Strategic Management Analysis of Nike

Nike was founded by Bill Bowerman and Phil Knight. The two men met when Bowerman was coaching track and field at the University of Oregon and Knight was a middle distance runner on his team. After earning an MBA from Standford, Knight returned to Oregon and approached Bowerman with an idea to bring in low priced, high-tech athletic shoes from Japan to compete in the United States athletic shoe market. With a handshake and a five hundred dollar investment by both men, Blue Ribbon Sports was born in 1964. BRS began importing shoes from Onitsuka Tiger, with Knight making sales at high school track meets and Bowerman

Nike is the leading and yet renowned supplier of athletic apparel and shoes. The company controls close to 33% of the global athletic shoe market (Dogiamis & Vijayashanker,2009).Nike was founded by Bill Power and Phil Knight in 1962 as a Blue Ribbon Support and then was later on renamed to Nike in the year 1968 (Patrow,2003).The company supplies very high quality product in close to 100 countries with major markets being located in the U.S,U,K, Asia Pacific as well as in the Americas. The company has managed to attain its lead and legendary position via the application of innovative and yet attractive product design which is backed by quality production as well as well crafted marketing strategies.

This involves the company's target market. The mission statement includes the element of customers because it states that "entertain and

Nike, Inc. has been the world’s leading innovator and provider in athletic footwear, apparel, equipment and accessories for 50 years. Their mission has been to bring inspiration and innovation to every athlete in the world; if you have a body, you are an athlete. Arguably one of the most innovative companies in the world, Nike has built its brand into an iconic world-class powerhouse that continues to dominate the market with no signs of slowing up. Nike’s marketing and advertising have been breakthrough, aspirational, and legendary over the years, featuring high-profile athletes and heroes.

As a leading company in footwear industry, Nike believes they have the responsibility to conduct their business in an ethical way and also expects the same of its business partners. Moreover, Nike focuses on working with long-term, strategic suppliers that demonstrate a commitment a safe working conditions to their employees (Nike, Inc., 2014).

Nike invested in their brand by getting sports heroes to advertise for their brand such as Michael Jordon, Tiger Woods and the Brazilian football team. This further fuel the products appeal towards the consumers.

The aim of this paper is to use the “Nike - The art of selling air.” case study and concepts from strategic marketing theory to identify marketing challenges and how those challenges could be best addressed using marketing principles. The paper will:

One of Nike’s main opportunities is product development. Developing their product range makes them more competitive and because products tend to go out of fashion quickly, Nike must introduce new products relatively fast because consumer demand the newest and latest products. Increase in internet shopping will no doubt reduce the cost and improve prices making them even more competitive.

Nike began as Phil Knight’s semester-long project to develop a small business, which included a marketing plan. This project was part of Phil Knight’s MBA course at Stanford University in the early 1960s. Phil Knight had been a runner at the University of Oregon in the late 1950s. His idea for his project was to develop high quality running shoes. He thought that high quality/low cost products could be produced in Japan and then shipped to the United States to be sold at a profit. His professor thought that Knight’s idea was interesting, but not much more than a project.

China’s one-child policy was a population planning policy of China and was introduced in 1979. The policy was originally designed to be a one-generation policy. This policy enforcement varied, in some places the restrictions were more relaxed while in densely populated areas the policy was strictly enforced. In 1980 official policy granted local officials the flexibility to make exceptions. Some exceptions included; ethnic minorities, the father being a disabled serviceman, both parents being single children, and if a family's first-born is a daughter they are allowed a second child. In 2015, China announced plans of allowing all families to have two children.

In 1972, BRS introduced its first line of Nike shoes and in 1978, BRS, Inc. officially renamed itself to Nike, Inc. and the sponsorship of athletes became a key marketing tool for the rapidly growing company. By 1980 the company went public and attained a 50% market share in the U.S. athletic shoe market. Furthermore, Nike expanded its product line for many sports and regions throughout the world and in 1988 the famous slogan "Just Do It" Nike ad campaign was chosen by Advertising Age as one of the top five ad slogans of the 20th century (Nike, 2011) Nowadays is the largest seller of athletic footwear and apparel in the world. They employ more than 33,000 people globally and sell products in more than 180 countries around the globe reporting revenues of 19.2 billions of dollars. The mission statement of Nike, as the world 's leading athletic brand is “to deliver innovation and inspiration to every athlete”. Through the slogan “if you have a body you are an athlete” Nike pretends to spread a sports mentality in the society (Nike, 2011).

Brands use different strategies to create competitive advantages to beat with their rivals. Some companies use “Overall Cost Leadership” to increase profit by reducing costs and increase market share by lowering price. Some companies use “Focus Strategies” to select a group of market and tailor its strategy to serve that group. The others use “Product Differentiation” as a strategy to obtain a premium price by making unique products. Nike, with its differentiation strategy, the company is continuing to separate its self from the competitors by using its superior technology and innovation. This paper mainly discusses on the company’s product differentiation and analysis how the company using this strategy to build its brand image and become a market leader in sportswear industry. A brief discuss about Nike competitive advantage which related to its broad differentiation aspect and the company product life cycle are also presented on this paper.

Nike has a mission statement that lets everyone know what the main objective is. “To bring inspiration and innovation to ever *athlete in the world.” Founder Bill Bowerman defined athlete the following way: “*If you have a body, you are an athlete.”(Mission statement, Nike.com) That definition is the heart of Nike’s business model and has been the center point to their vision. They are saying that everyone in the world is athlete and they want to inspire and innovate every type of demographic. Nike’s view has been a critical to their spectacular growth to be a major global

Nike’s management understands how important a relevant strategy is in the global environment, as Don Blair, Nike’s CFO, stated “...we are refocusing our efforts, increasing our investments in innovation, using our voice for stronger advocacy and looking at how we incubate new, scalable business models that enable us to thrive in a sustainable economy.”

Nike started to open up manufacturing factories in countries like Indonesia, Pakistan and Vietnam. Due to the wants of Nike to increase their revenue they tried to outsource the labor of their products since labor work in the US is very high and expensive. This was a bad idea due to that Indonesia pays their workers extremely low wages. Pakistan doesn’t have an age limit for them to be able to legally to work so many children in Pakistan were making