA. It’s hard to imagine how a significant portion of that could be relocated back to the USA especially as global business serving the global market. It is quite clear that any onshoring that will happen will be due to political pressure and may be nothing more than a symbol. However, it may be enough to create enough jobs to make a difference in the for the few who would benefit, regardless of how low skilled those jobs are.

Really nice and well-supported piece. It is interesting to see how US protectionism does not only impact international companies but also US brands with global exposure. The current protectionism also puts Nike and other US companies in a complicated dilemma: should they define their long term strategy based on the current (and limited to 4-8 years) political environment? To address your questions, I can see Protectionism as a double edged sword for US jobs. In the short term, it may lead to reshoring and increasing local jobs. However, it will certainly accelerate automation which at some point will offset the previous job creation. That said, I also believe that Nike may have already started investing in automation, which can be supported with the information showed in Exhibit A of your article. Regardless of US protectionism, Nike knows that it will eventually face higher labor costs in the developing world and then automation will also play a key role there.

Nike is an interesting company in the context of isolationism. Nike has never had a factory in the United States and seems to never intend to have one. Often, we have seen Trump take on company’s that are moving factories from the US abroad. Phil Knight’s original strategy in the business was to use the arbitrage of offshore manufacturing in the US shoe market. Given that Nike is a brand that is part of the American way of life, I wonder if that position would insulate it from any large imposed tariffs and the fact that it has never had a US factory.

Protectionist policies are an interesting question with respect to Nike. The company has historically conducted manufacturing offshore due to cost advantages / labor arbitrage, but as we’ve seen vis-a-vis the recent iPhone 10 debacle at Foxconn and other suppliers, labor arbitrage is hardly a sustainable strategy going forward. Further, “speed to market” has been a hugely important area of focus for Nike over the past several years, and irrespective of protectionist trade policies, the company has made a very deliberate shift towards near shore manufacturing in response to consumer demands, not due to the political climate. In addition, as the company’s business shifts increasingly towards emerging markets such as China and Southeast Asia (around 40% of Nike’s business is from North America, and this will decline over time), production will naturally shift towards those high growth markets. Nike’s long term decisions will hardly be governed by a tenuous, ephemeral political administration that has demonstrated little capability to execute on its stated agenda.

Isolationism will clearly be a difficult trend for Nike to combat. It appears that Lobbying in the shorter term is one way the company is fighting back. However, 11% import tariffs in the Trumpian era is going to be a difficult trend to combat.

I highly doubt that this America first rhetoric and policy will result in economic benefits for the United States. What it has done is create incentives for more automation in these industries which will in the long term likely remove more manufacturing jobs here at home.

In response however, Nike’s approach has been robust. Setting up factories in high import countries was a smart immediate step for the company. Additionally, hiring and training high skilled workforces will fall in line with the President’s wishes and will hopefully result in positive outcomes.

I don’t think protectionism will achieve its intended goal. It is not aligned with the fundamental interest of a US-based multi-national corporation. An MNC will seek the global source of labor with the lowest cost to build its competitive edge. Meanwhile, the US consumers also benefit from the low price incurred accordingly. However, what politician thinks is to increase the local jobs. These two motives don’t align well. It is not advisable to force companies to create more jobs at the sacrifice of their economic interest or competitive advantage. This probably will result in the company’s operating inefficiently and cut off jobs in the end.

In this globalized world, what the US should think about is how to better educate its people so that they can assume the jobs with high value in the value chain. Low-end jobs are either face the challenge of being transferred to emerging market or being replaced by automation or artificial intelligence.

Very well written and interesting read Isabel! While I am skeptical of the government being able to impose a 45% tariff due to retaliation from China, I agree that such isolationist policies will hasten adoption of advanced automation and AI-based technologies in factories. I am curious to see if Nike can find ways to source raw materials and move onshore some of the up-stream activities.

It seems that offshore manufacturing is in the DNA of the Nike business model, as the labor costs have been so significantly differently. But what if automation changes that? What if a sneaker built by robots and a few skilled production line managers makes US truly competitive? Nike and primary competitor adidas seem to be investing heavily in developing products and automated manufacturing capacity [1]. In fact, Adidas is building a factory in Atlanta this year [2]. If were sitting in Beaverton watching the increasing trend toward Isolationism around the world I would be exploring blue prints for smaller more automated factories that could bring the production closer to the markets they serve and ofter protection from increasing tariffs. Just don’t tell Trump that it’s robots and not the american electorate that will be working the line.

[1] https://www.recode.net/2016/9/27/13065822/adidas-shoe-robots-manufacturing-factory-jobs [2] http://www.businessinsider.com/the-future-of-shoe-manufacturing-in-america-2017-3

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Product Innovation in the Global Fashion Industry pp 79–111 Cite as

Nike: An Innovation Journey

• Michelle Childs 5 &
• Byoungho Jin 6  
• First Online: 29 November 2017

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3 Citations

Part of the book series: Palgrave Studies in Practice: Global Fashion Brand Management ((PSP:GFBM))

Nike is an American multinational company that has evolved to become a global leader in athletic wear with annual sales exceeding $21 billion in 2016, more than half of which is attributed to international markets. Since its inception in 1964, Nike has been an innovation leader in product development, marketing and consumer experience. Due to a dedication to continuous innovation, Nike has been able to sustain a competitive advantage within the athletic apparel and footwear marketplace. This case highlights key points in Nike’s journey of innovation and examines how Nike has successfully emerged as a global champion within the athletic wear industry. Based on these analyzed strategies, this case provides implications that are relevant for practitioners and academics.

• Athletic wear
• Product development innovation
• Marketing innovation
• Consumer experience innovation

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Childs, M., Jin, B. (2018). Nike: An Innovation Journey. In: Jin, B., Cedrola, E. (eds) Product Innovation in the Global Fashion Industry. Palgrave Studies in Practice: Global Fashion Brand Management . Palgrave Pivot, New York. https://doi.org/10.1057/978-1-137-52349-5_4

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Global Sourcing at Nike

• Format: Print
• | Language: English
• | Pages: 31

About The Authors

Nien-he Hsieh

Michael W. Toffel

Related work.

• June 2019 (Revised January 2023)
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Case Study | Inside Nike’s Radical Direct-to-Consumer Strategy

• Chantal Fernandez

In October 2020, in the middle of a global pandemic that had infected 188 countries, causing record sales damage across the retail sector, Nike’s share price hit an all-time high.

Like other retailers, Nike had been forced to close most of its network of more than 900 stores across the world, as had its key wholesale partners like Nordstrom and Foot Locker.

But the American sportswear giant’s performance during the pandemic, when its online sales spiked, signalled to many that Nike had the competency to prosper long term, in a future that will be increasingly defined by e-commerce and digital brand connections.

It was a validation of a strategy that Nike prioritised three years ago, dubbing it “Consumer Direct Offense,” but the seeds of the approach go back almost a decade.

ADVERTISEMENT

Above all, Nike is a marketing company. It doesn’t just sell sneakers; it sells the brand aspiration that imbues those sneakers with meaning. But to achieve the reach required to scale its business, Nike’s distribution strategy had long-relied on third-party retailers to sell its products, even if the consumer experience offered by those partners diluted its brand.

But in a future increasingly defined by e-commerce, fast-moving trends and, above all, the rising power of branding to drive consumer preference when competitors are just a click away, Nike realised that in order to thrive, it needed to take control of its distribution to better manage its brand and deepen its connection with consumers.

It was definitely architecting a new retail, and a bold, retail vision for Nike.

Such an evolution is easier said than done, especially for a business as large as Nike in a category as competitive as sportswear. But by radically cutting back on its wholesale distribution and raising the bar for brand experience with the third-party partners that remained; expanding its focus on content, community and customisation to keep customers close; investing in its data analytics and logistics capabilities; and rethinking the role of the store as a brand stage, Nike drove a veritable direct-to-consumer revolution.

When the pandemic hit, these shifts went into overdrive.

“It was definitely architecting a new retail, and a bold, retail vision for Nike,” said Heidi O’Neill, Nike’s president of consumer and marketplace, and one of the most prominent executives leading the brand’s new strategy in recent years. “But it started with our consumer, and we knew that consumers wanted a more direct relationship with us today.”

In this case study, BoF breaks down Nike’s pioneering direct-to consumer strategy and how it has worked to the brand’s advantage, propelling its share price to new heights during the global crisis of 2020.

Click below to read the case study now.

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12E.6 Nike and Globalization

This set uses Nike as a case study of globalization to examine the costs and benefits of a worldwide business on the individual workers and on the national economies involved.

• HSS 12.6.1 Identify the gains in consumption and production efficiency from trade, with emphasis on the main products and changing geographic patterns of twentieth-century trade among countries in the Western Hemisphere.
• ELD.PI.11-12.1.Em Engage in conversational exchanges and express ideas on familiar current events and academic topics by asking and answering yes-no questions and wh- questions and responding using phrases and short sentences.
• ELD.PI.11-12.2.Em Collaborate with peers to engage in short, grade-appropriate written exchanges and writing projects, using technology as appropriate.
• ELD.PI.11-12.3.Em Negotiate with or persuade others in conversations (e.g., ask for clarification or repetition) using learned phrases (e.g., Could you repeat that please? I believe…) and open responses to express and defend opinions.
• ELD.PI.11-12.4.Em Adjust language choices according to the context (e.g., classroom, community) and audience (e.g., peers, teachers).
• ELD.PI.9-10.6c.Br Use knowledge of morphology (e.g., derivational suffixes), context, reference materials, and visual cues to determine the meaning, including figurative and connotative meanings, of unknown and multiple-meaning words on a variety of new topics.
• CCSS.ELA-Literacy.RH.11-12.7 Integrate and evaluate multiple sources of information presented in diverse formats and media (e.g., visually, quantitatively, as well as in words) in order to address a question or solve a problem.
• CCSS.ELA-Literacy.RH.11-12.8 Evaluate an author\'s premises, claims, and evidence by corroborating or challenging them with other information.
• CCSS.ELA-Literacy.RH.11-12.9 Integrate information from diverse sources, both primary and secondary, into a coherent understanding of an idea or event, noting discrepancies among sources.

Investigative Question

How does globalization affect international and national economies, and individuals.

Due to trade liberalization policies (the lowering of trade barriers between countries), along with advances in technology, communication, and transportation that speed up trade between countries, all economies throughout the world are more closely integrated with one another today than at any other time in the past. As part of understanding what globalization is, students consider the question: How does globalization affect international and national economies, and individuals? Students explore how changes in government policy, technology, information, and the rise of global markets contributed to this process. A sign that the U.S. economy is more globally integrated is the large percentage of exports and imports in GDP. Students will learn what exports and imports are, examine a trade deficit and surplus, and examine the balance of payments. They learn how the United States economy can be influenced by external factors, such as an increase in the price of oil on the global market or major changes in the incomes of its trading partners.

Trade occurs between individuals and firms globally due to differing comparative advantages. To address the uneven consequences of globalization, students consider this question: Why are there critics of globalization? International trade can be mutually beneficial to countries as it encourages specialization based on comparative advantage, increases overall productivity and employment, and lowers prices for consumers. The growth of world trade has contributed to an overall increase in personal income in our recent history, but this increase has not been uniform across nations and within nations. Critics of globalization assert that freer trade does not equate with fair trade; certain nations and classes within nations benefit while other nations and classes within nations do not share in the prosperity. Students can analyze protectionist measures used to reduce imports and examine the positive and negative impacts upon different groups, such as the effect of trade restrictions implemented during the Great Depression. Students might collect data, evaluate the sources of the data, and use the data to analyze particular trade restrictions of the United States and its trading partners. They might use the same process to defend or argue against current trade agreements and disputes between the United States and other countries.

Globalization refers to the faster and freer flow of goods and services, inputs, money, and ideas around the world, as well as the emergence of a global production system used by multinational corporations. Financial transactions, whether in the form of credit, stocks, or bonds, also flow quickly around the world and cause economies to be closely integrated with one another. Students learn that trade liberalization, technology, information, and lower costs of transportation have all fostered globalization. Students can trace the impact of globalization for themselves, for different groups in their own economy, and for groups in other countries. Students can also use their knowledge from tenth-grade world history in examining developing countries and studying how they have been impacted by globalization.

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• The National Archives and Records Administration (NARA) . NARA has developed a vast collection of document analysis worksheets, ready for classroom use. Their website offers teachers a wide collection of customizable tools – appropriate for working with photographs, maps, written documents, and more. NARA has also customized their tools to meet the needs of young learners, and intermediate or secondary students.

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Nike Globalization Issues: The Good and the Bad

Introduction

Welcome to The Knowledge Nest, your trusted source of insightful information on various topics. In this article, we delve into the impacts of globalization on Nike's international operations. Globalization has significantly influenced Nike's business model, supply chain, and social and economic dynamics. We will explore both the positive and negative aspects of Nike's globalization strategy and its effects on communities and society.

The Positive Impacts of Globalization on Nike

Globalization has presented Nike with numerous opportunities to expand its brand worldwide. Through offshore manufacturing and sourcing, Nike has been able to reduce production costs, increase profit margins, and maintain competitive pricing for its products. This has allowed the company to offer affordable and high-quality athletic footwear and apparel to a global consumer base.

Expanding Market Reach

Nike's globalization efforts have enabled the brand to reach new markets and tap into new customer segments around the world. By establishing manufacturing facilities in different countries, Nike has been able to cater to the unique needs and preferences of local consumers. This localized approach to product development and marketing has helped Nike gain a competitive edge and increase its market share globally.

Job Creation and Economic Growth

One of the significant positive impacts of Nike's globalization strategy is the generation of employment opportunities in the regions where the company operates. Nike's manufacturing facilities create jobs for thousands of individuals, providing them with stable income and supporting local economies. Additionally, Nike's presence can stimulate economic growth by attracting investments and fostering the development of ancillary industries in the supply chain.

Technological Advancements and Innovation

Globalization has facilitated knowledge exchange and collaboration among Nike's global network of suppliers, designers, and researchers. This exchange of ideas and expertise has accelerated technological advancements and innovation within the company. Through leveraging the expertise of talented individuals worldwide, Nike has been able to develop cutting-edge products and deliver superior athletic performance.

The Negative Impacts of Globalization on Nike

While globalization has brought several benefits to Nike, it has also raised concerns and criticisms related to labor practices, environmental sustainability, and socio-economic inequality. It is important to address these negative impacts to ensure responsible and sustainable business practices.

Labor Exploitation and Sweatshops

Nike has faced criticism in the past for its labor practices in some developing countries. Reports of low wages, long working hours, and unsafe working conditions in Nike's supply chain have raised concerns about labor exploitation and sweatshop conditions. Although Nike has taken steps to address these issues, ensuring fair and ethical practices throughout the supply chain remains a challenge.

Environmental Footprint

The expansion of Nike's global operations has resulted in increased carbon emissions, waste generation, and resource consumption. As a responsible global citizen, Nike needs to prioritize sustainability and reduce its environmental footprint. The company has made efforts to adopt eco-friendly manufacturing practices and invest in sustainable materials, but continuous improvement is necessary to mitigate the negative environmental impacts of globalization.

Socio-Economic Inequality

On a broader scale, globalization has contributed to socio-economic inequality in various regions. The concentration of wealth and power in the hands of multinational corporations like Nike can lead to disparities in income and opportunities. Nike must take proactive measures to support local communities, promote fair trade practices, and ensure that the benefits of globalization are more evenly distributed.

In conclusion, the impacts of globalization on Nike's international operations are both positive and negative. While it has allowed Nike to expand its market reach, create jobs, and foster innovation, it has also raised concerns about labor practices, environmental sustainability, and socio-economic inequality. It is crucial for Nike to address these challenges and uphold ethical and responsible business practices. As consumers, we should also be aware of these issues and support companies that prioritize sustainability and social responsibility in their globalization strategies.

References:

• "Nike's Globalization Strategies and Impacts" - Journal of International Business Research
• "The Effects of Globalization on Labor Practices in the Apparel Industry" - International Journal of Business and Social Science
• "Globalization and Sustainable Development: A Case Study of Nike" - International Journal of Business, Humanities, and Technology

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How Globalization Impacts Operations Management

Nike Marketing Strategy 2024 - 7 Effective Findings from Case Studies

• 17 Comments
• Published on Sep 20 2023

Table of Contents

Nike marketing strategy: top effective findings from case studies, history of nike, goals and objectives - nike marketing strategy, nike’s target audience, nike marketing strategy: challenges, solutions, and its approaches, how nike’s marketing strategy evolved, how to apply the nike’s marketing strategy to your brand, growth and market reach, what to take.

Nike has taken an image of an athleisure company and an American multinational corporation, but, the brand has taken way the world with inspiration, emotion, diversity, and unity with its simple marketing campaigns.

The core purpose of Nike marketing strategy is to keep moving the world forward. Over the years, it has launched and introduced various stylish and sustainable services from remembering the Swoosh, and the tagline ” Just Do It” which does not only come into our mind.

Enlisting the action of Nike's marketing strategies is remarkable. What makes it so special to get the products?

There are multiple reasons why people buy Nike products in this case study explained, but, one absolutely convincing means is that it is more than a brand that builds communities, planet protection, and makes sports accessible beyond diverse horizons. We have also discussed the top Nike Marketing Strategies that you can learn in 2024.

Purpose of the Article

The main aim of this article by Sprintzeal caters to information as social proof from various case studies about a process, product, or service that can resolve marketing issues.

Known as one of the largest athletic apparel companies,  Nike (Nike, Inc.)  is an American multinational association that deals with the design, development, manufacture, and global marketing and sales of footwear, accessories, apparel, equipment, and services. Began with a mission to, “bring inspiration and innovation to every athlete” in the world It is based in Beaverton, Oregon, NIKE, Inc. includes the Nike, Converse, and Jordan brands, and many more. 

It was founded by Bill Bowerman and his former student Phil Knight in 1964.

Nike plans to build a 3.2 million square foot expansion to its World Headquarters in Beaverton.

The Nike brand strategy focuses on bringing the culture of the invention to today’s athletes while solving issues for the upcoming generation.

Nike has acquired and sold several footwear and apparel companies over the years. It has also acquired Starter, Zodiac, Celect, and Datalogue and purchased RTFKT Studios.

It was founded in 1964 by Bill Bowerman, a track-and-field coach at the University of Oregon, and his former student Phil Knight as Blue Ribbon Sports. The brand was rebranded in the 60s, their company was relaunched as Nike in 1971.

In 1972, Blue Ribbon sports which later became Nike unveils "Moon Shoes

In 1974, the Waffle Trainer was patented, featuring Bill's famous Waffle outsole.

In 1982, introduced the Air Force 1 basketball shoe.

In 1994, Nike signs LeBron James

In 2000, launched Nike Shox in the market.

In 2008, introduced the Flyware shoe and signs Derek Jeter

In 2018, introduced React Element 87. Nike launched a new "Just do it" ad campaign featuring Colin Kaepernick.

In 2020, Nike Air-max 97G "Peace and love" was introduced. It also reveals uniforms for the 2020 Tokyo Olympics.

The main priorities and objectives of Nike marketing strategy,

• It includes promoting diversity, equity, and inclusion.
• Innovations that create sustainable materials and approaches to tackle environmental impact.
• Towards advancing a transparent and responsible supply chain.
• To build community by investing in organizations that pay efforts on economic empowerment, education, and equality.
• Uplifts unity with the current generation through sport and encourages an active lifestyle to reach their potential future.

To truly understand the effectiveness of Nike's marketing strategy, it's crucial to dissect the various segments within their vast target audience. Nike's ability to connect with different consumer groups is a central theme in this Nike marketing strategy case study. Let's delve deeper into these segments:

Athletes, Professionals, and Enthusiasts: Nike casts a wide net, catering to athletes at all levels, from elite professionals to passionate enthusiasts. Their product range is meticulously designed to enhance athletic performance, making Nike the preferred choice for athletes worldwide.

Running Enthusiasts: Nike's dominance in the running domain is unparalleled. They offer an extensive selection of running shoes, apparel, and accessories tailored to the specific needs of runners, whether they're seasoned marathoners or occasional joggers.

Sports Enthusiasts: Beyond athletes, Nike appeals to anyone with a fervent passion for sports. Their marketing efforts invite individuals to adopt the mindset of an athlete, whether they actively engage in sports or simply lead an active lifestyle.

Women in Sports: Recognizing the growing influence of women in sports, Nike has dedicated a significant portion of their marketing efforts to empower female athletes and sports enthusiasts.

Young Athletes: Nike understands the importance of cultivating brand loyalty from a young age. Their marketing strategies are crafted to inspire and engage young athletes, nurturing a lifelong connection to the brand.

Sustainability Advocates: In recent years, Nike has expanded its reach to consumers who prioritize sustainability and ethical practices. Their marketing seamlessly integrates these values, resonating with the environmentally conscious audience.

This diverse and inclusive approach to their target audience has been a pivotal factor in the success of Nike's marketing strategy. It showcases their ability to resonate with a wide range of consumers, from professional athletes to environmentally conscious individuals.

Striving to create more eco-friendly materials as possible, bioplastic for their sneakers is used as a replacement for plastic, leather, and other materials.

Well known for the fact that Nike promotes its products through sponsorship agreements with influencing athletes, professional teams, and athletic teams.

- High level competition of Nike with Adidas and Reebok and other companies with the closely similar product line and common target markets. 

- Limited exports of Nike products due to legal restrictions can be one reason for fewer sales or revenues.

- The economic and political situation of those countries manufacturing Nike products is also one main challenge.

- Being a global brand, controversies are sensitive to the company image.

Hence, these is some of the reasons why strategies are relevant for Nike.

The questions still arise, why do people go after Nike products even if several brands apply the same approach? Does Nike market segmentation do it differently?

With being able to pull effective  Nike marketing plan  guidelines over past years; the other part also had faced consequences and drove up on solutions-making with,

1) Advertising

One of the key parts of the  Nike advertising strategy  is advertising through television ads and other social media forms with affiliate marketing.

In 1982, Nike aired its first three national television ads during the broadcast of the New York Marathon.

2) New Media Marketing

Having to understand the importance of having different mediums along with display advertising, content marketing, and social media promotions, boosts Nike global marketing strategy in the right direction.

Nike is risk-taker, with the way to early application of internet marketing, email management technologies, narrowcast communication technologies, and broadcast to build multimedia marketing campaigns.

3) Emotional Branding

How undeniable that Nike always puts powerful emotions through the brand! The advertisement seldomly briefs on its products and services.

A few of the best ads and commercials from Nike quotes for motivation, inspiration, and greatness can be:

“We gave up giving up”,

“All you have to do is pick up your feet.”

“My better is better than your better.”

“Don’t believe you have to be like anybody to be somebody.”

The building of the right emotions by Nike effortlessly comes through curated content and narrative that again narrates a story; a tale of inspiration applicable to anyone to combat their challenges and meet their victory.

Instead, Nike emotional branding has been impactive followed as an effective strategy in the world of marketing at present. It inturns invokes emotions related to success, morale, victory, and self-improvement which makes it a powerful product.

4) Nike Target Market Segmentation

One thing marketers should learn from  nike segmentation targeting and positioning 

is understanding their customer.

And, Nike focuses very well on their main target markets for their product and services i.e., athletes, runners, and sports enthusiasts.

In the running years, it enlarges strategies to lead precise market segments for runners, women, and young athletes. 

An observation is taken into action to create that meets the custom interests as per customer requirements.

5) Convey a Story

To have been accompanied by a global audience, another marketing strategy applies by conveying the story in simple and effective points rather than using descriptive or jargon with their brand voice.

In this way, they connect and try to encourage the masses to chase their dreams and “Just do it”.

An instance as shown in the above image; another excellent technique is their tagline which builds an emotional marketing story that relates to anyone to catch their dream and build customer loyalty,

6) Newsworthiness

This brand strategy uses newsworthiness to impact and appeal to a story. In most cases, it uses recent events or happenings about what people need or want to know.

It is also tricky to decide what stories to cover, but Nike evaluates and continues with newsworthy stories before the release to avoid controversies or false information.

This pattern could be applied based on events that impact your readers all over the world

7) Invest in Customer Loyalty

In Nike, it associates with diverse masses apart from the target audience. Does it have good customer loyalty? Yes. 

With less loyal customers, the challenge to come up with anticipatory decisions and effectively plan your finances can be scary.

One of the reasons the brand is irresistible globally till current which is less surprising is sole because of customer loyalty. The precise, well-executed product and service not only attract new customers but retain customers with good profit margins.

- Nike is releasing “No Finish Line,” a new book that celebrates and figures Nike’s 50 years of game-changing design and innovation in the favor of athletes and sports. It lay down a design vision for the next 50 years.

- It applies measures to create a better future by investing in active and inclusive communities. Nike Community Impact Fund (NCIF), an employee-led and neighborhood-focused approach 

in aid of local community organizations globally for a positive, effective, and making a play for all the kids.

- Nike made about 35% digital and aims to achieve 50% by 2025.

One of the best ephemeral approaches is that a part of Nike’s success goes to influencing and inspirational athletes such as Michael Jordan, Mia Hamm, Roger Federer, Tiger Woods, Kobe Bryant, Lebron James, and many others.

To truly appreciate the efficacy of Nike's marketing strategy, it's essential to trace the evolutionary path it has taken over the years. This retrospective analysis of Nike's marketing strategy is integral to our Nike marketing strategy case study. Here is a comprehensive exploration of the evolution of Nike's marketing approach:

The Early Years: Nike's origins can be traced back to its predecessor, Blue Ribbon Sports, which primarily served as a distributor of Japanese running shoes. During this nascent phase, Nike's strategy was firmly rooted in performance and innovation.

The Birth of Nike: In 1971, Nike emerged as a distinct entity, drawing inspiration from the Greek goddess of victory. This marked the inception of Nike's emphasis on empowerment and achievement, an approach that would become central to their branding.

Celebrities Take Center Stage: The 1980s heralded a new era for Nike, marked by the strategic use of celebrity endorsements, most notably with basketball icon Michael Jordan. These high-profile endorsements solidified a deep emotional connection between Nike and consumers.

The "Just Do It" Era: In 1988, Nike introduced its iconic "Just Do It" slogan, encapsulating the ethos of personal determination and resilience. Swiftly, it became synonymous with the brand's identity and mission.

Digital Transformation: Nike was an early adopter of digital marketing, recognizing the potential of the internet and social media. They harnessed these platforms to engage consumers through multimedia campaigns and create a digital presence that mirrored their innovative spirit.

Emotional Branding: Nike's pivot towards emotional branding represented a pivotal moment in their marketing evolution. Rather than simply showcasing products, they focused on evoking powerful emotions, such as success, motivation, and self-improvement. This shift solidified Nike as a potent and influential brand.

Sustainability and Inclusivity: In recent years, Nike has demonstrated a commitment to sustainability and inclusivity, both in their products and marketing. They aim to create eco-friendly products and promote social responsibility, aligning with the evolving values of today's consumers.

This journey of evolution highlights Nike's remarkable adaptability and capacity to align their strategy with changing consumer landscapes. From their roots in performance and innovation to their current focus on emotional branding, sustainability, and inclusivity, Nike's marketing strategy has continued to resonate with a diverse and ever-changing audience.

To harness the power of Nike's potent marketing strategy for your own brand, it's essential to follow a well-defined blueprint. This section of our Nike marketing strategy case study provides a step-by-step guide on how to apply Nike's principles to your brand effectively:

Know Your Audience Inside Out: Much like Nike, start by conducting thorough market research to understand your target audience's specific needs, preferences, and aspirations. Tailor your products and marketing strategies accordingly.

Forge an Emotional Connection: Take a page from Nike's playbook and aim to create profound emotional connections with your audience. Share compelling stories that resonate with your brand's mission and values, inspiring and motivating your customers.

Embrace the Digital Realm: Leverage the expansive digital landscape, including social media, content marketing, and multimedia campaigns, to amplify your brand's reach. Follow Nike's lead in utilizing these platforms effectively to engage and captivate your audience.

Champion Sustainability and Social Responsibility: If your brand aligns with sustainability and social causes, make them integral to your strategy. Showcase your commitment to positive change through sustainable practices and support for relevant social issues.

Consistency is Key: Maintain a consistent brand image and message across all marketing channels. This consistency not only reinforces your brand identity but also leaves a lasting impression on your audience.

Prioritize Innovation: Continuous innovation should be at the heart of your strategy, much like Nike's dedication to pushing the boundaries. Innovate your products and marketing strategies to stay relevant and capture the full attention of your audience.

Leverage Influencers and Celebrities: Collaborate with influencers or celebrities whose values align seamlessly with your brand's mission. This partnership can help expand your reach and enhance your brand's credibility, similar to Nike's successful partnerships with iconic athletes.

By following these steps, you can effectively incorporate the power of Nike's marketing strategy into your own brand. Building a successful brand, as exemplified in this Nike marketing strategy case study, requires a strategic approach, unwavering dedication, and a profound understanding of your audience's aspirations and needs.

Don't Wait, Just Do It

In the ever-changing field of marketing, the key to success is action. Much like Nike urges you to take action; we encourage you to propel your digital marketing career forward by enrolling in Sprintzeal's Digital Marketing Course. Don’t let your hesitation cost you your opportunities.

Equip yourself with the skills, knowledge, and confidence excel in the digital marketing domain. We curate and design our courseware to ensure you're well-prepared for the dynamic world of digital marketing. So, why delay? Enroll now , and allow us to help you make your career in digital marketing.

As per  Wikipedia , During the Q1 of 2020, the company's online sales have grown by 36%. While the net income in mil. is $6,046 and revenue is $46,710 in 2022. 

As per the Forbes report, Nike's Financial Summary for 2022, the revenue is $46.9 billion with assets of $38.6 billion and profits of $6.1 billion.

The following image gives a glance at the percentage growth with the approaches.

Image Source:  Nike

Final Results

During the article study, we also found that problems may occur subsequently with changes made to the distribution, marketing, and management strategies of Nike.

Companies can refer to Nike's marketing strategy to influence the four Ps i.e, price, product, promotion, and place. New features may expand the changes to higher growth of the product and might develop a new market.

Source 1:  Nike-A Case Study Just Do It

Source 2:  Nike Marketing Case Study

Source 3:  An Investment Analysis Case Study: Nike - NYU Stern

Research Details

This article emphasizes curated study from three case studies apart from Nike’s official website.

Therefore, all the effective strategies are presented for information and education means for readers in response to the current marketing issues along with the given references in this article.

Winning the market is one technique that Nike has been doing so well since its implementation till date. What’s even interesting is having to market its products under its various brands and subsidiaries.

The subsidiaries like Nike+, Nike Golf, Nike Blazers, Nike Pro, Air Jordan, Air Max, and other brands like  Hurley Int., Jordan, and Converse.

In the field of such marketing, digital marketing plays a dominant role. To pursue a career in digital marketing training, choosing from a globally recognized ATO (An accredited training organization) from  Sprintzeal  accelerates your career of interest.

To explore more courses, consider visiting  Sprintzeal’s all courses  and earn a certification to level up your career.

For details or queries in your field,  Click Here  or  chat with our experts , and our course experts will get to you.

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Nchumbeni is a content writer who creates easy-to-read educational blogs, articles, varying client request, and social media content helping millions of learners meet their career goals.

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Home » Management Case Studies » Case Study of Nike: Building a Global Brand Image

Case Study of Nike: Building a Global Brand Image

Brand history.

The idea of Nike began way back in the 1950s. A track coach by the name of Bill Bowerman was at the University of Oregon training his team. Bill was always looking for a competitive edge for his runners, like most of us today look for any advantage we can get. Bill said he tried using different shoes for his runners as well as trying other things to try and make his athletes better. Bill tried to contact the shoes manufactures in attempt to try out his ideas for running shoes. This however failed. In 1955 a track runner by the name of Phil Knight enrolled at Oregon. Phil was on the track team under Bill. Phil graduated from Oregon and acquired his MBA from Stanford University. Phil went on to write a paper that talked about how quality shoes could be made over in Japan and they would be cheaper. Phil called a company in Japan and became a distributor of Tiger shoes in the United States of America. Phil sent some pairs of shoes to his old track coach trying to get Bill to buy the shoes. Instead of buying these shoes Bill offered Phil a partnership to create better running shoes. In 1964 Bill and Phil shook hands and formed Blue Ribbon Sports. The companies’ first move was to order three hundred pairs of shoes from the company in Japan. While Bill examined these shoes and tried to make them better Phil was out selling the shoes. Bill had his track team at Oregon try out his new creations. This became the foundation of Nike. Due to the fact that Bill and Phil still had a full time job, they hired Jeff Johnson as their first full time employee. Jeff soon became a invaluable utility man for the company. In 1971 Jeff created brochures, marketing materials and even shot photos for a catalogue. The very first Blue Ribbon store was opened by Jeff. Meanwhile the relationship between Blue Ribbon and the company from Japan was starting to deteriorate. Bill and Phil made the jump to manufacturing and designing their own footwear. The trade marks swoosh which was introduced at this time. The Nike line of footwear was unveiled in 1972, during the U.S. Track and Field Trials. One pair of the shoes had a huge impression on a dozen multiple runners that wore the new shoes. These shoes incorporated a new style of soles that that had nubs on them that resembled the ridges of a waffle iron. These shoes were also a lot less heavier than most running shoes at the time. With the new image Nike started looking for athletes to wear, promote and elevate the new shoes. The first athlete they found was Steve Prefontaine. Prefontaine never lost a race that was over a mile in distance in his college career between 1969 and 1973. Prefontaine challenged Bill , Phil and their new company to stretch their talents. In turn Prefontaine became an ambassador for Blur Ribbon Sports and Nike. In 1975 Prefontaine died at the age of 24, but his spirit still lives on within Nike. Prefontaine became the “soul of Nike”. When 1980 hit Nike entered the stock market and became a publicly traded company. Once this happened many of the people that started the company moved on with their lives. This included Phil Knight who resigned from his president spot for over a year. In the mid-1980s Nike started to slip from top of its industry. This started to change when Michael Jordan released a new shoe through Nike. When this happened Nike’s bottom line got a boost. In 1988 the slogan that we all know today “Just do it” was introduced as a way for Nike to build on its momentum from their “Revolution” campaign. The Just do it campaign included three advertisements in which a young athlete by the name of Bo Jackson was involved in. By the end of the decade Nike was at the top of their industry once again. The 90’s brought a series of outreach for Nike. At this point in time Nike deepened their commitment into others sports such as soccer and golf. In 1995 Nike signed the whole World Cup wining Brazilian National Team. This also allowed Nike to create jerseys for the team. Nike also landed contracts with both the men’s and woman’s teams for the United States. The biggest thing that Nike was criticized for was when they signed a young golfer by the name of Eldick “Tiger” Woods for huge deal. All of the competition said this was a dumb idea till Tiger won the 1997 Masters by a record 12 strokes. In 2000 a new shoe was introduced. This shoe went by the name of the Nike Shox. This shoe combined more than 15 years of dedication and perseverance. Nike is still the industry leader in their markets and continues to grow more and more each year around the world. This company will have much more to offer in the future.

Brand Equity

Having and holding customers is likely to be a competitive battle which each brand tries all efforts to win. They compete for functional attributes, distinctive services or innovative technologies. So what are emotional and functional benefits which Nike provides for their customers?

Since Nike was set up by someone who has a deep passion for athletics and running, it should come no surprise that product is important. Products that are comfortable, authentic, functionally innovative and uniquely designed. The innovative technology is considered as one of the defining dimensions of Nike’s brand identity and corporate culture.

The simple driving concept has led to some impressive innovations which is considered as one of the defining dimensions of Nike’s brand identity and corporate culture. The first highlight was Air cushioning, using pressurized gas to cushion impact and new materials such as Urethane, that was used first with the Air Max running shoes. More recently, to obtain maximum performance, Nike Sport Research laboratory has discovered the innovative technology such as Shox, which are made mostly of rubber and spring back adding more power to a runner’s stride and Total 90 Concept, a range of equipment to help players perform over 90 minutes of a soccer match. Such innovative technology which Nike has used has gained the strong hold in consumers’ perceptions.

Clearly, functional benefit is the fundamental and classical features to communicate with customers. However, if Nike just provided high quality running shoes to enhance athletic performance, Nike would not be strong brands. Big brands need to be beyond the purely functional relationships. They should create a more strong emotional attachment with core consumers because emotional benefits add richness and depth to the brand and the experience of owning and using the brand. Nike offers emotional benefits which are “the exhilaration of athletic performance excellence; feeling engaged, active, and healthy; exhilaration from admiring professional and college athletes as they perform wearing “your brand” – when they win, you win too”.

Associated brand with the top athletes, Nike tells story of brands which the main themes is sportsmanship and unrelenting effort. These are the story of Michael Jordan who won a record 10th scoring title and was selected as one of the 50 Greatest Players in American’s National basketball association championship. Lance Armstrong survived and won a second straight Tour de France while Tiger Woods completed the career Grand Slam, ensuring his place in golf history at the age where most of us are still wondering what we will do when we grow up. The most three prominent athletes has generated the inspiration for young and next generation of athletes. Nike has succeeded to transfer their inspirations to every single purchaser. Wearing every pair of Nike shoes is to engage a passion for excellence and encourage to do your own thing. “Just do it” – the tagline could sum up all the greatest values of brand which is.

“Just Do It” Campaign

Products are no longer just products, they move beyond the functional meanings. Nowadays, they are definitely social tools serving as a means of communication between the individual and his significant references. Products are considered as a symbol of individuality and uniqueness, and also symbol of affiliation and social identification. It is particularly trued with the fashion brands. Fashion brands such as clothes, bags, shoes and etc satisfy opposing functions, both social identification and distinction among individuals.

Nike must have understood the recipe well. The “Just do It” campaign in the early 1990s would be a perfect example. Losing ground to archival Reebok which was quick initiative on designing “style”, “fashion” aerobics shoes in 1980s, Nike responded dramatically and forcefully by launching the “Just do it” campaign which was mainly focused on person wearing on products instead of product itself.

Purchasing an athlete-endorsed product is one means of symbolically and publicly demonstrating aspirations to be a part of the group and such behaviors are directly influenced by the extent to which a fan identifies with an athlete endorser. Heroes and hero worship was being built as the main themes of advertising. Celebrity endorsements such as Bo Jackson, John McEnroe and Michael Jordon appealed to the consumers sense of belonging and “hipness”. In other words, Americans consumers were convinced that wearing for every part of your life was smart (the shoes are designed for comfort) and hip (everyone else is wearing them; you too can belong to this group). “Just Do It” campaign succeeded (Nike increased its share of the domestic sport shoe business after launching this campaign in America from 18 percent to 43 percent, regained the leader position) because it could fascinate customers in both separating ways. Wearing Nike as a self fulfilling image declaration – “if you are hip, you are probably wearing Nike”. But perhaps most importantly, it could create the desirable needs -“if you want to be hip, wear Nike” .

Brand Loyalty

Luring by good shoe with innovative functionality and athletic aspiration value, Nike has indeed come to mind and heart of its customers. By the mid of 1990s, 77 percent of male Americans from the age of 18 to 25 chose Nike as their favorite shoe. The figure still remains stably despite of that “up” and “down” year Nike has been experience, gaining the high score of customer satisfaction at 79 percent rated by The American Customer Satisfaction Index Organization .

It could be said that loyalty to the Nike brand is driven by many external and internal factors such as brands’ subjective and objective characteristics and loyalty building programs. One visible example of creating innovative method to capture the strong relationships with Nike users is that creating Joga.com, a social network site for foot ball fans. Launching quietly in the early 2006, the site became an instant hit, peaking at 7.5 million viewers when Nike showed Ronaldinho video clips. More than 1 million members from 140 countries signed up by mid July. In this site, fans can create their personal blogs, build communities around favorite teams or players, download video and organize pickup games. By enrolling consumers in building and shaping the content of the website, Nike pulled their loyal customers closer, nurtured deeper bonds of loyalty and advocacy.

Brand Awareness

Brand awareness is the first and crucial stage of consumer’s preference. It refers to the strength of a brand’s presence in the consumers’ mind. Nike has been successful in building awareness. The “Swoosh” symbol has been appeared everywhere, on shoes, hats, billboards and soccer balls across the globe too remarkably to such extent that one author used the title “The Swooshification of the World” on Sports Illustrated column that imaged a future in which the swoosh could surpass sports to become a letter of the alphabet and the new presidential seal, among other things. True be told, the recognition of the ‘swoosh’ is extremely high.

As of 2000, 97 percent of American citizens recognized the brand logo, as the strong brand penetration. Nike could be recognized consistently without identification of brand name, even by the youngest group (aged from 4 to 6 years old). This perhaps may reflect the general level of advertising and promotion that children are exposed to.

How has Nike done to build brand awareness? Sponsorships, advertising and experience focused retailing (Nike town) are three vivid channels that Nike has applied to enhance its brand image and awareness. Among these strategies, athlete endorsements could be considered as the most significant success of Nike brand.

Nike has been invested millions of dollars to associate their brand names with easily recognizable athletes with the aim of brand image building. Athletes at the top of their respective sport such as Micheal Jordan, Tiger Woods, and Lance Armstrong who are well – liked and respected by members of the brand’s target audience are chosen as endorsers to associate the Nike brand with the athlete’s celebrity image. This strategy has been paid off, for example, since Tiger Woods and Nike cooperated, annual sales for Nike Golf have exceeded to nearly $500 million dollars with an estimated 24 percent growth per year in the first five years of the agreement.

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2025 and Beyond

Move to zero.

In the race against climate change we’re creating solutions that are better for all athletes* and the planet. We’ve set bold, science-based targets.

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Scaling Ideas at NIKE is the Game-Changer

In the race against climate change we’re creating solutions that are better for all athletes* and the planet. We’re scaling sustainable innovations throughout our whole business to reduce NIKE's environmental impact. We’ve set bold, science-based targets. And we’re optimistic—our successes and failures over the past 30 years are inspiring the solutions and resolve to create a future in which we all and this beautiful blue ball thrive.

Putting Progress in Perspective

NIKE has the climate impact of a global city. That’s a significant role for a company to play and it motivates us to look at everything we do, because small adjustments lead to big changes. Most people understand NIKE is big. But we thought it would be worthwhile to give that idea more context. NIKE is about 75,400 employees; upwards of 1 million employees in our owned and supplier facilities; over 1,500 physical spaces; and we emitted 11,706,664 metric tons CO2e in FY20. If we were a city, we’d have roughly the population and carbon footprint of Amsterdam, Netherlands.

Materials & Design

Currently, 78% of all NIKE, Jordan, and Converse products contain some recycled material. We’re working to increase that number because adjusting materials, which are about 70% of our total carbon footprint, is one of our biggest opportunities to reduce our impact. Take recycled polyester. This now foundational fabric begins as recycled plastic bottles. They are cleaned, shredded into flakes, converted into pellets, and spun into new, high-quality yarn that delivers peak performance while reducing carbon emissions by up to 30% compared to virgin polyester. One of our most popular product lines, the Tempo Short, is made from at least 75% recycled polyester. Most options come in at 100%. To date, this single product is responsible for pulling 112 million plastic bottles out of landfills and waterways.

Supply Chain

Sustainable materials matter that much more if our manufacturing is done responsibly. Our end-to-end approach looks at carbon, energy, waste, chemistry and water across the entire product lifecycle, ultimately making choices that improve conditions for teams and locations worldwide. Creating products takes energy. And today, that process also makes waste. But there is a growing truth of waste: trash is treasure. One of our greatest inventions is Nike Air. It’s also one of our most sustainable innovations. We’re able to reuse more than 90% of the waste from Air manufacturing, often turning it into new Air bags. This ensures all Nike Air soles are made with at least 50% recycled material. Small changes pave the way to achieve big aims. Since our last Impact Report, we’ve made single digit centimeter adjustments across product manufacturing meaning more than 3.5 million kg of waste was prevented. At scale, these adjustments and innovations are our path to achieving our aims of 100% of the waste from our extended supply chain diverted from landfills and at least 80% recycled back into NIKE products and other goods. We aren’t there yet, but just like our athletes constantly working to be better than they were before, progress is an every day goal.

Completing the Circle

The last phase of a product’s life—getting it to athletes* and, eventually, back from them—is the most challenging sustainability puzzle. Customized goods and next-day delivery are norms. What to do with a well-loved or defective product is blurry. And no one likes receiving a crunched package. So we’re re-thinking it all with ingenuity, science and grit. We’ve set a 2025 goal to donate, refurbish, or recycle 10X more used or defective product than we do today. To achieve this, we’re making it easier for people to return their used product back to us. Active in stores throughout the USA and Europe, we’re scaling Reuse-A-Shoe to stores in Greater China and re-energizing our operations. We’re hosting up-cycling workshops and providing relevant content like the Nike Circular Design Guide to consumers. Recently, we rolled out Nike Refurbished in select North America stores. We’re also hosting up-cycling workshops and providing relevant content like repair & care videos (that will go live this summer) to help extend the life of products. We’re just getting started with some of these services, but our aim is the same as with anything we do. To serve all the planet’s athletes with inspiration and innovation.

A Team Effort

When it comes to re-writing our planet’s future, our aim is to change industry standards along with our products and processes. Because we know that the faster we can collectively do more for the environment, the better it will be for generations to come. We’re also creating ways for each athlete* to take part. Look for the sunburst when shopping NIKE products. Tune in to Talking Trash for discussion and ideas from the NIKE community. Take note of brands’ accountability to larger sustainability agreements like G7 Fashion Pact, Transform to Net Zero and UNFCCC Fashion Industry Charter for Climate Action . Keep an eye out for Membership resources, like Repair & Care videos going live this summer and local store programming.

Related Stories

Impact Report

Take a look at Nike’s long term sustainability goals and how we’re measuring up so far.

Cosmic Unity: Behind The Design

Discover how a basketball shoe designed with at least 25% recycled material by weight, is the next step in Nike's vision of a zero waste future.

Climate and Sport Study

We’ve partnered with Climate Impact Lab to show the connection between a stable climate and athletic performance.

Circular Design Guide

Rethink every process. Reuse every item. Designing for the future starts here. Check it out.

When you see this symbol, you see one small step in our journey to Move to Zero.

Originally published: June 22, 2021

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