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Case Study | Inside Nike’s Radical Direct-to-Consumer Strategy

• Chantal Fernandez

In October 2020, in the middle of a global pandemic that had infected 188 countries, causing record sales damage across the retail sector, Nike’s share price hit an all-time high.

Like other retailers, Nike had been forced to close most of its network of more than 900 stores across the world, as had its key wholesale partners like Nordstrom and Foot Locker.

But the American sportswear giant’s performance during the pandemic, when its online sales spiked, signalled to many that Nike had the competency to prosper long term, in a future that will be increasingly defined by e-commerce and digital brand connections.

It was a validation of a strategy that Nike prioritised three years ago, dubbing it “Consumer Direct Offense,” but the seeds of the approach go back almost a decade.

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Above all, Nike is a marketing company. It doesn’t just sell sneakers; it sells the brand aspiration that imbues those sneakers with meaning. But to achieve the reach required to scale its business, Nike’s distribution strategy had long-relied on third-party retailers to sell its products, even if the consumer experience offered by those partners diluted its brand.

But in a future increasingly defined by e-commerce, fast-moving trends and, above all, the rising power of branding to drive consumer preference when competitors are just a click away, Nike realised that in order to thrive, it needed to take control of its distribution to better manage its brand and deepen its connection with consumers.

It was definitely architecting a new retail, and a bold, retail vision for Nike.

Such an evolution is easier said than done, especially for a business as large as Nike in a category as competitive as sportswear. But by radically cutting back on its wholesale distribution and raising the bar for brand experience with the third-party partners that remained; expanding its focus on content, community and customisation to keep customers close; investing in its data analytics and logistics capabilities; and rethinking the role of the store as a brand stage, Nike drove a veritable direct-to-consumer revolution.

When the pandemic hit, these shifts went into overdrive.

“It was definitely architecting a new retail, and a bold, retail vision for Nike,” said Heidi O’Neill, Nike’s president of consumer and marketplace, and one of the most prominent executives leading the brand’s new strategy in recent years. “But it started with our consumer, and we knew that consumers wanted a more direct relationship with us today.”

In this case study, BoF breaks down Nike’s pioneering direct-to consumer strategy and how it has worked to the brand’s advantage, propelling its share price to new heights during the global crisis of 2020.

Click below to read the case study now.

• Mark Parker
• John Donahoe
• direct to consumer
• athletic apparel

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Product Innovation in the Global Fashion Industry pp 79–111 Cite as

Nike: An Innovation Journey

• Michelle Childs 5 &
• Byoungho Jin 6  
• First Online: 29 November 2017

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

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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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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Global Sourcing at Nike

By: Nien-he Hsieh, Michael W. Toffel, Olivia Hull

This case explores the evolution of Nike's global product sourcing strategy, in particular ongoing efforts to improve working conditions at its suppliers' factories. When the case opens in July 2018,…

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The Inside the Case video that accompanies this case includes teaching tips and insight from the author (available to registered educators only).

This case explores the evolution of Nike's global product sourcing strategy, in particular ongoing efforts to improve working conditions at its suppliers' factories. When the case opens in July 2018, Vice President of Sourcing Amanda Tucker and her colleagues in Nike's Global Sourcing and Manufacturing division were focusing on three key supply chain challenges: sourcing from suppliers that meet compliance standards, challenging and encouraging suppliers to improve capabilities, and being responsive to consumer demand across the world.

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Sustainability

Nike Considered: Getting Traction on Sustainability

Rebecca M. Henderson

Richard M. Locke

Christopher Lyddy

Jan 21, 2019

In 2008, Hannah Jones, Nike’s new VP of Corporate Responsibility, wanted the company to be a leader in creating sustainable footwear, and subsequently developed a strategy for working with the product units to do so. Questions remained about whether Nike was on the right track and if the company was doing enough in the sustainability arena.

Learning Objective

To explore the role of an index tool as a vehicle for making products more sustainable.

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sustainability, strategy

Nike Considered: Getting Traction on Sustainability 

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Please note you do not have access to teaching notes, co‐creating value through customers' experiences: the nike case.

Strategy & Leadership

ISSN : 1087-8572

Article publication date: 5 September 2008

This case aims to demonstrate how leading firms are learning how to sustain competitive advantage by co‐creating experiences of value with customers.

Design/methodology/approach

The shoe company Nike provides a glimpse of the next “best practices” of value co‐creation with customers. By engaging with informed, connected, and networked customers around the globe, Nike has found their shared experiences to be a new source of value.

The paper finds that customers are now informed, connected, networked, and empowered on a scale as never before, thanks to search engines, engagement platforms, the growth of internet‐based interest groups, and widespread high‐bandwidth communication and social interaction technologies. Customers have learned how to use these new tools to make their opinions and ideas heard.

Practical implications

A few leading companies like Nike are involving customers in the value creation process by offering Internet sites where they can share their interactions and experiences. These range from customers' ideas about how to improve or customize products to their feelings when they use products.). For Nike, the learning from these interactions creates new strategic capital. The company can now learn directly from customers' direct input on their preferences. Nike can build relationships and trust with the Nike+ community and experiment with new offerings, all the while enhancing its brand.

Originality/value

The strategic opportunity for Nike is to build and promote the use of Internet engagement platforms through which the firm can build customer relationships on a scale and scope as never before. Effectively managing these new initiatives initially posed a new challenge for Nike, a traditionally product‐centric organization. Now their viewpoint is reversed. “In the past the product was the end point of the consumer experience. Now it is the starting point.”

• Value added
• Customer information
• Social interaction
• Consumer marketing
• Customization

Ramaswamy, V. (2008), "Co‐creating value through customers' experiences: the Nike case", Strategy & Leadership , Vol. 36 No. 5, pp. 9-14. https://doi.org/10.1108/10878570810902068

Emerald Group Publishing Limited

Copyright © 2008, Emerald Group Publishing Limited

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NIKE (A) (Condensed)

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David B. Yoffie

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Table of Contents

Nike marketing strategy: top effective findings from case studies, history of nike, goals and objectives - nike marketing strategy, nike’s target audience, nike marketing strategy: challenges, solutions, and its approaches, how nike’s marketing strategy evolved, how to apply the nike’s marketing strategy to your brand, growth and market reach, what to take.

Nike has taken an image of an athleisure company and an American multinational corporation, but, the brand has taken way the world with inspiration, emotion, diversity, and unity with its simple marketing campaigns.

The core purpose of Nike marketing strategy is to keep moving the world forward. Over the years, it has launched and introduced various stylish and sustainable services from remembering the Swoosh, and the tagline ” Just Do It” which does not only come into our mind.

Enlisting the action of Nike's marketing strategies is remarkable. What makes it so special to get the products?

There are multiple reasons why people buy Nike products in this case study explained, but, one absolutely convincing means is that it is more than a brand that builds communities, planet protection, and makes sports accessible beyond diverse horizons. We have also discussed the top Nike Marketing Strategies that you can learn in 2024.

Purpose of the Article

The main aim of this article by Sprintzeal caters to information as social proof from various case studies about a process, product, or service that can resolve marketing issues.

Known as one of the largest athletic apparel companies,  Nike (Nike, Inc.)  is an American multinational association that deals with the design, development, manufacture, and global marketing and sales of footwear, accessories, apparel, equipment, and services. Began with a mission to, “bring inspiration and innovation to every athlete” in the world It is based in Beaverton, Oregon, NIKE, Inc. includes the Nike, Converse, and Jordan brands, and many more. 

It was founded by Bill Bowerman and his former student Phil Knight in 1964.

Nike plans to build a 3.2 million square foot expansion to its World Headquarters in Beaverton.

The Nike brand strategy focuses on bringing the culture of the invention to today’s athletes while solving issues for the upcoming generation.

Nike has acquired and sold several footwear and apparel companies over the years. It has also acquired Starter, Zodiac, Celect, and Datalogue and purchased RTFKT Studios.

It was founded in 1964 by Bill Bowerman, a track-and-field coach at the University of Oregon, and his former student Phil Knight as Blue Ribbon Sports. The brand was rebranded in the 60s, their company was relaunched as Nike in 1971.

In 1972, Blue Ribbon sports which later became Nike unveils "Moon Shoes

In 1974, the Waffle Trainer was patented, featuring Bill's famous Waffle outsole.

In 1982, introduced the Air Force 1 basketball shoe.

In 1994, Nike signs LeBron James

In 2000, launched Nike Shox in the market.

In 2008, introduced the Flyware shoe and signs Derek Jeter

In 2018, introduced React Element 87. Nike launched a new "Just do it" ad campaign featuring Colin Kaepernick.

In 2020, Nike Air-max 97G "Peace and love" was introduced. It also reveals uniforms for the 2020 Tokyo Olympics.

The main priorities and objectives of Nike marketing strategy,

• It includes promoting diversity, equity, and inclusion.
• Innovations that create sustainable materials and approaches to tackle environmental impact.
• Towards advancing a transparent and responsible supply chain.
• To build community by investing in organizations that pay efforts on economic empowerment, education, and equality.
• Uplifts unity with the current generation through sport and encourages an active lifestyle to reach their potential future.

To truly understand the effectiveness of Nike's marketing strategy, it's crucial to dissect the various segments within their vast target audience. Nike's ability to connect with different consumer groups is a central theme in this Nike marketing strategy case study. Let's delve deeper into these segments:

Athletes, Professionals, and Enthusiasts: Nike casts a wide net, catering to athletes at all levels, from elite professionals to passionate enthusiasts. Their product range is meticulously designed to enhance athletic performance, making Nike the preferred choice for athletes worldwide.

Running Enthusiasts: Nike's dominance in the running domain is unparalleled. They offer an extensive selection of running shoes, apparel, and accessories tailored to the specific needs of runners, whether they're seasoned marathoners or occasional joggers.

Sports Enthusiasts: Beyond athletes, Nike appeals to anyone with a fervent passion for sports. Their marketing efforts invite individuals to adopt the mindset of an athlete, whether they actively engage in sports or simply lead an active lifestyle.

Women in Sports: Recognizing the growing influence of women in sports, Nike has dedicated a significant portion of their marketing efforts to empower female athletes and sports enthusiasts.

Young Athletes: Nike understands the importance of cultivating brand loyalty from a young age. Their marketing strategies are crafted to inspire and engage young athletes, nurturing a lifelong connection to the brand.

Sustainability Advocates: In recent years, Nike has expanded its reach to consumers who prioritize sustainability and ethical practices. Their marketing seamlessly integrates these values, resonating with the environmentally conscious audience.

This diverse and inclusive approach to their target audience has been a pivotal factor in the success of Nike's marketing strategy. It showcases their ability to resonate with a wide range of consumers, from professional athletes to environmentally conscious individuals.

Striving to create more eco-friendly materials as possible, bioplastic for their sneakers is used as a replacement for plastic, leather, and other materials.

Well known for the fact that Nike promotes its products through sponsorship agreements with influencing athletes, professional teams, and athletic teams.

- High level competition of Nike with Adidas and Reebok and other companies with the closely similar product line and common target markets. 

- Limited exports of Nike products due to legal restrictions can be one reason for fewer sales or revenues.

- The economic and political situation of those countries manufacturing Nike products is also one main challenge.

- Being a global brand, controversies are sensitive to the company image.

Hence, these is some of the reasons why strategies are relevant for Nike.

The questions still arise, why do people go after Nike products even if several brands apply the same approach? Does Nike market segmentation do it differently?

With being able to pull effective  Nike marketing plan  guidelines over past years; the other part also had faced consequences and drove up on solutions-making with,

1) Advertising

One of the key parts of the  Nike advertising strategy  is advertising through television ads and other social media forms with affiliate marketing.

In 1982, Nike aired its first three national television ads during the broadcast of the New York Marathon.

2) New Media Marketing

Having to understand the importance of having different mediums along with display advertising, content marketing, and social media promotions, boosts Nike global marketing strategy in the right direction.

Nike is risk-taker, with the way to early application of internet marketing, email management technologies, narrowcast communication technologies, and broadcast to build multimedia marketing campaigns.

3) Emotional Branding

How undeniable that Nike always puts powerful emotions through the brand! The advertisement seldomly briefs on its products and services.

A few of the best ads and commercials from Nike quotes for motivation, inspiration, and greatness can be:

“We gave up giving up”,

“All you have to do is pick up your feet.”

“My better is better than your better.”

“Don’t believe you have to be like anybody to be somebody.”

The building of the right emotions by Nike effortlessly comes through curated content and narrative that again narrates a story; a tale of inspiration applicable to anyone to combat their challenges and meet their victory.

Instead, Nike emotional branding has been impactive followed as an effective strategy in the world of marketing at present. It inturns invokes emotions related to success, morale, victory, and self-improvement which makes it a powerful product.

4) Nike Target Market Segmentation

One thing marketers should learn from  nike segmentation targeting and positioning 

is understanding their customer.

And, Nike focuses very well on their main target markets for their product and services i.e., athletes, runners, and sports enthusiasts.

In the running years, it enlarges strategies to lead precise market segments for runners, women, and young athletes. 

An observation is taken into action to create that meets the custom interests as per customer requirements.

5) Convey a Story

To have been accompanied by a global audience, another marketing strategy applies by conveying the story in simple and effective points rather than using descriptive or jargon with their brand voice.

In this way, they connect and try to encourage the masses to chase their dreams and “Just do it”.

An instance as shown in the above image; another excellent technique is their tagline which builds an emotional marketing story that relates to anyone to catch their dream and build customer loyalty,

6) Newsworthiness

This brand strategy uses newsworthiness to impact and appeal to a story. In most cases, it uses recent events or happenings about what people need or want to know.

It is also tricky to decide what stories to cover, but Nike evaluates and continues with newsworthy stories before the release to avoid controversies or false information.

This pattern could be applied based on events that impact your readers all over the world

7) Invest in Customer Loyalty

In Nike, it associates with diverse masses apart from the target audience. Does it have good customer loyalty? Yes. 

With less loyal customers, the challenge to come up with anticipatory decisions and effectively plan your finances can be scary.

One of the reasons the brand is irresistible globally till current which is less surprising is sole because of customer loyalty. The precise, well-executed product and service not only attract new customers but retain customers with good profit margins.

- Nike is releasing “No Finish Line,” a new book that celebrates and figures Nike’s 50 years of game-changing design and innovation in the favor of athletes and sports. It lay down a design vision for the next 50 years.

- It applies measures to create a better future by investing in active and inclusive communities. Nike Community Impact Fund (NCIF), an employee-led and neighborhood-focused approach 

in aid of local community organizations globally for a positive, effective, and making a play for all the kids.

- Nike made about 35% digital and aims to achieve 50% by 2025.

One of the best ephemeral approaches is that a part of Nike’s success goes to influencing and inspirational athletes such as Michael Jordan, Mia Hamm, Roger Federer, Tiger Woods, Kobe Bryant, Lebron James, and many others.

To truly appreciate the efficacy of Nike's marketing strategy, it's essential to trace the evolutionary path it has taken over the years. This retrospective analysis of Nike's marketing strategy is integral to our Nike marketing strategy case study. Here is a comprehensive exploration of the evolution of Nike's marketing approach:

The Early Years: Nike's origins can be traced back to its predecessor, Blue Ribbon Sports, which primarily served as a distributor of Japanese running shoes. During this nascent phase, Nike's strategy was firmly rooted in performance and innovation.

The Birth of Nike: In 1971, Nike emerged as a distinct entity, drawing inspiration from the Greek goddess of victory. This marked the inception of Nike's emphasis on empowerment and achievement, an approach that would become central to their branding.

Celebrities Take Center Stage: The 1980s heralded a new era for Nike, marked by the strategic use of celebrity endorsements, most notably with basketball icon Michael Jordan. These high-profile endorsements solidified a deep emotional connection between Nike and consumers.

The "Just Do It" Era: In 1988, Nike introduced its iconic "Just Do It" slogan, encapsulating the ethos of personal determination and resilience. Swiftly, it became synonymous with the brand's identity and mission.

Digital Transformation: Nike was an early adopter of digital marketing, recognizing the potential of the internet and social media. They harnessed these platforms to engage consumers through multimedia campaigns and create a digital presence that mirrored their innovative spirit.

Emotional Branding: Nike's pivot towards emotional branding represented a pivotal moment in their marketing evolution. Rather than simply showcasing products, they focused on evoking powerful emotions, such as success, motivation, and self-improvement. This shift solidified Nike as a potent and influential brand.

Sustainability and Inclusivity: In recent years, Nike has demonstrated a commitment to sustainability and inclusivity, both in their products and marketing. They aim to create eco-friendly products and promote social responsibility, aligning with the evolving values of today's consumers.

This journey of evolution highlights Nike's remarkable adaptability and capacity to align their strategy with changing consumer landscapes. From their roots in performance and innovation to their current focus on emotional branding, sustainability, and inclusivity, Nike's marketing strategy has continued to resonate with a diverse and ever-changing audience.

To harness the power of Nike's potent marketing strategy for your own brand, it's essential to follow a well-defined blueprint. This section of our Nike marketing strategy case study provides a step-by-step guide on how to apply Nike's principles to your brand effectively:

Know Your Audience Inside Out: Much like Nike, start by conducting thorough market research to understand your target audience's specific needs, preferences, and aspirations. Tailor your products and marketing strategies accordingly.

Forge an Emotional Connection: Take a page from Nike's playbook and aim to create profound emotional connections with your audience. Share compelling stories that resonate with your brand's mission and values, inspiring and motivating your customers.

Embrace the Digital Realm: Leverage the expansive digital landscape, including social media, content marketing, and multimedia campaigns, to amplify your brand's reach. Follow Nike's lead in utilizing these platforms effectively to engage and captivate your audience.

Champion Sustainability and Social Responsibility: If your brand aligns with sustainability and social causes, make them integral to your strategy. Showcase your commitment to positive change through sustainable practices and support for relevant social issues.

Consistency is Key: Maintain a consistent brand image and message across all marketing channels. This consistency not only reinforces your brand identity but also leaves a lasting impression on your audience.

Prioritize Innovation: Continuous innovation should be at the heart of your strategy, much like Nike's dedication to pushing the boundaries. Innovate your products and marketing strategies to stay relevant and capture the full attention of your audience.

Leverage Influencers and Celebrities: Collaborate with influencers or celebrities whose values align seamlessly with your brand's mission. This partnership can help expand your reach and enhance your brand's credibility, similar to Nike's successful partnerships with iconic athletes.

By following these steps, you can effectively incorporate the power of Nike's marketing strategy into your own brand. Building a successful brand, as exemplified in this Nike marketing strategy case study, requires a strategic approach, unwavering dedication, and a profound understanding of your audience's aspirations and needs.

Don't Wait, Just Do It

In the ever-changing field of marketing, the key to success is action. Much like Nike urges you to take action; we encourage you to propel your digital marketing career forward by enrolling in Sprintzeal's Digital Marketing Course. Don’t let your hesitation cost you your opportunities.

Equip yourself with the skills, knowledge, and confidence excel in the digital marketing domain. We curate and design our courseware to ensure you're well-prepared for the dynamic world of digital marketing. So, why delay? Enroll now , and allow us to help you make your career in digital marketing.

As per  Wikipedia , During the Q1 of 2020, the company's online sales have grown by 36%. While the net income in mil. is $6,046 and revenue is $46,710 in 2022. 

As per the Forbes report, Nike's Financial Summary for 2022, the revenue is $46.9 billion with assets of $38.6 billion and profits of $6.1 billion.

The following image gives a glance at the percentage growth with the approaches.

Image Source:  Nike

Final Results

During the article study, we also found that problems may occur subsequently with changes made to the distribution, marketing, and management strategies of Nike.

Companies can refer to Nike's marketing strategy to influence the four Ps i.e, price, product, promotion, and place. New features may expand the changes to higher growth of the product and might develop a new market.

Source 1:  Nike-A Case Study Just Do It

Source 2:  Nike Marketing Case Study

Source 3:  An Investment Analysis Case Study: Nike - NYU Stern

Research Details

This article emphasizes curated study from three case studies apart from Nike’s official website.

Therefore, all the effective strategies are presented for information and education means for readers in response to the current marketing issues along with the given references in this article.

Winning the market is one technique that Nike has been doing so well since its implementation till date. What’s even interesting is having to market its products under its various brands and subsidiaries.

The subsidiaries like Nike+, Nike Golf, Nike Blazers, Nike Pro, Air Jordan, Air Max, and other brands like  Hurley Int., Jordan, and Converse.

In the field of such marketing, digital marketing plays a dominant role. To pursue a career in digital marketing training, choosing from a globally recognized ATO (An accredited training organization) from  Sprintzeal  accelerates your career of interest.

To explore more courses, consider visiting  Sprintzeal’s all courses  and earn a certification to level up your career.

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Nchumbeni Yanthan

Nchumbeni is a content writer who creates easy-to-read educational blogs, articles, varying client request, and social media content helping millions of learners meet their career goals.

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Business Growth strategy of Nike: A case study

Nike (NASDAQ: NKE) is the industry-leading global brand of sports shoes and apparel. It is the most popular brand of sports shoes and apparel and the favorite of millions of customers and fans from around the world. Apart from the several other things, Nike is well known for its great marketing strategy that has turned it into a well-recognized brand name worldwide. Nike’s global popularity and growth have resulted from its focus on product quality and innovation. The company sells its products globally through a large network of distributors, resellers, and company-owned stores as well as its e-commerce channels. Its products are highly popular among the millennial consumers because of their style and attraction.

With time, Nike’s popularity and market position have continued to strengthen, driven by a growing focus on quality and customer experience. The Swoosh logo is recognized easily around the world and differentiates Nike from the crowd of sports shoes and apparel brands. While the nearest rival of Nike is Adidas, the shoe industry is marked by intense competition and there are several more brands like Puma , Reebok, New Balance, and Fila competing with Nike.

Due to the intense competition in the industry, companies also need to invest heavily in marketing as well as product development. To maintain sales and growth momentum, companies focus on marketing as well as customer engagement apart from product innovation. However, Nike’s identity and brand image are very different from its rivals. An outstanding marketing strategy has helped the company acquire higher visibility and find faster growth compared to rivals. Now, the company is also investing in being more sustainable . 

In 2019, the company generated a net revenue of $39.1 billion compared to $36.4 billion in 2018. Nike has enjoyed consistent growth in  revenue over the past several years. It also enjoys one of the best margins in the industry. In 2019, its gross margin stood at 44.7% compared to 43.8% in the previous year. Nike is a highly profitable brand. Now, the company is focusing on growing its direct to consumer sales using its own e-commerce channels. 

In this post, we will analyze the core pillars of Nike’s business growth strategy. However, prior to that, we will analyze the target audience of Nike and who are the main customer segments that buy  Nike products.

Target market of Nike:

Nike targets the athletes mainly .  Its products are made for athletes and for everyone interested in sports. However, sports and sportswear have not remained limited just to the field but have become a part of the modern lifestyle and fashion. Athleisure trends have brought athletics products to mainstream fashion. However, it is mainly the millennial generation and Gen Z that are the biggest fan of athleisure products. Nike’s target audience lies mainly in the 15-45 age group. However, it is not just men but women are also big fans of Nike products, which has been evident in the growing sales of Nike products for women.

Overall, it is mainly the urban affluent consumers that are in the age group 15-45 that are Nike’s main target market. Nike makes mainly premium products and targets affluent consumers living in large cities. The company has introduced a nice product range for Kids also but the core audience of Nike is between 15 and 45 years of age. Nike is actively targeting millennial consumers in the digital space. Apart from digital promotions and through social media, the company is also using its own digital sales channels to engage the tech-savvy millennial consumers.

Core Pillars of Nike’s Business Growth Strategy:

Marketing is on e of the core pillars of Nike’s business growth strategy. Since its early days, the company is known for its focus on marketing. It has always followed a unique and outstanding marketing strategy. Its focus has remained on sports and how people around the world connect with sports. It is why a large number of video ads created by Nike focus on motivating athletes. Its Swoosh logo sets it apart from the crowd of brands in the market. However, the key lies in how Nike creates and executes its marketing campaigns.

The company has run several iconic advertising campaigns in its history including the Just Do It campaign that came in 1988. Nike has established itself as an athletic brand that makes products related to sports. However, it has created a distinct image and that was made possible by striking the right tone in terms of marketing.

Nike is a great storyteller and instead of promoting specific products or trying to increase sales by using seasonal promotional techniques, the company connects with its fans and followers around the world through sports. It does not create ads but instead, it creates stories. While other brands try to grow sales by promoting their products and brand, Nike does it differently. It creates stories that its audience can love and in this way it has struck a stronger emotional bond with its audience worldwide.

However, the company also invests a large sum each year in marketing. In fiscal 2019, the company spent around $3.75 billion on marketing activities compared to $3.6 billion in the previous year.  Another important marketing technique that Nike has been successfully utilizing for years is sponsorship. It has sponsored many well-known athletes including Cristiano Ronaldo who first signed with the company in 2003 and then entered into a lifetime agreement in 2016. The company continues to place a heavy focus on marketing and uses a mix of digital channels with other channels for running global campaigns. Marketing will remain a key driver of growth for the company and also a leading differentiator that has helped it retain its leadership position in the industry and as a great brand.

Product innovation:

Another key driver of popularity and sales growth for Nike is its focus on product innovation . Nike products are in demand because they are outstanding. Apart from the quality of raw materials used, the company also invests in developing technologies and methods that help it create better products that provide superior performance compared to the rivals. It has also established a research lab that employs more than 40 researchers with doctorates from various scientific disciplines.

The Nike Explore Team Sport Research Lab started as a small lab more than 30 years ago. The lab is located at Nike headquarters in Beaverton, Oregon.  It is an integral part of the Nike Explore Team that strives to create innovations for athletes globally. Nike’s research lab has entered into strategic partnerships with major universities and institutions throughout Asia, Europe and North America. These strategic partnerships provide Nike access to the world’s best talent, tools and athletes, and allow the lab to maintain cutting-edge science.

Nike has created several game-changing technologies in its history. Apart from helping the company acquire a higher popularity and grow its sales, these technologies have helped Nike establish itself as the leading innovator in the sports shoe industry. Several leading innovations introduced by Nike like the NIke Flywire support system, lunarlite foam cushioning,  Hyoerdunk basketball show, new generations of free footwear, and the Trainer 1 shoe continue to set new standards for the industry. The sports shoe industry is experiencing intense competition and to maintain its leadership position , the company will have to maintain its focus on product innovation in the future also.

Focus on customer experience:

Great brands do not just create great products. Instead, they create great experiences. Now, the focus has shifted from product quality to the entire customer journey. Companies are using data and analytics to create great customer experiences to offer the customers the best experience at every touchpoint. Nike’s focus also remains on providing its customers the best experience so that they remain loyal and engaged. Superior customer experience also leads to a stronger brand image and higher brand equity.

Nike has always focused on customer experience and whichever channel customers are buying from including the online and offline channels. The focus is on providing customers with the best experience. Apart from other things, brands are relying on higher personalization to offer their customers the best. For this purpose, brands like Nike use data and analytics to design exclusive experiences for their customers and engage them on all channels. Nike’s growth in sales along its direct sales channel is also a result of the consistent focus of the company on customer experience. Nike Direct has experienced enormous growth over the previous few years and it is also why the company is not relying on other e-commerce channels but developing its own and deepening its relationship with its customers. Nike has always been a customer-centric company.

The Nike App brings the best of Nike to its customers, personalized for each one of them. Apart from providing early access to new products, the app also lets customers shop for exclusive collections and get invitations to member-only events and experiences. However, things do not stop just there because when it comes to customer satisfaction Nike cannot stop at anything. For example, Nike is using Machine learning, AI, and recommendation algorithms to serve its customers better. Using the Nike Fit app, customers can just snap a picture of their feet and find the right fit. Since a large number of customers are shopping or checking out new products online, Nike is focusing more on digitalization. In 2018, it acquired Zodiac, a data and analytics company, to speed up digitalization. It has also helped Nike grow the level of personalization it offers its customers. In fact, Nike’s customer-centricity has continued to grow with time. It is one of the central pillars of its business strategy.

Establishing and growing own e-commerce channel:

Nike has created an omnichannel experience for its customers. Apart from the physical channels that include the Nike company owned stores and wholesales, it is also selling to its customers through its own website and app. While the company can extend its reach by using the other e-commerce channels too like Amazon and other local online shopping websites in various corners of the world, it decided to develop its own e-commerce channel. The main reason was to avoid brand dilution. Initially, Nike had also taken the regular way, where it would sell its products online on Amazon.

It started a pilot program with Amazon in 2017 as  part of which it was going to sell its shoes and apparel on Amazon. However, the pilot program ended in 2019 with Nike dropping off Amazon . It was when Nike gave its retail strategy an enormous overhaul. It had hired ex-E-Bay Inc. Chief Executive Officer John Donahoe as its next CEO which signaled Nike’s aggressive movement towards ecommerce. The company stated that it had decided to complete its pilot program with Amazon as a part of its focus on elevating consumer experiences through more direct and personal relationships with its customers.

Despite the enormous reach of Amazon, the problem is that fakes also flourish on the platform and that can result in brand dilution for companies like Nike. So, Nike is back to its own e-retail platform. However, the company’s strategy has paid off and it enjoyed the results during the pandemic when people had stopped shopping  from physical stores. During the period, people turned to its website and app in record numbers to shop for sneakers and workout apparel. The company has also been strategically investing in its own  neighborhood stores called Nike Live that will serve as pickup hubs for the people shopping online from Nike. The changes that the pandemic has brought about are going to last for long and Nike’s strategy is to be a digital first organization. In the future, this could mean faster growth for the company.

Supply chain management:

Supply chain management is also a critical pillar of Nike’s business strategy. The company has managed its supply chain very well which allows it to save costs and grow its business faster. Nike has a global supply chain, a large part of which is located in the Asian region. The company has outsourced all its manufacturing to independent suppliers. It allows the company to focus exclusively on other things like marketing, product design and innovation, new technologies and distribution. Overall, Nike’s supply chain is one of its core strengths driving faster growth for the business. A large part of its entire product range, around 90% is produced by suppliers that have worked with the company for 15 years or more.

Independent contract manufacturers located outside the US manufacture virtually all of Nike products. Many of these contract manufacturers own several factories. 112 factories located in 12 countries supplied Nike shoes in 2019. Four leading contract manufacturers accounted for 61% of the company’s footwear production in 2019. All of them accounted for more than 10% of the company’s footwear production during the year.

However, none of the producing factories accounted for more than 10% of footwear production in the year; the largest factory accounted for only 9% of the total. Most of the Nike brand footwear production took place in Vietnam, China, and Indonesia. Together, the three countries accounted for 49%, 23%, and 21% of Nike brand footwear, respectively (NIKE Annual report, 2019).

334 factories in 36 countries produced Nike brand apparel in 2019. Most of Nike’s apparel production took place in China, Vietnam, and Thailand. Together, the three countries accounted for 27%, 22%, and 10% of Nike’s apparel production during the year. The top five apparel manufacturers together accounted for 49% of the company’s apparel production in 2019.

By outsourcing its supply chain to independent contractors, the company can derive cost savings and focus more on making its operating model more efficient. Nike’s supply chain is lean and agile. The company has established long term relationships with its suppliers and also takes care of how its suppliers operate. It has adopted rules and regulations as well as an ethical code of conduct for its suppliers.

Investing in technology strategically:

Nike made technology a strategic priority early enough. The company has been investing in being a digital-first organization for the past several years. While the benefits of being a highly digital company were strongly felt during the pandemic, its investment in technology can help it gain a substantial advantage in the longer run. Nike moved aggressively towards cloud-native , micro-service architecture to enable speed, scale, and stability across the enterprise.

The company had realized it years ago that the future lay in the clouds. The earlier the company adopted the technology, the faster its growth and its lead over the other brands. Using observability, security, reliability, availability, and performance as core principles for software development, it has reimagined its entire technology stack during the last five to six years. In 2019, while the company dropped its distribution partnership with Amazon, it has continued to use AWS to run its global website and apps. Years ago, Nike realized that several of its engineering processes routinely utilized off-the-shelf vendor software that did not really meet its strategic needs in terms of functionality, security, or scale. As a result, it directed its engineering teams to develop cloud-based software, and the result was that it developed cutting-edge applications and platforms serving on a global scale.

 While technology has evolved at a very fast pace, and new innovations just keep coming, Nike needed to move swiftly in order to keep pace with the fast-changing market dynamics that followed technological development. So, it turned to open source solutions to maintain its ability to innovate continually.  It started utilizing NoSQL, serverless, containers, AI/ML, GraphQL, and others as a part of its journey to becoming cloud-native .  However, this also required Nike to bring corresponding cultural changes within the organization. It actively created a culture of sharing all that Nike learned, both internally and externally. The company had recognized that accelerating its digital transformation was the one best option if it wanted to strengthen its connection with its customers through individually tailored content. It launched several new digital platforms including SNKRS app and NikePlus. 

The company relies on AWS to provide personalized apps, better features, up-to-date content and responsive shopping experience for its customers. Nike Retail has leveraged AWS to provide seamless, channel-agnostic consumer journeys that enable speed, stability, and scale to the business. These innovations are part of Nike’s most innovative retail concepts, like Nike’s House of Innovation where consumers can use the Nike app on their own devices to do self-checkout and more.   NIKE Engineering.

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Nike: Case Study

The following case study analysis of the company involves a detailed strategic plan, which will be in its use for the next three to five years. Discussing the company’s background and its past success and failure will set the base for the discussion of its strategic plan. The mission and vision of the company will define how things will be done. Further building on the plan, a thorough SWOT analysis will also be conducted and the critical success factors, as well as other miscellaneous factors, will be evaluated.

Company Background

The organization chosen is Nike, the shoes, clothing, and sports apparel company. The brand name Nike and the logo of “Swoosh” are some of the most recognized in the world. Nike is into footwear, especially for sports (basketball, football, soccer), eyewear, watches, skateboarding gear, snowboarding gear, swimming gear, tennis gear, clothing, etc. The customers of Nike are those who need utmost convenience in terms of all the accessories that they are adorning while they are playing any particular sport. Nike is a brand for adventurous and sporty people. It’s a fast and ambitious brand, which has cleared this factor in its slogan “Just Do It!” The brand name is very strong, giving value to all the products of the company. The logo of Swoosh is simple, fluid, and fast. The evolution of the Nike logo very clearly depicts the slow and steady capture it did in the footwear market. First, the logo contained the brand name as well as the symbol. But now only the symbol Swoosh is necessary to distinguish a Nike product. It is a rare brand name and symbol. Nike has created this tough brand name after years of innovation, therefore; the chances that it gets imitated are also very low of this resource. Nike continues to envision a better and more successful future than its current state and therefore will exploit the full competitive potential of its brand name and symbol.

Nike does not spend on manufacturing its products and therefore saves costs there. It uses those saved costs for Research & Development. Nike has always wanted to provide a competitive edge, to help athletes perform better. Its R & D is committed to designing footwear and apparel of every make, model, and body style which makes it the very best performance product. Nike Sports Research Laboratory (NSRL) was designed just to do that. Then there is the Advanced Product Engineering (APE) group which is involved in long-term product development. The R&D resource gives Nike the rareness that is needed to differentiate its products from competitors. Moreover, the resulting innovation of R & D adds value to the brand name and its products. Such high class and dedicated R&D is hard to imitate and the organization is focusing and relying on its R & D resource to exploit further opportunities in the market.

As Nike does not produce shoes, the main focus of the company is to create and market the products. It spends a great deal on marketing and advertising and has contracts with most celebrities like Michael Jordan, Andre Agassi, Charles Barkley, and Troy Aikman to name a few. Moreover, the concept of the ads is also very different and tries to focus on a different target audience every time. The ambassadors help in increasing the value of the brand as all the fans of the ambassador will feel good about Nike once the ambassador is associated with it. Furthermore, ambassadors who sign a contract with Nike are restricted to endorse only Nike and no other company and therefore, it gives the ambassador resource rareness. Nike spends a lot in paying these ambassadors and so the firms without this resource will face a cost disadvantage in obtaining it.

In the past, in around 2000, Nike had a supply chain disaster, which was a software problem, due to which Nike had to suffer from around $100 million in sales which did not happen eventually, its stock price saw a decline of a hefty 20% and even started a chain of lawsuits. But the lesson that was learned from this whole disaster was that if there will be involvement from all levels of the company into the plan, then there are high chances that the plan will get through. And even if it backfires, the consequences are not that bad.

Mission Statement & Vision Statement

Vision is a phrase or sentence that tells where the company wants to be in the future. It is a dream that the founders of the organization want to realize. It is what an organization strives to materialize. (Scott, 1993) In the case of Nike, its vision is to become a truly global company with international sales and a diverse and united workforce as well as to have dedicated retailers around the globe who work for the betterment of the organization. In the words of Philip Knight, the CEO of Nike Inc., the vision can be stated as:

“If we do become truly global, we’ll be a much better company and have a serious advantage over the competition. When that day comes, we will have an educated, integrated workforce on the ground in every country, sharing a clear and current understanding with other Nike sites worldwide. A retailer in Singapore or Shanghai will be as important as one in New York.”

The vision of the company truly reflects the objectives that it holds. Fulfilling these objectives one at a time will help the company in realizing this vision one day. For now, the objectives of making acquisitions and increasing sales fit the vision of Nike becoming a global company and having a diverse workforce.

The mission is the reason for the existence of any company. Nike’s mission is to “Bring inspiration and innovation in whatever we create, be it be footwear, apparel or equipment.”

Through the mission, the vision is better and easily realized. The objectives are that sales have to be increased to 15 billion by the year 2010, and this will only be possible if Nike has a competitive edge over other companies and when its products keep on outgrowing themselves and bring innovations within.

The values of the Nike Company and its employees are that they want to deliver the best products to the athletes, who are their major target market. If using Nike wear, the athletes can succeed in their sports; there is nothing better than that for the Nike Company. Too much focus on advertising and the cosmetics of Nike wear was not an essential part for the company. All they wanted was a quality product that would fulfill what it was claiming.

The values that are of the Nike Company will greatly help the company in reaching its desired state. This is because one of the desired states is to make loads of acquisitions. If making a quality and innovative product is one of the aims of the company, then acquisitions will give the company more control over the whole supply chain management, thus lowering costs and making it easy to invest more in R&D.

Internal Analysis & External Analysis

The organization has a very rich history of making and following its strategic plans through and through. The company has come a long way, and it has always been able to succeed and surface from rough times because it always defined the goals and objectives, thus helping the employees know exactly what has to be done and achieved. (Goldman, 2000).

The company had responded well to internal and external changes as well as challenges. One of the biggest internal challenges was the failure of the i2 software unit, which caused the company losses in sales, a decrease in stock price, and all bad things possible. At such a time, keeping the employees motivated and the management intact was a Herculean task but the leaders of the company handled it pretty well. External challenges have always been the number of competitors in the footwear market. And since Nike is practicing diversification, then its competitors also lie in other markets, like the watch industry and the eyewear industry. Nike very well counters its competitors by investing heavily in R&D and relying on the Nike product to deliver innovation, creativity, comfort, and success to its target market.

SWOT Analysis of Plan’s Focus Area

Goals for year 1:

• Increasing the advertising, focusing on the brand and its qualities.
• Increasing the R&D, to come out with a new type of footgear for football.

Goals for year 2:

• Acquiring Nelson & Company, a company which produces the sole for the footgear, thus making the backward chain as part of the Nike Company.
• Using below-the-line activities in marketing, to appeal and interact with the consumers directly.

Goals for year 3:

• Sponsoring as many sporting events as possible, to put a maximum impact on sports players as well as those audiences who are watching these sports
• Acquiring Croket & Company, a logistics company, does the distribution of shoes all over the country as well as exports it outside the country.

The company’s strength lies in its powerful research and development team which spends approximately $73.2 million on design innovation and development. Nike has two research labs that work round the clock to see the present, as well as the future of the footwear market, and these researchers, make sure that the design so that Nike stays ahead of the competition. Moreover, the company’s marketing is very strong. Whether it is print media or TV, sponsoring Olympics or regular college games, Nike has always been the first to market and advertise its brand name. Nike has been successful in its attempts to build loyalty by licensing Nike gear to college sports teams. Due to intense marketing strategies, there is a strong recognition of the Nike brand even overseas. Nike is already the number one in the overall footwear market in Spain, France, Belgium, Holland, Finland, and the United Kingdom. Furthermore, the company’s finance department has become one of its biggest strengths over all these years. Every new year indicates an increase in sales, income, assets, and shareholders’ equity from the previous year. To add to the list, the distribution of Nike products is quick and efficient, allowing the smooth flow of inventory.

Nike has received some criticism in the past few years over the exploitative practices of management in some Asian countries. They are concerned about the maltreatment that employees receive. They often have to work in factories where there is 100o c of temperature and empowering paint and glue smells. This was one of the initial weaknesses of the company, which were later looked after and turned into a strength. Moreover, initially, the management had also faltered in doing its job honestly. It had grown complacent and was switching from job to job, which meant poor coordination among various departments. This was ultimately also turned into a strength by giving the company a viable corporate culture, under the leadership of Philip Knight and then Tom Clark.

Opportunities

The biggest opportunity for Nike lies in the international competition that it faces. This competition will open up new markets and provide Nike with a completely new and vast target audience to cater to. This will widen the capacity in which sales can increase. Moreover, China was given the MFN (Most Favored Nation) status by President Bill Clinton in 1997. Because China is a major source of footwear production, it is important for athletic shoe companies that MFN status for China continues. Furthermore, NAFTA and GATT will allow better access to world trade for Nike. And the opportunity of the vast market, ready to be exploited for the best prices in manufacturing contracts, can be well exploited by Nike if it wants to keep its manufacturing cost low.

The biggest threat for Nike lies in the fact that there have been observations regarding the changes in consumer demand. It has been seen that the demand for branded athletic shoes is decreasing whereas people now prefer moderately priced casual shoes or sandals or work boots over what Nike sells. Nike will have to overcome this threat by arousing the feeling of desire for its products among its potential target audience. Moreover, the increase in competition can even pose a threat to Nike. This price war or market share war is not necessarily Nike’s win every time. At times it might lose and that is when international competition becomes a threat. Furthermore, many eastern companies are moving towards technological innovation in footwear. Nike has got to realize that now it has competition at home as well as abroad when it comes to innovation via technology.

Long Term Objectives

• Making a few acquisitions that will strengthen the company’s core business.
• To make the company’s worth 15 billion by the year 2010.

Strategy Analysis and Choice

Generic strategy.

Michael porter in 1980 gave three various generic strategies which can be used by organizations if they want to be sustainable in capturing the market share and keeping their products at an edge over others. (David, 2005) The three various strategies are:

• Cost leadership
• Differentiation
• Focus or niche strategy

But when it comes to Nike, it aims to have differentiation as its generic strategy. Having the differentiation strategy is important for Nike, since it invests heavily in the Research & Development of the company, and produces innovative products for the greater convenience and comfort of its target market.

Grand strategy

Grand strategy is the plan which the company aims to generally follow to achieve its long-term goals. (Hill, 2006) Defining a grand strategy for Nike is essential since it is embarking on one of its long-term, strategic plans. There are three types of grand strategies:

• Retrenchment

Nike will be focusing on the grand strategy of Growth. It will be aiming to make more acquisitions of forwarding and backward linkages of the supply chain and it also wants to increase its sales by reaching out to more sports lovers.

Integration Strategies

• Backward Integration: Nike pursues the backward integration strategy by trying to seek increased control over suppliers. It bought Tetra plastics who were the suppliers of the plastic films found in Nike’s air sole shoes.
• Forward Integration: Nike has even gained ownership over its distributors. It purchased the distribution operations of many of its worldwide distributors in an attempt to control the marketing of Nike products. Nike even consolidated the operations of 31 distribution centers in the European Union into one distribution center in Belgium.

Intensive Strategies

• Market Penetration: Nike has always tried to increase its market share for present products and services in present markets through greater marketing efforts. It has spent billions of dollars hiring celebrities to be ambassadors for its products. Moreover, unique advertising concepts and ideas are tried to be broadcasted via advertisements. For instance, it spent $30 million for advertising and sponsoring individual athletes and teams during the 1996 Olympics to gain increased market share.
• Market Development: Nike’s vision is to become a truly global company and extend its sales internationally. It is always endeavoring to introduce its products in new geographic areas. With its sales now across 110 countries in six continents, Nike is fast becoming global. Olympics in various countries presents Nike with the opportunity to gain market share internationally.
• Product Development: Nike has always focused attention on innovation and spending money on Research and Development, which lets it improve its present products and developing better ones. Nike spent $73.2 million on product research, development and evaluation. Groups have been created which design shoes suited for need five years in the future and a new design is launched in the market every few days.

Diversification Strategies

• Concentric Diversification: Nike has been the leader of innovation for the past 30 years. Nike believes that as human potential evolves, so must our products. Therefore, it keeps on designing new shoes for all sorts of athletes engaged in all sorts of sports. This addition of new, but related products to the product catalog of Nike is concentric. Apart from its R&D in making products, Nike also acquired Canstar Sports Inc. which manufactures in-line roller skates, ice skates, and blades, etc.
• Conglomerate Diversification: Nike takes diversity to another level by adding new, but unrelated products to its product line. This shows the vast breadth of Nike products. In an attempt to practice the conglomerate diversification strategy, Nike acquired Cole Haan Accessories Company in 1990, which is a distributor of high-quality belts, braces, and small leather goods. This is a different category of products when compared to footwear.

Plan Goals and Implementation

For a company like Nike, which has mentioned that it aims to have a diverse workforce working for it, leadership can come from any part of the organization. It believes in the fact that whenever a certain employee is given leadership of a certain task, he is being given the chance to be able to create a better and bright future. (Lamb, 1984) Leadership in a company like Nike does not lie and depends only on the senior management or the senior executives. It lies with every employee. Thus, such leadership and autonomy with every employee define the culture of Nike.

Critical Success Factors

The critical success factors in any organization are those factors whose presence is necessary within the company if it is to achieve the mission that it has. (Saloner, 2001) For now, Nike has a strategic plan of around 3 years, and thus, completing the plan would not be possible without these factors:

• Money: the company aims to have 15 billion-dollar sales by the year 2010
• Future: the company wants to acquire many other chains in its supply chain to have maximum flexibility in operations
• Customer satisfaction: the company is investing heavily in R&D, so that new innovation can be brought to the customer
• Quality: Nike aims to grow its sales based on good quality only. Advertising, sponsoring are just the peripherals to get Nike noticed. A sustained increase in sales will only be possible if the investment is made into quality.
• Product development: Nike has come a long way. Even the logo has revolutionized over the years. Thus, Nike has developed as a product, as a company. More acquisitions and thus more sales will help the company grow further.

Controls and Evaluation

As far as controls and evaluation are concerned, the company Nike has an Audit Committee, which will be doing its job concerning the internal controls of the company. the job will also be under the Board of Directors of Nike, but since there can always be some biasness on their part, so the Audit Committee has been made which will have a non-biased approach towards the control process. (Goldman, 2000).

Evaluation of the strategic plan will be made every quarter. There are two goals for each of the three years. And on every quarter of one financial year, the evaluation will be performed on how much the goals have been achieved. This evaluation can be measured in terms of sales or the number of contracts signed with other companies for acquisitions or the number of new products which are being worked upon in the R&D Department.

To conclude, Nike has been a very leading company in the athletic footwear market. It has always given tough competition to its rivals Adidas and by the year 2000, Nike had almost double the market share as compared to Adidas. Such market share is non-sustainable unless heavy investment is made to satisfy the customers and keep sales stable, if not increasing. Such goals can only be fulfilled if thorough strategic plans are made and then worked upon.

David, F. (2005) Strategic Management: Concepts. Prentice-Hall.

Goldman, R. (2000) Nike Culture the Sign of the Swoosh. SAGE.

Hill, C. (2006) Strategic Management: An Integrated Approach. Houghton Mifflin.

Saloner, G. (2001) Strategic Management. John Wiley.

Lamb, R. (1984) Competitive Strategic Management. Prentice-Hall.

Scott, C. (1993) Organizational Vision, Values and Mission: Building the Organization of Tomorrow. Thomson Crisp Learning.

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Nike Sustainability and Labor Practices 2008-2013

The case discusses Nike’s sustainability and labor practices from 1998 to 2013, focusing on the successful steps Nike took up and down the supply chain and in its headquarters to make its products and processes more environmentally friendly, and the challenges and complexities it was still facing in its efforts to improve labor conditions. Nike’s labor practices were the subject of high profile public protests in the 1990s, and CEO Mark Parker said the company still had a lot of work to do in that area. The case also details how making sustainability a key part of the design process led Nike to develop more innovative and high-performing products, such as a breakthrough running shoe called the Flyknit, which was widely worn at the 2012 Olympics. Following protests in the late 1990s over unsafe working conditions, low wage rates, excessive overtime, restrictions on employee organizing, and negative environmental impacts, Nike began shifting from a reactive to a proactive mode. During the 15 years covered in this case, Nike made significant changes in its sustainability practices, including moving its Corporate Responsibility team much further upstream in the organization, where it could have a greater impact on decisions by providing input early in the process. The company also developed multiple indexes that measured its sustainability practices and those of its independent contract manufacturers. The indexes had metrics for measuring the relevant impacts of product waste, water, chemistry, labor, and energy. Nike’s critics said many labor issues had not been resolved, but Nike made progress in that area through collaboration with governments, NGOs and labor unions, and through management compliance trainings. If a contract factory did not score high enough on the company’s sustainability and labor ratings scales, Nike would impose sanctions on the factory or even drop it from the supply chain. These actions took Nike off the top of most activists’ target lists.

Learning Objective

The learning objective of the case is for students to understand how a large, high-profile global company is navigating the complexities of becoming more sustainable and improving labor practices.

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