CASE STUDY

OF
NIKE
Resource Person:
Prof. Ghulam Ahmad Rana

MBA Professional
4th Semester (Section E-9)

NIKES STORY

Begin in 1964 as Blue Ribbon Sports.

Renamed Nike in 1978, after the Greek goddess of victory.
Key people of Nike: Bill Bowerman & Phil Knight.
Headquarters in Beaverton, Oregon , USA.
Worlds most competitive sports and fitness company.
Nike employees over 26,000 people.
Current CEO: Mark Parker.

1. Nikes brand Image &

Source of brand equity in
United States.
Nikes image is that of power, dedication, hard work and the desire to succeed.
It is an aggressive and performance oriented brand.
It has always given full attention and priority to performance and durability.

It always sales feelings of comfort and emotions to people.

It always provides higher quality to all consumers especially to young people
who admire it.
The slogans used in its advertising & marketing campaigns are always
inspiring & worthy to its brand image.

The main source of brand equity for Nike is the professional athletes
and players of international sports. It has always chosen upcoming stars
as its brand ambassadors. It is the brand that usually signs top athletes
and players of every sport from all over the world to profitable deals so
that those signed athletes and players can wear and represent Nike to its
fullest in their all respective fields across the world.

2. Effects of Nike's efforts to

corporation on its source of
United States, Europe & Asia. . .

become a global
brand image in

Nike is moving forward strongly in the global market.

Their newest strategy is putting emphasis on individuality and appealing to
each sport and athlete in the U.S , Europe and Asia.
The broadening of their SIX categories (Soccer, Basketball, running, mens
training, womens fitness and sports culture) and the awareness being arisen in
many new countries this could actually be a great potential for Nike and their
brand.
They associated with famous American athletes like Michal Jordan and
McEnroe who personifies Nikes core values of achievement, performance and
innovation.

CONTD
European marketing team targeted a single sport at a time to develop the
brand in Europe.
Nike had to change its sponsorship approach, making soccer a big part of this
shift.
Nike also had to change its advertising, making it less aggressive and more
representative of consumers taste in Europe.
It also had to become more involved on a grassroots level with club sports,
school teams and local events in Europe.
Nikes approach in Asia was similar with similar results.

3. Importance of Sponsorships
and endorsements
to Nikes business?
And effect of becoming an official
sponsor for the
Olympics on Nikes relationship with consumers.
Sponsorships and endorsements are very vital to Nikes business. In fact
celebrity endorsements are corner stones in Nikes global brand equity.
Nike has built a strong brand image along the years through successful brand
associations with legendry athletic heroes across the world.
The benefits of these celebrity endorsements and sponsorship programs
exceeded the monetary benefits of increasing revenue.
Actually it conveyed the brand personality and shaped the Nikes brand
image in the minds of consumers affectively.
Michal Jordan, McEnroe, Tiger Woods and Maria Sharapova etc

CONTD
Sponsorship of the Olympics games will start of many opportunities to
bring sports events into the mainstream for regional and global markets.
It will establish Nike as one of the leading sportswear companies in the
world.
Not only it will enhance Nikes brand image among the consumers, but
the brand awareness and brand equity will reach its peak.

4. Nike a target for critics

of globalization???
Nikes response on allegations of
unfair global labor practice!!!
Nike has been criticized for its operations and for contracting with factories
of third world countries like China, India, Vietnam, Pakistan, Mexico and
Indonesia etc.
Nikes operations in Vietnam have been criticized for violating the minimum
wage and overtime laws in Vietnam as 1996.
For the poor working conditions with poor ventilation and exposure to
dangerous levels of carcinogens.
For child labor in Pakistan.
Also for forcing its workers to work 65 hours a week.

CONTD
In response to growing global criticism, Nike responded by. . . .
Increasing the minimum age of footwear factory workers to 18 years, and
minimum age for all other light-manufacturing workers to 16 years.
Expending education programs for workers in all Nikes footwear factories.
Comprehensive changes in its corporate labor policy.
New ventilation systems have been installed.
60-hour work week has been enforced.
Has assured an average salary well above national salary average.

CONTD
Announced the implementation of new
global labor standers.
Become a charter member of the fair labor
associations.
From all these Nikes efforts in the area of
labor and environmental or health
standards show that company is serious and
much concerned about doing the right
things and is truly conscious about these
issues.

5. Nikes acquisitions?
&
Brands Nike should try to acquire next?
Nikes acquisitions and brands being controlled by Nike are as follow. . .
Cole Haan: Based in Maine, sells dress and casual footwear and accessories
for men and women under the brand name of Cle Haan, g Series and
Bragano.

Nike Bauer Hockey: Based in New Hampshire, manufactures and distributes

hockey ice skates, apparel and equipment, as well as equipment for in-line
skating, street and roller hockey.

CONTD
Hurley International: Based in California, designs and distributes a line of
action sports apparel for surfing, skateboarding and snowboarding, youth
lifestyle apparel and footwear.

Converse: Based in Massachusetts, design and distributes athletic and casual

footwear, apparel and accessories.

CONTD
Yes these acquisitions make sense for Nike because it had many goals behind
these acquisitions because. . .

They were searching for

Brand diversity.
Ways providing additional avenues for growth.
Segmenting this business by customers.
Opportunities to address the low end through distribution at retailers.
As Nike is looking to target Chinese market for increasing its monetary benefits
and brand equity so Nike should try to acquire Chinese brand Li-Ning next.

6. Importance of Fashion
to Nike?
&
In China Fashion OR Performance???
With added exposure Nike challenged to respond to
market demand for fashionable athletic footwear and
apparel.
In this quest Nike will succeed if they keep quality and
performance at the core of their business.
Now no one can deny the importance of fashion as it is
the integral part of Nikes production.

In this regard they opened the first Nike Goddess store to

sell fashionable sportswear for women only in the year
2001.

CONTD
While entering into Chinese market
Nike has to focus on fashion along with
performance, as it is performance
oriented company, because now fashion
has become more important for any
brand to capture the new markets.
Although Chinese are not fashion
oriented people but now some analyst
believe that the new middle class in
China has began to follow western
culture which is enrich with fashion.

7. Nikes strategies to
defend its position
Vs

Adidas & Rebook a joint force???

Nike should keep differentiating its products from Rebook and Adidas. They
should maintain their reputation as an innovator and should preserve Nikes
brand equity domestically and perhaps most importantly globally.
Nike can protect their market share among female consumers within the
industry by targeting some of their promotions to female consumers.

In terms of product differentiation, Nike is leading the market so it should keep

this differentiation alive.
Also it should also differentiate its services to compete with its competitors i.e.
Adidas & Rebook.
Apparel and equipment customization.

CONTD
Nike should think about latest trends and styles
and should keep introducing fashionable shoe.
Low price range can also boost up its sales and
market share among its competitors.
In Asian countries Nike should work with
reasonable price because here in Asian countries
demand is very elastic.

It should be more responsive towards society to

show its concern for society and this will be a point
of differentiation.

CONTD
Nike should devote vast resources
on R&D of its product to compete
with this joint force.
It should sponsor cricket teams and
cricketers of countries like Pakistan,
India, Bangladesh, Sri Lanka, Australia
and other cricket playing nations to
grab the market share in this sector.

Recommendations
Nike must gain a more positive global image, especially regarding labor
laws.

Nike has to be sufficient regarding its own stores because it is lacking

in this regard.
Expansion into sports sunglasses and jewellery items can also be a
good move for Nike.
It should engage more in community centred activities such as charity
programmes, fitness programmes for children to boost up corporate
social responsibility.

CONTD
Going deeply into e-commerce can increase sales due to high internet
users.
Nike should Strengthen distribution in regions where it is currently
losing sales.
It must gain strong presence in China which is a vast market for any
brand.

Targeting Asian pop culture such as Pop singers, Bollywood etc can
also enhance its brand equity.