This paper aims to study Nike Inc

through tools like the BCG matrix,

Ansoff matrix, CPM matrix and the
IFE-EFE matrix and provide
suggestions to improve Nike’s
branding strategy.

NIKE BRAND
ANALYSIS AND
BRANDING
STRATEGY SCOPE
Fashion brand management & Strategic
and innovation management

Arshia Chatterjee, Hrithika Mandan, Maitri

Pruthi, Palak Aggarwal and Priyal Goyal
Table of content
Executive Summary 4
Branding strategy 4
Types of branding strategies 5
The product brand 5
Corporate branding 6
Benefit branding 6
The Line Brand 8
The Range Brand 8
The Umbrella Brand 8
The Source Brand 8
The Endorsing Brand 8
Nike Inc. 9
Nike marketing strategy 9
People 9
Community 10
Planet 10
Customer journey map 10
Opportunity of improvement 11
Nike BCG matrix 12
Cash cows 13
Stars 13
Question marks 14
Dogs 14
Nike Ansoff Matrix 14
Product Development 14
Market Penetration 15
Market Development 15
Diversification 16
Nike’s CPM matrix 16
Identification of competitors - Adidas and Puma 17
Adidas’s Strengths 17
Adidas’s Weakness 17
Puma’s Strengths 18
Puma’s Weakness 18
CPM and Critical success factors 20

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 Critical factors 20
Nike’s IFE-EFE matrix 22
IFE 22
EFE 23
Suggested strategies that Nike can implement 24
Nike branding strategy 1 24
Conceptualization 24
Need 24
Purpose 24
Objective 25
Initiation 25
Summary 25
Stakeholders 26
Nike 26
Consumer 26
Feasibility 26
End strategy 26
Nike branding strategy 2 26
Conceptualization 26
Need 26
Purpose 27
Objective 28
Initiation 28
Summary 28
Stakeholders 28
Nike 28
End consumer 28
Feasibility 28
End strategy 28
Nike Branding Strategy 3 - Revamping prices of the product 29
Need 29
Purpose 29
Objective 30
Initiation 30
End Strategy 31
Nike branding strategy 4 31
Conceptualisation 31
Need 31
Purpose 32

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 Objective 32
Initiation 33
Summary 33
Feasibility 33
End Strategy 33
Nike branding strategy 5 33
Conceptualisation 33
Need 33
Purpose 33
Objective 34
Initiation 34
End Strategy 34
Conclusion 35

References 35

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Executive Summary
Strategic planning may be characterized as a systematic effort to produce fundamental
decisions and actions that shape and guide what a business organization is, what it does, and
why it does it. The objective of strategic planning is to develop a map by which to manage an
organization's positioning.

Strategic management is the ongoing planning, monitoring, analysis and assessment of all
necessities an organization needs to meet its goals and objectives. Changes in business
environments will require organizations to constantly assess their strategies for success.
Whereas, a branding strategy, also known as brand development strategy, is the long-term plan
to achieve a series of long-term goals that ultimately result in the identification and preference
of your brand by consumers.

Brand strategy is a plan that encompasses specific, long-term goals that can be achieved with
the evolution of a successful brand - the combined components of your company's character
that make it identifiable.

A well-defined and executed brand strategy affects all aspects of a business and is directly
connected to consumer needs, emotions, and competitive environments.

Hence, in this document, we dive deeper into the strategic management matrices and come up
with suggestions of branding strategies that Nike should take up as a brand.

Branding strategy
A product that’s well-received by a target audience can transform a business. As consumers
become savvier, businesses need to become more strategic in their branding efforts to ensure
their products and services are met with high demand. When it comes to branding strategies,
there is no one-size-fits-all option. A branding strategy, also known as brand development
strategy, is the long-term plan to achieve a series of long-term goals that ultimately result in
the identification and preference of your brand by consumers. A successful branding strategy
encompasses the brand's mission, its promises to its customers, and how these are
communicated.

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Often misconceived, a branding strategy is not the sum of your logo, color palette, or website;
though these creative elements are integral to a successful branding strategy. A branding
strategy revolves around all the intangible elements that over time drive brand awareness, brand
equity, and brand sentiment.

Brand awareness
Brand awareness is a general term that describes how familiar (aware) consumers are with a
brand or its products. Put simply, brand awareness is the measure of how memorable and
recognizable a brand is to its target audience. Establishing brand awareness is a powerful
marketing strategy that leads consumers to develop an instinctive preference towards a brand
and its products. Making a brand recognizable and memorable is at the heart of most marketing
strategies because it is a major force behind brand trust, and ultimately, sales generation.

Brand equity
Brand equity, in marketing, is the worth of a brand in and of itself — i.e., the social value of a
well-known brand name. The owner of a well-known brand name can generate more revenue
simply from brand recognition, as consumers perceive the products of well-known brands as
better than those of lesser-known brands.

Brand sentiment
Brand sentiment refers to the underlying emotion expressed in a mention of your brand. Brand
sentiment can convey positive, negative, or neutral opinions in customer's comments.

Types of branding strategies

The product brand

● Product branding focuses on making a single product distinct and recognizable.
Symbols or designs are an essential part of product branding to help your customers
identify your product easily.

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Corporate branding
● Corporate branding is a core value of business and a philosophy that a business develops
to present itself to the world and its own employees. Effective corporate brands often
seek to display the company’s mission, personality, and core values in each point of
contact it has with prospective customers, current customers, and past customers.
● For example, Nike’s core values and mission are recognizable across all of their
platforms and products. Nike’s mission statement is “To bring inspiration and
innovation to every athlete in the world.” And its slogan, next to their famous swoosh
check mark logo, is “Just do it”. As a corporate brand, Nike positions themselves as a
brand for athletes, sports enthusiasts, and anyone who is passionate about fitness. They
also make it clear that they believe anyone can be an athlete.

Benefit branding
● Benefits-based branding is the concept of replacing the what of the product with the
why of the product in the messaging. Promotional campaigns and brand messaging
under this strategic technique focuses on the utility of the product and what it can help
people achieve rather than bombarding them with the specifications or the features of
the product itself.
● Nike, by selling the idea of running, is selling its shoes indirectly. Time and again Nike
ads have showcased a protagonist battling against a challenge and coming out on top,
incidentally, using Nike products, such as the Find Your Greatness campaign

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The Line Brand
Under line branding strategy, complementary products combine to form a complete whole with
a common concept.The brand appeals to a well defined segment of the market who
acknowledge its worthiness and like the brand concept. They go hand in hand with the brand
concept or application.

The Range Brand

Range branding permits brand’s expansion into nearby territories of complementary products
which support the main product’s usage. Brands can move beyond product complementary.
The expertise developed in some area by the firm is used in launching different products. Range
brands encompass many products under a single banner. They share a common promise and
range of brand’s area of competence. A single brand concept brings products together.

The Umbrella Brand

Umbrella branding is referred to as a marketing practice which involves selling several related
products under the name of a single brand. Umbrella Branding (umbrella brand) also known as
(family branding) involves creating good brand equity for a single brand.
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The Source Brand
Source or double branding strategy combines the firm’s name with the product brand name. It
is the hybrid of umbrella brand and product brand strategy. The product is given a brand name
and is combined with the name of the firm. he product stands to benefit from what the company
has been able to cultivate in terms of awareness expertise, attribute and reputation associations.

The Endorsing Brand

The endorsing brand strategy is one of the least expensive ways of giving substance to a
company name and allowing it to achieve a minimal brand status.

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Nike Inc.
Nike is an American multinational corporation that is engaged in the design, development,
manufacturing, and worldwide marketing and sales of footwear, apparel, equipment,
accessories, and services. The company is headquartered near Beaverton, Oregon, in the
Portland metropolitan area. It is the world's largest supplier of athletic shoes and apparel and
a major manufacturer of sports equipment, with revenue in excess of US$37.4 billion in its
fiscal year 2020 (ending May 31, 2020). In 2020 the brand alone was valued in excess of $32
billion, making it the most valuable brand among sports businesses.
Nike, Inc., formerly (1964–78) Blue Ribbon Sports, an American sportswear company
headquartered in Beaverton, Oregon. It was founded in 1964 as Blue Ribbon Sports by Bill
Bowerman, a track-and-field coach at the University of Oregon, and his former student Phil
Knight. They opened their first retail outlet in 1966 and launched the Nike brand shoe in 1972.
The company was renamed Nike, Inc., in 1978 and went public two years later. By the early
21st century, Nike had retail outlets and distributors in more than 170 countries, and its logo—
a curved check mark called the “swoosh”—was recognized throughout the world. (The Editors
of Encyclopaedia Britannica, 2019)

Nike marketing strategy

● Mission and vision: ‘Bring inspiration and innovation to every athlete in the world (if
you have a body, you are an athlete)’
● In addition to their established mission and vision statement, Nike has developed 29
industry leading targets for 2025 according to FY20 NIKE, Inc. Impact Report (2020).
These targets are divided into three subcategories: People, Community, and Planet.
● Nike raced ahead of the pack by exploiting its brand power to move from athletics
footwear into athletics clothing, turning itself into a symbol of fitness and well-being.
It then went several steps further, positioning itself as an athletic lifestyle company.
Today, the company offers innovative and stylish products, backed by marketing that
combines traditional advertising with imaginative schemes.

People

➔ Improved diverse representation and hiring

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 ➔ Equal and competitive pay & benefits for employees
➔ Health & safety efforts such as improved workspaces
➔ Inclusive culture & engagement concerning focus on improving access for all athletes
➔ Education & professional development
➔ Business diversity & inclusion concerning suppliers
➔ Foundational expectations in terms of labour, health, safety, and environmental
standards.

Community

➔ Active kids
➔ Inclusive communities which concern supporting organizations in regards of racial
inequality
➔ Employee engagement
➔ Community investment

Planet

➔ Carbon, reduction of greenhouse gasses

➔ Waste reduction in manufacturing. Refurbished/recycled/donated products
➔ Water usage reduction
➔ Chemistry alternatives that are cleaner

Customer journey map

The customer journey map helps us understand the target customer's brand experience with
Nike and identifies scope of improvement.

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 Customer Evaluation of Choice of sales Purchase and
Need recognition Orientation
journey alternatives channel usage

What is the The customer The customer feels The customer finds
The customer looks
The customer thinks about the need to evaluate the right fit with the
customer for sales channel
needs a new pair of possible avenues of alternatives help of customer
thinking or for best service and
running shoes purchase according considering the size service. Community
feeling? deal
to need of the shoe market formation

What is the Comparing Visiting several Comparing prices, Engaging with Nike
Customer defines
different brand websites and services, return community, sharing
customer’s what the specific
products in order to physical stores for policy, delivery experience of social
actions footwear needs are
find the right fit the right fit options media

High profile
What is the athletes and
Nike targets the
customer’s celebrities Physical Nike
customer with a Physical Nike Store, Nike application,
promoting the Store, retailer,
touchpoint customised add on
brand, Nike PR
retailer, website or
website or mobile
community, social
with the a digital platform mobile application media, Email
events and application
business? and hoardings
customer usage
blogs

Figure: Customer journey map of Nike

Source: Primary data

Opportunity of improvement

Within the first stage of the customer journey, it would be desirable if the customer
immediately considers Nike as their best option. Subsequently, the customer would base their
specific needs around the product offer from Nike.

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Nike BCG matrix

Figure: Nike BCG matrix

➔ The matrix reveals two factors that companies should consider when deciding where to
invest—company competitiveness, and market attractiveness—with relative market
share and growth rate as the underlying drivers of these factors.

➔ Each of the four quadrants represents a specific combination of relative market share,
and growth:

◆ Low Growth, High Share. Companies should milk these “cash cows” for cash
to reinvest.
◆ High Growth, High Share. Companies should significantly invest in these
“stars” as they have high future potential.
◆ High Growth, Low Share. Companies should invest in or discard these
“question marks,” depending on their chances of becoming stars.
◆ Low Share, Low Growth. Companies should liquidate, divest, or reposition
these “pets.”

➔ Nike’s operating segment are apparel, equipment, and footwear with the operating
regions in Europe, Africa, Middle East, US, Americas and Asia Pacific. It introduces
the “Swift technology”, which helps in increasing the track times to 1.13%. Soccer or
football wear is Europe’s #1. For better understanding the Nike’s market position and
to analyze that whether it is able to capitalize the products, BCG matrix is used for

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 dividing the different segments of the products and benchmark the performance to the
strongest competitors.

Figure: Nike revenue division (2021)

Source: statista

Cash cows

These are the products that are the market leaders, and bring more of the revenue in the
company, as compared to the cash they consume. These have more market share as compared
to market growth. This provides cash for turning the question mark in cash cow products.
Hardware, equipment and apparels are the cash cow of Nike. The market growth rate of
apparel and hardware are 7.67% and -0.43%, however, market shares are 1.12 and 0.93. Nike
endorses many famous celebrities like Rihanna for the advertisement purpose to expand the
women’s segment, and bring more designs and products in the women category.

Stars

Figure: Nike footwear global marketshare 2020

Source: Statista

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These products generate highest amount of cash and have highest market growth of the
company, but there is the possibility of these products turning into cash cow for the company,
if the growth strategies are not sustained properly. Footwear are the Nike’s start item, which
has 16.07% of market growth and 1.97% of market share. Nike SHOX has also introduced
different types of footwear and still it continues towards boom. It profit recover, and growing
to 30% to reach around $1.2 billion. Nike’s footwear are famous across the globe as the most
qualitative item, and many famous athletes use it. Nike Jordans have also recently become
status symbol goods in the streetwear market.

Question marks

These are the problem child of the company, which have the more market growth as compare
to market share, however, if the effective strategies are made by the company and use
efficiently, then the products can be converted into cash cow. Converse, Jordan and Hurley
are considered as the question mark of the company. These are the brands which are involve in
the manufacturing of the apparel and accessories of the Nike. Converse is almost out of the
town, because many athletes switch to competitors or stop using it. Hurley and Jordan need
effective strategies as they both have the potential to grow and increase the sales.

Dogs

These are the products which are at break even point for the company, as they do not consume
much cash nor they generate enough profit. For Nike Skateboarding (Nike SB) are
categorized in the dog quadrant, as it is not considered as the core skateboarding brand in the
skateboarding community and did not get much support from the people. Still it is operating,
as Nike is the sports brand and Skateboarding is one of the sub categories of sports.

Nike Ansoff Matrix

Product Development

When the organizations decide to bring innovative products for their existing customers
through changing designs, product features or characteristics, to retain existing customers then
it means a firm is using an intensive growth plan through product development. It is the primary

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growth plan for Nike. Product development deals with the innovation of the latest goods to
increase the profit income of the firm and is involved in this intensive growth plan. For instance,
the mission statement of Nike focuses on the execution of new and innovative product features
like unique and different designs of shoes. Modern techniques increase the number of goods
and keep them apart from market rivalry. Despite fluctuating buying behavior of the consumer
the value and attractiveness of new products remain the same. Therefore, the product
development strategy of Nike supports its generic competitive strategy of differentiation. The
main objective of this intensive growth plan is to expand the market share of Shoe Company
by integrating the latest technologies in the design and quality of its sports shoes.

Market Penetration

When a firm uses an intensive growth plan to penetrate the market by producing the same
product in the same market and market segment but at different price levels then it is called
market penetration. It is the secondary growth plan executed by Nike to penetrate the existing
market. This strategy helps in generating large profits on sales. The market penetration strategy
of Nike is to distribute more and an extensive number of athletic shoes to American customers.
Although, due to having a leading position in the global shoe market, penetration strategy is
considered a secondary plan of Nike. The company is penetrating the competitive market
through various other manners like the cost leadership strategy of a firm has extended its market
penetration due to reasonable productivity. The major objective of this strategy is to grow
market share. Nike is selling its shoes and bags at a very low price and customers are always
attracted to the low price. In this way, more and more customers are buying their product that
increases the market share of a company.

Market Development

It is the most profitable strategy of a company because it helps to expand the company’s growth
by focusing on different markets and its segments. Nike is planning to open its shoe retailing
shops in Africa and the Middle East to generate more profit through sales. However, the growth
of a company can be determined through a worldwide market saturation of Nike shops. It has
also been observed that an intensive growth plan is playing a vital role in the financial,
demographic and geographical growth of a firm. Whereas, a generic competitive plan of

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differentiation supports the company to interfere in the fresh market by producing attractive
products. The strategic objective related to market development is to generate revenues by
entering into new markets of Africa and the Middle East.

Diversification

It deals with the introduction of new products and services in a new market to reduce and
recover losses. The least important growth strategy for Nike is Diversification. This plan is
based on the production of new products into new markets to endeavour business but Nike has
already executed this strategy at the beginning of the business operations like the development
of apparel and sports goods in the product Mix. In earlier times, the production of the company
was based only on sports shoes. The competitive generic plan of differentiation for Nike can
be supported by diversification. The major goal of this strategy is to reduce the chances of
financial risks by entering into new markets

Nike’s CPM matrix

A competitive profile matrix (CPM) allows the firm’s owners to evaluate their firms against
their key rivals by using critical success factors (Zimmerer,Scarborough, & Wilson, 2008).
According To David (2011,) “A CPM identifies a firm's major competitors and its particular
strengths and weaknesses in relation to sample firm’s strategic position.

The above definitions of CPM signify two important tasks:

● firstly, the identification of competitors as well as their strengths and weaknesses,
● and secondly, the identification of key or critical success factors. (Bhattacharjee, 2015,
69)

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Identification of competitors - Adidas and Puma

Adidas’s Strengths
● According to Forbes, it is ranked third (Nike is first and ESPN is second) with a brand
value of $6.8 billion.
● The company has a strong marketing strategy that fuels the demand for its products.
Adidas is a big player in the athletic wear market and focuses on making high-quality
products that are also stylish.
● Adidas has put a premium on product quality above all else. In 2018, EUR 153 million
was invested in research and development (0.7 percent of its annual net sales). One of
the driving forces behind its ever-expanding consumer base is high-quality, creative
products.
● Although the Adidas brand is limited to the sportswear market, the company's products
are diverse. It provides various items designed to appeal to a wide range of sports, such
as boots, clothing, and hardware accessories. (2021 In-Depth SWOT Analysis of
Adidas | Adidas Business Strategy Business Management & Leadership December
2021, n.d.)

Adidas’s Weakness
● The company's image has not been as successful as its competitors like Nike. U.S.
consumers do not view the brand as highly as their European counterparts do. Also,
Adidas' products are more expensive than its competitors and other apparel brands.
● One of the weaknesses of Adidas is that it is limited to certain countries, which can be
a problem in terms of expanding their business.
● Technology has to be improved in order to stay ahead of the curve.
● One weakness for Adidas is the high prices on their products in comparison to other
brands. Adidas competes with other companies such as Nike and Puma, and it's
challenging to maintain a competitive advantage. (2021 In-Depth SWOT Analysis of
Adidas | Adidas Business Strategy Business Management & Leadership December
2021, n.d.)

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Puma’s Strengths
● Strong sporting goods brand - Puma’s strong sporting goods brand is a major
strength that provides the ability to attract customers to products, including entirely
new product lines. The brand is an internal factor that helps achieve growth by
increasing the company’s share of the global market for athletic shoes, apparel,
accessories, and equipment.
● High product innovation - The corporation continuously seeks new ways to improve
its shoes, such as through the integration of computing technology. This internal
factor is supported through Puma’s corporate structure, which involves teams
dedicated to innovation for product design and development.
● Global supply chain - Puma’s global distribution and sales network is a strength that
enables extensive access to the international market. These two internal factors are a
result of the company’s strategic efforts to build its business network for a globally
competitive enterprise that exploits regional economic benefits, such as low labor and
material costs in some regions and high selling prices in others.
● Global distribution and sales network - The brand has put strategic efforts to build
its business network for a globally competitive enterprise that exploits regional
economic benefits, such as low labor and material costs in some regions and high
selling prices in others.

Puma’s Weakness
● Imitability of some products -Puma's inability to compete in the worldwide market
is due to its product design imitability. Because of the problem of counterfeiting
sporting products, such an internal strategic component is crucial in this SWOT
analysis. Counterfeits of Puma-branded shoes and apparel, for example, are common
in nations with lax anti-counterfeiting legislation. This internal component is a
strategic issue because it affects the company's prospective sales and tarnishes the
sporting goods brand's reputation.
● Low level of business diversification - Puma's narrow concentration on sporting
items reflects a lack of business diversification. Because of this flaw, the company is
subject to downturns and dangers in the athletic goods industry.

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 ● Brand value - Puma has a lesser “brand value” compared to its competitors, it is
amazingly popular, but many people have the perception that Puma is a cheaper
variant of some other high-end brands.

NIKE competitive profile matrix (CPM) MATRIX DATA

Critical success
Nike Adidas Puma
factors
Market share $28.0b $13.7b $2.9b
Global expansion 170 countries 160 countries 120 countries
1050.2 million
Marketing $3.11 Billion USD 2573 million euros
euros
Revenues (2019) $44.5 billion USD 23.64 billion euros 5.5 billion euros
Financial strength High medium low
athletic footwear, sports shoes,
Apparel, footwear, sportswear,
Brand recognition apparel, equipment, and apparel, and
accessories sports equipment, toiletries equipment
Product diversity high high medium
product quality good good medium
Innovation high high medium
Average
Price
Higher segment Higher segment higher
competitiveness
segment
Brand value $30.44 billion USD $14.3 billion USD $4 billion
Competitive Profile Matrix (CPM) of NIKE
Nike Adidas Puma
Critical success
factors
Weight Rating Score Rating Score Rating Score

Market share 0.1 4 0.4 4 0.4 2 0.2

Global expansion 0.09 4 0.36 3 0.27 2 0.18
Marketing 0.1 4 0.04 3 0.3 2 0.2
Revenues 0.15 4 0.6 3 0.45 2 0.3
Financial strength 0.1 4 0.4 3 0.3 1 0.1
Brand recognition 0.09 3 0.27 3 0.27 3 0.27
Product diversity 0.09 2 0.18 3 0.27 2 0.27
product quality 0.1 3 0.3 3 0.3 2 0.2
Innovation 0.08 3 0.24 3 0.24 3 0.24
Price
0.09 3 0.27 3 0.27 2 0.18
competitiveness

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 Total 1 3.06 3.07 2.14

Conclusion
Studying the CPM matrix shows that you outperform your competition on customer service,
but they're overall your superior. If you improve your online presence to a four or your product
quality to a three, you'll pull ahead of them. The same strategic analysis applies to any CPM
matrix, although it gets more complicated as you add companies and weighted factors. One of
the strengths of using a competitive profile matrix is that it forces you to think about your
industry, what the key success factors are, and how important they are. That can clarify your
thinking about strategy. The downside is that assigning numbers to these factors is subjective
rather than analytical.

CPM and Critical success factors

The CPM uses critical success factors (CSFs) which allow a firm to compare itself to those of
other competitors in a particular industry (Capps & Glissmeyer,2012). The critical success
factors are those factors that are either viewed by the customers as valuable or which provides
the firms a significant advantage.

Critical factors
1. Brand Value - Adidas is the third leading sports brand in the world. According to
Forbes, its brand value stands at $6.8 trillion.

2. Brand Image - Nike is globally recognized as a premium sportswear brand. It enjoys

strong brand awareness.In recent years, Nike’s pivot towards social justice causes has
been polarizing but profitable. At the same time, Nike has faced accusations regarding
poor working conditions and unfriendly labour treatment. This has somewhat dented
its brand image.Nike has taken steps to improve the issue. But the labor controversy
has impacted the brand’s name.

3. Brand Value - Puma’s presence is spread over 120 countries. Puma’s revenue growth
was 12.8% in the first quarter of 2016. It has enjoyed steady growth since.Puma’s
growth is credited to its bold expansion policies.

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4. Legacy - Adidas has a prestigious legacy. Its status as one of the oldest (and possibly
first) sports brands is an asset.Adidas has been a popular choice in the sports industry
for ages.

5. Strong marketing campaigns- Nike is associated with inspirational campaigns

featuring world-class athletes. Slogans like ‘Just do it’ embody the company’s
principles of ambition and inclusivity.

6. Marketing - Puma invests heavily in marketing and sponsorships. It was an official

sponsor for the FIFA World Cup 2018.Puma boasts iconic sports personalities as brand
ambassadors. Examples include Pelé and Diego Maradona.PUMA also sponsors clubs
(e.g., Arsenal FC) as well as national football teams.

7. Complete Control of Business - Nike’s online and physical outlets are supervised and
controlled by the company without third-party assistance.Adidas’s outsourcing
strategy leaves it dependent on third parties. This grants regional manufacturers
much power when it comes to business (especially negotiations) with Adidas.

8. Innovation - Puma has always had a strong Research and Development team. The
company’s most notable innovation came with the 68-needle Brush Spikes. The shoes
were banned by the IAAF because of the advantage they gave to athletes. (Comparative
SWOT Analysis of Adidas, Nike, and Puma, 2021)

9. Limited market - Nike’s primary revenue is from North America. This is despite the
fact that Nike is a globally recognized band. Middle-income earners, especially in
developing countries, find Nike products cost-prohibitive.Puma is also lagging behind
the competition in opening new stores and capturing new markets. This is impacting its
future earnings

10. Strong competition - Puma faces strong competition from Adidas and Nike. The two
companies have greater revenue flow and disposable income. Puma’s market share is
also smaller.

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 11. Variable Quality Control - Nike does not have a team dedicated to quality control
in many countries. As a result, the quality of Nike products is not uniform across
markets. The lack of a centralized system of quality control impacts Nike’s credibility.

12. Limited Brand Image - There are only Adidas and Reebok as brand names selling only
sports products. There is no far-reaching diversification of brands.Puma’s footwear
earns the largest share of revenue in the company. Puma has not expanded enough into
apparel and accessories.

Three important steps are to be followed while developing a CPM using these critical factors:

● Firms must attach weight to each individual CSF reflecting their relative importance
which must be summed up to 1.00
● Rank each one based on the relative strengths and weaknesses of the company as well
as its competitors by assigning 1 to major weakness and 4 to major strengths
● And finally get the weighted scores by multiplying the weight for each factor with its
corresponding ranking (Zimmerer et al., 2008).

Nike’s IFE-EFE matrix

IFE

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Since the total score of IFE is >2.5, i.e. 2.98, it shows that the company is doing well internally
and hence is successful, profitable and healthy. The conclusion and weighted score is based on
the unbiased weights and ratings provided to each internal strength as well as weakness.

The key internal strengths and weaknesses mentioned here have been obtained through
research from various articles and case studies on Nike available online.

EFE

Since the total score of EFE is >2.5, i.e. 2.74, it shows that the company is doing well externally
as well and hence it shows that the company is grabbing all possible opportunities externally
and has no reason to be worried on that aspect. The conclusion and weighted score is based on
the unbiased weights and ratings provided to each internal strength as well as weakness.
The key external strengths and weaknesses mentioned here have been obtained through
research from various articles and case studies on Nike available online.

23
Suggested strategies that Nike can implement

Nike branding strategy 1

Conceptualization

Need
Nike’s Airjordans are one of the most sought after sneakers for streetwear and sneaker heads.
This has led to a number of retailers selling counterfeit Air Jordan sneakers because of high
demand and high prices. Nike is suing 589 websites, the owners of 676 social media accounts
and more than 100 unidentified companies and individuals for allegedly selling counterfeit
versions of its Nike and Converse shoes online. (PYMNTS, 2021) The available loopholes in
the design patents give rise to this counterfeiting industry.

Purpose
“Nike protects its iconic sneaker designs, and its intellectual property in those designs, by
rooting out bad actors that undermine the DNA of sneaker culture by promoting and selling
fakes,” Nike launched the Air Jordans, it’s top selling sneakers in 1985 however it’s design
patent was very recently trademarked in 2021. The patent covers the top design panel, sole
design panel and even minute details like ringlets for laces. However it does not cover colour

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as a part of the design patent which leaves a major loophole for counterfeit products to still be
there in the market.

Figure: Air Jordan trademark

Source: Input magazine

Objective
To increase customer connect with the Nike brand and have a clear brand image by
reducing counterfeit production avenues.

Initiation

Summary
Nike launches different Air Jordan editions with different colour combinations but a similar
design. The price varies accordingly and the demand depends on the same. Moreover Nike
launches these sought after sneakers in limited quantities making them very difficult to get and
automatically prestigious.

Figure: Dior Air Jordans release data

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Under Trademark law, color is inherently indistinct, but a combination of colors, with sufficient
acquired meaning can gain distinctiveness and is capable of being registered as a trademark. A
combination of colors may be considered distinctive for the purposes of trademark protection
only when it can be demonstrated that the combination of colors is so closely associated with
a product or brand that the product or brand can be recognized by the particular combination
of colors only. (Rao & Singh, 2019)
Patenting the color combination for every Air Jordan may lead to less production of
counterfeit goods due to licensing and legal issues.

Stakeholders

● Nike

Gets counterfeit product market share, gets a clear brand image of providing authentic
prestigious sneakers and increases direct connect of the brand with the consumers that
want it.

● Consumer

Gets a guarantee of the authentic Nike brand experience and quality products.

Feasibility
An end-to-end trademark registration solution costs approximately $460.

End strategy

Register every Air Jordan under a separate design patent including the colour combination of
the said edition to cover all integral elements of the design.

Nike branding strategy 2

Conceptualization

Need
Flipping sneakers has been a viable business proposition for decades. The demand side
emerged as far back as 1985, when Nike dropped the Air Jordan 1, a culture-shifting sneaker

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that sold faster than the company could manufacture it. The supply side followed soon after,
when some retailers began selling the few pairs they could get for more than Nike’s $64.95
suggested retail price. A year later, the company doubled down, limiting the initial release of
the Air Jordan 2 to just 30 stores in 19 cities and adding $40 to the price. The Air Jordan 3,
which marked the debut of Tinker Hatfield’s iconic “Jumpman” logo, was so popular that Nike
has reissued it countless times without ever really satisfying demand. There is a gap in the
demand for the shoes and the supply by Nike causing a section of resellers to come into play
in the market. These resellers use Bots to block the raffael slots given by Nike to purchase their
limited edition sneakers from the SNKR app or website by increasing probability and hoarding
stock. They then resell these shoes at high profits because of the exclusive demand. Bad bots
erode the trust sneakerheads have in your brand. They sever the connection with genuine
customers who could return to buy and evangelize your brand. And they create
overwhelming traffic that can crash your site, losing sales on products across the board.
(queit, 2021)

Purpose
Given the status quo resellers can charge huge premiums where Nike could have been making
retail sales. According to Imperva’s 2020 Bad Bot report over 18% of traffic to ecommerce
sites comes from bad bots.On hyped releases, close to 100% of traffic comes from bots,
according to Akamai’s director of threat research. Limited-edition releases and high-profile
collaborations generate so much demand that an entire resale industry has emerged. The
purpose of a sneaker bot is to automate the purchase of limited-edition sneakers. These bots
have an unfair advantage over human buyers: speed. When a hot new sneaker is released for
sale, it can sell out in a matter of minutes or even seconds. Snatching a pair has become almost
impossible without the assistance of bots. People in search of profit take advantage of their
superior speed to snap up a maximum of limited-edition sneakers in a minimum of time, which
they can then resell with an often significant markup. the global sneaker resale market is
currently valued at $6 billion. The most coveted sneakers can fetch thousands of dollars a pair,
making a very pretty margin for the reseller. A security mechanism to eliminate bots is very
important for Nike to make the end consumer have a direct brand connect with Nike rather than
resellers for the complete brand experience as it is a direct-to-consumer brand.

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Objective
To reduce bot intervention in Nike sneaker raffle slots and increase end consumers direct
connection with the brand and increase end consumer presence on Nike website and
divert reseller market share.

Initiation

Summary
The end consumer of Nike faces problems purchasing limited-edition sneakers directly from
Nike because of low stocks in-store and online and intervention of sneaker bots in Nike sneaker
tokens. A software employed to fight these sneaker bots can remove barriers to a direct
customer connect with Nike.

Stakeholders

Nike

Establishes direct connection with the end consumer and gets direct retail sales.

End consumer

The end consumer gets direct access to the entire stock launched at launch prices without bots
with better technology hoarding stocks for reselling purposes.

Feasibility
The DataDome real-time bot detection software has been designed to handle any type of bot
traffic, including sneaker bots. They analyze 100% of all requests to their customers’ web
servers and use both server-side and client-side event-related data to distinguish human users
from even the most sophisticated bots.

End strategy

Outsourcing sneaker bot security software from Data dome to curb the problem of reselling.
To detect advanced sneaker bots, they use a combination of different approaches:

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 ● Fingerprinting: Their JavaScript tag collects signals to detect advanced bots, including
heavily modified Puppeteer, headless Chrome or Selenium bots (even from a library
that claims to bypass bot detection systems)
● Advanced IP reputation analysis: DataDome analyses every single request to
thousands of websites worldwide. Thanks to this pool of real-time data, they can
identify millions of IPs used by bots, whether they are data center or residential proxies.
● Machine learning-based behavioral detection: They use machine learning to infer
whether behavior originates from a human or a bot. Signals include client-side events
and traffic shape, among many others.

Nike Branding Strategy 3 - Revamping prices of

the product

Need
Nike had been accused of using sweatshops to produce its sneakers and activewear since the
1970s, but it was only in 1991 when activist Jeff Ballinger published a report detailing the low
wages and poor working conditions in Nike’s Indonesian factories that the sportswear brand
came under fire. (McCartney, 2020) Whether true or not, the company still suffers from this
unethical image and must sway the minds of the consumer and give them a renewed faith in
the responsibility of Nike. (Strategic Analysis of Nike, Inc, n.d.). Recently, The Foul Play report
by the Clean Clothes Campaign and Collectif Ethique sur l’Etiquette shows just how far Nike
has to go when it comes to living wages. It highlights the difference between the ever-
increasing amount of money paid on sponsorships to sports stars and other marketing expenses,
compared to the reduction of the share of the final price of your sports gear paid to workers in
the supply chain. The report calls on both Nike and Adidas to commit to paying living wages
across their supply chains by a specific date and other supporting action. (McCartney, 2020)

Purpose
While millions of people are getting ready to cheer their favorite teams during the Football
World Cup, a report by Éthique sur l’étiquette and Clean Clothes Campaign, ‘Foul Play’,
reveals that adidas and Nike, major sponsors of the global event, pay poverty wages to the

29
thousands of women in their supply chain that sew the football shirts and shoes of players and
supporters.The World Cup is the main stage for adidas and Nike’s intense competition for
sponsorships. Together they sponsor 22 out of the 32 teams. Over the last decade, budgets for
marketing and sponsorships have doubled in value.

Workers’ wages in the supply chain of the same brands do not follow this upward trend. The
new Foul Play report, published today, compares the current production costs of Nike sport
shoes with those of 25 years ago. The share of these costs that ends up in a workers’ pocket is
now a staggering 30% less than in the early 1990s. (Adidas and Nike Pay Record-Breaking
Amounts to Footballers, but Deny Decent Wages to Women Stitching Their Shirts, 2018)

Objective
To improve brand image affected by unfair paid wages to the workers.

Initiation

Much of these brands’ sportswear is produced in Indonesia where 80% of garment workers are
women and earn between 82 and 200 euro per month. Their wages often do not even cover
basic needs, and are much less than would enable them and their families to have decent lives,
which according to calculations by Asia Floor Wage would amount to 363 euro. Some of these
do not even receive their legal minimum wages.

Unions and civil society are therefore calling on Adidas and Nike to ensure living wages
throughout their supply chain. If Nike and adidas would have kept their sponsor contracts at
the 2012 levels instead of increasing them to unprecedented levels, they would have saved
enough money to cover living wages for the workers in their main production countries China,
Vietnam, Indonesia and Cambodia.

Both brands could start setting this right in Indonesia, where an agreement to tackle the wage
issue should be within reach. In 2011, after years of international campaigning of workers and
sports’ fans alike, the ground-breaking Indonesian Freedom of Association Protocol covering
workers’ trade union rights was signed between Adidas, Nike and four other sportswear brands,

30
major supplier factories and trade unions. The signatories also agreed to start negotiations about
two other labour rights issues identified by the unions in the future: wages and precarious
employment. However, ten years after the start of the negotiations in 2008, the sportswear
brands refused to continue the process.

Nike should change their buying practices because they affect the working conditions.
Knowing that the labour cost of a t-shirt produced in Indonesia is hardly 1% of the price,
(Adidas and Nike Pay Record-Breaking Amounts to Footballers, but Deny Decent Wages to
Women Stitching Their Shirts, 2018) brand can may be increase their profit margin or increase
their prices of the product.

End Strategy

Though increasing the price can be a very risky decision to make for the brand. But this can be
turned into an advantage for the brand if done right. As this controversy has been going on for
a long time, they can launch a huge marketing campaign regarding the reason for the price
being increased of their products. Reason being paying fair wages to the labourers. This will
help in creating a better brand image of the company among the consumers.

Nike branding strategy 4

Conceptualisation

Need

One of the most potent and sustainable differentiators is a network effect, where value grows
as more users or nodes join a network. This is beneficial for the brand as it increases credibility
across all its channels and creates a dedicated community for the brand to spread its message
effectively. Having a strong network with active consumers supporting a brand acts as an asset
in this day and age.

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 Figure: Nike’s running app

Purpose

The more people join and post on a particular platform, the more value users get out of it. The
more sellers are on an E-commerce website or app, the more buyers are attracted to it, which
in turn drives more sellers to become part of the market. Similarly, the more users there will be
across Nike’s channels, the more value it will have for both the brand and the customers,
thereby creating a strong network. One of the reasons why social business models are so
valuable, sticky and fast growing is because they often tap into the power of network effects.

Objective

To enhance customer presence in the workings in order to build a community to support

long term objectives of the brand.

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Initiation

Summary

Nike is connected with its consumers across various Omni channel platforms. The brand has
kept itself updated with all the market trends the competitors are using to build a connection
with its consumers. But the task is to keep these channels active and running for it to have a
direct impact thereby helping the brand reach out to its target consumer.

Feasibility
This strategy can be executed when the brand encourages the customer to connect with its omni
channel platforms. This encouragement can be in the form of extra discounts on downloading
the app or such incentives to increase the overall touchpoints with the consumer.

End Strategy

The message and values of the brand can go a long way and have a deeper impact in the minds
of the consumer, as a result of which a deeper connection can be developed.

Nike branding strategy 5

Conceptualisation

Need

Nike has a huge network of resellers and wholesalers (middlemen) (65%) of the total market.
The shoes are sold through various websites including superkicks, GOAT etc. This has led to
an increase in product value (The limited pieces are sold at a much higher price than the
company rate), lack of direct interaction of nike with its customers, lack of customer connect.

Purpose

Nike’s customer connect can be improved by selling the products only through Nike stores
online or offline. This has a two fold impact - Nike’s customer connect will improve by having
direct contact with its customers. It will also increase the online and offline traffic of Nike.

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 Source: https://medium.com/@constance_de_Villenfagne/the-sneakers-war-1176a97cdf99

Objective
1. To increase direct connect points with the customers
2. Reduction of wholesalers

Initiation

Reducing the number of wholesalers has a two fold positive impact. Direct connection and
more profit. Nike’s resellers have a monopoly over the pricing structure because of them being
in majority.

End Strategy

Nike’s retail sector makes Nike weak due to its sensitivity against pricing. 65% of Nike
products are sold directly to wholesalers or retailers. With retailers serving as their core
customers, Nike does not put up a fight against their pricing structures whatsoever. This
strategy will help resolve this issue.

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Conclusion
In conclusion, Nike as a brand is a strong brand doing everything on it’s platter, although there's
always scope for betterment. In today’s ever evolving market it is necessary for the brands and
companies to grow and evolve at the pace of the market. Today the market’s prime focus is
divided as per individual, some look for being cost effective, some look for being in trend
whereas some look for better technologies. Apart from the cost of shoes, today, there exist
other factors which will as well have an effect on the need for footwear, e.g.: preferences,
standard, trend, technology and if there are alternative merchandise. Additionally, hobbies or
views of other people can be a less individual cause of affecting the buying resolution. In
today's times of the extremely customer centric as well as customer engaging market, Nike has
its presence and hopefully will continue to have so.

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