Nike is headquartered in a state of art building that has a lake and more excellent and extraordinary facilities for its staff. A strategic objective based on the cost leadership generic strategy is to grow the company’s competitive advantage through new technologies to reduce production costs. This case study analyses the ever-evolving marketing strategies adopted by Nike to become a global brand. The marketing campaign for this product was supported by a memorable TV ad in which the Beatles' Revolution was the soundtrack. Both of these companies have seen rising share price, with Starbucks up 46% and Nike up 32% over one year, and there's good reason to believe that they will continue in that direction. With the rise of digital sales, having an international presence and strategy has become all the more important. Nike has captured approx. On this page, every week Nike sets a new challenge for its followers. 2. The Nike marketing strategy, in summary, is, invest heavily in marketing, use emotional advertising that every human being can identify with, offer premium products at premium prices and sell their products primarily through 3rd party retails stores. The same reasons it's seen so much success in the U.S.: a commitment to the customer experience, which matters everywhere, and strong technological innovation, which gives it the power to manage international growth. Nike Outlines Global Strategy for Creating a More Sustainable Business. By 1971, though BRS revenue had touched $1 million, the business relationship with Onitsuka was turning sour. He used to take help from university runners to test his creations and collect their feedback. To ensure success, Nikes managers must continually examine and improve strategies and approaches used in the 10 strategic decision areas of operations management. It had to be at once very distant from the core business and also very appealing. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Nike was also quick to seize the opportunity offered by social media to engage with a wider customer base so much so that it is now able to link its new hi-tech gadgets to social media platforms. This helped in absorbing shocks during running and jumping. Founded in January 1964 as Blue Ribbon Sports (BRS) by University of Oregon track athlete Philip Knight and his coach Bill Bowerman, the company was initially a distributor for the Japanese shoemaker Onitsuka Co and their brand Tiger. It created convenience so customers in other parts of the world could easily acquire Nike’s products and increased customer satisfaction as a result. The company's innovation debut was in 1979 when it introduced air cushioning technology. But its biggest selling point is the Nike + Fuelband Community on Facebook. This case study analyses the ever-evolving marketing strategies adopted by Nike to become a global brand. But it helps that most of us drink coffee, which makes for a more seamless international transition. We do that by building creative and diverse global teams, making a positive impact in the communities where we live and work and by … Through apps, Nike has come closer to its customers and can study them and communicate with them conveniently. You can read more about them on the official Nike file here. Going global is not a simple task for any company. Nike Global Expansion. Nike didn’t build its … The tie-up with Apple was Nike's realisation that most runners will use iPods or iPhones to listen to music while jogging. Nike's tech growth was also accompanied by social media initiatives. In contrast, a regular apparel seller even after spending huge amounts on advertising can only expect to meet a customer in the store when the customer has already made a decision to go and shop there. 1. This index was actually introduced in the era of Nike+ app but it was not actively promoted until Nike FuelBand was launched. So, to create a platform where a group of people can compare their energy spent, Nike created a new index called Nike Fuel. Many large U.S. companies, such as Nike (NYSE:NKE) are catching on. So now iPhones and iPods come pre-installed with Nike+ app. And yet, Nike’s marketing is not just about selling shoes or athletic apparel–it’s pitching a lifestyle. Starbucks is now in over 80 global markets, and the fourth quarter of 2019 saw a 3% increase in international comps, up from a 1% increase in 2018. What an iconic brand.” I thought to myself. Invented in the mid 1970s by a NASA engineer, it kept up the revenue of Nike for long. Nike's sales philosophy - if you have a body, you are an athlete - had enticed everybody who wanted to think of himself/herself as an athlete or wanted to get more athletic. Today, each Nike sub-brand has its own Facebook page, which runs product specific promotions and features events in a particular sporting activity. In a bid to regain its edge, Nike, in 1987, launched a new product called Air Max. Strong Brand Awareness – Nike is one of the most recognizable brands in the world as its name alone is memorable, easy to pronounce, and very unique. The shoes had two interdependent bags with compressed air inside. January 21, 2010. According to Mintel, 20%of the U.S. athletic market is controlled by Nike. Somewhere in its evolution, Nike also realised the importance of hi-tech gadgets in day-today lives. And it was time for something that would differentiate Nike in the long run. By doing so, they minimise the scope of their corporate responsibilities, concentrating on activities that add the highest value. Returns as of 12/23/2020. Also, the … 31% of the global athletic footwear market. This case study analyses the ever-evolving marketing strategies adopted by Nike to become a global brand. One such activity is the Nike Global Expansion strategy. Stock Advisor launched in February of 2002. Its image as a technological front-runner and high status symbol gives it an edge in sales, and no other athletic shoe company can quite match it in terms of revenue and innovation. Adapting from their origins of supplying trainers to athletes, they’ve evolved to focus on everyone, all across the globe. The combined cost leadership and differentiation generic strategies boost Nike’s performance in the global industry. It was a tool to measure the distance and speed of a run or a walk and was built on a virtually flawless partnership strategy. It had less to do with shoes and more to do with athletes. Instead it uses the social media site to motivate its users to get fit. It seems like everyone knows that here, you'll get a quality cup of coffee in a relaxed environment and a table for your laptop. Currently, Nike has nearly 40 models under this brand name. Our mission is to bring inspiration and innovation to every athlete* in the world. Users can compare the Nike Fuel accumulated and comment on the challenge, motivate each other, share their difficulties and get suggestions on how to improve the general level of fitness. Compared to other specialised players like Jawbone's UP and Fitbit Flex, FuelBand is rather primitive. Market data powered by FactSet and Web Financial Group. Yes, it is back to shoes but with lots of electronics, including Nike Chip Skis. The fact that the company has a global supply chain means that it is subject to the vicissitudes of international trade practices including labor strikes in its overseas locations, currency fluctuations that decrease its margins, as well as lack of control over the geopolitical events happening around the world which have the potential to disrupt its global supply chain. Nike has a strategy of growing in a way that is responsible and ensures long term financial growth. Doing business responsibly has been at the cornerstone of Nike’s growth strategy. NIKE GLOBAL SOCCER MARKETING STRATEGY The Positioning statement of Nike is “For serious athletes, Nike gives confidence that provides the perfect shoe for every sport”. NIKE is a brand of Innovation, Growth and Purpose. Thanks to its technology leap, Nike, it is said, was able to cut down on advertising expenses by 40 per cent without compromising on efficiency and results. This idea of getting a consistently quality product, no matter where one is in the world, seems to translate across countries and cultures. He already thought that it would be beneficial to the company if it used manufacturing plants in other countries outside the United States, because the labor costs would be much lower. “Ah, Nike. Nike plans to achieve greater worldwide dominance through its premium and exclusive products that appeal to a mass audience of fans internationally. She has now turned her focus to helping investors lead happier and richer lives at The Motley Fool. The company aimed to build a profitable global portfolio of branded footwear and apparel, equipment and accessories businesses, to deliver value to all its stakeholders. The whole evolution process has managed to change the concept of what a regular apparel seller is. The company has done a thorough analysis of the issues involved in international operations, including higher development costs and risks related to varying cultural norms. A Nike + Sportwatch was also introduced in combination with the chip. The bags can be seen by the athletes (users) through a 'special window' in the heel or toe shoe. Nike monitors that region thoroughly to find opportunities for community engagement, and the result has been explosive growth. However, notwithstanding positive comps and cash flow from domestic operations, growth is coming from international locations, and Starbucks is cultivating these markets that are slowly catching up. Taking the initiative With the rise of digital sales, having an international presence and strategy has become all the more important. The second quarter of 2020 saw $10.3 billion in revenue and 10% growth, crushing numbers for its closest rival, Adidas (OTC:ADDYY), which saw $7.1 billion and 6% growth in its most recent quarterly report. In many ways, Nike is hard to beat, too. In September 2010, Nike introduced a running app to be used in the latest iPhones. Nike Business Strategy and Competitive Advantage: Nike is the leading brand in sports shoes and apparel industry. A very large infrastructure is essential to manage its global presence well. Nike was cashing in on the most technologically advanced portable device that could do all the tech work brilliantly. In those days, Bowerman would often rip apart the Tiger brand shoes to see how he could make them lighter and better. Although sales to wholesalers accounted for about 68% of Nike’s global revenues in fiscal 2019, … NEW YORK (May 5, 2010) – Today NIKE, Inc. (NYSE: NKE) unveiled its strategy and key initiatives to achieve sustainable, long-term growth across its global portfolio of brands and businesses. Nike- A Truly Global Company: Nike is the world market leader in athletic shoes and apparel and operates in more than 200 countries. With this, iPhone/iPod users can map out their running route and later share it with their Facebook friends. Nike Inc.’s International Strategy Nike Inc. defines its international strategy based on three core strategic questions (This international strategy is also valid for Turkey): What new business concepts could enable NIKE, Inc. to thrive in a sustainable economy? And it is here that Nike Fuel comes into play. The band tracks the wrist movement, predicts the activity performed and the approximate amount of calories burned. Global marketing helps create a strategy for a similar product in a different market. Nike produces a […] An effective distribution strategy would be key for Nike. Nike delivers innovative products, experiences and services to inspire athletes. Outsourced Manufacturing Units: Nike receives footwear from more than 140 factories located in 13 countries across the globe. Known for bringing the best innovations to athletes at every level, it is no surprise that Nike continuously strives for excellence. A design student Carolyn Davidson created the famous 'swoosh' logo for $35. But it was Nike's product. I'm writing this as I sit in a Starbucks (NASDAQ:SBUX) cafe at Charles De Gaulle Airport in Paris, and while the language is different, the experience is very much the same. These areas pertain to the main decisions in managing streamlined opera… Nike's success lies in its ability to understand how innovation can be used to reinforce brand identity: Simona Botti, Nike took a unique approach for its shoe manufacturing process and occupied the mind space as a maker of athletic shoe: Sunil Chandiramani, Michelle Sanusi, Alexander Lazarev, Jesper Milling Jorgensen, Vasyl Latsanych, Setting aside its global strategy helped Gillette in India, How Starbucks survived financial crisis of 2008. Its swoosh symbol is easily recognized by everyone. Consumer Direct Offense strategy grows revenues The company, under its Consumer Direct Offense strategy, is growing its digital presence. Nike Inc (Nike) had been a phenomenal mature sporting goods brand controlling the market share and growing faster than the competitors. The latest Nike products released in end-2012 include Nike + Baseball and Nike + Training Shoes. The power of such customer contact is phenomenal as it gives greater visibility in a single click, generates interactions among customers and gives the company an opportunity to collect info about customers' choices and preferences. It was for the first time that a Beatles song was being used in a TV ad. On this day, Nike introduced its first mass produced gadget, Nike + iPod Sports Kit, in the US market. In 1973, they called their brand Nike after the Greek goddess of victory. So it started to combine new products with hi-tech solutions to give unconventional capabilities to a customer of sportswear. Nike’s Strengths – Internal Strategic Factors. The production of goods in locations other than those in which they are sold has been … The page on Facebook does not say much about the FuelBand. Starbucks and … Today, the estimated market value of Nike is about $10.7 billion. 14. A Review of Nike Offshore Outsourcing Strategy Offshore global outsourcing has been a peculiar strategy adopted by some giant organization basically to cut cost. For example, a Facebook user who wants to know more about the latest basketball shoes or game can turn to Nike Basketball Facebook page. In today’s competitive environment, Nike, one of the global leaders in sporting goods industry, has established a strong position for enhancing athletic life style. The greater share of the gain came from international markets, specifically in China, as these areas have been fueling the company's growth over the past year: Not only are these numbers fantastic, they're also remarkably consistent, which is important for investors to consider when evaluating a company's longer-term sustainability. Cumulative Growth of a $10,000 Investment in Stock Advisor, How Nike's and Starbucks' Global Strategies Keep Them Ahead of Competitors @themotleyfool #stocks $SBUX $NKE $ADDYY, Nike Continues Drawing Bullish Analyst Predictions, Copyright, Trademark and Patent Information. Almost every year after Nike launched its air cushioning technology, it released new versions of Air Max. Although sales growth came in lower than the prior-year period, revenue was up 5% year over year despite the coronavirus turmoil. 13 3.3.1 - Product Nike is a global company with a portfolio based on Nike Inc. (2017) that includes a vast variety of products of footwear, apparel, equipment, and accessories for men, women, boys and girls. It also provides information on the latest game of endorsed athletes. The company was actually selling just a small electronic chip that had to be inserted in the shoe (preferably a special one, but even a regular shoe would do) and a wireless connection device that had to be plugged to an iPod. Meaningful story – They’re selling more than a product; they’re selling aspiration. Riding on the success of this campaign, Nike, a year later, launched an even more empowering series of ads with the tag line "Just do it". The shoes featured gas-filled plastic membranes that could be inserted into the sole for comfort during running. The athletic footwear leader's digital strategy was the … Executive Summary: Constant innovation has been the byword for Nike's success. It requires stability and a core business back at home before any company can grow beyond its borders, and enough brand recognition that it can have the confidence that it will take hold outside of its home country. It paved the way to a truly innovative future of the company. See you at the top! 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