nike case study geography

Nike: An Innovation Journey

• First Online: 29 November 2017

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• Michelle Childs 5 &
• Byoungho Jin 6  

Part of the book series: Palgrave Studies in Practice: Global Fashion Brand Management ((PSP:GFBM))

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Nike is an American multinational company that has evolved to become a global leader in athletic wear with annual sales exceeding $21 billion in 2016, more than half of which is attributed to international markets. Since its inception in 1964, Nike has been an innovation leader in product development, marketing and consumer experience. Due to a dedication to continuous innovation, Nike has been able to sustain a competitive advantage within the athletic apparel and footwear marketplace. This case highlights key points in Nike’s journey of innovation and examines how Nike has successfully emerged as a global champion within the athletic wear industry. Based on these analyzed strategies, this case provides implications that are relevant for practitioners and academics.

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In 1928 in Chicago, IL, Cole Haan was established by two founders—Trafton Cole and Eddie Haan. The company focused exclusively on men’s footwear before expanding into women’s footwear in 1979 (Shoemetro, 2016 ).

Bauer was founded out of Kitchener, Ontario, Canada in 1927 and was the first company to make hockey skates that had a permanent blade attached to the boot, an innovation that changed the industry (Ozanian, 2012 ).

The Jordan brand was launched in 1984 when basketball star Michael Jordan signed a contract with Nike. An outcome of this five-year, $2.5 million deal was a brand new line of shoes called Air Jordan (Footlocker, 2017 ).

With roots in beach culture, Hurley was established in Southern California in 1999 by Bob Hurley. Initially, it was known for surf-related products but eventually became a youth lifestyle brand (Transworld Survey, 2002 ).

Converse began in 1908 near Boston, MA as a rubber shoe company that specialized in galoshes. The brand expanded to sneakers and basketball shoes starting in 1920 (Converse, 2017 ).

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Department of Retail, Hospitality, and Tourism Management, The University of Tennessee, Knoxville, TN, USA

Michelle Childs

Department of Consumer, Apparel, and Retail Studies, The University of North Carolina at Greensboro, Greensboro, NC, USA

Byoungho Jin

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Childs, M., Jin, B. (2018). Nike: An Innovation Journey. In: Jin, B., Cedrola, E. (eds) Product Innovation in the Global Fashion Industry. Palgrave Studies in Practice: Global Fashion Brand Management . Palgrave Pivot, New York. https://doi.org/10.1057/978-1-137-52349-5_4

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• Nike: a TNC

Drawing diagrams

This article uses Nike as a case study of globalisation and looks at the social and economic impacts of industrial development by TNCs

• Volume 24, 2012/ 2013
• Globalisation
• Human Geography
• People and the Environment

Alexander Cooke

Nike is a transnational corporation (TNC) founded nearly half a century ago. It is world famous for its trainers and sportswear, which feature the globally recognised ‘swoosh’ symbol.

Globalisation occurs as more connections are made between countries through trade and communications. It can bring wealth but it also causes inequalities.

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Describes the history of Nike, its economic strategy, and the industries in which it competes. The teaching objective is to ask the student to identify and evaluate Nike's economic/technical strategy.

• Length: 31 page(s)
• Publication Date: Oct 16, 1984
• Discipline: General Management
• Product #: 385025-PDF-ENG

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Oct 16, 1984 (Revised: May 15, 1990)

Discipline:

General Management

Geographies:

United States

Industries:

Apparel industry

Harvard Business School

385025-PDF-ENG

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• Revision notes >
• IGCSE Geography Revision Notes >

Theme 3: Economic Development

Case Study: Nike

Pro impacts:.

• substantial employment
• pays slightly higher than other countries
• Improves skills
• Contribution to local tax will give the government opportunities ie improving infrastructure
• trade of unions able to protect workers

Con impacts:

• child labour
• poor working conditions
• sexual and verbal abuse
• the exploitation of the environment and pollution. As there is a huge demand for water 
• wage below minimum wage

     Positive impact for Nike and US:

• Cheap labor and manufacturing

         Negative impact for Nike and US:

• company image negatively impacted
• doesn’t manufacture in the US so there is a loss of jobs and negative implants of balance of payments
• trade unions complain due to poor working conditions

Ways in which Nike fixed their image:

• by boycotting and protesting by the public Nike had to change its image
• they became transparent and publicly addressing the issues and labor practices
• improved working conditions (improved oversight and made sure they had clean air)
• Nike also raised the minimum wage up

 Nike TNC image Background:

• Two decades ago the country was under major fire for abusive labor practices after outsourcing labor overseas because it was cheaper.
• The public was shocked over Indonesian Nike workers earning as little as 1/4 cents an hour. Disturbing allegations of abuse included stories that a Vietnamese sub-contractor ran women outside until they collapsed for failing to wear regulation shoes. Customers staged embarrassing public protests at the olympics and at Nike stores. People began boycotting the brand in droves.

Nike Basic Facts:

Headquarters – 

• Beaverton Oregon, US

Location of manufacturing – 

• Almost all Nike shoes are manufactured outside of the United States. The leading manufacturer of Nike shoes is China and Vietnam each accounting for 36% of the total manufactured world wide. Indonesia accounts for 22% and Thailand for 6% of the Nike shoes that are being produced world wide.Nike is hesitant to disclose information about the contract companies it works with.

Global revenue – 

• In 2020, Nike’s global revenue amounted to about 37.4 billion U.S. dollars.

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A case study on Nike covering globalisation and development.

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TNCs: A case study about Nike

Subject: Geography

Age range: 11-14

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Last updated

15 May 2020

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