Management 475

Individual Case Analysis

April 22, 2011

Nike, Inc.
By,
Matt Hansen
Background and Current Strategies
Background and History

Nike, Inc. is a major publicly traded sportswear and equipment supplier based in
the United States. The company is headquartered near the Portland metropolitan area in
Beaverton, Oregon. It is the world's leading supplier of athletic shoes and apparel and a
major manufacturer of sports equipment.
The company was founded in January 1964 as Blue Ribbon Sports by Bill
Bowerman and Philip Knight and officially became Nike, Inc. in 1978. The company
takes its name from Nike, the Greek goddess of victory. Nike markets its products under
its own brand as well as Nike Golf, Nike Pro, Air Jordan, Nike Skateboarding and
subsidiaries including Cole Haan, Hurley International, Umbro and Converse. In
addition to manufacturing sportswear and equipment, the company operates retail stores
under the Niketown name. Nike sponsors many high profile athletes and sports teams
around the world, with the highly recognized trademarks of "Just do it" and the “Swoosh”
logo.
Before there was the Swoosh, before there was Nike, there were two visionary
men who pioneered a revolution in athletic footwear that redefined the entire industry.
Bill Bowerman was a nationally respected track and field coach at the University of
Oregon, who was constantly seeking ways to give his athletes a competitive advantage.
He experimented with different track surfaces, re-hydration drinks and most importantly
innovations in running shoes. But the established footwear manufacturers of the 1950s
ignored the ideas he tried to offer them, so Bowerman began cobbling shoes for his
runners.
Philip Knight was a middle distance runner that just so happened to enroll at the
University of Oregon and ran for Bowerman’s program. Upon graduating from Oregon,
Knight earned his MBA in finance from Stanford University, where he wrote a paper that
proposed quality running shoes could be manufactured in Japan that would compete with
more established German brands. Bowerman later stunned Knight by offering to become
his partner, and to provide his footwear design ideas.

Current Strategies
Corporate-What businesses do they compete in?
-Nike’s primary product focus is athletic footwear designed for specific sports or just for
leisure. They also specialize in athletic apparel carrying the same trademarks and brand
names as most of their footwear lines. Some of their newer products consist of
performance equipment under the Nike brand name that includes sport balls, timepieces,
eyewear, skates, bats, and other equipment designed for sports activities. In addition,
they use their subsidiaries to sell other sports related products.

Business Unit-How do they compete?

-The generic strategy of differentiation involves the creation of something that is
perceived by the industry as being unique. Nike is unique and separates themselves from
their competitors in a number of ways. Nike Realizes that in order to be on top of the
industry they need to offer a wider variety of products to develop a sense of culture and
fulfill the needs of their loyal customers. When it comes to segmentation they not only
offer footwear but they also manufacture equipment and apparel, which spreads their
influence in other sports related markets. They also use the subsidiaries to target
different consumer groups.

Inter-organizational- How do they interact?

-Nike has been active in founding and supporting a variety of different international and
non-profit organizations, all aimed at improving standards for workers in various
developing countries. Listed below are a few examples…

United Nations Global Compact-

Launched in 2000, the Global Compact seeks to promote corporate citizenship among
multinational companies. It promotes a core of standards in human rights, labor rights,
and environmental stability. The countries where the MNC’s operate engage in activities
that are aimed at improving these core standards.

Global Alliance for Workers and Communities-

An alliance of private, public, and non-profit organizations that seeks to improve training
opportunities for younger workers in small developing countries. Other known
companies that are port of the Global alliance are the MacArthur Foundation, The Gap
Inc., and World Bank

Fair Labor Association-

President Clinton started the FLA in 1996. It is an American non-profit organization that
seeks to bring together various industry stakeholders to develop standards as well as
monitor these standards around the world.

Functional/Operational- Advertising Strategy

-Their main advertising strategy is to have a dominant presence in the media. They
established their media presence in several major trend-setting cities across the United
States. They used TV ads to link their name with the cities, but the real drivers were
huge billboards and murals on different buildings and such that featured their sponsored
athletes, instead of their products. Their main advertising strategy is too focus on their
celebrity endorsements as well as Nike sponsored sporting events to create awareness of
the brands following. In 2008 they spent a large amount on advertising during the
Olympics. It seems that their advertising strategies have all been superior and efficient
considering the Nike “swoosh” is one of the most known logos in the world today.
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