NIKE CASE STUDY ANALYSIS

Prepared by:
Riya Srivastav
Ayush Kumar Pandey
Ayushman Tripathi
Naga Lokesh Budati
 HISTORY OF NIKE
• 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.
• In 1966, it opened the first BRS retail store in Santa
Monica, California.
• By 1971, though BRS revenue had touched $1 million,
the business relationship with Onitsuka was turning
sour. 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.
• In 1973, they called their brand Nike after the Greek
 All ABOUT SNEAKERS
• Introduced in 19th Century, got attention in early 20th Century.
• First high profile brand-Converse, with shoe name “All-Star”.
• Nike, Adidas and Puma came later.
• Brand endorsements with Basketball players.
• Market for sneakers estimated to be $50 Billion annually.
• Nike’s main competitors are Puma, Adidas.
• Nike in 2017, collaborated with Virgil Abloh, Director of Louis Vuitton who deconstructed
its products.
• The Internet propelled to thriving secondary market for sneakers, (e.g.- eBay).
 NIKE’S FOCUS ON ‘GOING DIRECT’
• Customer Direct Offense: An initiative to focus more of
the company’s resources on selling directly to consumers.
• The goal is to better serve the consumer personally.
• According to Sussman, “the retailers that aren’t evolving
to offer better consumer
experiences will find themselves challenged.”
• Nike’s portfolio comprises of four apps: The Nike app,
Nike Run Club, Nike
Training Club, and SNKRS ;membership programs like
Nike.com and the NikePlus.
• Service model: Make consumers feel loved by Nike.
 BRINGING SNEAKERS TO THE MARKETPLACE

• The merchandising team, gathers consumer insights, market data, to plan the right product.

• To determine the quantities the team was focused on the right balance between supply and
demand.

• High energy launches fall into three categories: Explore, Invest and Scale.

• For high-heat launches, the app is a key connection point to consumers across the
marketplace.

• SNKRS helps to drive the energy of their multi-billion-dollar business.

 APP ORIGINS

• To ensure its continued dominance, the 55-year old company went back to its startup roots
with the formation of what it calls s23NYC – otherwise known as Nike’s first digital studio.

• Formed after Nike acquired Richard Branson’s Virgin Mega in August of 2016, the new venture
infused the Nike with a bit of startup energy.

• SNKRS app is designed to deliver value proposition and enhance consumer experience.

• Faris team in s23NYC, upon joining Nike was to completely rethink how the brand perceived its
customers.

• Introduce thrill of the chase, extended to cater large scale.

 SEASON 1
• GESTURE UNLOCK
• SNKRS Stash: Adds gamification element where releases
are hidden in "Stash Spots" throughout a certain city,
which users must physically activate on site for ability to
purchase; Also limited to big cities thus far, but there
has been discussion of those in other areas to "team
up" with active shoe-seekers through a live stream .

• SNKRS Cam: Augmented reality-like experiences where

sneakers are unlocked in specific places via the camera
function on SNKRS (here is a collaboration between Nike
and Momofuku chef-owner David Chang; shoe was
unlocked with the Momofuku menu)
• SNKRS Draw: Raffle system in which users can register for
the Draw within a pre-determined time period (usually 10,
30, or 60 minutes); Winners are notified after the Draw
concludes

• SNKRS Pass: Reservation system where all users receive a

notification at a random time, after which it becomes "First
Come First Serve" to make a reservation for in-store pickup;
So far has only been launched in big cities such as NYC and
LA (with many requests/complaints to expand it across
U.S.)
 SEASON 2
The art of champions campaign
 THE CAMPAIGN FOR THE KENDRICK LAMAR’S TOUR

• In the spring and summer of 2018, S23NYC teamed with hip-

hop star Kendrick Lamar.
• For this campaign S23NYC produced thousand pairs of ‘Cortez
Kenny III” a black shoe with white Nike logo and red ribbon.
• Faris and his team already stashed with LA, NYC and Houston
and then they planned for Boston and Chicago.
• If fans in one place 26000 seat venue open the SNKRS app
during Lamar’s show they got access to the stash and could
purchase a pair for $100 until suppliers run out
• Unlock the stash and all pairs sold out within three minutes.
 CONCLUSION
• Nike’s revenue stood at $35 bn with gross profit of $ 15 bn approximately in 2017.
• Nike has embraced premium pricing strategy creating a unique value proposition.

• The secret sauce behind Nike’s success in building up its digital and direct-to-consumer
businesses is the link between its apps and its store strategy with great experience.

• Made 80% revenue from North America and China only through sneakers and apparel.
 SUGGESTIONS
• Improve its product mix to attract more customers, especially non-athletes – sunglasses,
watch, etc.
• Increase market presence in developing countries
• Stepping into the line of economy boosting projects that will encourage recycling.
• Reducing controversy surrounding their trade and production practices.
• Retailers in Developing countries disturbing the demand.
• Manufacturing several other sports related products.
• New Portfolio(Brands).
• Product promotion other than shoes.
THANK YOU