nike case study pdf

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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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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In 1928 in Chicago, IL, Cole Haan was established by two founders—Trafton Cole and Eddie Haan. The company focused exclusively on men’s footwear before expanding into women’s footwear in 1979 (Shoemetro, 2016 ).

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The Jordan brand was launched in 1984 when basketball star Michael Jordan signed a contract with Nike. An outcome of this five-year, $2.5 million deal was a brand new line of shoes called Air Jordan (Footlocker, 2017 ).

With roots in beach culture, Hurley was established in Southern California in 1999 by Bob Hurley. Initially, it was known for surf-related products but eventually became a youth lifestyle brand (Transworld Survey, 2002 ).

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Department of Retail, Hospitality, and Tourism Management, The University of Tennessee, Knoxville, TN, USA

Michelle Childs

Department of Consumer, Apparel, and Retail Studies, The University of North Carolina at Greensboro, Greensboro, NC, USA

Byoungho Jin

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University of North Carolina at Greensboro, Greensboro, North Carolina, USA

Department of Economics and Law, University of Macerata, Macerata, Italy

Elena Cedrola

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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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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.

• Mark Parker
• John Donahoe
• direct to consumer
• athletic apparel

© 2024 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions

The Best Athletic Shoes for Women Were Designed for Men. Until Now.

Fast-growing start-ups like Hettas, Saysh and Moolah Kicks created sneakers designed specifically for active women. The sportswear giants are watching closely.

Visa, Mastercard Reach $30 Billion Deal With US Retailers

The companies agreed to cap credit-card swipe fees in one of the most significant antitrust settlements ever, following a legal fight that spanned almost two decades.

What a Fashion Company Is Worth Today

In an era of austerity on Wall Street, apparel businesses are more likely to be valued on their profits rather than sales, which usually means lower payouts for founders and investors. That is, if they can find a buyer in the first place.

What’s the Plan at H&M?

The fast fashion giant occupies a shrinking middle ground between Shein and Zara. New CEO Daniel Ervér can lay out the path forward when the company reports quarterly results this week.

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By: C. Roland Christensen, David C. Rikert

Describes the history of Nike, its economic strategy, and the industries in which it competes. The teaching objective is to ask the student to identify and evaluate Nike's economic/technical strategy.

• Length: 31 page(s)
• Publication Date: Oct 16, 1984
• Discipline: General Management
• Product #: 385025-PDF-ENG

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Oct 16, 1984 (Revised: May 15, 1990)

Discipline:

General Management

Geographies:

United States

Industries:

Apparel industry

Harvard Business School

385025-PDF-ENG

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Nike case study