Let's conquer your financial goals together...faster. It created convenience so customers in other parts of the world could easily acquire Nike’s products and increased customer satisfaction as a result. However, the number of calories spent is not a robust index of energy used because 100 calories burned by a person who weighs 100 kg is not the same as the same amount of energy burned by a person who weighs 50 kg. In 2008, Nike created a Facebook account. The massive brand is a socially conscious business, meaning they focus on improving the world, and target audience around them. Today, each Nike sub-brand has its own Facebook page, which runs product specific promotions and features events in a particular sporting activity. An effective distribution strategy would be key for Nike. The second quarter of 2020 saw $10.3 billion in revenue and 10% growth, crushing numbers for its closest rival, Adidas (OTC:ADDYY), which saw $7.1 billion and 6% growth in its most recent quarterly report. Meaningful story – They’re selling more than a product; they’re selling aspiration. Nike’s mission statement is to inspire and innovate on a global scale. 1.0 INTRODUCTION OF NIKE Nike is a major publicly traded sportswear, footwear and equipment supplier based in the US which was founded in 1962 originally know as Blue Ribbon Sports. 14. Although sales growth came in lower than the prior-year period, revenue was up 5% year over year despite the coronavirus turmoil. Nike pairing up with Apple Inc, another company known for its innovative products, was a way to bring into its fold the Facebook fans of the company. Through apps, Nike has come closer to its customers and can study them and communicate with them conveniently. Nike monitors that region thoroughly to find opportunities for community engagement, and the result has been explosive growth. Nike Inc.’s International Strategy Nike Inc. defines its international strategy based on three core strategic questions (This international strategy is also valid for Turkey): What new business concepts could enable NIKE, Inc. to thrive in a sustainable economy? Nike has captured approx. Yes, it is back to shoes but with lots of electronics, including Nike Chip Skis. According to Mintel, 20%of the U.S. athletic market is controlled by Nike. The series had three ads featuring young sportsman Bo Jackson who campaigned on the benefits of a new cross-training pair of Nike shoes. The greater share of the gain came from international markets, specifically in China, as these areas have been fueling the company's growth over the past year: Not only are these numbers fantastic, they're also remarkably consistent, which is important for investors to consider when evaluating a company's longer-term sustainability. And this is not a mistake–it’s an intentional goal of the Nike branding strategy. The combined cost leadership and differentiation generic strategies boost Nike’s performance in the global industry. NIKE is a brand of Innovation, Growth and Purpose. This case study analyses the ever-evolving marketing strategies adopted by Nike to become a global brand. It requires stability and a core business back at home before any company can grow beyond its borders, and enough brand recognition that it can have the confidence that it will take hold outside of its home country. He used to take help from university runners to test his creations and collect their feedback. Starbucks and … By focusing on a wider global audience, these companies stand to benefit from new opportunities and strengthened revenue streams in the decade ahead. Nike's competitors had by then developed their business in this segment. What was it that Nike did for the partnership? Nike- A Truly Global Company: Nike is the world market leader in athletic shoes and apparel and operates in more than 200 countries. Known for bringing the best innovations to athletes at every level, it is no surprise that Nike continuously strives for excellence. In many ways, Nike is hard to beat, too. The app used the phone's accelerometer and so there was no need of a chip in the shoe. Europe, Asia, North and Latin America are the main markets in which Nike sells its products, which makes it a truly global organisation. The latest Nike products released in end-2012 include Nike + Baseball and Nike + Training Shoes. Nike Global Expansion. Going global is not a simple task for any company. Returns as of 12/23/2020. Nike Global Expansion is down to 8 specific things. See you at the top! The band tracks the wrist movement, predicts the activity performed and the approximate amount of calories burned. In 1973, they called their brand Nike after the Greek goddess of victory. Products like Nike + iPod for gym goers and Polar WearLink+ targeted specific needs of users. This helped the company to increase brand awareness and also reach out to customers who were still in two minds about choosing their brands. One such activity is the Nike Global Expansion strategy. But it was Nike's product. It has been pushing the technological boundaries of innovation to offer its customers new products and also differentiate itself from its competitors. Outsourced Manufacturing Units: Nike receives footwear from more than 140 factories located in 13 countries across the globe. Market data powered by FactSet and Web Financial Group. This helped in absorbing shocks during running and jumping. The power of such customer contact is phenomenal as it gives greater visibility in a single click, generates interactions among customers and gives the company an opportunity to collect info about customers' choices and preferences. Users can compare the Nike Fuel accumulated and comment on the challenge, motivate each other, share their difficulties and get suggestions on how to improve the general level of fitness. Stock Advisor launched in February of 2002. The users of Nike+ can not only store and review their results in their computers or devices but also analyse and share them within the community. Jennifer grew up in New York and parlayed her finance and public administration degrees into helping good causes with non-profit work. Cumulative Growth of a $10,000 Investment in Stock Advisor, How Nike's and Starbucks' Global Strategies Keep Them Ahead of Competitors @themotleyfool #stocks $SBUX $NKE $ADDYY, Nike Continues Drawing Bullish Analyst Predictions, Copyright, Trademark and Patent Information. Its swoosh symbol is easily recognized by everyone. Starbucks is now in over 80 global markets, and the fourth quarter of 2019 saw a 3% increase in international comps, up from a 1% increase in 2018. “Ah, Nike. Nike plans to achieve greater worldwide dominance through its premium and exclusive products that appeal to a mass audience of fans internationally. A very large infrastructure is essential to manage its global presence well. Fast forward to May 20, 2006. Riding on the success of this campaign, Nike, a year later, launched an even more empowering series of ads with the tag line "Just do it". Nike Inc (Nike) had been a phenomenal mature sporting goods brand controlling the market share and growing faster than the competitors. Overall, revenue was up 6% year-over-year. The company's innovation debut was in 1979 when it introduced air cushioning technology. It seems like everyone knows that here, you'll get a quality cup of coffee in a relaxed environment and a table for your laptop. Nike is headquartered in a state of art building that has a lake and more excellent and extraordinary facilities for its staff. Executive Summary: Constant innovation has been the byword for Nike's success. The company released the Nike app in China this past quarter, and it was downloaded 1 million times on the day of the launch, making it the top shopping app in all of China. Thanks to its technology leap, Nike, it is said, was able to cut down on advertising expenses by 40 per cent without compromising on efficiency and results. Currently, Nike has nearly 40 models under this brand name. It was a tool to measure the distance and speed of a run or a walk and was built on a virtually flawless partnership strategy. It also provides information on the latest game of endorsed athletes. Nike didn’t build its … For example, a Facebook user who wants to know more about the latest basketball shoes or game can turn to Nike Basketball Facebook page. The production of goods in locations other than those in which they are sold has been … This case study analyses the ever-evolving marketing strategies adopted by Nike to become a global brand. Its image as a technological front-runner and high status symbol gives it an edge in sales, and no other athletic shoe company can quite match it in terms of revenue and innovation. The shoes had two interdependent bags with compressed air inside. Global marketing helps create a strategy for a similar product in a different market. Instead it uses the social media site to motivate its users to get fit. All the rest (calculation, storage, integration) was done by the iPod. NEW YORK (May 5, 2010) – Today NIKE, Inc. (NYSE: NKE) unveiled its strategy and key initiatives to achieve sustainable, long-term growth across its global portfolio of brands and businesses. NIKE GLOBAL SOCCER MARKETING STRATEGY The Positioning statement of Nike is “For serious athletes, Nike gives confidence that provides the perfect shoe for every sport”. A positive impact of Nike’s offshoring strategy was that it allowed Nike to meet the growing market demand of its customers that resulted from global economic growth. Many of the high-end luxury shops are understandably quiet, but Starbucks is hopping. She has now turned her focus to helping investors lead happier and richer lives at The Motley Fool. Nike is the world leader in the manufacturing of sportswear and gear with more than 47 market shares across the global (Nike.com, 2011). January 21, 2010. On this page, every week Nike sets a new challenge for its followers. Going miles ahead of its competitors with a user community of more than six million people, Nike products were not just dressing up the athletes but also coaching the masses who wanted to be like athletes. Nike Business Strategy and Competitive Advantage: Nike is the leading brand in sports shoes and apparel industry. This index was actually introduced in the era of Nike+ app but it was not actively promoted until Nike FuelBand was launched. He already thought that it would be beneficial to the company if it used manufacturing plants in other countries outside the United States, because the labor costs would be much lower. In due course, even the hi-tech Air Max technology was found to be inadequate to entice customers. Almost every year after Nike launched its air cushioning technology, it released new versions of Air Max. One of the company's latest products is Nike FuelBand, a wristband that calculates the amount of energy spent during a day. On this day, Nike introduced its first mass produced gadget, Nike + iPod Sports Kit, in the US market. Many large U.S. companies, such as Nike (NYSE:NKE) are catching on. 1. And it was time for something that would differentiate Nike in the long run. Compared to other specialised players like Jawbone's UP and Fitbit Flex, FuelBand is rather primitive. 13 3.3.1 - Product Nike is a global company with a portfolio based on Nike Inc. (2017) that includes a vast variety of products of footwear, apparel, equipment, and accessories for men, women, boys and girls. Nike produces a […] The whole evolution process has managed to change the concept of what a regular apparel seller is. Practice Leads to High Performance as Nike Executes Global Strategy. The same reasons it's seen so much success in the U.S.: a commitment to the customer experience, which matters everywhere, and strong technological innovation, which gives it the power to manage international growth. By 1971, though BRS revenue had touched $1 million, the business relationship with Onitsuka was turning sour. A Nike + Sportwatch was also introduced in combination with the chip. With the rise of digital sales, having an international presence and strategy has become all the more important. Former CEO Phil Knight said in his book Shoe Dog, "Business is war without bullets," and Nike knows that to keep its top spot, it can't let up on the offensive. Nike's tech growth was also accompanied by social media initiatives. To ensure success, Nikes managers must continually examine and improve strategies and approaches used in the 10 strategic decision areas of operations management. And yet, Nike’s marketing is not just about selling shoes or athletic apparel–it’s pitching a lifestyle. In order to maintain this mission statement, Nike has ensured that it has maintained socially … Adapting from their origins of supplying trainers to athletes, they’ve evolved to focus on everyone, all across the globe. The Nike marketing strategy, in summary, is, invest heavily in marketing, use emotional advertising that every human being can identify with, offer premium products at premium prices and sell their products primarily through 3rd party retails stores. A Review of Nike Offshore Outsourcing Strategy Offshore global outsourcing has been a peculiar strategy adopted by some giant organization basically to cut cost. But its biggest selling point is the Nike + Fuelband Community on Facebook. 31% of the global athletic footwear market. Nike was also quick to seize the opportunity offered by social media to engage with a wider customer base so much so that it is now able to link its new hi-tech gadgets to social media platforms. I'm writing this as I sit in a Starbucks (NASDAQ:SBUX) cafe at Charles De Gaulle Airport in Paris, and while the language is different, the experience is very much the same. With this, iPhone/iPod users can map out their running route and later share it with their Facebook friends. The main driver of Starbucks revenue is domestic sales, which accounted for 69% of the total revenue in the 2019 fourth quarter. A design student Carolyn Davidson created the famous 'swoosh' logo for $35. Somewhere in its evolution, Nike also realised the importance of hi-tech gadgets in day-today lives. But in mid 1980s the revenue started dipping mainly because the management did not take note of the aerobics boom. Nike's sales philosophy - if you have a body, you are an athlete - had enticed everybody who wanted to think of himself/herself as an athlete or wanted to get more athletic. Doing business responsibly has been at the cornerstone of Nike’s growth strategy. What an iconic brand.” I thought to myself. These areas pertain to the main decisions in managing streamlined opera… The page on Facebook does not say much about the FuelBand. Consumer Direct Offense strategy grows revenues The company, under its Consumer Direct Offense strategy, is growing its digital presence. But it helps that most of us drink coffee, which makes for a more seamless international transition. And it is here that Nike Fuel comes into play. This made it easy for a person involved in a particular sport to choose his/her shoes. In today’s competitive environment, Nike, one of the global leaders in sporting goods industry, has established a strong position for enhancing athletic life style. Nike has a strategy of growing in a way that is responsible and ensures long term financial growth. Strong Brand Awareness – Nike is one of the most recognizable brands in the world as its name alone is memorable, easy to pronounce, and very unique. This market position is partly a result of effective and efficient operations management (OM). The company was actually selling just a small electronic chip that had to be inserted in the shoe (preferably a special one, but even a regular shoe would do) and a wireless connection device that had to be plugged to an iPod. Nike has been creative since the start. In a bid to regain its edge, Nike, in 1987, launched a new product called Air Max. The company has done a thorough analysis of the issues involved in international operations, including higher development costs and risks related to varying cultural norms. It also gives endless chances for customer segmentation and product differentiation, the pillars of any marketing strategy. Our mission is to bring inspiration and innovation to every athlete* in the world. Both of these companies have seen rising share price, with Starbucks up 46% and Nike up 32% over one year, and there's good reason to believe that they will continue in that direction. So it started to combine new products with hi-tech solutions to give unconventional capabilities to a customer of sportswear. Although sales to wholesalers accounted for about 68% of Nike’s global revenues in fiscal 2019, … Nike’s Strengths – Internal Strategic Factors. However, notwithstanding positive comps and cash flow from domestic operations, growth is coming from international locations, and Starbucks is cultivating these markets that are slowly catching up. 2. In contrast, a regular apparel seller even after spending huge amounts on advertising can only expect to meet a customer in the store when the customer has already made a decision to go and shop there. A strategic objective based on the cost leadership generic strategy is to grow the company’s competitive advantage through new technologies to reduce production costs. Nike was cashing in on the most technologically advanced portable device that could do all the tech work brilliantly. Nike owns 31% of the global footwear market with an average of shoes sales that reach 120,000,000 pairs (Statistic Brain, 2017). It’s the number one sports manufacturer in the world. In 1966, it opened the first BRS retail store in Santa Monica, California. So, they moved on from being distributors of athletic footwear to designers and manufacturers of athletic footwear and took full control over their value chain. Why has Starbucks been so successful worldwide? Nike's success lies in its ability to understand how innovation can be used to reinforce brand identity: Simona Botti, Nike took a unique approach for its shoe manufacturing process and occupied the mind space as a maker of athletic shoe: Sunil Chandiramani, Michelle Sanusi, Alexander Lazarev, Jesper Milling Jorgensen, Vasyl Latsanych, Setting aside its global strategy helped Gillette in India, How Starbucks survived financial crisis of 2008. We do that by building creative and diverse global teams, making a positive impact in the communities where we live and work and by … This idea of getting a consistently quality product, no matter where one is in the world, seems to translate across countries and cultures. Today, the estimated market value of Nike is about $10.7 billion. Invented in the mid 1970s by a NASA engineer, it kept up the revenue of Nike for long. The fact that the company has a global supply chain means that it is subject to the vicissitudes of international trade practices including labor strikes in its overseas locations, currency fluctuations that decrease its margins, as well as lack of control over the geopolitical events happening around the world which have the potential to disrupt its global supply chain. Global Marketing Strategies. In September 2010, Nike introduced a running app to be used in the latest iPhones. It brought the idea and developed it into a business. So now iPhones and iPods come pre-installed with Nike+ app. The Ascent is The Motley Fool's new personal finance brand devoted to helping you live a richer life. The bags can be seen by the athletes (users) through a 'special window' in the heel or toe shoe. The athletic footwear leader's digital strategy was the … It was for the first time that a Beatles song was being used in a TV ad. Founded in January 1964 as Blue Ribbon Sports (BRS) by University of Oregon track athlete Philip Knight and his coach Bill Bowerman, the company was initially a distributor for the Japanese shoemaker Onitsuka Co and their brand Tiger. Nike Inc. is a leading global manufacturer and seller of sports shoes, apparel and equipment. The focus was on digital gadgets. In those days, Bowerman would often rip apart the Tiger brand shoes to see how he could make them lighter and better. A lifestyle that everyone feels they need to have. The marketing campaign for this product was supported by a memorable TV ad in which the Beatles' Revolution was the soundtrack. The company aimed to build a profitable global portfolio of branded footwear and apparel, equipment and accessories businesses, to deliver value to all its stakeholders. Constant innovation has been the byword for Nike's success. You can read more about them on the official Nike file here. The inception of the company strategy of Nike was born when was Phil Knight was still a university student. Also, the … Nike Outlines Global Strategy for Creating a More Sustainable Business. By doing so, they minimise the scope of their corporate responsibilities, concentrating on activities that add the highest value. It paved the way to a truly innovative future of the company. So, to create a platform where a group of people can compare their energy spent, Nike created a new index called Nike Fuel. The tie-up with Apple was Nike's realisation that most runners will use iPods or iPhones to listen to music while jogging. Starbucks and Nike are ahead of the pack, which goes a long way toward ensuring long-term growth. The shoes featured gas-filled plastic membranes that could be inserted into the sole for comfort during running. Taking the initiative With the rise of digital sales, having an international presence and strategy has become all the more important. 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