Nike Company Profile

02-02-2011 Company Profile: Nike, Inc.
Nike, Inc. (pronounced /ˈnaɪki/) (NYSE: NKE) is a major publicly traded sportswear and equipment supplier based in the United States. The company is headquartered
in Beaverton, Oregon, which is part of the Portland metropolitan area. It is the world's leading supplier of athletic shoes and apparel[2]and a major manufacturer of sports
equipment with revenue in excess of $18.6 billion USD in its fiscal year 2008 (ending May 31, 2008). As of 2008, it employed more than 30,000 people worldwide. Nike
and Precision Castparts are the only Fortune 500 companies headquartered in the state of Oregon, according to The Oregonian.
The company was founded on January 25, 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 (Greek Νίκηpronounced [níːkɛː]), the Greek goddess of victory; it is also based on Egyptian usage of "strength", "victory", nakht[citation needed]. Nike
markets its products under its own brand as well as Nike Golf, Nike Pro, Nike+, Air Jordan, Nike Skateboarding and subsidiaries including Cole Haan, Hurley
International, Umbro and Converse. Nike also owned Bauer Hockey (later renamed Nike Bauer) between 1995 and 2008.[3] 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.
|Contents |
| [hide] |
|1 Origins and history |
|1.1 Acquisitions |
|2 Products |
|3 Headquarters |
|4 Manufacturing |
|4.1 Human rights concerns |
|5 Environmental record |
|6 Marketing strategy |
|6.1 Advertising |
|6.1.1 Kasky v. Nike |
|6.1.2 Beatles song |
|6.1.3 Minor Threat ad |
|6.1.4 Horror ad |
|6.1.5 Chinese-themed ad |
|6.1.6 Pretty |
|6.2 Place |
|6.3 Sponsorship |
|7 References |
|8 External links |
Origins and history
Nike, originally known as Blue Ribbon Sports, was founded by University of Oregon track athlete Philip Knight and his coach Bill Bowerman in January 1964. The company
initially operated as a distributor for Japanese shoe maker Onitsuka Tiger, making most sales at track meets out of Knight's automobile.[4]
The company's profits grew quickly, and in 1966, BRS opened its first retail store, located on Pico Boulevard in Santa Monica, California. By 1971, the relationship between
BRS and Onitsuka Tiger was nearing an end. BRS prepared to launch its own line of footwear, which would bear the newly designed Swoosh.[5]
The first shoe to carry this design that was sold to the public was a soccer shoe named "Nike", which was released in the summer of 1971. In February 1972, BRS introduced
its first line of Nike shoes, with the name Nike derived from the Greek goddess of victory. In 1978, BRS, Inc. officially renamed itself to Nike, Inc. Beginning with Ilie Nastase,
the first professional athlete to sign with BRS/Nike, the sponsorship of athletes became a key marketing tool for the rapidly growing company.
The company's first self-designed product was based on Bowerman's "waffle" design. After the University of Oregon resurfaced the track atHayward Field, Bowerman began
experimenting with different potential outsoles that would grip the new urethane track more effectively. His efforts were rewarded one Sunday morning when he poured liquid
urethane into his wife's waffle iron. Bowerman developed and refined the so-called 'waffle' sole which would evolve into the now-iconic Waffle Trainer in 1974.
By 1980, Nike had reached a 50% market share in the United States athletic shoe market, and the company went public in December of that year.[6] Its growth was due largely
to 'word-of-foot' advertising (to quote a Nike print ad from the late 1970s), rather than television ads. Nike's first national television commercials ran in October 1982 during the
broadcast of the New York Marathon. The ads were created by Portland-based advertising agency Wieden+Kennedy, which had formed several months earlier in April 1982.
Together, Nike and Wieden+Kennedy have created many indelible print and television ads and the agency continues to be Nike's primary today. It was agency co-founder Dan
Wieden who coined the now-famous slogan "Just Do It" for a 1988 Nike ad campaign, which was chosen byAdvertising Age as one of the top five ad slogans of the 20th
century, and the campaign has been enshrined in the Smithsonian Institution.[6] San Franciscan Walt Stack was featured in Nike's first "Just Do It" advertisement that debuted on
July 1, 1988.[7]
Throughout the 1980s, Nike expanded its product line to include many other sports and regions throughout the world.[8]
Acquisitions
▪ As of November 2008, Nike, Inc. owns four key subsidiaries: Cole Haan, Hurley International, Converse Inc. and Umbro.
▪ Nike's first acquisition was the upscale footwear company Cole Haan in 1988.
▪ In February 2002, Nike bought surf apparel company Hurley International from founder Bob Hurley.[9]
▪ In July 2003, Nike paid US$305 million to acquire Converse Inc., makers of the iconic Chuck Taylor All Stars.[10]
▪ On March 3, 2008, Nike acquired sports apparel supplier Umbro, known as the manufacturers of the England national football team's kits, in a deal said to be
worth £285 million (about US$600 million).[11]
▪ Other subsidiaries previously owned and subsequently sold by Nike include Bauer Hockey and Starter.[12]
Products
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A Nike brand athletic shoe
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A pair of Nike Air Jordan I shoes
allfreeessays.com/print/…/86382 1/14
Nike produces a wide range of sports equipment. Their first products were track running shoes. They currently also make shoes, jerseys, shorts, baselayers etc. for a wide range
of sports including track & field, baseball,ice hockey, tennis, Association football, lacrosse, basketball and cricket. Nike Air Max is a line of shoes first released by Nike, Inc. in
1987. The most recent additions to their line are the Nike 6.0, Nike NYX, and Nike SB shoes, designed for skateboarding. Nike has recently introduced cricket shoes, called
Air Zoom Yorker, designed to be 30% lighter than their competitors'.[13] In 2008, Nike introduced the Air Jordan XX3, a high performance basketball shoe designed with the
environment in mind.
Nike sells an assortment of products, including shoes and apparel for sports activities like association football[14], basketball, running, combat sports, tennis, American
football, athletics, golf and cross training for men, women, and children. Nike also sells shoes for outdoor activities such as tennis, golf, skateboarding,association
football, baseball, American football, cycling, volleyball, wrestling, cheerleading, aquatic activities, auto racing and other athletic and recreational uses. Nike is well known and
popular in youth culture, chavculture and hip hop culture as they supply urban fashion clothing. Nike recently teamed up with Apple Inc. to produce the Nike+ product which
monitors a runner's performance via a radio device in the shoe which links to the iPod nano. While the product generates useful statistics, it has been criticized by researchers
who were able to identify users' RFID devices from 60 feet (18 m) away using small, concealable intelligence motes in awireless sensor network.[15][16]
In 2004, they launched the SPARQ Training Program/Division.
Some of Nike's newest shoes contain Flywire and Lunarlite Foam. These are materials used to reduce the weight of many types of shoes.[17]
In the video game Gran Turismo 4 there is a car by Nike called the NikeOne 2022, designed by Phil Frank.
Headquarters
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Nike's world headquarters are surrounded by the city of Beaverton, Oregon but are technically within unincorporated Washington County.
This distinction, according to The Oregonian, has been a source of contention between the city of Beaverton and Nike since the company purchased 74 acres (0.3 km²) of
nearby Beaverton land that soon fronted the Jared Co-operation. When Nike proposed expanding their headquarters in that direction, Beaverton at first wanted them to build
housing near the MAX light rail station and criss-cross the property with two public roads, expectations defined by the zoning already in place when Nike bought the land.
Beaverton's request was mostly consistent withMetro's transit-oriented development plans for the region. After a year, which included a threat by Nike to move 5,000 jobs out
of the state, Beaverton backed down from the requirement for housing, but the lack of accommodation was something that Nike did not forget.
The annexation standoff soon led Beaverton to attempt a forcible annexation. That led to a lawsuit by Nike, and lobbying by the company that ultimately ended in Oregon Senate
Bill 887 of 2005. Under that bill's terms, Beaverton is specifically barred from forcibly annexing the land that Nike and Columbia Sportswear occupy in unincorporated
Washington County for 35 years, while Electro Scientific Industries and Tektronix get that same protection for 30 years.[18]
The world headquarters is situated on approximately 200 acres (0.81 km2) of land. The first phase of construction was completed in 1990, followed by expansions in 1992,
1999, 2001 and 2008. There are 17 buildings, together providing approximately 2,000,000 square feet (190,000 m2) of office space. Each building is named for a legendary
coach or athlete who has had a long affiliation with Nike, including Tiger Woods, Lance Armstrong, Mia Hamm, Michael Jordan, Pete Sampras, Joan Benoit Samuelson, John
McEnroe and several others.
Two of the buildings are child development centers, named for Joe Paterno and C. Vivian Stringer, that together provide daily child care for approximately 500 children of Nike
employees. A man-made lake, fed by a natural spring, covers 6 acres (24,000 m2) and is adjacent to a protected wetland area that runs through the center of the campus. The
dirt from the lake was deposited around the perimeter of the grounds to create a 14-foot (4.3 m) tall, sloping berm that helps create a campus-like feel. Approximately 5,000
employees are based at the world headquarters, with another 2,000-2,500 in additional buildings in office complexes nearby.[19]
Manufacturing
Nike has contracted with more than 700 shops around the world and has offices located in 45 countries outside the United States.[20] Most of the factories are located in Asia,
including Indonesia, China, Taiwan, India, Thailand, Vietnam, Pakistan, Philippines,and Malaysia.[21] Nike is hesitant to disclose information about the contract companies it
works with. However, due to harsh criticism from some organizations like CorpWatch, Nike has disclosed information about its contract factories in its Corporate Governance
Report.
Human rights concerns
Nike has been criticized for contracting with factories in countries such as China, Vietnam, Indonesia and Mexico. Vietnam Labour Watch, an activist group, has documented
that factories contracted by Nike have violated minimum wage and overtime laws in Vietnam as late as 1996, although Nike claims that this practice has been halted.[22] The
company has been subject to much critical coverage of the often poor working conditions and exploitation of cheap overseas labor employed in the free trade zones where their
goods are typically manufactured. Sources of this criticism include Naomi Klein's book No Logo and Michael Moore's documentaries.
Nike has been criticized about ads which referred to empowering women in the U.S. while engaging in practices in East Asian factories which some felt disempowered women.
[23]
During the 1990s, Nike faced criticism for use of child labor in Cambodia and Pakistan in factories it contracted to manufacture soccer balls. Although Nike took action to curb
or at least reduce the practice of child labor, they continue to contract their production to companies that operate in areas where inadequate regulation and monitoring make it
hard to ensure that child labor is not being used.[24]
In 2001 a BBC documentary uncovered occurrences of child labor and poor working conditions in a Cambodian factory used by Nike.[25] In the documentary, six girls were
focused on, all of whom worked seven days a week, often 16 hours a day.
Campaigns have been taken up by many colleges and universities, especially anti-globalisation groups as well as several anti-sweatshop groups such as the United Students
Against Sweatshops.[26] Despite these campaigns, however, Nike's annual revenues have increased from $6.4 billion in 1996 to nearly $17 billion in 2007, according to the
company's annual reports.
A July 2008 investigation by Australian Channel 7 News found a large number of cases involving forced labour in one of the biggest Nike apparel factories. The factory located
in Malaysia was filmed by an undercover crew who found instances of squalid living conditions and forced labour. Nike have since stated that they will take corrective action to
ensure the continued abuse does not occur.[27]
Following Liu Xiang's withdrawal from the 2008 Olympics, Nike admitted seeking help from "relevant government departments" in the Chinese government to track down and
identify an anonymous Internet poster.[28]
Environmental record
The consistently growing textile industry often negatively impacts the environment. Because Nike is a large participant in this manufacturing, many of their processes negatively
contribute to the environment. One way the expanding textile industry affects the environment is by increasing its water deficit, climate change, pollution, and fossil fuel and raw
material consumption. In addition to this, today's electronic textile plants spend significant amounts of energy, while also producing a throw-away mindset due to trends founded
upon fast fashion and cheap clothing.[29]Although these combined effects can negatively alter the environment, Nike tries to counteract their influence with different projects.
According to a New England-based environmental organisation Clean Air-Cool Planet, Nike ranks among the top 3 companies (out of 56) on a survey conducted about
climate-friendly companies.[30] Nike has also been praised for its Nike Grind programme (which closes the product lifecycle) by groups like Climate Counts.[31] In addition to
this, one campaign that Nike began for Earth Day 2008 was a commercial that featured Steve Nash wearing Nike's Trash Talk Shoe, a shoe that had been constructed in
February 2008 from pieces of leather and synthetic leather waste that derived from the factory floor. The Trash Talk Shoe also featured a sole composed of ground-up rubber
from a shoe recycling program. Nike claims this is the first performance basketball shoe that has been created from manufacturing waste, but it only produced 5,000 pairs for
sale.[32] Another project Nike has begun is called Nike's Reuse-A-Shoe program. This program, started in 1993, is Nike's longest-running program that benefits both the
environment and the community by collecting old athletic shoes of any type in order to process and recycle them. The material that is created from the recycled shoes is then used
to help create sports surfaces, such as basketball courts, running tracks, and playgrounds.[33]
Marketing strategy
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Nike's marketing strategy is an important component of the company's success. Nike is positioned as a premium-brand, selling well-designed and expensive products. Nike lures
customers with a marketing strategy centering around a brand image which is attained by distinctive logo and the advertising slogan: "Just do it".[34] Nike promotes its products
by sponsorship agreements with celebrity athletes, professional teams and college athletic teams. However, Nike's marketing mix contains many elements besides promotion.
These are summarised below.
Advertising
From 1972 to 1982, Nike relied almost exclusively on print advertising in highly vertical publications including Track and Field News. Most of the early advertising was focused
on a new shoe release, essentially outlining the benefits of the running, basketball or tennis shoe. In 1976, the company hired its first outside ad agency, John Brown and Partners,
who created what many consider Nike's first 'brand advertising' in 1977. A print ad with the tagline "There is no finish line" featured a lone runner on a rural road and became an
instant classic. The success of this simple ad inspired Nike to create a poster version that launched the company's poster business.
In 1982, Nike aired its first national television ads, created by newly formed ad agency Wieden+Kennedy, during the New York Marathon. This would mark the beginning of a
remarkably successful partnership between Nike and W+K that remains intact today. The Cannes Advertising Festival has named Nike its 'advertiser of the year' on two
separate occasions, the first and only company to receive that honor twice (1994, 2003).[35]
Nike also has earned the Emmy Award for best commercial twice since the award was first created in the 1990s. The first was for "The Morning After," a satirical look at what a
runner might face on the morning of January 1, 2000 if every dire prediction about Y2K came to fruition.[36] The second Emmy for advertising earned by Nike was for a 2002
spot called "Move," which featured a series of famous and everyday athletes in a stream of athletic pursuits.[37]
In addition to garnering awards, Nike advertising has generated its fair share of controversy:
Kasky v. Nike
Consumer activist Marc Kasky filed a lawsuit in California in 2002 regarding newspaper advertisements and several letters Nike distributed in response to criticisms of labor
conditions in its factories. Kasky claimed that the company made representations that constituted false advertising. Nike responded that the false advertising laws did not cover
the company's expression of its views on a public issue, and that these were entitled to First Amendment protection. The local court agreed with Nike's lawyers, but
the California Supreme Court overturned this ruling, claiming that the corporation's communications were commercial speech and therefore subject to false advertising laws.
The United States Supreme Court agreed to review the case (Nike v. Kasky) but sent the case back to trial court without issuing a substantive ruling on the constitutional issues.
The parties subsequently settled out of court before any finding on the accuracy of Nike's statements, leaving the California Supreme Court's denial of Nike's immunity claim as
precedent. The case drew a great deal of attention from groups concerned withcivil liberties, as well as anti-sweatshop activists.
Beatles song
Nike was the focus of criticism for its use of the Beatles song "Revolution" in a 1987 commercial, against the wishes of Apple Records, the Beatles' recording company. Nike
paid $250,000 to Capitol Records Inc., which held the North American licensing rights to the Beatles' recordings, for the right to use the Beatles' rendition for a year.
Apple sued Nike Inc., Capitol Records Inc., EMI Records Inc. and Wieden+Kennedy advertising agency for $15 million.[38] Capitol-EMI countered by saying the lawsuit was
'groundless' because Capitol had licensed the use of "Revolution" with the "active support and encouragement of Yoko Ono Lennon, a shareholder and director of Apple."
According to a November 9, 1989 article in the Los Angeles Daily News, "a tangle of lawsuits between the Beatles and their American and British record companies has been
settled." One condition of the out-of-court settlement was that terms of the agreement would be kept secret. The settlement was reached among the three parties
involved: George Harrison, Paul McCartney, Ringo Starr; Yoko Ono; and Apple, EMI and Capitol Records. A spokesman for Yoko Ono noted, "It's such a confusing myriad
of issues that even people who have been close to the principals have a difficult time grasping it. Attorneys on both sides of the Atlantic have probably put their children through
college on this."
Nike discontinued airing ads featuring "Revolution" in March 1988. Yoko Ono later gave permission to Nike to use John Lennon's "Instant Karma" in another ad.
Minor Threat ad
In late June 2005, Nike received criticism from Ian MacKaye, owner of Dischord Records, guitarist/vocalist for Fugazi & The Evens, and front-man of defunct punk band Minor
Threat, for appropriating imagery and text from Minor Threat's 1981 self-titled album's cover art in a flyer promotingNike Skateboarding's 2005 East Coast demo tour.
On June 27, Nike Skateboarding's website issued an apology to Dischord, Minor Threat, and fans of both and announced that they tried to remove and dispose of all flyers.
They state that the people who designed it were skateboarders and Minor Threat fans themselves who created the ad out of respect and appreciation for the band.[39] The
dispute was eventually settled out of court between Nike & Minor Threat. The exact details of the settlement have never been disclosed.
Horror ad
In this ad, a parody of horror films, Olympic runner Suzy Favor-Hamilton is running a bath in a remote wilderness cabin when a chainsaw-wielding masked killer appears.
Hamilton is obviously in much better shape than the would-be killer and, thanks to her Nike gear, sprints away. The final shot shows the killer out of breath, limping away and
ends with the tagline, "Why Sport?" which is quickly answered with "You'll live longer."
First aired during the opening ceremony of the 2000 Summer Olympics (Friday), the ad titled "Horror" generated roughly 200 complaints (according to NBC) that caused the
network to pull the ad by Sunday. ESPN followed suit, but the ad continued to air with little or no controversy on several other networks, including FOX, WB, UPN and
Comedy Central.
Protesters argued that the ad made light of violence against women, while others claimed it was just too scary to watch, especially for children who enjoy watching the Olympics.
Nike spokespeople retorted it was meant to be humorous, and to satirize the typical horror flick where a helpless woman was destined to be slashed. Hamilton herself stated the
ad was inspirational, since it is the woman who defeats the man.
Chinese-themed ad
In 2004, an ad about LeBron James beating cartoon martial arts masters and slaying a Chinese dragon in martial arts offended Chinese authorities, who called the ad
blasphemous and insulting to national dignity and the dragon. The ad was later banned in China. In early 2007 the ad was reinstated in China for unknown reasons.[40]
Pretty
In the run up to the 2006 U.S. Open, Nike began running Pretty, a television advertisement featuring Maria Sharapova. The ad was a popular and critical success, and went on
to win several of the industry's top awards, including two Cannes Gold Lions.
Place
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Niketown at Oxford Street,London
Nike sells its product to more than 25,000 retailers in the U.S. (including Nike's own outlets and "Niketown" stores) and in approximately 160 countries in the world. The
company also has a program called NIKEiD at nikeid.com, which allows customers to customize designs of some styles of Nike shoes and deliver them directly from
manufacturer to the consumer. Nike sells its products in international markets through independent distributors, licensees, and subsidiaries.
Sponsorship
Main article: Nike sponsorships

Nike pays top athletes in many different sports to use their products and promote/advertise their technology and design.
Nike's first professional athlete endorser was Romanian tennis player Ilie Năstase, and the company's first track endorser was distance running legend Steve Prefontaine.
Prefontaine was the prized pupil of the company's co-founder Bill Bowerman while he coached at the University of Oregon. Today, the Steve Prefontaine Building is named in
his honor at Nike's corporate headquarters.
Besides Prefontaine, Nike has sponsored many other successful track & field athletes over the years such as Carl Lewis, Jackie Joyner-Kerseeand Sebastian Coe. However, it
was the signing of basketball player Michael Jordan in 1984, with his subsequent promotion of Nike over the course of his storied career with Spike Lee as Mars Blackmon, that
proved to be one of the biggest boosts to Nike's publicity and sales.
During the past 20 years especially, Nike has been one of the major clothing/footwear sponsors for leading tennis players. Some of the more successful tennis players currently
or formerly sponsored by Nike include: James Blake, Jim Courier, Roger Federer, Lleyton Hewitt, Juan Martín del Potro, Andre Agassi, Rafael Nadal, Pete Sampras, Marion
Bartoli, Lindsay Davenport, Daniela Hantuchová, Mary Pierce, Maria Sharapova,Serena Williams.
Nike is also the official kit sponsor for the Indian cricket team for 5 years, from 2006 till end of 2010. Nike beat Adidas and Puma by bidding highest (US$43 Million total).
Nike also sponsors some of the leading clubs in world football, such as Manchester United, Arsenal, FC Barcelona, Inter Milan, Juventus,Shakhtar, Porto, Steaua, Red
Star, Club América, Aston Villa, Celtic and PSV Eindhoven. Nike will also sponsor Dundee United from summer 2009.
Nike sponsors several of the world's top golf players, including Tiger Woods, Trevor Immelman and Paul Casey.
Nike also sponsors various minor events including Hoop It Up (high school basketball) and The Golden West Invitational (high school track and field). Nike uses web sites as a
promotional tool to cover these events. Nike also has several websites for individual sports, including nikebasketball.com, nikefootball.com, and nikerunning.com.
Marketing strategy
Nike implemented a number of marketing strategies to sell its products. One of the most important consideration is its marketing mix, better known as the 4Ps.
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Nike is a global sports shoe giant company. It is the largest seller of athletic footwear in the world, holding the lion share of 33% of the global market. The company has
production facilities in Asia, sales facilities in almost 200 countries, and customer service and other operational units worldwide.
The marketing mix or the 4 Ps of Marketing are Product, Price, Place (distribution) and Promotion. Nike's 4Ps are the following:
1. Product
Nike offers a wide range of shoe, apparel and equipment products, all of which are currently its top-selling product categories. Nike started selling sports apparel, athletic bags
and accessory items in 1979. Their brand Cole Haan carries a line of dress and casual footwear and accessories for men, women and children.
They also market head gear under the brand name Sports Specialties, through Nike Team Sports, Inc. They sell small amounts of plastic products to other manufacturers through
Nike IHM, Inc. Bauer Nike Hockey Inc. manufactures and distributes ice skates, skate blades, in-roller skates, protective gear, hockey sticks and hockey jerseys and
accessories.
2. Price
Nike’s pricing is designed to be competitive to the other fashion shoe retailers. The pricing is based on the basis of premium segment as target customers. Nike as a brand
commands high premiums. Nike’s pricing strategy makes use of vertical integration in pricing wherein they own participants at differing channel levels or take part in more than
one channel level operations. This can control costs and influence product pricing.
3. Place
Nike shoes are carried by multi-brand stores and the exclusive Nike stores across the globe. Nike sells its product to about 20,000 retail accounts in the U.S. and in almost 200
countries around the world. In the international markets, Nike sells its products through independent distributors, licensees and subsidiaries. Independent distributors need not
adapt to local pressures because the 4Ps of marketing are managed by distributors.
4. Promotion
Promotion is largely dependent on finding accessible store locations. It also avails of targeted advertising in the newspaper and creating strategic alliances. Nike has a number of
famous athletes that serve as brand ambassadors such as the Brazilian Soccer Team (especially Ronaldino, Renaldo, and Roberto Carlos), Lebron James and Jermane O’Neal
for basketball, Lance Armstrong for cycling, and Tiger Woods for Golf.
Nike also sponsors events such as Hoop It Up and The Golden West Invitational. Nike’s brand images, the Nike name and the trademark swoosh, make it one of the most
recognizable brands in the world. Nike’s brand power is one reason for its high revenues. Nike’s quality products, loyal customer base and its great marketing techniques all
contribute to make the shoe empire a huge success.
Pest analysis
Nike is the leading footwear company in the world. PEST Analysis sums up how the company's business strategies fare in the macro environmental level.
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Nike, Inc. is an incorporated company that designs, develops and markets worldwide athletic footwear, apparel, equipment and accessories. Nike employs both traditional and
non-traditional distribution channels in almost 200 countries with primary market regions in the United States, Europe, Asia Pacific, and the Americas.
Nike has some 20,000 retailers worldwide including Nike factory stores, Nike stores, NikeTowns, Cole Haan stores, and Web sites which sell Nike's sports and leisure
products. Nike accounts for 33% of the global market share in the athletic footwear industry.
PEST Analysis of Nike
Nike, being an international organization, needs to focus on macro environmental factors. Macro environmental factors comprise Political, Economics, Society, and Technology,
viz, PEST Analysis.
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Product Management
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Political Analysis
The government must create economic policies that will foster the growth of businesses. Nike, fortunately, has been helped by the US policies which enable it to advance its
products. The support accorded to Nike by the US government, particularly in the general macroeconomic stability, low interest rates, stable currency conditions and the
international competitiveness of the tax system, form the foundation critical to Nike’s growth.
Economic Analysis
In economy, the biggest threat for Nike would be economic recession. During recession, Nike’s growth will be adversely affected. The US economy is experiencing a downturn
right now. Consumer purchases are slowing down. Currently, Nike's feeling the pinch of the economic recession. The Asian economic crisis also affects Nike since its goods are
manufactured in Asia. The labor costs and material prices are going up.
Nike's growth is not just affected by the local economy but also in the international economy. A weak Euro and an Asian recession could mean weak sales for Nike. The overall
results in the sales generated by Nike in athletic footwear, however, remained stable. The global market makes up for the variances in sales particularly between peak and lean
seasons.
Society Analysis
People are more health conscious nowadays. Diet and health are getting more prominence. Consequently, more and more people are joining fitness clubs. There is an
accompanying demand for fitness products particularly exercise apparel, shoes and equipment. Nike is at the forefront of this surge in demand as people are looking for sports
shoes, apparel and equipment.
Nike, however, failed to foresee problems brought about by a sweatshop expose pertaining to labor and factory conditions at production locations in Asia. This caused bad
publicity and declining sales as society and consumers demand more socially responsible companies.
Technology Analysis
Nike uses IT in its marketing information systems very effectively. Nike applies marketing information systems to the economics of innovation, segmentation and differentiation for
most of its businesses. Nike’s leadership status owes in large part to the use of extremely valuable Information Technology, and applying it to every aspect of the product from
development to distribution.
Nike, being the world leader in the athletic footwear industry, is able to effectively harness its environment to boost its marketing efforts. This strategy has translated into robust
sales of Nike's products.
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In many ways, the sleek, four-story building that houses Nike Inc.'s (NKE ) Innovation Kitchen is a throwback to the company's earliest days. Located on the ground floor of
the Mia Hamm building on Nike's 175-acre headquarters campus in Beaverton, Ore., the Kitchen is where Nike cooked up the shoes that made it the star of the $35 billion
athletic footwear industry. In this think tank for sneakers, designers find inspiration in everything from Irish architecture to the curving lines of a Stradivarius violin. One wall
displays models of every Air Jordan ever made, while low-rise cubicles are littered with sketches of new shoes. The Kitchen is off limits to most visitors and even to most Nike
employees. The sign on the door says, only half in jest: "Nobody gets in to see the cooks. Not nobody. Not no how."
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This is where, nearly 20 years ago, Nike star designer Tinker Hatfield came up with the Air Jordan -- the best-selling sports shoe of all time. Right now, Hatfield and his team are
tallying the results of the Athens 2004 Olympic Games. Hatfield and his design geeks produced an array of superfast sneakers for the Games, including the sleek track spike
called Monsterfly for sprinters and the Air Zoom Miler for distance runners. As befits a global company, Nike's sponsored athletes hailed from all over the world. They took
home a lot of hardware from Athens, including 50 gold medals and dozens more silver and bronze. In the men's 1,500-meter run, for instance, Hicham El Guerrouj of Morocco
grabbed gold, Bernard Lagat of Kenya took the silver, and Rui Silva of Portugal won the bronze. All wore the Air Zoom Miler, while U.S. sprinter Shawn Crawford won the
200-meter gold in a pair of Monsterflys. And Nike apparel had its day in the sun, too. The top four finishers in the men's 100-meter race all wore the sign of the Swoosh.
GOING ESTABLISHMENT
The most telling events for Nike didn't take place on the track, however. The brash guerrilla marketer, famous for thumbing its nose at big-time sporting events, was showing a
new restraint. Eight years ago in Atlanta, Nike ambushed basketball sponsor Champion (a brand of Sara Lee Corp.) by sneaking giant Swoosh signs into the arena. When the
cameras panned the stands, TV audiences saw the Nike logo loud and clear, while Champion had nothing. Nike has even signed up to become an official U.S. Olympic sponsor
in four years in Beijing, and it has toned down its anti-Establishment attitude. For good reason: These days, Nike is the Establishment when it comes to global sports marketing.
With revenues exceeding $12 billion in fiscal 2004, the company that Philip H. Knight started three decades ago by selling sneakers out of the back of a car at track meets has
finally grown up.
The kind of creativity that led Bill Bowerman, the University of Oregon track coach who co-founded the company with Knight, to dream up a new kind of sneaker tread after
studying the pattern on his wife's waffle iron, is still revered at Nike. When it comes to the rest of the business, however, it's a whole new ball game. Gone are the days when
Nike execs, working on little more than hunches, would do just about anything and spend just about any amount in the quest for publicity and market share. Scott Bedbury, a
former Nike marketing chief, recalls pitching his advertising budget to Knight back in 1987. He was asking for a huge increase, from $8 million to $34 million and was prepared
to make his case. Instead, Knight asked him the one question he hadn't prepped for: "How do we know you're asking for enough?" That year, Nike spent a jaw-dropping $48
million. The brash innovator of sports marketing may still open the checkbook wide -- as it did when it signed basketball phenom LeBron James to a $90 million endorsement
contract last year, but those grand gestures are far fewer at the new Nike.
In the past few years, the company has devoted as much energy to the mundane details of running a business -- such as developing top-flight information systems, logistics, and
(yawn) supply-chain management -- as it does to marketing coups and cutting-edge sneaker design. More and more, Nike is searching for the right balance between its creative
and its business sides, relying on a newfound financial and managerial discipline to drive growth. "Senior management now has a clear understanding of managing the creative
process and bringing it to the bottom line. That's the big difference compared to the past," says Robert Toomey, an equity analyst at RBC Dain Rauscher Inc. in Seattle.
BUSINESSLIKE -- AND UNCOOL?

In the old days, Nike operated pretty much on instinct. It took a guess as to how many pairs of shoes to churn out and hoped it could cram them all onto retailers' shelves. Not
anymore. Nike has overhauled its computer systems to get the right number of sneakers to more places in the world more quickly. By methodically studying new markets, it has
become a powerhouse overseas -- and in new market segments that it once scorned, such as soccer and fashion. It has also beefed up its management team. And after stumbling
with its acquisitions, Nike has learned to manage those brands -- Cole Haan dress shoes, Converse retro-style sneakers, Hurley International skateboard gear, and Bauer in-line
and hockey skates -- more efficiently. Indeed, part of Nike's growth strategy is to add to its portfolio of brands.
To many of the Nike faithful, those sorts of changes smacked of heresy. Lebron James is cool. Matrix organization and corporate acquisitions aren't. But cool or not, the new
approach is working. In fiscal 2004, ended May 31, Nike showed just how far it had elevated its financial game. It turned in a record year, earning almost $1 billion, 27% more
than the year before, on sales that climbed 15%, to $12.3 billion. What's more, orders worldwide were up a healthy 10.7%. In North America orders rose 10% following eight
stagnant quarters.
That performance has pleased investors, who now see a company where earnings are less volatile and less fad-driven, yet still growing rapidly enough to spin off lots of cash. In
the past fiscal year, Nike's free cash flow totaled $1.2 billion, and its return on invested capital was 22%, up from only 14% four years ago. The company boosted its dividend
by 43% last fall and completed a $1 billion share repurchase. It plans to buy back $1.5 billion more in shares over the next four years. The result: Nike stock recently traded at
about 78, up 37% in the past year vs. a 9% rise in the Standard & Poor's 500-stock index. The truth is, the onetime corporate rebel is edging toward blue-chip respectability.
Who'd have figured?
Nike believes its newfound discipline will enable it to meet its targets of 15% average annual profit growth and revenue growth in the high single digits. Wall Street shares that
optimism. Says John J. Shanley, an analyst at Susquehanna Financial Group, an institutional broker in Bala Cynwyd, Pa.: "Nike is probably in the best financial position it has
been in in a decade." In fact, some analysts believe Nike is poised to become a $20 billion company by the end of the decade.
That would have seemed laughable just a few years ago -- sales started falling after hitting the $9.6 billion mark in 1998. Even before Nike's superstar endorser and basketball
great Michael Jordan retired from the game in 2003, Nike's creative juices seemed to have run dry. Air Jordans at $200 were collecting dust on store shelves as buyers seeking
a different look began switching to Skechers (SKX ), K-Swiss (KSWS ), and New Balance shoes. Nike wrestled with accusations that it exploited Asian factory workers. Ho-
hum new sneakers and troubled acquisitions didn't help. Nike, eager to regain its old momentum, bumped up production -- only to end up pushing more sneakers into the market
than the customers wanted to buy. As for financial discipline? Well, just consider this: From 1997 to 1999, Nike didn't even have a chief financial officer. "We had a bit of a
burning platform," says Donald W. Blair, the executive whom Knight recruited from PepsiCo Inc. (PEP ) to fill the position.
It was during those tough times that Phil Knight, who had disengaged from Nike in order to travel and pursue other interests, came back to the company. The year was 1999.
Co-founder Bowerman had died, and Nike was floundering. Knight, now 66, needed to set things straight. Standing before thousands of employees at a company meeting, he
admitted that the managers who were running the place had failed. And he went on to blame himself. "He said he wasn't as engaged as he should be, and he said there were
things he could do better," recalls Steve Miller, Nike's former global sports marketing director, who was there. "I was personally stunned he would be so open about his failings."
Knight, whose son died in a scuba diving accident earlier this summer, declined to speak to BusinessWeek.
Knight has been hailed as a visionary for his company's breakthrough design, technology, and marketing prowess. In the 1980s and '90s, Knight forever changed the rules of
sports marketing with Nike's huge endorsement contracts and in-your-face advertising. Mixing marketing and pop music is commonplace now. But Nike created a small furor in
1987 when it used the Beatles' Revolution in ads to sell cross-training sneakers.
Still, when his iconoclastic company faltered, Knight looked beyond the technology and marketing antics that had served it well in the past. Upon his return to the company five
years ago, his first order of business was to put together a new executive team. Knight drew on some Nike veterans, executives who carry the heritage and culture of Nike's
early years. But he also recruited some key players from far outside Nike and its industry. CFO Blair, who came aboard in 1999, was lured from Pepsi, while Mindy F.
Grossman was plucked from Polo Ralph Lauren Corp. (RL ) the next year with the mission of redefining Nike's $3.5 billion global apparel business. The-day-to-day boss, Chief
Operating Officer Thomas E. Clarke, now runs Nike's new business ventures division.
Knight made his boldest management move in 2001, when he named two longtime Nike insiders, creative brand and design wonk Mark G. Parker and operations maven
Charles D. Denson, as co-presidents. With Grossman and Blair providing an outsider's perspective and with Parker and Denson steeped in the company's culture, Knight hoped
to achieve a balance between the old and the new, the creative and the financially responsible. The unusual co-president structure was hardly Business 101, and many observers
figured the new team wouldn't last. Few believed co-presidents could survive the inevitable political maneuvering and clash of egos.
SUCCESSION SWEEPSTAKES?
No matter what else Knight intended, it also looked very much as if he had set up a horse race among those most likely to succeed him. Knight, who owns 80% of Nike's voting
stock, and about 36% of the common shares, has never said when or even if he will retire or what will happen to his voting stock on his death. Speculating on his eventual
departure has been the topic of water-cooler conversations for nearly a decade. The succession issue remains the single biggest question at the company, although the new
management structure has gone a long way toward assuring investors that the bench is deep.
Possibly because there was little time for politicking or backstabbing, given Nike's plight, Parker, Denson, and the rest have mostly steered clear of those pitfalls and focused on
shoring up Nike's weaknesses. "There are aspects of this culture that are incredibly powerful and strong," says Parker, citing design and marketing. "But we needed to get after
the basic pieces of the business: operating principles, financial management, supply-chain renovation, and inventory management."
In the old days at Nike, the culture encouraged local managers to spend big and to go flat-out for market share instead of profitability. In Paris, for instance, the company spent
lavishly for a soccer park at the 1998 World Cup to promote itself. Analysts estimate, conservatively, that it was more than $10 million over budget. The cost, which Nike never
disclosed, caused Wall Street to start asking whether anyone was in charge.
So Parker and Denson engineered a matrix structure that breaks down managerial responsibility both by region and product. Because the company pumps out 120,000 products
every year in four different launch cycles, local managers always had plenty of choice -- but also plenty of ways to screw up. Under the matrix, Nike headquarters establishes
which products to push and how to do it, but regional managers are allowed some leeway to modify those edicts. The matrix won't guarantee that another fiasco like the Paris
soccer park cannot occur, but it makes it a lot less likely.
FILLING THE ORDERS

Nike also overhauled its supply-chain system, which often left retailers either desperately awaiting delivery of hot shoes or struggling to get rid of the duds. The old jerry-built
compilation strung together 27 different computer systems worldwide, most of which couldn't talk with the others. Under Denson's direction, Nike has spent $500 million to build
a new system. Almost complete, it is already contributing to quicker design and manufacturing times, and fatter gross margins -- 42.9% last year, up from 39.9% five years ago.
Nike says that the percentage of shoes it makes without a firm order from a retailer has fallen from 30% to 3%, while the lead time for getting new sneaker styles to market has
been cut to six months from nine.
Meanwhile, Nike has started paying serious attention to its handful of acquisitions, once treated as more of an afterthought. After buying up Cole Haan almost 15 years ago,
Nike struggled to add any real value at the dress-shoe outfit. But lately, Nike managers have figured out that by giving their acquired brands some independence, rather than
forcing Nike's testosterone-laced corporate culture on them, they can achieve better results. "We've learned to let those brands pull resources and expertise out of the mother
ship as opposed to pushing the mother ship onto the brands," Blair says. Nike doesn't break out results for each sub-brand, but the group's sales grew 51%, to $1.4 billion last
year. With nearly a quarter of the sales growth, Converse was the star.
That still-modest portfolio of different brands helps to lessen the company's dependence on hit shoes and could help Nike turn in a more consistent performance. That's why
Nike is eager to snap up complementary brands as they become available. In mid-August it paid $43 million for Official Starter Properties, licensors of sneakers and athletic
apparel whose brands include the budget-level Shaq label. "What we're trying to do is move toward more of a consumer, noncyclical model," says Blair. "The key is trying to
find the right balance of discipline, innovation, creativity, and structure."
Nike has also had to grapple with the touchy topic of sweatshop labor at the 900-odd independent overseas factories that make its clothes and sneakers. When Nike was
getting pummeled on the subject in the 1990s, it typically had only two responses: anger and panic. Executives would issue denials, lash out at critics, and then rush someone to
the offending supplier to put out the fire. But since 2002, Nike has built an elaborate program to deal with charges of labor exploitation. It allows random factory inspections by
the Fair Labor Assn., a monitoring outfit it founded with human rights groups and other big companies, such as Reebok International Ltd. and Liz Claiborne Inc., that use
overseas contractors. Nike also has an in-house staff of 97 which has inspected 600 factories in the past two years, grading them on labor standards. "You haven't heard about
us recently because we have had our head down doing it the hard way. Now we have a system to deal with the labor issue, not a crisis mentality," says Maria S. Eitel, Nike vice-
president for corporate responsibility.
It's overseas, in fact, where most of Nike's sales now come from. Last year, for the first time, international sales exceeded U.S. sales -- still the company's single largest market.
Under Grossman, Nike is making sports fashion a core business, something unthinkable until recently inside Nike's male-dominated culture. Thanks to stylish athletic wear --
think tennis star Serena Williams at the U.S. Open -- Nike's worldwide apparel sales climbed 30% in three years, to $3.5 billion in fiscal 2004.
Of course, Nike still faces challenges. After several years of red-hot growth, European sales of higher-priced shoes have started to slide. In the U.S., retro-sneaker makers like
K-Swiss, Diesel, and Puma are filling a rising demand. And adidas-Salomon has redoubled efforts to attack the North America basketball market, where Nike has a 60% share.
Taking a leaf from Nike's book, Adidas just signed three NBA all-stars: Tracy McGrady, Tim Duncan, and Kevin Garnett, each of whom will have his own sneaker. On the
technology front, Adidas has unveiled the Adidas 1, a $250 shoe slated for December that has a computer chip that automatically adjusts the fit as the wearer runs.
Nike aims to keep pace in the techno-battle with Nike Free, a shoe still being tested, that makes runners feel as if they were barefoot. It's inspired by the barefoot runners of
Kenya, who have proved that shoeless training builds strength and improves performance. Meanwhile the company continues to refine its Shox technology -- a special cushioning
system first developed for runners, which is now becoming a top seller in categories from running to basketball to cross training. The shoes, which sell for up to $135 a pair,
helped put to rest the idea that high-priced sneakers no longer sell well in the U.S.
SWIFTEST KICK
Nike has also shown it can grow by expanding into new markets. When the U.S. hosted the World Cup in 1994, Nike's global soccer sales were $45 million. But a team of
executives persuaded Knight that soccer was the company's future. Today, soccer sales are nearly $1 billion, or 25% of the global market. This year, for the first time, Nike's
share of the soccer shoe market in Europe, 35%, exceeded Adidas, at 31%. Nike has achieved that fast growth in part by using the same outsize marketing tactics that made it
big in the U.S. It paid the prestigious Manchester United club an unprecedented $450 million over 14 years to run its merchandising and uniform operation.
Just before this summer's European soccer championships, Nike launched its Total 90 III, a sleek shoe that draws inspiration from cars used in the Le Mans 24-hour road race.
Nike realized that millions of kids around the globe play casual pickup soccer games in the street and developed the shoe especially for them. That insight does not impress
soccer purists. "Nike is selling a lot of the Total 90 street shoes and is including them in the soccer category," huffs Adidas CEO Herbert Hainer. "They are trying to turn the
business model into a lifestyle." He's right, of course. Just as Nike made basketball shoes into an off-the-court fashion statement, its Total 90s have become fashion accessories
for folks who may never get closer to a soccer pitch than the stands.
What's the lesson? Let other companies worry about the traditional boundaries between sport and fashion. Nike has built its empire by transforming the technology and design of
its high performance sports gear into high fashion, vastly expanding its pool of potential customers. If competitors want to get hung up on what exactly Nike's selling, that's O.K.
with the folks in Beaverton. It's all Nike to them.
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We Are What We Wear
In the late 20th century American, the cultural capital of corporations has replaced many human forms of capital. As we buy, wear, and eat logos, we become the henchmen and
admen of the corporations, defining ourselves with respect to the social standing of the various corporations. Some would say that this is the new form of tribalism, that in sport
corporate logos we ritualize and humanize them, we redefine the cultural capital of the corporations in human social terms. I would say that a state where culture is
indistinguishable from logo and where the practice of culture risks infringement of private property is a state that values the corporate over the human. (Susan Willis, 1993: 132-
133 per Cole, 1995: 365)
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Have we come to this? In light of the rash of killings over Nike shoes in 1991 and the continued market dominance of the brand, clearly Nike exerts a significant social and
psychological force on the American consumer. It is my assertion that Nike appeals to a buying public that treats fitness as a worthy individual goal which simultaneously imparts
social identification. The question remains, how? Nike ads, when first released were "treated like new plays or books" (Katz, 1994:153). Through semiotic analysis of a number
of Nike advertisements, I hope to uncover at least the clues to Nike's pull on public imagination. (The Media and Communications Site concerning semiotic analysis informs this
discussion and stands as a great study aid and interesting read)
Unlocking Nike's Ads
I plan to work with a small number of Nike ads that speak to the entire genre, though a thorough analysis would include the Air Jordan series, the women-oriented
"Empathy"campaign, and All Conditions Gear ads to name a few. I hope to incorporate a wider variety of Nike advertisements at a later date.
Nike's ads, like any other business's, require interpretation. Some of this reading goes on at the conscious level, some unconsciously. As opposed to extremists on either side of
the interpretative question, I fall most nearly to the constructivist point of view in that I view meaning as an interplay between text and the reader. Chandler writes, "Texts are full
of indeterminacies which require the reader's active interpretation. We must draw not only on our knowledge of language, but on our knowledge of the world." Thus, readers of
advertisements bring with them a surface knowledge of the language as well as a set of preconceived ideas about how to relate the ad to themselves. These mental templates are
known as schemata. Examples of these may include ideas of the rebel, corporate businessman, or avant-garde artist as well as Southern Baptist churches, universities, or
mechanics' garages.
Ads work on a variety of different levels including, but not limited to, sign typology, paradigmatic meaning, psychological appeals, emotion, roles, values/beliefs, and knowledge.
Again, the impact of an ad comes from the interplay between these various aspects of make-up and the reader's own notions about him/herself and the world.
So, taking the "Test Your Faith" ad as our first example: Straight off, the reader finds him/herself thrust into the schema of religious worship. Not only must the viewer literally
look up to the runner, but he/she receives the imperative to "Test your faith." The runner pictured appears in the midst of a run and rests easy in the knowledge of his own god-
like attention to fitness. Likewise, the runner has no identity beyond his role in the ad. That is, we cannot see his face, giving him an added element of the unknown divine. The
reader feels cowed looking from a subordinate position at the figure of the runner in his element. The text implies a direct connection between exercising (in this case, running)
and religious questioning. (cp. Nike and the Sanctification of Sport in the History section of this project) The writers seem to suggest an element of transcendence possible in
exercise, as well as the need to continually question who we are in relation to our gods and what we hold most sacred. For the runner in the ad, exercise is the object of sanctity.
Yet the reader might inhabit a different role by placing themselves as the runner in the ad itself. Transported from reading a magazine to the middle of a run, filled with the sensual
pleasure of using one's body, the reader identifies him/herself as the 'tester of faith.' And finding the purity of exercise within the soul, the reader can accept a measure of hearty
self-congratulation.
A slightly dissimilar angle for interpretation would be to imagine the set of causes or drives that propelled the runner in the ad from his home to the streets for a run.
Recall Bauman's statement of drive for fit bodies. The measure of the individual in contemporary society rests upon the extent to which they exercise their body. Seeing the
runner engaged in a long run should impel the reader to imagine their own set of values and desires. What would it take to get them on the streets for a run? How important is
exercise to that person? The ad places fitness as a top priority and suggests that the reader must acknowledge the fitness culture, even if they do not take an active part.
Finally, the gritty gray and white tones of the advertisement insinuate a harsh world in which running becomes an escape. Reading the ad, perhaps themselves members of such a
life, viewers will immediately seek the release and redemption that running and exercise offer.
Moving on to another example of running advertising, we look at "You either ran...": Again placed in the dichotomy between athletes and spectators, the reader need only answer
one question. Have I run today? Respondents will fall neatly into two categories and can take with them the requisite set of emotions that come with their answer. Identification
and affiliation with others, approval, self-worth, and pride all spring from the answer 'yes.' Meanwhile, shame (first and foremost) and ostracization from the 'in-crowd' leave a
bitter taste in the mouths of those answering 'no.'
Placing the runner against a neutral background gives the appearance of a void in which must be placed the sum of viewers' athletic endeavors. They will be judged and given
admittance or refusal to the world that Nike's runner inhabits. The world of the ad is composed of little more than the runner and the bland sky behind him. For the reader, the
added force of the text--almost taunting, by now--makes the point clear. You must belong.
Katz asserts that "Nike's ads in track and field and running [magazines] have long been acknowledged to be as much a way to support the sport's means of communication as
ways to sell gear" (119). While this may be letting Nike off a bit easy, the advertisements above demonstrably speak to an elite group of readers well-versed in the intricacies of
running.
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All these factors tie into the ongoing cultural formation of the fit body discussed in this project's Fitness Culture section. During the late 1980s, Nike attained a relative saturation
of the U.S. market for athletic goods and apparel, leaving Nike executives wondering 'where do we go from here?' Appealing to a higher sense of excellence (arete, to borrow
another Greek word married to the philosophy of Nike), Nike hoped to inculcate a sense of individual accomplishment possible in sport as well as play into that very same sense
already budding in the breasts of consumers. Herein lies another example of the indivisibility of the fitness culture and Nike's place in it. Phil Knight on marketing: "What Nike
does well is to interpret what people are doing, what they're interested in, and we've been lucky enough to align ourselves completely with what we perceive" (Katz, 1994: 150).
But one should not imagine Nike as a mere reflector of popular culture, as the advertising examples above relate. In fact, Jensen (Advertising Age, 12/16/96) imagines Nike's
marketing formula to consist of the integration of the swoosh into the cultural fabric of sports and harnessing of its emotional power.
Originally, Knight hated ads and spent much more on promotions. For example in 1976, only $100,000 were allocated for advertising versus $310,000 for promotion (Strasser
& Becklund, 1994: 239). Knight and the other Nike executives knew well "the importance of owning athlete-endorsed apparel...to youth for the sense of cultural power and
belonging it imparted" (Wilson & Sparks, 1996: 415). And who can deny the success of such long-term promotional efforts as the Nike Air Jordan campaign ? Such a
phenomenon places the real cultural power in individuals (MJ) and the corporations that sponsor them (Nike) and "reflects the position of athletic apparel as an icon for 'culture
of consumption" (Dyson 1993 per Wilson & Sparks, 1996). By the mid-80s, Nike athletes were becoming a special brand of celebrity, with a unique pull on popular
imagination, often engendered by their own line of athletic shoes. By promoting the brand in high schools and colleges, Nike looks to actively influence younger buyers. Said
Sonny Vacarro, a former Nike employee, "The kids will become the messengers" (Katz, 1994: 153). Americans under 25 make up one-half of Nike's sales and 70% of the
money spent on footwear by boys between 13 and 18 came in the form of Nikes. "The shoes were how the boys felt about life and they had been magically ingrained with their
secret aspirations" (ibid.). Wearing a pair of athletic shoes endorsed by a celebrity player signifies the almost the same status that having a fit body does. What is more, the
advertising of Nike actively seeks to "diminish the distance between the greatest athletes and those who play and exercise for fun" (ibid.: 136). In short, Air Jordans allow any
and everyone to "Be Like Mike."
With the statement that Nike "tries to capture the passion and even the moral force" of sport and reify it in a pair of shoes (Katz, 1994: 86), the reader can begin to understand
the ideology that goes toward selling a pair of Nikes. Tying into the religious matrix once more, Nikes become iconic signifiers of faith, personal health, and social inclusion.
Nike proffers cultural belonging, the promise of individual athletic achievement, and dreams of parity with the world's greatest athletes. Operating on a series of different levels of
human understanding, Nike's advertisements actively seek the emotional response necessary to sell shoes, but more importantly, to propagate and sustain the fitness culture.
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Hincker's Homepage
…………………………Nike, Inc. is a marketer of sports apparel and athletic shoes. The American manufacturer, through its marketing strategy which rests on a favourable
brand image, has evolved into a large multinational enterprise. In keeping with the brand image is its association with the distinctive logo and its advertising slogan, "Just do it." In
order to maintain and sustain this image, the company makes huge investments in advertising and brand promotion.
Its promotional activities include agreements for product sponsorship with professional athletic teams, celebrity athletes, and numerous college athletic teams. Nike is involved in
the production of goods for a wide variety of sports, competing with every sports fashion brand in existence. Because of the absence of any single brand that rivals the products
of Nike, the company has no direct competitors, with the exception of German company Adidas. This has helped popularize the brand worldwide in all areas of sport and sports
fashion.
Leave a comment Report
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Guest
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How does Nike use the marketing mix for it's success?
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Guest
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Well one of the nike marketing strategy is use celebrity.
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Guest
The short version of this is: Nike makes itself pop up everywhere, so that it's well known. It associates with people that most of it's consumers want to emulate (such
as michael jordan, in the 1990's) and creates products that will appeal to as wide of an audience as possible while using those celebrities it's consumers want as bait (eg, michael
jordan and the Air Jordan shoeline). This is just the marketing side: The business as a whole creates fast, easy assembly methods that allow it to use cheap labor in southeast asia
and elsewhere to get cheap products (around 10 dollars) and sell them at extremely high prices (about 150 dollars). With nike, most of what you're buying is image.
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Choscura
I must questions the "The Marketing Strategy" for Nike as of June 2009. Where has Nike gone?? I am aware of the Nike brand at all times- however I never see "JUST DO IT"
anymore. No more vibrant outfits for sport stars on the court/field etc. I just want to know, when did Nike Change its Marketing Strategy from "In your face" to ........ Where did
Nike go????
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Guest
Do you think that using leaders- celebrities- cultural, sport, etc etc by sponsorship is enough? I know it is working properly. But other parts of marketing mix are in shadow of
this one. I think it is a shame.
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I promised myself that I wasn't going to give Nike (NKE) the publicity that it wants with its new rivalry uniforms. You see, the company has decided that 10 colleges will wear
specially designed uniforms for their big rivalry games this year, assigning the slogan "Prepare for Combat" to the program.
For example, The Ohio State University will wear "retro-inspired" uniforms when it takes the field against that team from up north (Michigan). I was worried when I heard that
Nike was designing this uniform; Ohio State doesn't do alternate uniforms -- they never have. Honestly, it isn't all that bad; the jersey leaves a little to be desired, but perhaps that
is just me.
Nike has gone as far as replacing the metal belt buckles on the pants with titanium, because it is more lightweight. The apparel firm is really going rather far to try and make
everyone believe that these uniforms are designed to make the players faster and stronger (hence the titanium buckles); more like gladiators/soldiers.
Nike has also given each school a special slogan for the occasion. Ohio State's slogan is "Earned," Texas Christian's is "Don't Back Down," and Virginia Tech's is "Good Guys
Wear White." Not bad; I get the idea behind special one-off uniforms (translation: money grab) and the fact that we are supposed to believe that the uniforms will make the
players faster. I even understand the idea that football players are gladiators, even soldiers (find the great George Carlin bit for a description of football as war), but I think that
Nike may have forgotten something in trying to make the football as war metaphor. Let's take a look at the gem of viral marketing that Nike unleashed on the campus of Virginia
Tech, a combat vehicle emblazoned with Nike's "Prepare for Combat" slogan.
I'm guessing that Nike has decided that it wants to sweep the whole Virginia Tech massacre under the rug. Yes, this has people talking. Yes, this is bringing publicity to the
company. Yes, this is launching the new uniform directive. But at what cost? Honestly, the bad vibes rippling across the Intrawebs are going to get people talking about Nike's
new directive, but the publicity could spark outrage. Yes, Virginia Tech is very proud of its Corps of Cadets and its ties to the military, but Nike may have crossed a line here.
Perhaps I am being a bit too sensitive; if you think so make sure to let me know.
I can't wait until Nike decides to place Michael-Vick themed doghouses all around the Virginia Tech campus with the slogan "You're in for a dog fight" splashed on the sides.
(Michael Vick went to Virginia Tech ... get it?)
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Nike and the American Body
JUST DO IT. SWOOSH. THERE IS NO FINISH LINE. Few athletic icons rise in our consciousnesses faster than Nike. Who can deny the ubiquitous swoosh and its
national, indeed global, impact on the ways in which we play our games and even view our own bodies? Nike's advertising has assumed a lion's share of cultural capital which
inserts itself into every nook and cranny of the American mindset. Nike appears atop the cultural pyramid and has perched there longer than most companies could dream. Katz
(1994) descries that "special Nike strain of the myriad intricacies of cool," whereby Nike has come to interject itself into the fabric of culture by defining what it means to be
irreverent, athletic, and entirely 'with it.' Consistently re-inventing its appeal, Nike works to gear its products toward the maintenance of the athletic body. One statement of
purpose declares the company exists "to enhance people's lives through sport and fitness," while another imagines Nike engaged in "keeping the magic of sport alive" (both Katz,
1994: 25).
Yet an underlying set of principles informs the Nike behemoth and contributes to its continued success. This project intends to take an introductory look at those principles and
synthesize them into a working model of American fitness culture as influenced by Nike.
I'll preface with a number of questions designed to determine the loci of power for Nike and the fitness culture.
• How have Nike's advertising campaigns influenced the American psyche and engendered a sharp focus on bodily appearance and fitness?
• Taking Nike's prime motivator (as a for-profit corporation) to be sales, what are the motivations for consumers to buy athletic apparel?
• Does fitness signify status in American society? Does this point to a re-ordering of cultural priorities?
• Does the fit body merely inhabit sport culture or drive it?
Using the history of Nike as a jumping off point, one can begin to order the list of drives and desires that contribute to the fitness culture and Nike's place therein.
Popular conceptions of the body and exercise didn't just appear overnight. Rather, they were the result of a long simmering that gradually came to represent what Americans now
think about when they imagine fitness and exercise.
Looking to semiotic analysis of Nike's advertisements (specifically those concerned with running), I hope to draw out some of the meanings and foundations of thought informing
popular fitness culture and those who use it to make money, i.e. Nike.
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Preliminary Information: Iconography Explained
Nike's Heritage
NIKE, pronounced NI-KEY, is the winged goddess of victory according to Greek mythology. She sat at the side of Zeus, the ruler of the Olympic pantheon, in Olympus. A
mystical presence, symbolizing victorious encounters, NIKE presided over history's earliest battlefields. A Greek would say, "When we go to battle and win, we say it is NIKE."
Synonymous with honored conquest, NIKE is the twentieth century footwear that lifts the world's greatest athletes to new levels of mastery and achievement. The NIKE
'swoosh' embodies the spirit of the winged goddess who inspired the most courageous and chivalrous warriors at the dawn of civilization. (from Nike Consumer Affairs packet,
1996)
The Swoosh
[pic] The SWOOSH logo is a graphic design created by Caroline Davidson in 1971. It represents the wing of the Greek Goddess NIKE. Caroline Davidson was a student at
Portland State University in advertising. She met Phil Knight while he was teaching accounting classes and she started doing some freelance work for his company. Phil Knight
asked Caroline to design a logo that could be placed on the side of a shoe. She handed him the SWOOSH, he handed her $35.00. In spring of 1972, the first shoe with the
NIKE SWOOSH was introduced.....the rest is history! (from Nike Consumer Affairs packet, 1996)
A brief history of Nike
The Nike athletic machine began as a small distributing outfit located in the trunk of Phil Knight's car. From these rather inauspicious beginnings, Knight's brainchild grew to
become the shoe and athletic company that would come to define many aspects of popular culture and myriad varieties of 'cool.'
Nike emanated from two sources: Bill Bowerman's quest for lighter, more durable racing shoes for his Oregon runners, and Knight's search for a way to make a living without
having to give up his love of athletics. Bowerman coached track at the University of Oregon where Phil Knight ran in 1959. Bowerman's desire for better quality running shoes
clearly influenced Knight in his search for a marketing strategy. Between them, the seed of the most influential sporting company grew.
The story goes like this: while getting his MBA at Stanford in the early '60s, Knight took a class with Frank Shallenberger. The semester-long project was to devise a small
business, including a marketing plan. Synthesizing Bowerman's attention to quality running shoes and the burgeoning opinion that high-quality/low cost products could be
produced in Japan and shipped to the U.S. for distribution, Knight found his market niche. Shallenberger thought the idea interesting, but certainly no business jackpot. Nothing
more became of Knight's project.
Cut to 1963. Phil Knight traveled to Japan on a world-tour, filled with the wanderlust of young men seeking a way to delay the inevitable call of professional life. Seemingly on a
whim, Knight scheduled an interview with a Japanese running shoe manufacturer, Tiger--a subsidiary of the Onitsuka Company. Presenting himself as the representative of an
American distributor interested in selling Tiger shoes to American runners, Knight told the businessmen of his interest in their product. Blue Ribbon Sports--the name Knight
thought of moments after being asked who he represented--was born. The Tiger executives liked what they heard and Knight placed his first order for Tigers soon thereafter.
By 1964, Knight had sold $8,000 worth of Tigers and placed an order for more. Coach Bowerman and Knight worked together, but ended up hiring a full-time salesman, Jeff
Johnson. After cresting $1 million in sales and riding the wave of the success, Knight et. al. devised the Nike name and trademark Swoosh in 1971.
By the late '70s, Blue Ribbon Sports officially became Nike and went from $10 million to $270 million in sales. Katz (1994) describes the success via Nike's placement within
the matrix of the fitness revolution: 'the idea of exercise and game-playing ceased to be something the average American did for fun,' instead Americans turned to working out as
a cultural signifier of status. Clearly, the circumstances surrounding the shift are not this simple; it is one of the aims of this project to discover other generators of popular attention
to health.
If Nike didn't start the fitness revolution, Knight says, "We were at least right there. And we sure rode it for one hell of a ride" (Katz, 66). The 80s and 90s would yield greater
and greater profits as Nike began to assume the appearance of athletic juggernaut, rather than the underdog of old. "Advertising Age" named Nike the 1996 Marketer of the
Year, citing the "ubiquitous swoosh...was more recognized and coveted by consumers than any other sports brand--arguably any brand" (Jensen, 12/96). That same year Nike's
revenues were a staggering $6.74 billion. Expecting $8 billion sales in fiscal 1997, Nike has targeted $12 billion in sales by the year 2000.
And all from the back of a car.
Few can question Nike's financial hegemony. But nearly $7 billion in revenues clearly begs the question, What sells these shoes? It is my assertion that Nike's power to sell
comes from deep-rooted yearnings for cultural inclusiveness and individual athletic accomplishment. These seemingly paradoxical desires collide in consumers hearts and minds
and produce the unyielding zeal for Nike shoes and apparel. Unfortunate effects of this zeal can be found in the rash of Nike apparel killings in 1991 and the profusion of Nike
collectors and webpages designed around the company's products. (See listing of homepages on Works Cited Page) Nike appeals to these disparate elements of Americans'
personalities through an advertising philosophy that is, at once, simple and sublime. In addition, Nike's practice of top-level athletes promoting their products appeal to countless
ages and creeds as a way to identify with and emulate their athletic heroes. These forces work powerfully upon the individual consumer, but one should not lose sight of the
cultural context in which the individual moves.
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Origins of the Fitness Culture
What does it mean to be fit? How healthy are you? In what ways does a hard, athletic body appeal to you? How many hours a week do you spend working out? What's your
cholesterol level? Your resting pulse? Your VO2 max?
Questions like these bombard the contemporary athletic consumer. Visions of lean, golden-tanned bodies sweating in exercise accost us from all media. Yet, these dreams (or
nightmares) of idyllic exercise have only recently held popular sway. As late as the 1950s, American consumers rested easy in their self-conceptions of health. But even by that
time, the subtle messages that make up popular notions of health began to undergo transformation. Howell (1991) cites the post-WW2 years as the time during which the
massive growth of state apparatus came to define precisely the term "quality of life." The concept of leisure came to represent, writes Gruneau (1984), the happiness and success
of postwar social democracy. In turn, leisure became a sign of broader political and cultural advances in American life.
Ingham, Katz, and Cole all place the germ of the fitness culture within the late 1970s and early 1980s. Writing in perhaps the seminal work of fitness anthropology, Ingham
(1985) frames the preoccupation with the body in terms of a contradiction between the welfare state and consumer culture. As the American state assumed more and more
responsibility for its poor, many citizens viewed welfare as morally repugnant. Conservatives saw the admission of moral weakness in placing a demand on the state to take care
of one's body. In contrast, liberals thought the poor stigmatized for not being able to perform the role of "body-consumer." That is, the individual who purchases goods and
services based upon their exercise efficacy. Without delving into a discussion of the morality of the welfare state, it should be noted that both points of view deal exclusively with
the body. Ingham cites Bauman:
The care of the body [is] the crucial time and money-consuming activity of the denizens of consumer society. The body is charged with the responsibility for success and failure in
earthly endeavors, and the urge 'to do something about my life' is most eagerly translated into a precept 'to do something about my body.'"
As the First Running Boom took off in the late 70s, the idea of exercise and game-playing ceased being something Americans did for fun. Instead, "one ran for long life, health, or
for a toned body suitable to the imminent halter-topped, and stretch-panted aesthetic" (Katz, 1994:65-66). Working on the body became a means of taking control of and
displaying one's self. It gave the individual an iconographic representation of who they were in relation to everyone else.
How could this not appeal to the Yuppie generation? The allure was sexless, promised empowerment, status, and long life (Park, 1994: 62). The working out Yuppie defined
himself by a "self-betterment ethos" and a quality of life dependent upon the popular culture. Driven by market persuasion and a design aesthetic that included bodies created by
technology, the Baby Boom generation measured the quality of life by the body (Howell, 1991: 262-263).
Cole (1995) concurs with the idea of the body as a manifestation of consumer identity:
The images disseminated by promotional culture routinely and repetitiously solicit the hard body, the deep self, and free will (which aroused the desire to do work on the body
and consume commodities in order to maintain the body and stabilize the identity.
And in their 1997 essay on soccer's racial and class divisions in suburban American, Andrews et. al. perhaps most succinctly summarize the culture of the fit body: "the body [is
metamorphisized]into a corporeal commodity through which self-worth is expressed."
Nike and the Sanctification of Sport
There can be little argument over the rise of sport or its continued domination in the minds of the American people. Katz (1994:25) believes sport "surpassed popular music as
the captivating medium most essential to being perceived as young and alive." The preceding discussion of fitness culture and the myriad TV, radio, and internet advertisements
for everything from home gyms to running shoes to season tickets at the ballpark speak to the overarching desire for and subjugation to the gods of Sport. Corporations, reading
groups, mailing lists, local clubs, national organizations, and high school teams have all sprung up like mushrooms around the monolithic structure of Sport.
If Nike didn't spawn the fitness revolution, "we were at least right there. And we sure rode it for one hell of a ride." --Nike President and CEO Phil Knight, as quoted by Katz
(1994)
While Nike may or may not have begun the fitness boom, the company certainly capitalized on it and inserted itself into the cultural fabric by its incisively clever marketing and
promotional tools. What then, does Nike's advertising impart? What images and significance do people assign to Nike?
According to the words of Nike's founder, a sense of mythology and mystery surrounds sport. Knight believes "superior athletic ability speaks to everyone's belief in some
primordial capacity for a kind of true greatness that has been obscured over time by...the general clutter of contemporary life" (Katz, 1994: 6). Through Nike's vision, the
American public has been privy to a conception of athletes as gods, games as ritual life, and the entire galaxy of sport as an Elysian Field, promising sound minds in sound bodies.
Inside Nike, athletics are seen as Man's highest plane of being. Nike wants to package this idea, get it into the minds of the consumers, and keep it there until the time comes to
buy sport apparel.
By all accounts, this approach has been wildly successful. (See Nike History and Timeline.) If religion speaks to the most elevated part of Man's nature and holds the greatest
influence over Him, Nike's recasting of Sport as sacred virtually ensures a buying public wedded to the notions of athletes as ultra-human and exercise as a means to that uber-
humanity. Nike's products stand as the bridge between the ideological apotheosis of Sport and the common man. Anyone with the right amount of money, Nike seems to imply,
can outfit themselves in the garments of their gods. Sport and religion become intertwined and interchangeable, as Howell (1991) writes of "secular cathedrals full of technological
devices with which to develop the bronzed muscular Adonis-like body." Runner-philosopher George Sheehan wrote, "When I run the roads, I am a saint...I am Thoreau , the
solitary seeking union with the world around him." Katz offers: "Physical self-improvement and health became the basis of the new secular religion, and Nikes became the
chalices and rosaries of choice" (1994:66). Cole has Nike directing "our gaze from bodily surfaces to depth, to the qualities of the essential self" (1995: 352). The active body
equates to a sacred object, exercise represents the ritual of religion, and athletes look like gods. Sport has defined a new pantheon of deities and presented new roads to
redemption. Nike, for its part, has played a crucial role in that shift and made a mint in the process.
Cole's analysis of Nike's part in the fitness culture depicts a more psychological focus, though still tinged with aspects of religiosity. The appeal of Nike comes from its insistence
on the natural self, the body unimpeded by modern conceptions of beauty and unencumbered by the psychic weight of "beauty" practices. "Nike (as metonym for exercise)
situates itself as a better version of beauty practices through its apparent recognition and affirmation of an inner and more authentic self" (Cole, 1995: 32). Placing Nike's rise to
market hegemony in terms of cultural realignments, Cole writes:
It is not a coincidence that Nike became Nike during the decades marked by significant economic and political shifts, whose corresponding cultural emphases were on fitness,
health, addiction, and individual responsibility. (1995: 355)
Fitness culture and Nike were contemporaneous partners in the promulgation of the hard-bodied aesthetic. Neither entity can claim parentage of the other, and both owe their
continued existence to the well-being of the other. Through a complex web of political and social changes, Americans' value systems after the Second World War began to
include fitness as a morally upstanding activity because of its sacred connotations and self-bettering ethos. In this new system, athletes stand as gods and their apparel offers the
promise of increased performance and godhood by proxy. Likewise, sport appealed to Baby Boomers as it proffered the means to display market savvy, technological
"hipness," and a fully realized self. Nike understands very well the pull of sport in popular culture. Its vision telegraphs a desire to "create covenants between customers and a
special company cast as a haven for people who identify completely with athletes and sports" (Katz, 1994: 24). This statement from Phil Knight exemplifies the religiosity,
interconnectivity, and economics of the fitness culture and Nike's unique relation thereto
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A Thread in the American Fabric
The quality of life in American culture has undergone extensive re-working in the minds and bodies of the public. Over the course of the last half-century, fit bodies have come to
signify self-realized psyches, status in Yuppie-dom, and an individual sense of athletic prowess. In a society departing from standardized religious practice, exercise has come to
stand in as a "secular religion," capable of imparting the sense of community and self-betterment of the faith. In many cases, as the discussion of the fitness culture demonstrated,
Nike is interchangeable with the word exercise in popular American discourse. In fact, Nike has so woven itself into the American fabric that images such as this: [pic] draw little
notice from defenders of the flag. In fact, Nike designed the uniforms for the USA Track and Field Team and the National Soccer Teams, incorporating the [pic] into the very
symbol of the American identity.
Lasch and Narcissism in Contemporary American Culture
Although Cheryl Cole can make statements like "The story of Nike is one of global trade in the body," (1995: 365) ultimately the matter comes down to the individual. The
personal drives and desires of individual consumers move the vast corporate machinery of Nike. Through efficient and effective appeals to its market share, Nike taps into a
culture of "competitive individualism" wherein Americans no longer attempt to "inflict [their] own certainties on others but to find meaning in life" (Lasch, 1978: xvi). Though an
older critique of American culture, Lasch's arguments concerning social narcissism still hold true when placed in the context of the fitness culture of which Nike is a component.
Many of the shared characteristics between the clinical psychological dimension and the social manifestations of narcissism, can be effectively applied to the exercise aesthetic
and culture of sport covered in this project. Lasch (33) lists intense fear of old age and death, fascination with celebrity, a sense of inner emptiness, and dependence on the
vicarious warmth provided by others as some of the motivations of the narcissist. One could substitute the contemporary American fit athlete in his place. In point of fact, the
modern media's definition of narcissism covers the idea quite well when discussing the fit body. Many of the consumers who represent Nike's clientele possess the vanity, self-
satisfaction, self-glorification, and self-admiration that Lasch bemoans as an underdeveloped set of criteria for narcissism. Yet if these Nike customers did not hold these
attributes, what would get them to buy the products in the first place?
So, we can begin to see that Nike culture (which very nearly subsumes fitness culture) holds the social and psychological aspects of narcissism in common. Exercise will always
have individual dividends, regardless of the context in which it is performed. And this suits the American public just fine. Because for the foreseeable future, they will continue to
JUST DO IT.
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Strengths.
• Nike is a very competitive organization. Phil Knight (Founder and CEO) is often quoted as saying that 'Business is war without bullets.' Nike has a healthy dislike of is
competitors. At the Atlanta Olympics, Reebok went to the expense of sponsoring the games. Nike did not. However Nike sponsored the top athletes and gained valuable
coverage.
• Nike has no factories. It does not tie up cash in buildings and manufacturing workers. This makes a very lean organization. Nike is strong at research and development, as is
evidenced by its evolving and innovative product range. They then manufacture wherever they can produce high quality product at the lowest possible price. If prices rise, and
products can be made more cheaply elsewhere (to the same or better specification), Nike will move production.
• Nike is a global brand. It is the number one sports brand in the World. Its famous 'Swoosh' is instantly recognisable, and Phil Knight even has it tattooed on his ankle.
Weaknesses.
• The organization does have a diversified range of sports products. However, the income of the business is still heavily dependent upon its share of the footwear market. This
may leave it vulnerable if for any reason its market share erodes.
• The retail sector is very price sensitive. Nike does have its own retailer in Nike Town. However, most of its income is derived from selling into retailers. Retailers tend to offer a
very similar experience to the consumer. Can you tell one sports retailer from another? So margins tend to get squeezed as retailers try to pass some of the low price competition
pressure onto Nike.
Opportunities.
• Product development offers Nike many opportunities. The brand is fiercely defended by its owners whom truly believe that Nike is not a fashion brand. However, like it or not,
consumers that wear Nike product do not always buy it to participate in sport. Some would argue that in youth culture especially, Nike is a fashion brand. This creates its own
opportunities, since product could become unfashionable before it wears out i.e. consumers need to replace shoes.
• There is also the opportunity to develop products such as sport wear, sunglasses and jewellery. Such high value items do tend to have associated with them, high profits.
• The business could also be developed internationally, building upon its strong global brand recognition. There are many markets that have the disposable income to spend on
high value sports goods. For example, emerging markets such as China and India have a new richer generation of consumers. There are also global marketing events that can be
utilised to support the brand such as the World Cup (soccer) and The Olympics.
Threats.
• Nike is exposed to the international nature of trade. It buys and sells in different currencies and so costs and margins are not stable over long periods of time. Such an exposure
could mean that Nike may be manufacturing and/or selling at a loss. This is an issue that faces all global brands.
• The market for sports shoes and garments is very competitive. The model developed by Phil Knight in his Stamford Business School days (high value branded product
manufactured at a low cost) is now commonly used and to an extent is no longer a basis for sustainable competitive advantage. Competitors are developing alternative brands to
take away Nike's market share.
• As discussed above in weaknesses, the retail sector is becoming price competitive. This ultimately means that consumers are shopping around for a better deal. So if one store
charges a price for a pair of sports shoes, the consumer could go to the store along the street to compare prices for the exactly the same item, and buy the cheaper of the two.
Such consumer price sensitivity is a potential external threat to Nike.
'If you have a body, you are an athlete' - Bill Bowerman said this a couple of decades ago. The guy was right. It defines how he viewed the world, and it defines how Nike
pursues its destiny. Ours is a language of sports, a universally understood lexicon of passion and competition. A lot has happened at Nike in the 30 years More . . .
Disclaimer: This case study has been compiled from information freely available from public sources. It is merely intended to be used for educational purposes only.
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England football star Wayne Rooney, pictured advertising Nike. The image is set to cause a real stir.
Nike, who have been outgunned by Adidas in the marketing stakes so far at this years World Cup, have displayed the message on a huge billboard on the M4 motorway in
England. It is set to cause controversy as it depicts footballer Rooney, arms stretched wide, as if he were adorned on a crucifix. The image goes further by emulating blood on
Rooney’s face and body in the shape of a cross, a St Georges cross.
Nike are unable to advertise within any of the World Cup football stadiums, as Adidas are the official sponsors. Adidas also sponsor the match balls and the referees kits.
Therefore Nike have to rely on other ways to market their sportswear and football boots.
Nike know this poster will cause controversy and gain press coverage, that’s why they decided to “just do it”.
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Nike is the world's #1 manufacturer and marketer of athletic footwear and apparel. Almost out of the blue, the company established itself as one of the world's most familiar
brands during the 1980s and 1990s. As familiar as a Coke bottle or Big Mac, the Nike "swoosh" logo came to symbolize not just sports culture, but street culture, as the appeal
of the star players who endorsed the brand was carried onto city streets. The approach of the new century set Nike new problems. Trainers went (briefly) out of fashion,
economic slowdown and labour problems hit Asian performance. But the group has bounced back strongly, retaining its iron grip on the global sporting footwear sector and on
US sports-related apparel. Sports culture remains an intrinsic part of modern daily life, and Nike has strengthened its hold on the market as a whole through endorsement
partnerships with many of the world's most prominent sports men and women as well as a string of memorable and effective marketing campaigns.
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management for the world's leading brands and companies, including details of which advertising agency handles which accounts in which countries for major markets.
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MARKETING STRATEGY PLAN: NIKE
This is an excerpt from the paper...
While Nike is the industry leader in athletic foot ware on both a national and a global basis, the companyÆs performance has been less than spectacular over the past two years
(HooverÆs, Inc. 1). Three areas of particular concern to the company in relation to the refinement of its marketing strategy to improve the companyÆs performance are (a) the
dispute between Nike and Foot Locker (a leading athletic shoe retailer), (b) NikeÆs strategies for dealing with outlets (the companyÆs own Nike Town stores and retail Web
outlet, as well as discount outlet retailers), and (c) the companyÆs overall retail strategy (product and target market issues concerning an athletic emphasis versus a fashion
emphasis, as well as similar issues affecting the retail marketing of its products).
The three areas of concerns described above require the development of strategic responses by the company. Thus, each of the three areas defines an objective for NikeÆs
marketing strategy plan. This current research developed two suggested marketing strategy options in relation to each of the three objectives for the company to consider for
inclusion in its marketing strategy plan.
In the Nike, Inc. (4) Form 10-K filed with the Securities and Exchange Commission reporting on NikeÆs Fiscal 2002 (closed 31 May 2002) results, the company revealed that
it anticipated substantially lower order levels from its largest customer during the remainder of ca
...
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Comparison between Nike and Adidas [pic]

[Nike][Adidas][Industry Leaders][Home]
| |[pic] |[pic] |
| |Nike |adidas-Solomon |
|Headquarters |Beaverton, OR USA |Herzogenaurach, Germany |
|Major Markets |Basketball, Cross-training, Running, Women and Children’s shoes |Soccer, Tennis, Athletics |
|Key Sponsorships |Michael Jordan; Mia Hamm; Tiger Woods; Brazil Soccer |New York Yankees; University of Tennessee; Kobe Bryant
|
|Strategies |� Domestic market focus |� European market focus |
| |� Shifted focus to soccer in order to gain international recognition |� Adidas dominates the world market, specifically the soccer market
which is|
| |� Started athlete sponsorship frenzy |considered the "world’s sport." |
| |� Has created new look shoes to excite "bored customers" |� Sponsors professional athletes and athletic teams in response to
Nike’s |
| |� Nike Team Sports |marketing technique |
| |� Changes shoe designs frequently to stay ahead of competitors |� Tries to cut production time and cost in order to be more efficient
|
| |� Customized products (Nike ID) |� Uses low wage labor to cut production costs |
| |� Uses overseas manufacturing factories to cut production costs. |� Has enhanced marketing and advertising budget |
| |� Perfected its internet site with custom footwear options |� Has recently tried to expand its market to sports equipment and apparel
|
| |� Has lead the industry in advertising and marketing strategies | |
|Outsourcing |� Nike is not a production company; almost all shoes are outsourced; the home |� Adidas outsourced its production but the design and
development process is|
| |office in Beaverton designs, develops and markets the goods |based in Germany. |
| |� Subcontractors in Taiwan and Korea contract to other Asian countries for |� In 1993, Adidas moved its production overseas to Asia in order
stay |
| |production |competitive in the industry. |
| |� Assembly factories in Taiwan, Korea, China, Indonesia and Vietnam produce | |
| |the shoes. | |
| |� Nike’s trading company is the Nissho Iwai Corporation | |
| | | |
Domestic marketing of NIKE is more in U.S.A where a large number of NIKE’s products are sold. NIKE is profiting from the lucrative NBA in the U.S.A. NIKE partnered
with NBA stars such as Micheal Jordan and LeBron James in 2005 to create a “niche” for its product in the local market. NIKE continues to do this even with world class Tiger
Woods, fully kitted by NIKE in all his outings in US and outside US. NIKE also makes takes advantage of the “keep fit” mentality of women in U.S.A to market its product by
promoting adverts that they are being empowered for keeping fit. NIKE sells its product to over 25000 retailers in U.S.A. However, the competition has not been easy with
hyper-competition from Adidas and Reeboks and others. The economic recession too is posing a tough challenge for NIKE.
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Nike is one of the top brands in sports and the #1 shoemaker in the world. The athletic apparel and footwear giant was founded in 1964 by Phil Knight and Bill Bowerman.
Formerly known as Blue Ribbon Sports, the company now has recognizable brands across many sectors: Nike, Jordan Brand, Nike Golf, Converse, Hurley, Nike Soccer,
Umbro and Cole Haan.
Nike has more than 30% global market share in the athletic footwear category and almost 10% share of the athletic apparel market. Nike’s market share in the United States is
higher, they have almost 40% of the U.S. market. Nike had almost $19 billion in global revenue in 2008 (source).
Nike reinvests approximately 12% of their revenue into marketing, which includes advertising, endorsements and sponsorship deals. In 2008, Nike spent almost $3 billion
dollars on marketing. Nike’s U.S. budget is close to $800 million. Nike is seeing strong results from their spending because their 3 top brands (Nike, Jordan, Converse) grew
11% in September, while competitors Adidas, Reebok and New Balance fell by an equal amount (source: AdAge).
Nike social network marketing
This article comes from Businessweek.
How Nike's Social Network Sells to Runners
The Nike+ site is drawing hordes of runners, and its success may hold lessons for brand building on the Web
By Jay Greene November 17, 2008
[pic]
Nike (NKE) is winning a new game that other corporations, from Coca-Cola (KO) to Verizon (VZ) to General Motors (GM), have tried unsuccessfully to play: building brand
loyalty via online social networking.
In the two years since it launched Nike+, a technology that tracks data of every run and connects runners around the world at a Web site, nikeplus.com, Nike has built a legion
of fans. In August, for instance, 800,000 runners logged on and signed up to run a 10K race sponsored by Nike simultaneously in 25 cities, from Chicago to São Paulo. Now
the company is testing a social network to promote its basketball shoes.
How Nike+ benefits the company's bottom line is harder to gauge. Some analysts back up Nike's claims that the site is renewing the popularity of its running shoes.
SportsOneSource, a Princeton (N.J.) market research firm, says Nike accounted for 48% of all running-shoe sales in the U.S in 2006. Today, its share is 61%. "A significant
amount of the growth comes from Nike+," says Matt Powell, a SportsOneSource analyst.
SYNCHING WITH IPOD
But skeptics such as Sam Poser, a stock analyst at brokerage firm Sterne Agee & Leach in New York, say Nike+ attracts only serious runners, a drop in the bucket compared
with its total customer base.
Overall, the use of social networks worldwide has grown 38% in the past year, according to market researcher comScore. But a recent McKinsey survey found that many
companies struggle with Web 2.0 technology and that only 21% of the nearly 2,000 executives who responded were satisfied with the software available to launch blogs or
create Facebook applications.
Nike's online strategy differs from those of other companies. Most have tried to create virtual communities through a build-it-and-they-will-come approach centered on a brand
or specific product. Originally, the Beaverton (Ore.) company envisioned Nike+ simply as a clever way to combine music and running, not as a prototype for a new kind of
marketing. "It was never about how can we convert some percentage of users [to buy Nike shoes]," says Stefan Olander, global director of Nike consumer connections.[pic]
The key to bringing runners onto the Web was the development in 2006 of a $29 Sport Kit sensor that, when synched with an iPod touch or nano, tracks runners' speed,
mileage, and calories burned. When those runners dock their iPods, nikeplus.com launches, and the run data get uploaded. More important, the site is a virtual gathering place.
Runners have collectively logged 93 million miles on nikeplus.com.
So far Nike has sold 1.3 million Nike+ iPod Sport Kits, according to SportsOneSource, and 500,000 Nike+ SportBands (at $59 apiece), wristwatch-like devices for runners
who don't want to listen to music. While sales from these products total $56 million, that's just a rounding error at a company that posted $18.63 billion in sales in fiscal 2008.
Robyn Winters, an assistant manager of a North Face (VFC) store in Seattle, picked up a Nike+ kit and sneakers in 2006. Winters, 28, who had already run a half-marathon,
credits Nike+ with boosting her enthusiasm for running and for Nike, too.
On nikeplus.com, she's part of a group of 90 runners who challenge each other to go faster and farther. Since first logging on, Winters has run two 50-kilometer races and one
50-mile race, and she plans to run two more 50-milers before yearend. This October, she bought a new pair of Nike shoes and two backpacks with Nike's Human Race logo
on them—one for herself, the other for her husband.
Nike now hopes to score with another group of jocks: basketballers. The company is beta-testing Ballers Network, a Facebook application that lets players organize real-world
games and manage their teams online.
Rivals are joining the race. Next year, adidas intends to introduce in the U.S. a sensor called miCoach that allows runners to upload heart rate and running data to a Web site via
mobile phone. But an American miCoach will have a long way to go to catch up with Nike+. About 93 million miles, in fact.
…………………………………………………………………………………………………..
|Nike, the largest seller of athletic footwear and athletic apparel| |
|in the world with subsidiaries in over 200 countries across the | |
|world, has attempted to keep itself on the cutting edge of | |
|technology. Nike has been launching new technically advanced shoe | |
|models from time to time, backed by innovative advertisements, | |
|celebrity endorsements, successful associations (college teams) | |
|and event sponsorships. | |
| | |
|When it faced a crisis in the late 1990s, Nike decided to | |
|strengthen its management, overhaul its information systems, and | |
|streamline supply chain management. Since then, Nike has been | |
|achieving rapid growth by using aggressive marketing tactics. | |
However, the company still faces many challenges in the wake of changing fashion trends, the falling sale of its higher- priced shoes, and increasing competition. The case
discusses the evolution of Nike's marketing strategy and the company's various initiatives to strengthen its competitive position in a changing environment.
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Nike Company Profile

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02-02-2011 Company Profile: Nike, Inc.

Origins and history

In 2004, they launched the SPARQ Training Program/Division.

|[pic] |This section needs additional citations for verification. |

Human rights concerns

|[pic] |This section needs additional citations for verification. |

Main article: Nike sponsorships

BUSINESSLIKE -- AND UNCOOL?

FILLING THE ORDERS

We Are What We Wear

Unlocking Nike's Ads

Nike and the American Body

Preliminary Information: Iconography Explained

A brief history of Nike

Origins of the Fitness Culture

Nike and the Sanctification of Sport

A Thread in the American Fabric

Lasch and Narcissism in Contemporary American Culture

MARKETING STRATEGY PLAN: NIKE

This is an excerpt from the paper...

Comparison between Nike and Adidas [pic]

Nike social network marketing

This article comes from Businessweek.

How Nike's Social Network Sells to Runners

By Jay Greene November 17, 2008

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