nike case study 2022

The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.

News & Analysis

• Professional Exclusives
• The News in Brief
• Sustainability
• Direct-to-Consumer
• Global Markets
• Fashion Week
• Workplace & Talent
• Entrepreneurship
• Financial Markets
• Newsletters
• Case Studies
• Masterclasses
• Special Editions
• The State of Fashion
• Read Careers Advice
• BoF Professional
• BoF Careers
• BoF Insights
• Our Journalism
• Work With Us
• Read daily fashion news
• Download special reports
• Sign up for essential email briefings
• Follow topics of interest
• Receive event invitations
• Create job alerts

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.

ADVERTISEMENT

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

© 2024 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions

For Struggling Public Companies, Going Private Is No Panacea

Nordstrom, Tod’s and L’Occitane are all pushing for privatisation. Ultimately, their fate will not be determined by whether they are under the scrutiny of public investors.

Why Esprit’s Ambitious Rebrand Fell Short

The company is in talks with potential investors after filing for insolvency in Europe and closing its US stores. Insiders say efforts to restore the brand to its 1980s heyday clashed with its owners’ desire to quickly juice sales in order to attract a buyer.

How Adidas Sambas Took Over the World

The humble trainer, once the reserve of football fans, Britpop kids and the odd skateboarder, has become as ubiquitous as battered Converse All Stars in the 00s indie sleaze years.

How Hudson Yards Defied Its Haters and Became New York’s Top Mall

Manhattanites had little love for the $25 billion megaproject when it opened five years ago (the pandemic lockdowns didn't help, either). But a constantly shifting mix of stores, restaurants and experiences is now drawing large numbers of both locals and tourists.

Subscribe to the BoF Daily Digest

The essential daily round-up of fashion news, analysis, and breaking news alerts.

Our newsletters may include 3rd-party advertising, by subscribing you agree to the Terms and Conditions & Privacy Policy .

Our Products

• BoF Insights Opens in new window

Nike's Digital Transformation Efforts Continue to Win Big

Nike’s digital transformation enters the metaverse and embraces supply chain automation.

Long a pioneer in the retail sector , over the past decade Nike has emerged as a true digital visionary. The embrace of cutting-edge technology combined with a “Consumer Direct Acceleration” (CDA) strategy has not only enabled Nike to survive the turbulence of the last two years, but thrive. 

In fact, according to the company’s most recent earnings report , digital channels and applications now account for 26% of Nike’s revenues, its Q3 earnings revealed, with digital sales in the US up 33% on the same quarter last year. Furthermore, Nike revenues for the quarter were $10.9 billion. Net income was $1.39 billion, down 4% on the same period in 2021.

In the years leading up to the COVID-19 pandemic, Nike made a number of savvy digital investments including the launch of its mobiles apps (NIKE mobile app, the SNKRS mobile app, the NTC (Nike Training Club) and NRC (Nike Run Club). Nike’s exercise app, the Training Club, alone was responsible for boosting sales in China by 30% during the pandemic.

In partnership with intelligent automation provider Laiye , they also launched a chatbot that not only helped e-commerce customers find what they were looking for, but could also offer the shopper personalized product recommendations. 

The company has also made significant investments in data science technology , acquiring data integration startup platform, Datalogue, in 2021 as well as two predictive analytics tools Zodiac (2018) and Celect (2019).

However, the transformation hasn’t stopped there. Here’s a look at what else is on Nike’s digital transformation plate. 

Nike Enters the Metaverse

In November 2021, Nike introduced the world to Nikeland , its Roblox -hosted metaverse. Since then, 7 million people have visited to browse merchandise, build and style avatars, design sneakers, play games, and roam its immersive 3D landscape. 

Later that same year, Nike also acquired digital sneaker company, RTFKT, to help them expand into the NFT space and, so far, the partnership has proven to be successful. For example, in April of 2022, Nike and  RTFKT Studio launched CryptoKicks Dunk Genesis, a collection of 20,000 non-fungible tokens (NFT) shoes that can be purchased and worn by your avatar in the metaverse. A total of 600 pairs of NFT sneakers were sold out in just  6 minutes, generating a total revenue of $3.1 million . 

Supply Chain Transformation

Perhaps seeing the writing on the wall, Nike began reimagining its supply chain to reflect its increasingly digital, D2C strategy. To start, the company opened dozens of new regional distribution centers and launched a “sole train,” a dedicated high speed Los Angeles-to-Memphis train to transport items from the nation’s largest container ports and the company’s omnichannel facilities. 

Similar to many companies, they also expanded their use of physical robots (or co-bots , short for collaborative robots, as they call them), advanced demand-sensing technology and inventory optimization platforms to not only increase the speed of order processing and helped them triple their order capacity during the holiday season, but increase the accuracy of demand forecasts and minimize environmental impact. 

As Nike themselves put it in a recent blog post, “Using AI and machine learning, Nike is leveraging technology to forward-position the products that consumers love most and deliver faster, more precisely, and without compromising sustainability.”

Nike’s Next Move

When it comes to Nike’s long-term digital transformation ambitions, the race has only begun. In April 2022, it was announced that Nike had hired Dantley Davis as vice president of digital design. A long-time industry player, Davies helped build Netflix’s widely emulated digital interface and, later, served as Twitter’s first chief design officer. This move signals that a new era of innovation is about to commence. 

So does Nike's announcement that they plan to build a new technology center in Atlanta. According to Footwearnews.com , “As part of this new office, Nike said it is launching three ‘Centers of Excellence’ focused on disciplines that are particularly strong in the region like logistics and supply chain, which Nike is using to accelerate its digital-first supply chain strategy. Nike added that the center will also focus on cybersecurity and will establish an East Coast cybersecurity command center. The facility will also explore artificial intelligence and machine learning to help reimagine consumer experiences.” 

Furthermore, Nike also recently announced it will revamp its Nike China digital ecosystem including the Nike app and nike COM, snkrs app, Nike wechat applet, NTC wechat applet and other self owned digital platforms this July. Many also speculate that Nike will begin developing the next generation of fitness apps - ones that use biometric data to provide users with workouts specifically tailored towards their unique exercise habits, preferences and needs. 

Upcoming Events

All access: low code 2024.

April 16 - 17, 2024 Free PEX Network Webinar Series

AI Tech Stack Masters Exchange

April 17 - 19, 2024 The Georgian Terrace | Atlanta, GA

Insights into action: Methodologies for data strategy success

25 April, 2024 Online

Chief AI Officer USA Exchange

May 01 - 02 Le Méridien Hotel, Fort Lauderdale, Florida

All Access: AI in PEX 2024

May 07 - 08, 2024 Free PEX Network Webinar Series

24th Annual Shared Services & Outsourcing Week Europe 2024

14 - 16 May, 2024 Estoril Congress Centre, Lisbon, Portugal

Subscribe to our Free Newsletter

Insights from the world’s foremost thought leaders delivered to your inbox.

Latest Webinars

Using ai to improve master data processes.

2024-05-30 11:00 AM - 12:00 PM EDT

2024-04-25 11:00 AM - 12:00 PM EDT

Unlocking Business Value through AI-Powered Document Processing

2023-02-23 11:00 AM - 11:45 AM EST

RECOMMENDED

FIND CONTENT BY TYPE

• White Papers

Intelligent Automation Network COMMUNITY

• Advertise With Us
• Artificial Intelligence Universe
• Become a Member Today
• Cookie Policy
• User Agreement
• AIIA.net App
• AIIA Partners
• Intelligent Automation Showcase
• 2023 Editorial Calendar
• Webinar Series

ADVERTISE WITH US

Reach RPA, intelligent automation and digital transformation professionals through cost-effective marketing opportunities to deliver your message, position yourself as a thought leader, and introduce new products, techniques and strategies to the market.

JOIN THE Intelligent Automation Network COMMUNITY

Join IAN today and interact with a vibrant network of professionals, keeping up to date with the industry by accessing our wealth of articles, videos, live conferences and more.

Intelligent Automation Network, a division of IQPC

Careers With IQPC | Contact Us | About Us | Cookie Policy

Become a Member today!

PLEASE ENTER YOUR EMAIL TO JOIN FOR FREE

Already an IQPC Community Member? Sign in Here or Forgot Password Sign up now and get FREE access to our extensive library of reports, infographics, whitepapers, webinars and online events from the world’s foremost thought leaders.

We respect your privacy, by clicking 'Subscribe' you will receive our e-newsletter, including information on Podcasts, Webinars, event discounts, online learning opportunities and agree to our User Agreement. You have the right to object. For further information on how we process and monitor your personal data click here . You can unsubscribe at any time.

Brought to you by:

By: Frank T. Rothaermel

The case is set in January 2020 and the case protagonist is John Donahoe, Nike's new CEO. Nike is the largest company worldwide in the athletic footwear, apparel, and equipment business. The case…

• Length: 16 page(s)
• Publication Date: Oct 26, 2019
• Discipline: Strategy
• Product #: MH0060-PDF-ENG

What's included:

• Teaching Note
• Educator Copy

$4.95 per student

degree granting course

$8.95 per student

non-degree granting course

Get access to this material, plus much more with a free Educator Account:

• Access to world-famous HBS cases
• Up to 60% off materials for your students
• Resources for teaching online
• Tips and reviews from other Educators

Already registered? Sign in

• Student Registration
• Non-Academic Registration
• Included Materials

The case is set in January 2020 and the case protagonist is John Donahoe, Nike's new CEO. Nike is the largest company worldwide in the athletic footwear, apparel, and equipment business. The case focuses on the challenges Donahoe faces as he attempts to drive Nike to the goal of $50 billion in annual revenues by 2021. The case focuses on Nike's competition, the convergence of technology with apparel and footwear, as well as the company's corporate social responsibility issues. Donahoe has to address internal as well as external challenges. Donahoe was appointed CEO at a time when the Oregon sports and apparel company faces a number of controversies, including when Nike-sponsored athletes were caught up in scandals; the ban of Alberto Salazar, Nike's top running coach amid doping allegations; as well as continued concerns about Nike's workplace culture after an internal employee survey leaked describing the company as run by a boys club that is hostile towards women. Nike faces tough competition in all of its market, as well as along the value chain. Rapid advances in mobile technology and the development of the Internet of Things (IoT) could fundamentally change the industry. Nike is also moving further into ecommerce to offset the "Amazon effect." The fast-growing Chinese market, moreover, may provide an avenue for needed future growth.

Oct 26, 2019

Discipline:

McGraw-Hill Education

MH0060-PDF-ENG

We use cookies to understand how you use our site and to improve your experience, including personalizing content. Learn More . By continuing to use our site, you accept our use of cookies and revised Privacy Policy .

MIT Libraries home DSpace@MIT

• DSpace@MIT Home
• MIT Libraries
• Graduate Theses

Show simple item record

Sustaining Digital Transformation in the Post-COVID Era: Nike Case Study

Files in this item.

This item appears in the following Collection(s)

Inside Nike's high-profile gender discrimination lawsuit, where plaintiffs claim unequal pay and more thanks to a 'boys' club' culture

• Former female Nike employees sued the company over alleged gender discrimination in 2018.
• The case is one of the most high-profile cases filed in the wake of the #MeToo movement. 
• Here's a guide to Insider's coverage of the lawsuit, which awaits a final ruling on class certification.

A sweeping gender-discrimination lawsuit against Nike is at a critical point. In November, a judge ruled against a motion to make the case a class action.

The judge will soon consider objections to her ruling. 

The lawsuit was filed in 2018, a few months after the Wall Street Journal first reported on allegations of a "boys' club" culture at Nike. The company has repeatedly said it has zero tolerance for discrimination. 

Here's a guide to Insider's coverage of the lawsuit. 

Nike employees described 'sloppy drunk' men, witnessing oral sex, and requests to 'dress sexier' at work in newly unsealed surveys

In December 2022, Insider published the most detailed look yet at the nature and details of the allegations that first rocked the sportswear giant in 2018. The report used roughly 5,000 pages of court documents, including never-before-seen employee surveys, that were unsealed after a court challenge. 

Unsealed Nike employee surveys described a 'boys' club' culture where women were called 'honey' and 'females couldn't possibly play in the sandbox'

Another December Insider report dove deeper into the documents and surfaced additional details from the unsealed employee surveys, including claims of "overarching" themes of "normalized negative, manipulative and sexist behavior" at the company. 

Nike scores critical win in sweeping gender discrimination lawsuit

In November 2022, a federal judge ruled against a motion to convert the lawsuit into a class action. Nike and plaintiffs have since filed written objections to the ruling. A date has not been set for oral arguments.

If plaintiffs get the decision reversed, the case would proceed on behalf of roughly 5,000 women who have worked at Nike's headquarters since October 2017 instead of the 14 plaintiffs named currently.

Nike paid male employees $11,000 more than their female coworkers, newly unsealed court documents allege. Nike disputes the number and says there's no gender pay gap.

In November 2022, Nike and plaintiffs unsealed roughly 5,000 pages of documents, including details of an alleged $11,000 pay gap between 2015 and 2019 for male and female Nike employees. Nike disputed the calculation, which had previously been sealed. Plaintiffs used information obtained from Nike during discovery to compute the alleged gap.

Nike ordered to release additional information about pay practices in sweeping gender-discrimination lawsuit after Insider and other publications' challenge of court seal

In September 2022, a federal judge ruled in favor of Insider, the Oregonian, and the Portland Business Journal. The news outlets had challenged the protective order in the lawsuit, arguing for the public interest in the case. 

Nike is fighting to keep a massive gender-discrimination case from going forward. 3 lawyers walked us through what's at stake.

Three lawyers explained to Insider how class certification motions are a "central moment" in such cases and why companies like Nike fight so hard to defeat them. 

Nike unseals internal memos and human-resource documents as it gears up to defend itself against allegations of gender discrimination

In late April 2022, Nike unsealed its motion against class certification. The motion, and supporting documents, gave the fullest picture at the time of Nike's internal response to the allegations of gender discrimination and sexual harassment. 

Insider among publications working to unseal records in Nike's gender discrimination lawsuit

In early April 2022, Insider, the Oregonian, and the Portland Business Journal intervened in the lawsuit in an effort to get more of the case unsealed. Hundreds of court filings, including corporate records and witness testimony, remained off limits to the public. 

Nike pay and HR practices coming to light as part of lawsuit alleging gender discrimination

In late-March 2022, Nike unsealed more than 700 pages of records that showed the company would likely argue in court that individual hiring managers make decisions about pay, therefore any disparities were isolated, not systemic. 

Nike files motion to keep sensitive records in sweeping gender discrimination lawsuit sealed

In mid-March 2022, Nike said in a legal filing it was willing to make the "overwhelming majority" of the lawsuit public, but it wanted several records to remain sealed, including a plaintiffs' analysis of aggregate pay shortfalls and documents about three former employees who were the subject of complaints. 

Nike infuriated employees and helped spark a lawsuit with a 'tone-deaf' declaration about pay equity. Here's the leaked memo that drew so much scorn.

In April 2017, Nike's top human resources official proclaimed victory on pay equity in a company-wide email, saying women earned 99.6% of what men earned. The self-congratulatory tone of the email spurred an independent employee survey of sexual harassment and gender discrimination that ultimately landed on the desk of then-CEO Mark Parker. 

Do you work at Nike or have insight to share? Contact reporter Matthew Kish via the encrypted messaging app Signal (+1-971-319-3830) or email ([email protected]). Check out Insider's source guide for other tips on sharing information securely.

• Main content

Talkin' Baseball

Let's talk about baseball, the sports world, and the overall relationship with public relations.

Case Study: Nike & Colin Kaepernick “Just Do It” Campaign

Case Study: Nike’s 30th Anniversary “Just Do It Campaign” With Colin Kaepernick

Brian Urvater and Courtney Vandegrift 

Comm 473: PR Campaigns

Professor Renea Nichols

September 28, 2021

When Nike released the 30th anniversary “Just Do It” campaign, Nike’s brand leadership team members were taking a calculated risk. They knew full well how Kaepernick’s high profile protest might rub some of its consumer base the wrong way, yet they moved forward with it anyway In 2018, Nike launched a new ad campaign that was based on a strong political conflict capable of tearing apart the United States. The nation was polarized as a result of increased racism, police brutality, and social injustice. In the midst of an era labeled as the Black Lives Matter movement, where african americans felt oppressed and helpless due to the violent attacks against black communities across the country, Nike drew a great deal of attention with their new campaign strategy that showed support for black communities, athletes, and civil liberties proponents. The ad featured professional football player and civil rights activist Colin Kaepernick, best known for taking a knee during an NFL game’s national anthem to protest social injustice and police brutality. The advertisement image began with a quote that stated “Believe in something. Even if it means sacrificing everything.” Since Nike is a sports gear and apparel company, their products fit well into this campaign strategy because it highlights a celebrity athlete that is known worldwide. Their main objectives were to bring headline attention to the campaign by highlighting athletes that were pushing boundaries in society in some way.

This case study’s purpose is to research the public relations methods used in the 30th anniversary of the “Just Do It” Nike social media campaign featuring prominent NFL figure Colin Kaepernick. With input from former NFL player and founder of Go Big Recruiting Ross Tucker, this paper reflects the communications strategies used by Nike’s PR department to send a specific message to their target audience and influence their perception and brand loyalty. By taking a stand for a controversial social figure during a time of political disarray, Nike took a risk to convey their brand as a platform that brings attention to important social and political matters. Since the launch of the campaign in 2018, Nike has continued to represent themselves as an organization that supports local communities and athletes. By bringing more thought to important social issues such as systemic racism and police brutality, their objective is to use sports as a platform to accelerate social movements and reflect their brand as an organization in favor of activism and reform. Their message to consumers is strong and impactful, showing consumers that it is more than just sports, but also about making the world a better place by giving athletes a platform to discuss social problems and encouraging young athletes to take a stand for their own values and beliefs.

Communication Plan

Situation Analysis:

Nike is a retail organization that provides high quality athletic products that are used by professional sports organizations and aspiring athletes around the world. The light weight material of their clothing and the superiority of their sports products have made Nike the most prominent sports brand in the world. The company has partnerships with several professional leagues including NCAA, NBA, MLB, and NFL. In terms of distributing products, Nike has over 1,000 factories and over a million employees, which makes for a fast, efficient distribution process that translates to major financial success. The company brands itself well with a globally recognizable swoosh logo and a short, confident slogan known as “Just Do It,” which represents their mission to inspire athletes to pursue their wildest hopes and dreams. Nike not only uses famous athletes to endorse their products and engage with their sports-devoted audience, but the organization also pays close attention to social trends and issues that are impacting the United States. By using social responsibility to advance their agenda, the organization increases their popularity and widespread attention, and ultimately influences brand loyalty among consumers. Additionally, the use of controversial social justice campaigns has proven to be beneficial to Nike’s reputation of goodwill because it can lead to national headlines and widespread media attention that helps guide public opinion in the area of social awareness.

The organization depends on the United States market for revenue more than any other country. 40% of Nike’s revenue comes from North America, which leaves the company exposed to factors that can negatively impact the business. It presents a high risk when a company focuses on a single market because public relations and marketing campaigns can backfire if that specific market does not agree with the ideas presented by the organization’s campaign. Accordingly, this specific case study reviews a high risk social media tactic during a time of social dispute in the United States. With Nike’s growing competition, it is important for them to discover new strategies of engaging the public and grabbing the attention of their audience in which they simultaneously represent the values and beliefs of their brand.

In 2016, world renown San Francisco 49ers quarterback Colin Kaepernick took a stand against social injustice and police brutality by kneeling during the national anthem before a nationally televised game. This act led to public backlash from angry consumers over the idea that a high profile figure disrespected the U.S. flag in front of thousands of people. However, this performance of social activism came at a time of mass hysteria during BLM movements, where the nation was polarized due to increased rates of police cruelty and inequity among black communities. Young black athletes around the country were determined to fight for their civil rights and protect their liberties. In their pursuit to support athletes and black communities, Nike supported social justice activism by launching a social media campaign that focused on the controversial behavior of the NFL star. The organization’s goal was to convey the bigger picture of sports by incorporating the concept that athletics can be used as a platform to bring attention to important social and political issues. At the same time, Nike hoped to encourage consumers to follow their largest dreams and stand up for what they believe in. This multifaceted technique was a unique way of expressing the organization’s core standards and values. In a time of social dispute, Nike aimed to gain massive media attention through the campaign by developing a high risk social media strategy that would get people talking about sports and its relationship to real world issues.

Following his idea to kneel during the national anthem, an outbreak of disapproval for Colin Kaepernick surged throughout the nation. A poll during the 2016 season named Kaepernick the most disliked player in the league, with 37% of caucasians saying they “disliked him a lot,” and 42% of African Americans saying they “liked him a lot.” However, according to survey research conducted by YouGov to determine how Nike customers feel about Colin Kaepernick, 46% of responses revealed a positive outlook on the NFL star while 23% see him in a negative light. This reveals that a majority of Nike customers support social activism and the push for reform in the area of racial inequality and police cruelty. Therefore, by creating a social media campaign around Colin Kaepernick and social activism, Nike hoped to strategically reach their target audience and influence public opinion about their brand. However, other research states that 53% of Americans object to the idea of kneeling during the national anthem because they consider it to be disrespectful to the flag and the country as a whole. There was a high risk in launching a marketing campaign that was created from these statistics, but Nike is a company that thrives on taking risks with the public because they want their organization to be unique and stand out among others.

According to the Washington Post, the decision to use Colin Kaepernick as the main figure in their ad campaign was popular among young Americans. Cindy Boren from the Washington Post stated that “a Quinnipiac University poll showed voters approved of Nike’s decision to feature Kaepernick in its latest ad campaign, 49 percent to 37 percent.” The poll also determined that there was a large age gap among people who agreed and disagreed, “with those 18 to 34 approving of Nike’s decision by a 67-21 margin, while voters 65 and older disapproved of the decision, 46 to 39 percent.” Overall, the 30th anniversary of the “Just Do It” campaign was creative in the sense that it took a controversial social issue and turned it into something positive and innovative, in hopes that it would be beneficial to social movements, activist athletes, and eventually would influence product sales.

On the political side of the research that went into this campaign, there was a strong disconnect between opinions of whether kneeling during the national anthem was considered to be morally acceptable. According to a NY Post article, in a poll of 1,570 Americans, “Democrats strongly favored the right to protest, at 77%. Only 20% of Republicans, and 20% of self-described Trump voters, said yes. Along racial lines, 77% of blacks, 57% of Hispanics and 47% of whites answered positively.”

Nike also collected data about the overall reactions of consumers to brand’s voices about social issues and controversial topics. In a poll conducted by Sprout Social, 1,000 American consumers were asked if “people want brands to take stands on important issues.” 66% of consumers responded that “it is important for brands to take public stands on social and political issues.” This information was important to Nike’s decision to launch this campaign because it conveys what consumers are looking for in a brand. Many consumers, especially younger people, look for brands that they can personally connect with from an ethical standpoint. Furthermore, a 2017 survey from Edelman found that “the majority of millennials (60%) are belief-driven buyers” that trust a company based on the company’s brand identity and social/political beliefs. 53% of Millennials pay attention to how companies that they purchase goods and services from act with political and social matters. Moreover, 80% of teens, which is a huge target audience for Nike, support the Black Lives Matter movement. Looking at this research from an economic standpoint, younger generations are crucial for Nike to engage with through tactics such as these. According to a Forbes article by Jules Schroeder, “Millennials have $200 billion in buying power and Gen Z has $143 billion in direct buying power”, which is an area Nike wanted to take full advantage of with this campaign strategy. Nike’s decision to take a public stand on a social issue and promote Kaepernick in order to gather more attention and connect with their audience on a deeper level was a thoroughly researched public relations strategy. 

Nike aimed to create a strategic communications plan that highlighted social and political issues that were impacting athletes and communities around the country. More specifically, the campaign intended to support the revolution against social injustice in black communities due to implications of racism through police brutality and racial profiling. In order to accurately display their support for social movements occurring throughout the U.S., Nike centered their campaign strategy around Colin Kaepernick, whose decision to kneel during the national anthem to protest against racism and social injustice conveyed his will to sacrifice his career for the greater good. However, his actions on the field also sparked mass amounts of controversy throughout the country. 

One objective for this strategy was to raise awareness about an important issue. Nike describes themselves as an organization committed to addressing systematic racism and supporting local communities. They thrive on showing their support for social movements and using their platform to address underlying societal issues. By combining the sports world with the need to raise awareness about important topics, the campaign strategy targets a wide array of people. Not only did Nike desire to catch the eye of black communities, athletes, and sports fans by promoting a controversial social problem through a large, sport-based platform, but the organization also aimed to target millennials and Gen Z-ers in hopes of positive responses in a harsh political climate. Additionally, Nike planned to gain widespread media attention that would advertise the goodwill of the brand and appeal to younger, more prosocial generations. Additionally, the attention gathered from the campaign would boost brand loyalty and social media engagement. Although it involved high risk, the 30th anniversary of the “Just Do It” campaign was something that yielded extreme success.

Another objective included exemplifying the organization’s mission statement. As expressed by the founder of Kaye Media Partners Karen Mcfarlane, “Nike’s mission is to bring inspiration and innovation to every athlete in the world. Colin Kaepernick, through his advocacy, conviction, and talent on and off the field, exemplifies those values in the strongest of terms.” By launching a strategy that uses a prominent athlete who is known for social activism in the campaign, it will raise awareness for the issue and positively impact the social credibility of Nike. Additionally, by utilizing a notable person who gained national attention for sparking a controversial issue, Nike aimed to earn massive media attention that would engage their audience in order to promote the ethics and goodwill of the brand. This strategy brings attention to social concerns and connects the activism for these issues to Nike’s brand. Furthermore, this campaign tactic gives athletes a platform to speak out about their views on social issues, thereby impacting a large target audience of sports fans, young athletes, social activists, and black communities. Through this campaign strategy, Nike conveys that their organization stands by its athletes through political chaos and controversy, which sends a clear message about the brand’s identity to the target audience about what kind of company Nike intends to be known as. This communications plan proves that the company is principled and loyal to its publics, and is willing to fight for social justice despite the risks involved.

Execution: 

To execute this plan, Nike made the decision to partner with notable NFL quarterback Colin Kaepernick. The campaign, launched in Fall 2018, includes a close up image of Kaepernick with the quote, “Believe in something. Even if it means sacrificing everything,” across the picture. The famous Nike swoosh logo and slogan is printed on the bottom. This poster was distributed through social media platforms and on billboards. The campaign was first announced through Kaepernick’s social media accounts, which increased the amount of initial views and shares. In addition to social media shares, the image was also printed on billboards in prominent locations such as Times Square.

The poster is paired with a full advertisement called “Nike Dream Crazy” that features young and experienced athletes and encourages viewers to follow their dreams despite any roadblocks that may hinder their success. The narrator of the commercial says, “because calling a dream crazy is not an insult, it’s a compliment.” Not only does the ad stimulate viewers to push for their biggest goals, but it also addresses the idea that it’s bigger than sports; it’s about making a difference in society and the world. The ad expresses this message by featuring pro athletes such as Lebron James and Colin Kaepernick. A video of all star NBA player Lebron James speaking out at a rally is accompanied by the narrator saying “don’t become the best basketball player on the planet, be bigger than basketball.” This message encourages the audience to take a stand against social issues just as Lebron James and Colin Kaepernick have. 

The audience is able to see Nike as a company that protects social equity and works for the benefit of communities. The commercial tries to spread the message that sports are not just for entertainment, but they are a platform for spreading valuable messages and ideas that can positively impact society. Another theme is also presented in the commercial that reinforces the idea that people should work for their dreams no matter what barriers they have to break through. This message is presented with the stories of athletes like Shaquem Griffin, who plays in the NFL with only one hand, and Serena Williams, who grew up in Compton and later became one of the most talented athletes in the world. Overall, the creative aspect of this campaign sends two messages to publics: It’s bigger than sports, and anything is possible if you put your mind to it. As per PR and customer service expert Anna Cachares and digital marketing specialist Beth Kramer, “Nike released the Nike Dream Crazy ad featuring Kaepernick on YouTube, which has over 2.6 million views. It is worth noting that Nike launched these ads on social media, not on traditional channels, which suggests that they are targeting younger generations (Millennials and Gen Z).”

In addition to the graphic and advertisement that Nike launched in the fall of 2018, Nike also began selling merchandise that symbolizes Kaepernick’s impact. For the four year anniversary of Kaepernick taking a knee during the national anthem, Nike created an all black jersey with the number 7. The number 7 is representative of Kaepernick’s jersey when he took a  knee playing for the San Francisco 49ers.  “Through his continuous commitment, the number 7 jersey has become an iconic symbol for progress and positive change” (Nike). This jersey sold out on the Nike website. “True to each other.
 True to the movement.
 True to 7,” (Nike). Selling merchandise that goes along with the social activism campaign also adds to the execution of the overall strategy because it further emphasizes the brand’s dedication to their cause. Nike is able to make extra profit off the campaign’s theme by selling custom jerseys that symbolize working towards progressive social movements and change.

Analysis and Evaluation:

This case study introduces the idea that Nike’s PR department is willing to abide by a “high risk, high reward” policy. The fact that research showed a split between public opinion of the Colin Kaepernick crisis in relation to the Black Lives Matter movement conveys that Nike is a brand focused on supporting high profile figures that are willing to push for social reform. In Nike’s “Black Community Commitment” page on their website, they reference that addressing systematic racism and encouraging action and reform is a top priority of the company. The brand identity Nike creates through supporting a controversial figure’s social advocacy is  a great method of engaging their younger audience. Nike uses sports as a way to bring people together in unifying fashion to bring attention to important social issues and 

spark change. Their use of innovative social media strategies not only increases their reputation of being a brand of goodwill and ethics, but it also grabs massive amounts of attention from media and consumers. By using Colin Kaepernick as a main figure to promote social activism in the area of racism and police brutality, the organization was able to make national headlines and promote their brand as an inspiring, community-driven company that is focused on using sports to make a change in the world. Former NFL player and entrepreneur Ross Tucker agrees that it is a lot more common in recent years for athletes to have a cause and stand up for issues that are important to them, and brands are beginning to take advantage of this factor because large audiences are likely to be “receptive and supportive to that.” A large company like Nike is able to take risks with controversial issues to gain media attention because they have a wide array of publics. However, In Tucker’s case, he tends to stay neutral with political statements because he does not want to “turn off” one side of his audience as a result of conflicting viewpoints. With their big 

following, Nike has developed a strategy of using risky PR tactics to promote the goodwill of their brand, which is something that other smaller companies are unable to do in today’s political climate.

The poster image was successful in generating attention and presence on social media, and the video ad was successful in spreading important messages and influencing public opinion. According to Scharninghausen in the business wire press release, the single best thing about the ad as per 48% of viewers was the theme and message. In the first 24 hours of the campaign’s launch, Nike brought in $43 million worth of earned media, and their brand mentions increased 135% with over 2 million mentions (Cachares & Kramer).  In addition, “Advertisin g analytics company Ace Metrix says that the Nike Kaepernick ad is “less polarizing than social media suggests.” Just 13% of consumers reported that they were less likely to buy from Nike after viewing the Dream Crazy Kaepernick ad. This dropped to 10% among Millennials and 6% to Gen Z.” 

Overall, the 30th anniversary of the “Just Do It” campaign was created because it took a controversial social issue and turned it into something positive and innovative, in hopes that it would be beneficial to social movements, activist athletes, and eventually would influence product sales. In this case study, Nike proved that by supporting communities and athletes affected by social issues in the United States through unique social media marketing campaigns, and by tactically using prominent figures, target audiences can be successfully reached, ultimately having a positive impact on a brand’s social and economic success.

Current Information: ( https://about.nike.com/ )

The number 7 jersey being sold on the Nike website symbolizes the progress Kaepernick has contributed to the Black and Brown communities. This all black jersey is created and sold for the anniversary of Kaepernick’s impact.  The corporate website offers insight into Nike’s mission and goals. “Our mission is what drives us to do everything possible to expand human potential. We do that by creating groundbreaking sport innovations, by making our products more sustainable, by building a creative and diverse global team and by making a positive impact in communities where we live and work.” This current information ties into the case study topic because it provides information about Nike’s determination to make a difference in society by positively impacting communities in times of social despair. On the corporate website, there are four subcategories that describe the values of Nike as an organization, which ultimately support the campaign strategy for the 30th anniversary of the “Just Do It” slogan. The first category is “innovation,” where the company states that “to make big leaps, we take big risks,” which is true to the Coin Kaepernick issue because Nike supported an individual who was extremely controversial at the time for his activism for social justice. Next, the website refers to the team at Nike, where they describe their team of workers as “empowered, diverse, and inclusive,” ultimately representing the brand as a team that is united by sports. This is a feature that was represented in the Colin Kaepernick advertisement and currently persists as a main theme of Nike to encourage diversity and harmony despite cultural or racial backgrounds. Additionally, the website offers a look into “social and community impact,” where the company describes their belief that the power of sports can help change the world for the better. This concept was expressed with emphasis in the Kaepernick campaign, and is still a main theme of the organization that they continue to work towards today. Finally, Nike references “sustainable business innovation” on the corporate website to highlight a “sustainable future” in sports where athletes are able to thrive on a healthy, fair playing field and simultaneously use the power of team sport to improve social issues and positively impact the world. 

Current Impact:

Nike’s legacy from the 30th anniversary of the “Just Do It” campaign continues to live on and have an impact on society today. In a 2019 New York Times article titled “Colin Kaepernick ‘Dream Crazy’ Ad Wins Nike an Emmy,” Nike’s ad campaign conveys its creative nature as the advertisement was awarded an E mmy for being an outstanding and creative commercial. The idea of including a social aspect that relates to sports not only attracts young viewers and sports fans to the brand, but it also engages an audience of politically interested publics. People interested in politics and social activism now see Colin Kaepernick as the face of the NFL for his actions on the field, and they are more impacted by Nike for their brand values and support of a controversial athletic figure (Junge Welt, 2021).

The organization continues to support athletes that stand up for social movements and systematic racism, leading to a return of support from activist athletes. According to a 2021 Huffpost article, “longtime Collingwood sponsor Emirates condemned racism and said it was behind the club “proactively adopting changes as per the recommendations identified in their report.” In a statement.” As a result of media success with Colin Kaepernick and the will to work towards a better future for the world, Nike continues to use the same PR strategy to promote their brand and connect with their target audience that supports defending social movements. Nike expressed that the company st ood “against racism and discrimination in any form,” and that it believed “in the power of sport to create an equal playing field for all”. Current articles illustrate the idea that Nike’s media success in a harsh political climate during their 2018 campaign suggests that the same social media tactics can be effective in encouraging brand loyalty among consumers: “Since Nike is known for large-scale advocacy campaigns to drive social change through sport, most notably with US footballer Colin Kaepernick, one expert said the brand could see its partnership with Collingwood as an opportunity rather than a PR nightmare (Williams, 2021).” Their new campaign with Collingwood will accomplish the same goals because it has potential for controversy while also articulating the company’s focus on fixing social issues and resolving systematic racism around the world.

Nike also continues to push for the advancement of social movements by spending money on lobbying efforts. Years down the road, the company still pushes the idea of being viewed as a social activism organization by lobbying on topics such as physical education grants, taxes and climate change, as well as the “Uyghur Forced Labor Prevention Act.” Nike is an organization that has been heavily criticized in the past for their use of sweatshops and child labor in developing countries. “‘In the first three quarters of 2020, Nike spent $920,000 on in-house lobbying of Congress and other federal agencies,’” the New York Times reports” (Lowe 2020). In order to convey to the public that the company holds  good intentions and stands against unfair labor, they donate large sums of money to lobbying efforts. These issues have stemmed directly from the Kaepernick “Just Do It” campaign as Nike continues to adhere to the public by supporting social movements and the theme of making the world a better place.

Nike also continues to push their campaign with Kaepernick by c ommemorating anniversaries of his call to action with the kneeling protest. Four years after the social activism outbreak, Nike still pushes the campaign by selling special all black #7 Colin Kaepernick jerseys to increase profits and build off the highly su ccessful campaign. The company is able to continue their successful campaign by showing constant support for the activist athlete, commemorating him by holding special anniversaries that honor his stand against systemic racism and social issues related to the BLM movement. According to a recent article by Aaron Colen on Blaze Media, Kaepernick released a statement on social media about the bigger picture of sports and football, which is an idea that Nike forms around their brand through this campaign: “Four years ago, I took a knee to protest against systemic racism and social injustice,” Kaepernick wrote on social media. “It was that day that the number on my jersey would come to represent something greater than football, somethin g greater than me. Since then, the number 7 jersey has been a symbol for advancing the liberation and well-being of Black & Brown communities. Thank you for staying True.” People seem to resonate with the idea of buying Kaepernick apparel to support a social movement; “Nike released just two products related to Kaepernick, both of which were produced in seemingly low volumes and quickly sold out. They have been out of stock  for months, and consumers searching ‘Colin Kaepernick’ on Nike’s website are encouraged to sign up to be notified about ‘future Colin Kaepernick products,’” as per a NY Times article. Nike is able to profit off these continuous social media campaigns because the connection to Colin Kaepernick went viral online and had an emotional conne ction with many viewers. 

Despite all of the reactions from consumers, Nike did not put out any news releases for this campaign. The company communicated to their audiences and launched the cam paign primarily through social media and on billboards. On September 3, 2018 Colin Kaepernick posted a tweet of the Nike image he was featured i n. Nike retweeted this image and then launched the video advertisement a few days later. The only comment about the case came from Gino Fisanotti, North America’s vice president of brand for Nike. “We believe Colin is one of the most inspirational athletes of this generation, who has leveraged the power of sport to help move the world forward,” (Nike features NFL’s Kaepernick among athletes in ‘Just Do It’ campaign). Nike reported to ESPN about the partnership, and that business was the first one to spread the news.

Although Nike did not make many public statements, multiple media agencies and businesses made a comment about the campaign. The National Football League (NFL) issued a statement in support of the campaign just one day after the launch.‘“The National Football League believes in dialogue, understanding and unity,” NFL executive vice president of communications and public affairs Jocelyn Moore said Tuesday in a statement. “We embrace the role and responsibility of everyone involved with this game to promote meaningful, positive change in our communities . The social justice issues that Colin and other professional athletes have raised deserve our attention and action,” (NFL, 2018). This statement came to a surprise to some, since Kaepernick has been in a collusion case with the NFL since 2017.

Other media outlets covered the issue emphasizing the losses Nike was facing, and not on the issue Nike was taking a stance on. News outlets talked about how consumers were boycotting the brand. The Business Insider featured an article that talked about the hashtag, #Justburnit, which trended on social media with images of people destroying their Nike merchandise. This response toward the campaign showed a side of anger and opposed the collaboration.

This case study of Nike’s partnership with Colin Kaepernick provides a lot of insight in the field of public relations. Public relations professionals can learn from Nike’s strategies in this case to implement a strategic communications plan that engages their own audience in a meaningful way. Nike took a calculated risk when partnering with a public figure known for his polarizing beliefs. However, with Nike’s plan, they were able to create a campaign that drew in the attention of others. Their campaign provided the company an opportunity to use their platform to make a difference in society. Touching upon societal issues can be difficult, but when done appropriately they have a great impact. In addition to how Nike executed their plan, public relations professionals can take away how to use multiple platforms to get a message across to their audience. Nike utilized social media to spread their campaign as well as billboards in standout locations to grab the attention of others.

Another corporation who had a similar case to Nike was Pepsi. P epsi’s “Live for Now – Moments”  campaign. This campaign was a video designed to come across as an advertisement that promotes diversity, unification, and touch on the issue of police brutality, similar to Nike. They also featured a public figure, Kenall Jenner to grab their audience’s attention. However, the advertisement was poorly executed and outraged many viewers due to the insensitivity in the short film. The advertisement shows a diverse crowd of people coming together to protest. The crowd is then joined by celebrity Kendall Jenner, who leaves her photoshoot to join the protest and hand one of the police officers a pepsi. After he takes a sip, everyone who engaged in the protest celebrates. The execution of this advertisement made the issues of racial inequality and police brutality a simple fix. Pepsi released a statement apologizing for the advertisement and explaining that their intended message was not relayed appropriately. This advertisement was taken off air almost immediately.

Another campaign that was successful in getting their message across to viewers was Airbnb. Airbnb created a campaign in response to President’s Trump  closing the Ame rican borders to refugees in 2018. The advertisement aired during the Superbowl and was highly favored by the audience. The campaign was called “We Accept” and showed pictures of a bunch of different people of different nationalities. The quote on the advertisement read We believe no matter who you are, where you’re from, who you love or who you worship, we all belong. The world is more beautiful the more you accept.” Similar to Nike, Airbnb used their platform to address racial inequalities in society and bring attention to this issue. Although they did not use a celebrity, their timing of the advertisement got a huge amount of attention.

I believe that the tactics Nike used in this campaign were exclusive to their organization because it is difficult for a brand to side with a political viewpoint without losing a large chunk of their viewers. In a polarized political climate, organizations must be wary of the consequences of taki ng a side that part of their audience will not agree with. However, a company as big as Nike researched how people felt about Colin Kaepernick’s actions in order to determine the best strategies to implement into the campaign. Since they adhered to their young target audience and took a risk that conveys their brand identity and represents Nike as a brand of goodwill that supports social movements and activism, I think their PR department successfully accomplished their goals and objectives. I think their use of a prominent social activist figure in sports was a perfect way to display their brand identity and engage the most people possible. They were able to clearly get their message across to viewers that people should express their beliefs and fight for their values, even if it means losing everything you have worked for. After all, this idea of standing up for your own principles is the whole premise of the “Just Do It” slogan. Therefore, as a public relations professional, it is clear to me that their strategy of showing how people can “just do it” in a way that represents sports and social activism simultaneously was a remarkable way of gaining media attention and support from consumers.

References:

Balkam, J. (2021). Nike & Colin Kaepernick — A Case Study on Authentic Cause Marketing. Retrieved 28 September 2021, from https://medium.com/3-win-sponsorship/nike-colin-kaepernick-a-case-study-on-authentic-cause-marketing-1f8d2af02211

Carissimo, J. (2021). Colin Kaepernick joins Nike’s 30th anniversary “Just Do It” campaign. Retrieved 28 September 2021, from https://www.cbsnews.com/news/colin-kaepernick-nike-just-do-it-campaign-announcement-today-2018-09-03/

Case study: PepsiCo & Kendall JENNER’S controversial commercial . astute. (2020, February 21). Retrieved September 28, 2021, from https://astute.co/pepsi-kendall-jenner-commercial/  

Draper, K., & Creswell, J. (2019). Colin Kaepernick ‘Dream Crazy’ Ad Wins Nike an Emmy. Retrieved 27 September 2021, from https://www.nytimes.com/2019/09/16/sports/football/colin-kaepernick-nike-emmy.htm

Gilliland, N. (2021, February 18). 10 brand campa igns that took a stand on social issues . Econsultancy. Retrieved September 28, 2021, from https://econsultancy.com/brand-campaigns-that-took-a-stand-on-social-issues/

Hunnicutt, T., Allen, J., & McGurty, F. (2018, September 3). Nike features Nfl’s kaepernick among athletes in ‘just do it’ campaign . Reuters. Retrieved September 28, 2021, from https://www.reuters.com/article/us-nike-kaepernick/nike-features-nfls-kaepernick-among-athletes-in-just-do-it-campaign-idUSKCN1LJ21Y  

Jonathan Intravia, Alex R. Piquero, Nicole L eeper Piquero & Bryan Byers (2020) “Just Do It? An Examination of Race on Attitudes Associated with Nike’s Advertisement Featuring Colin Kaepernick”, Deviant Behavior, 41:10, 1221-1231, DOI: 10.1080/01639625.2019.1604299

Joon Kyoung Kim, Holly Overton, Nandini Bhalla, Jo-Yu n Li, Nike, Colin Kaepernick, and the politicization of sports: Examining perceived organizational motives and public responses, Public Relations Review, Volume 46, Issue 2, 2020, 101856, ISSN 0363-8111, https://doi.org/10.1016/j.pubrev.2019.101856 .

Li, J.-Y., Kim, J. K., & Alhar bi, K. (2020). Exploring the role of issue involvement and brand attachment in shaping consumer response toward corporate social advocacy (CSA) initiatives: the case of Nike’s Colin Kaepernick campaign. International Journal of Advertising , 1–25. https://doi-org.ezaccess.libraries.psu.edu/10.1080/02650487.2020.1857111

Merriam, L., & Quint, M. (2021). Nike Controversy: Colin Kaepernick Marketing Strategy Analysis. Retrieved 28 September 2021, from https://www.amanewyork.org/resources/nike-controversy/

Nfl. (2018, September 4). NFL: Issues raised by KAE PERNICK deserve attention . NFL.com. Retrieved September 28, 2021, from https://www.nfl.com/news/nfl-issues-raised-by-kaepernick-deserve-attention-0ap3000000958222

Nike cashes in on Kaepernick and anthem kneeling with jersey celebrating the anniversary of the protests. (2021). Retrieved 27 September 2021, from https://www.theblaze.com/news/nike-commemorates-four-year-anniversary-of-national-anthem-kneeling-with-special-edition-colin-kaepernick-jersey

Nike’s Support For ‘Systemically Racist’ Collingwood A Critical Global Test For Both Brands. (2021). Retrieved 27 September 2021, from https://www.huffpost.com /archive/au/entry/nike-collingwood-lumumba-kaepernick_au_6025c91ec5b6591becd79cc1

Nike uses Kaepernick and BLM to distract you from their support of Islamophobic genocide. (2021). Retrieved 27 September 2021, from https://www.msn.com/en-us/news/world/nike-uses-kaepernick-and-blm-to-distract-you-from-their-support-of-islamophobic-genocide/ar-BB1bt97T

Stillman, J. (2021). Here’s the Data That Proves Nike’s Colin Kaepernick Ad Is Seriously Smart Marketing. Retrieved 28 September 2021, from https://www.inc.com/jessica-stillman/heres-data-that-proves-nikes-colin-kaepernick-ad-is-seriously-smart-marketing.html

Nike Marketing Strategy 2024 - 7 Effective Findings from Case Studies

• 19 Comments
• Published on Sep 20 2023

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.

For details or queries in your field,  Click Here  or  chat with our experts , and our course experts will get to you.

Subscribe to our Newsletters

Explore program.

Apply for Free Consultation

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.

Popular Programs

Digital Marketing Masters Program

Live virtual training.

• 4 (859 + Ratings)
• 18k + Learners

Trending Now

Top google chrome extensions for online marketers in 2024.

11 Most Common Misconceptions About SEO in 2024

Guide to Banner Advertising for Google Ad Sense and Other Ad Networks

Brand Managers Guide 2024

Digital Marketing – Benefits, Types, Certifications and Jobs

Latest Digital Marketing Manager Interview Questions and Answers 2024

Top SEO Topics and Concepts – Role of SEO, Google, and AI with SEO

Digital Marketer Interview Questions and Answers 2024

Fundamentals of Digital Marketing 2024

Best Digital Marketing Books for 2024

On Page SEO Guide

Digital Marketing Plan - How to Create and Execute it

Brand Marketing Strategy Guide

YouTube Marketing Guide 2024

Career in Digital Marketing - A Complete Guide

SEO Optimization Tips for 2024

Career in Advertising - The Beginner's Guide

Affiliate Marketing - A Comprehensive Guide for Beginners

CPA Marketing Guide 2024

Search Engine Marketing - A Guide for Beginners

Top Digital Marketing Tools 2024

The future of Digital Marketing

Conversational Marketing - The Ultimate Guide 2024

Coca Cola Marketing Strategy - A Case Study

Tesla Marketing Strategy: Key Lessons to Learn

Digital Marketing Challenges & Solutions in 2024

SEO in Digital Marketing - How Does It Work?

How to Create a Social Media Marketing Strategy

Email Marketing for Beginners - Tips, Tools and Advantages

Colors for Marketing: Psychology of Colors for Your Brand

LinkedIn B2B Marketing Guide

What is PERT? How to use PERT in Project Management?

A Beginners guide to LinkedIn Marketing in 2024

Traditional Marketing vs Digital Marketing: How to Choose?

Types of Infographics - When and How to Use

Digital Economy - What is it and why is it important

What is Digital Leadership? A Brief Guide

Digital Marketing Tips for 2024

Online branding - Examples & Strategies

Amazon Marketing Strategy – A Brief Guide

Netflix marketing strategy- An overview on marketing tactics of Netflix

IKEA Marketing Strategy - An Inspiring Finding from the Case Studies

Discover Starbucks Marketing Strategy: The Success Secret

McDonalds marketing strategy: Inspiring Findings from a Case Study

What is Online Networking? How Can It Benefit Your Career Success?

Microsoft’s Market Success Strategy: A Case Study

Career Opportunities in Digital Marketing - A Complete Guide

Social Media Marketing Fundamentals for Business Growth

Crafting an Effective Social Media Strategy

• Agile Management 59
• AI and Machine Learning 27
• Big Data 50
• Business Management 24
• Cloud Computing 37
• Digital Marketing 50
• IT Hardware and Networking 13
• IT Security 79
• IT Service Management 28
• Microsoft Program 2
• Programming Language 29
• Project Management 124
• Quality Management 53

Trending Posts

Last updated on Nov 27 2023

Last updated on Jan 9 2024

Last updated on Nov 23 2023

Last updated on Jan 31 2023

Last updated on Sep 13 2023

Last updated on Jan 3 2023

• Corporate Partners
• Affiliate Program

QUICK LINKS

• Terms & Conditions
• Privacy Policy
• Cookie Policy
• Become an Instructor
• Sprintzeal Reviews

SECURE PAYMENTS

Top Trending Courses

People also bought.

© 2024 Sprintzeal Americas Inc. - All Rights Reserved.

• PMP, PMI, PMBOK, CAPM, PgMP, PfMP, ACP, PBA, RMP and SP are registered marks of the Project Management Institute, Inc.
• CBAP® - Is a registered trade mark of IIBA.
• ITIL® is a registered trade mark of AXELOS Limited, used under permission of AXELOS Limited. The Swirl logoTM is a trademark of AXELOS Limited, used under permission of AXELOS Limited. All rights reserved
• PRINCE2® is a registered trade mark of AXELOS Limited, used under permission of AXELOS Limited. The Swirl logoTM is a trademark of AXELOS Limited, used under permission of AXELOS Limited. All rights reserved
• Certified ScrumMaster® (CSM) and Certified Scrum Trainer® (CST) are registered trademarks of SCRUM ALLIANCE®
• Professional Scrum Master is a registered trademark of Scrum.org
• The APMG-International Finance for Non-Financial Managers and Swirl Device logo is a trade mark of The APM Group Limited.
• The Open Group®, TOGAF® are trademarks of The Open Group.
• IIBA®, the IIBA® logo, BABOK® and Business Analysis Body of Knowledge® are registered trademarks owned by International Institute of Business Analysis.
• CBAP® is a registered certification mark owned by International Institute of Business Analysis. Certified Business Analysis Professional, EEP and the EEP logo are trademarks owned by International Institute of Business Analysis..
• COBIT® is a trademark of ISACA® registered in the United States and other countries.
• CISA® is a Registered Trade Mark of the Information Systems Audit and Control Association (ISACA) and the IT Governance Institute.
• CISSP® is a registered mark of The International Information Systems Security Certification Consortium ((ISC)2).
• CompTIA A+, CompTIA Network+, CompTIA Security+ are registered marks of CompTIA Inc
• CISCO®, CCNA®, and CCNP® are trademarks of Cisco and registered trademarks in the United States and certain other countries.
• CSM®, CSPO®, CSD®, CSP®, A-CSPO®, A-CSM® are registered trademarks of Scrum Alliance®
• TOGAF® is a registered trademark of The Open Group in the United States and other countries
• All the online courses are accredited by respective governing bodies and belong to their respective owners.
• Call us on +1 833 636 6366
• Request a callback
• Mail Your Queries

Enquire Now for Up to 30% Off!

WHO WILL BE FUNDING THE COURSE?

Sunday, October 16, 2022

• Labels: Case Studies , Project Failure , Project Success

Case Study 16: Nike’s 100 Million Dollar Supply Chain "Speed bump"

“This is what you get for 400 million, huh?” 

Nike President and CEO Phil Knight famously raised the question in a conference call days before announcing the company would miss its third-quarter earnings by at least 28% due to a glitch in the new supply chain management software. The announcement would then send Nike’s stock down 19.8%. In addition, Dallas-based supply-chain vendor i2 Technologies, which Nike assigned blame, would suffer a 22.4% drop in stock price.

The relationship would ultimately cost Nike an estimated $100 million. Each company blamed the other for the failure, but the damage could have been dramatically reduced if realistic expectations had been set early on and a proper software implementation plan had been put in place. Most companies wouldn’t overcome such a disastrous supply chain glitch or “speed bump,” as Knight would call it, but Nike would recover due to its dominant position in the retail footwear and apparel market.

In 1999, two years before Knight’s famous outburst, Nike paid i2 $10 million to centralize its supply, demand, and collaboration planning system with a total estimated implementation cost of $40 million. Initially, i2 was the first phase of The Nike Supply Chain (NSC) project. The plan was to implement i2 to replace the existing system and introduce enterprise resource planning (ERP) software from SAP and customer relationship management (CRM) software from Siebel Systems.  

The goal of the NSC project was to improve Nike’s existing 9-month product cycle and fractured supply chain. As the brand experienced rapid growth and market dominance in the 1990s, it accumulated 27 separate order management systems around the globe. Each is entirely different from the next and poorly linked to Nike’s headquarters in Beaverton, Oregon.

At the time, there wasn’t a model to follow at the scale Nike required. Competitors like Reebok struggled to find a functional supply chain solution specific to the retail footwear and apparel industry. In an effort to solidify its position as the leader in sportswear, Nike decided to move forward quickly with i2’s predictive demand application and its supply chain planner software.

"Once we got into this, we quickly realized that what we originally thought was going to be a two-to-three-year effort would be more like five to seven," - Roland Wolfram, Nike’s vice president of global operations and technology.

The NCS project would be a success, and Nike would eventually accomplish all its supply chain goals. However, the process took much longer than expected, cost the company an additional $100 million, and could have been avoided had the operators or both companies taken a different approach to implementation.

"I think it will, in the long run, be a competitive advantage." – Phil Knight

In the end, Knight was right, but there are many valuable lessons to learn from the Nike i2 failure.

If you want to make sure your business critical project is off to a great start instead of on its way on my list with project failures? Then a New Project Audit is what you are looking for. If you want to know where you are standing with that large, multi-year, strategic project? Or you think one of your key projects is in trouble? Then a Project Review is what you are looking for. If you just want to read more project failure case studies? Then have a look at the overview of all case studies I have written here .

So, before we get into the case study, let’s look at precisely what happened...

Timeline of Events

1996 - 1999

Nike experienced incredible growth during this period but was at a crossroads. Strategic endorsement deals and groundbreaking marketing campaigns gave the company a clear edge over Adidas and Reebok, its two most substantial competitors in the 80s and 90s. However, as Nike became a world-renowned athletics brand, its supply chain became more complex and challenging to manage.

Part of Nike’s strategy that separated itself from competitors was the centralized approach. Product design, factory contracting, and order fulfillment were coordinated from headquarters in Oregon. The process resulted in some of the most iconic designs and athlete partnerships in sports history. However, manufacturing was much more disoriented.

During the 1970s and 80s, Nike battled to develop and control the emerging Asian sneaker supply chain. Eventually, the brand won the market but struggled to expand because of the nine-month manufacturing cycle.

At the time, there wasn’t an established method to outsource manufacturing from Asia, making the ordering process disorganized and inefficient across the industry. In addition, Nike’s fractured order management system contained tens of millions of product numbers with different business rules and data formats. The brand needed a new way to measure consumer demand and manage purchasing orders, but the state of the legacy system would make implementing new software difficult.

At the beginning of 1999, Nike decided to implement the first stage of its NSC project with the existing system. i2 cost the company $10 million but estimated the entire project would cost upwards of $400 million. The project would be one of the most ambitious supply chain overhauls by a company of Nike’s size. 

i2 Technologies is a Dallas, Texas-based software company specializing in designing solutions that simplify supply and demand chain management while maximizing efficiency and minimizing cost. Before the Nike relationship, i2 was an emerging player in logistics software with year-over-year growth. Involvement in the Nike project would position the company as the leading name in supply chain management software.

Nike’s vision for the i2 phase of NSC was “achieving greater flexibility in planning execution and delivery processes…looking for better forecasting and more profitable order fulfillment." When successfully implemented, the manufacturing cycle would be reduced from nine months the six. This would convert the supply chain to make-to-order rather than make-to-sell, an accomplishment not yet achieved in the footwear and apparel industry.

Predicting demand required inputting historical sales numbers into i2’s software. “Crystal balling” the market had substantial support at the time among SCM companies. While the belief that entering numbers into an algorithm and spitting out a magical prediction didn’t age well, the methodology required reliable, uniform data sets to function.

Nike decided to implement the “Big Bang” ERP approach when switching to i2 for the supply chain management. The method consists of going live where the business completely changes without phasing out the old system. Nike also opted for a single instance strategy for implementation. The CIO at the time, Gordon Steele, is quoted saying, “single instance is a decision, not a discussion.” Typically, global corporations choose a multi-instance ERP solution, using separate instances in various regions or for different product categories.

By June of 2000, various problems with the new system had already become apparent. According to documents filed by Nike and i2 shareholders in class-action suits, the system used different business rules and stored data in various formats, making integration difficult. In addition, the software needed customization beyond the 10-15% limit recommended by i2. Heavy customization slowed down the software. For example, entries were reportedly taking over a minute to be recorded. In addition, the SCM system frequently crashed as it struggled to handle Nike’s tens of millions of product numbers.

The issues persisted but were fixable. Unfortunately, the software was linked to core business processes, specifically factory orders, that sent a ripple effect that would result in over and under-purchasing critical products. The demand planner would also delete ordering data six to eight weeks after it was entered. As a result, planners couldn’t access purchasing orders that had been sent to factories.

Problems in the system caused far too many factory orders for the less popular shoes like the Air Garnett IIIs and not enough popular shoes like the Air Jordan to meet the market's demand. Foot Locker was forced to reduce prices for the Air Garnett to $90 instead of the projected retail price of $140 to move the product. Many shoes were also delivered late due to late production. As a result, Nike had to ship the shoes by plane at $4-$8 a pair compared to sending them across the Pacific by boat for $0.75.   

November 2000

According to Nike, all the problems with i2’s supply chain management system were resolved by the fall. Once the issues were identified, Nike built manual workarounds. For example, programmers had to download data from i2’s demand predictor and reload it into the supply chain planner on a weekly basis. While the software glitches were fixed and orders weren’t being duplicated or disappearing, the damage was done. Sales for the following quarter were dramatically affected by the purchasing order errors resulting in a loss of over $100 million in sales.

Nike made the problem public on February 27, 2001. The company was forced to report quarterly earnings to stakeholders to avoid repercussions from the SEC. As a result, the stock price dove 20%, numerous class-action lawsuits were filed, and Phil Knight famously voiced his opinion on the implementation, "This is what you get for $400 million, huh?"

In the meeting, Nike told shareholders they expected profits from the quarter to decline from around $0.50 a share to about $0.35. In addition, the inventory problems would persist for the next six to nine months as the overproduced products were sold off.

As for the future of NSC, the company, including its CEO and President, expressed optimism. Knight said, "We believe that we have addressed the issues around this implementation and that over the long term, we will achieve significant financial and organizational benefit from our global supply-chain initiative."

A spokeswoman from Nike also assured stakeholders that the problems would be resolved; she said that they were working closely with i2 to solve the problems by creating “some technical and operational workarounds” and that the supply chain software was now stable.

While Nike was positive about the implementation process moving forward, they placed full blame on the SCM software and i2 Technologies.

Nike stopped using i2’s demand-planning software for short-and-medium range sneaker planning; however, it still used the application for short range and its emerging apparel business. By the Spring of 2001, Nike integrated i2 into its more extensive SAP ERP system, focusing more on orders and invoices rather than predictive modeling.

What Went Wrong?

While the failures damaged each company’s reputation in the IT industry, both companies would go on to recover from the poorly executed software implementation. Each side has assigned blame outward, but after reviewing all the events, it's safe to say each had a role in the breakdown of the supply chain management system.

Underestimating Complexity

Implementing software at this scale always has risks. Tom Harwick, Gigi Information Group’s research director for supply chain management, said, “Implementing a supply-chain management solution is like crossing a street, high risk if you don't look both ways, but if you do it right, low risk.”

One of Nike's most significant mistakes was underestimating the complexity of implementing software at such a large scale. According to Roland Wolfram, Nike’s operators had a false sense of security regarding the i2 installation because it was small compared to the larger NSC project. "This felt like something we could do a little easier since it wasn’t changing everything else [in the business]," he says. "But it turned out it was very complicated."

Part of the reason why the project was so complicated was because of Nike’s fractured legacy supply chain system and disoriented data sets. i2’s software wasn’t designed for the footwear and apparel industry, let alone Nike’s unique position in the market.  

Data Quality

Execution by both parties was also to blame. i2 Technologies is on record recommending customization not to exceed 10-15%. Nike and i2 should have recognized early on that this range would be impossible to accommodate the existing SCM system.

Choosing a Big Bang implementation strategy didn’t make sense in this scenario. Nike’s legacy system data was too disorganized to be integrated into the i2 without making dramatic changes before a full-on launch.

Poor Communication

Communication between Nike and i2 from 1999 to the summer of 2000 was poor. i2 claimed not to be aware of problems until Knight issued blame publicly. Greg Brady, the President of i2 Technologies who was directly involved with the project, reacted to the finger-pointing by saying, "If our deployment was creating a business problem for them, why were we never informed?" Brady also claimed, "There is no way that software is responsible for Nike's earnings problem." i2 blamed Nike’s failure to follow the customization limitations, which was caused by the link to Nike’s bake-end.

Rush to Market

At the time, Nike was on the verge of solidifying its position as the leader in footwear and sports apparel for decades to come. Building a solid supply chain that could adapt to market trends and reduce the manufacturing cycle was the last step toward complete market dominance. In addition, the existing supply chain solutions built for the footwear and apparel industry weren’t ready to deploy on a large scale. This gave Nike the opportunity to develop its own SCM system putting the company years ahead of competitors. Implementing functional demand-planning software would be highly valuable for Nike and its retail clients.

i2 also was experiencing market pressure to deploy a major project. Had the implementation gone smoothly, i2 would have a massive competitive advantage. The desire to please Nike likely played a factor in i2’s missteps. Failing to provide clear expectations and communication throughout the process may not have happened with a less prominent client.  

Failure to Train

After the problems became apparent in the summer of 2000, Nike had to hire consultants to create workarounds to make the SCM system operational. This clearly indicates that Nike’s internal team wasn’t trained adequately to handle the complexity of the new ERP software.

Nike’s CIO at the time reflected on the situation. "Could we have taken more time with the rollout?" he asked. "Probably. Could we have done a better job with software quality? Sure. Could the planners have been better prepared to use the system before it went live? You can never train enough."

How Nike Could Have Done Things Differently

While Nike and i2 attempted to implement software that had never been successfully deployed in the global footwear and apparel industry, many problems could have been avoided. We can learn from the mistakes and how Nike overcame their challenges with i2 to build a functioning ERP system.

Understanding and Managing Complexity

Nike’s failure to assess the complexity of the problem is at the root of the situation. Regardless if the i2 implementation was just the beginning of a larger project, it featured a significant transition from the legacy system. Nike’s leadership should have realized the scale of the project and the importance of starting NSC off on the right foot.  

i2 also is to blame for not providing its client with realistic expectations. As a software vendor, i2 is responsible for providing its client with clear limitations and the potential risks of failing to deploy successfully.

See " Understanding and Managing Your Project’s Complexity " for more insights on this topic.

Collaborate with i2 Technologies

Both companies should have realized that Nike required more than 10-15% customization. Working together during the implementation process could have prevented the ordering issues that were the reason for the lost revenue.

Collaboration before deployment and at the early stages of implementation is critical when integrating a new system with fractured data. Nike and i2 should have coordinated throughout the process to ensure a smooth rollout; instead, both parties executed poor project management resulting in significant financial and reputational blows.  

See " Solving Your Between Problems " for more insights on this topic.

Hire a 3rd Party Integration Company

Nike’s lack of understanding of the complexity of SCM implementation is difficult to understand. If i2 had been truthful in that they did not know about problems with their software, Nike could have made a coordinated decision not to involve the software company during the process.

Assuming that is the case, Nike should have hired a 3rd party to help with the integration process. Unfortunately, Nike’s internal team was not ready for the project. Outside integrators could have prevented the problems before the damage was done.

Not seeking outside help may be the most significant aspect of Nike’s failure to implement a new SCM system.   

See " Be a Responsible Buyer of Technology " for more insights on this topic.

Deploy in Stages

A “Big Bang” implementation strategy was a massive mistake by Nike. While i2 should have made it clear this was not the logical path considering the capabilities of their software and Nike’s legacy system, this was Nike’s decision.

Ego, rush to market, or failure to understand the complexities of the project could all have been a factor in the decision. Lee Geishecker, a Gartner analyst, stated that Nike chose to go live a little over a year after starting the project, while projects of this scale should take two years before deployment. In addition, the system should be rolled out in stages, not all at once.

Brent Thrill, an analyst at Credit Suisse First Boston, is on record saying he would have kept the old system running for three years while testing i2’s software. In another analysis, Larry Lapide commented on the i2 project by saying, "Whenever you put software in, you don't go big bang, and you don't go into production right away. Usually, you get these bugs worked out . . . before it goes live across the whole business."

At the time, Nike’s planners weren’t prepared for the project. While we will never know what would have happened if the team had been adequately trained, proper preparation would have put Nike in a much better position to handle the glitches and required customizations.

See " User Enablement is Critical for Project Success " for more insights on this topic.

Practice Patience in Software Implementation

At the time, a software glitch causing a ripple effect that would impact the entire supply chain was a novel idea. Nike likely made their decisions to risk the “Big Bang” strategy, deploy in a year without phases and proper testing, and not seek outside help because they assumed the repercussions of a glitch wouldn’t be as catastrophic.

Impatience resulted in avoidable errors. A more conservative implementation strategy with adequate testing would have likely caught the mistakes.

See " Going Live Too Early Can Be Worse as Going Late " for more insights on this topic.

Closing Thoughts

One of the most incredible aspects of Nike’s implementation failure is how quickly the company bounced back. While Nike undoubtedly made numerous mistakes during the process, NSC was 80% operational in 2004.

Nike turned the project around by making adjustments and learning patience. Few companies can suffer a $100 million “speed bump” without filing bankruptcy, but Nike is in that position because of its resilience. The SAP installation wasn’t rushed and resumed many aspects of its original strategy. In addition, a training culture was established due to the i2 failures. Customer service representatives receive 140 to 180 hours of training from highly skilled “super users,” All employees are locked out of the system until they complete their required training courses.

Aside from the $100 million loss, the NSC project was successful. Lead times were reduced from nine months to six (the initial goal), and Nike’s factory inventory levels were reduced from a month to a week in some cases. Implementing a new SCM system also created an integration between departments, better visibility of customer orders, and increased gross margins.

While Nike could have executed far more efficiently, Phil Knight’s early assessment of the i2 failure turned out to be true. In the long run, the process gave Nike a competitive advantage and was instrumental in building an effective SCM system. 

In a nutshell: A failure to demonstrate patience, seek outside help, and rush software implementation can have drastic consequences.  

> Nike says i2 hurt its profits

> I2 Technologies, Inc.

> How Not to Spend $400 Million

> i2-Nike fallout a cautionary tale

> Nike rebounds: How Nike recovered from its supply chain disaster

> Scm and Erp Software Implementation at Nike – from Failure to Success 

> I2 Says: "You Too, Nike"

Nike - an omnichannel inventory management cautionary tale

In the early stages of the pandemic, sportswear manufacturer and retailer Nike deployed radio frequency identification (RFID) technology to track products flowing through outsourced manufacturing operations.

It also used predictive-demand analytics to minimise the impact of store closures across China. By rerouting inventory from in-store to digital-sales channels – and acting early to minimise excess inventory buildup across its network – the company was able to limit sales decline in the region to just 5%. 

But fast-forward two years, and Nike is in the midst of a global fire sale as it bids to clear an epic inventory glut that the company blames on late deliveries over the past two seasons, compounded by earlier ordering by retailers and faster-than-usual deliveries.

The company has admitted that, despite strong demand, it will follow a policy of “aggressive markdowns” to clear inventories, though this will likely impact margins this fiscal year.

Nike CFO Matt Friend said on the company’s quarterly call that inventory was up 44% company-wide, driven largely by a 65% hike in North America, its largest market. Friend said Nike plans to “tighten buys in the second half of the financial year and liquidate excess inventory more aggressively beginning in the current quarter”, in the hope it better balances inventory in 2023.

Many clothes retailers are experiencing something similar, watching inventory pile up  as inflation-hit consumers reign-in their spending. 

“I hesitate to call it a bloodbath, but it’s going to be ugly in terms of the amount of discounting and markdowns,” Urban Outfitters CEO Richard Hayne said during a Q3 earnings. 

In a post on LinkedIn, Brandon Rael – Business Transformation Leader with Capgemini Invent – said of the Nike situation: “It’s continuing its aggressive push with its direct-to-consumer (DTC) strategies, and, at the same time, is in an over-inventoried situation where it has to review its wholesale partnership model. 

“Nike is re-evaluating its wholesale partnership model while growing its DTC retail space. Its partnerships with Foot Locker, JD Sports, and others offer Nike an opportunity to manage its inventory challenges while extending its reach to customers, via well-established retail and wholesale models. 

“Foot Locker and others have done an outstanding job of adding value to the Nike brand by providing a shop-within-a-shop customer experience.” 

This ‘tale of two Nikes’ shows just how perilously difficult it is for businesses to manage inventory in a world in which market chaos is … groan … the ‘new normal’. 

While the digitalisation of inventory management can be seen as a salve to such problems, it is no panacea. Here, Supply Chain Digital speaks to Will Lovatt, General Manager and Vice President Europe with Deposco , an inventory visibility platform whose customer profiles range from rapidly growing small ecommerce operators through to global consumer packaged goods brands and leading-edge 3PL fulfilment operators. 

Lovatt shares insights into the inventory management challenges facing today’s businesses and how some of these challenges can be met.

Nike was drowning in inventory. Could digitalisation help?

Our proposition enables organisations to use inventory to satisfy customer demand, no matter where that inventory is located. The net effect is that, for the same inventory investment, we are able to extend the reach and responsiveness of the network. 

Nike’s consumer-facing ecommerce operations send stock via retail partners to satisfy its end customers. Digital solutions such as ours help organisations match customer demand to available inventory across the business, minimising overstocking.  

How has inventory management changed since COVID-19?

When the bricks-and-mortar retail world initially closed for Covid, online sales grew explosively, so having an omnichannel fulfilment capability became a necessity for every retailer, consumer brand, or marketplace operation. 

With omnichannel, brands are largely helpless. They lack a way to receive orders from whichever channels and locations orders are placed and then proactively identify the best inventory across the network to satisfy that demand, 

As the pandemic grew, many businesses were left with excess pockets of inventory originally intended to serve now-closed retail operations, as well as customer orders left unsatisfied in channels where no inventory was available.  

How do you make an omnichannel supply chain work?

For an omnichannel supply network to operate effectively, it needs to fulfil three key requirements.

First, it must be sufficiently flexible to evolve as new channels open and sources dry up. Plus, new selling platforms – marketplaces and ecommerce front-ends, for example – need to be integrated and served.

Second, it has to be connected in real-time to all viable sources of inventory – something that can only be achieved with the help of web-based IT services.

Finally, the company’s supply network must have deep knowledge of both the product and the sources of supply, so that the most suitable option is offered to customers based on location, timing, and local legislative requirements.

How can businesses best meet these challenges?

Primarily, organisations need to break away from the constraints of traditional retail-serving supply chains to accommodate supply networks. They can do so through dynamic, customer-focused, demand-satisfaction solutions; these need to deliver a real-time interface that embraces every commerce touchpoint while also considering all inventory sources.

Is legacy software in omnichannel fulfilment a problem?

Yes, it’s a major issue. Batch updates and overnight refreshes between domains may have been adequate for a supply chain where customer interaction was limited to retail locations only. But the dynamic world of omnichannel fulfilment has to execute in sub-seconds across all customer-serving locations. Mismatches can lead either to heavy overstocking or the risk of double selling.

Can dark store and in-store inventory warehousing help?

Our solutions were born on the web and are architected to work in mixed omnichannel IT environments to serve our rapidly growing ecommerce direct-to-consumer customers. 

We offer visibility across the inventory landscape, including traditional warehousing, retail stores, and various forms of fulfilment centres. Our customers also have the real-time ability to match source with demand. 

It’s all about working at scale and complexity but delivering simplicity and rapid time-to-value. 

• Identify & Address Forced Labour Compliance Risks With AIAG Sustainability
• Optimised Transport Vital for Cost Control and Resilience Operations
• Bain: CEOs Leveraging Supply Chain for Competitive Edge Digital Supply Chain
• SAP's new AI CO Herzig 'Will Drive the Tech to Next Level' Technology

Featured Articles

Top 100 Women 2024: Karen Jordan, PepsiCo – No. 5

Supply Chain Digital’s Top 100 Women in Supply Chain honours PepsiCo’s Karen Jordan at Number 4 for 2024 …

P&SC LIVE New York: Patricia Mendoza Rodriguez – VP

Patricia Mendoza Rodriguez, Vice President of Procurement at Reynolds American, will speak at Procurement & Supply Chain LIVE New York …

One More Month to Go: Procurement & Supply Chain LIVE Dubai

Just one more month to go until Procurement & Supply Chain LIVE returns with Procurement & Supply Chain LIVE Dubai – 15 May 2024 …

Top 100 Women 2024: Taryn Thompson, Bank of America – No. 4

EU Supply Chain Law: Key Supply Chain Consulting Firms

The Categories – Part 3: Procurement & Supply Chain Awards

• Meet our Sponsors: Procurement & Supply Chain LIVE New York
• The Categories – Part 2: Procurement & Supply Chain Awards
• Top 100 Women 2024: Sheri Hinish, EY – No. 3
• Top 100 Women 2024: Gretchen McCarthy, Target – No.2
• Procurement & Supply Chain Awards: The Categories (Part 1)

Nike v. StockX: Applying Intellectual Property Law to NFTs

Introduction   

In April 2022, someone paid $130,000 for a pair of Nike Dunks. Here’s the kicker – it was for a pair of virtual sneakers. Shelling out five to six figures for a pair of exclusive shoes is not rare in the sneaker world, but paying that much for a pair of virtual kicks is unprecedented.

This sale illustrates Nike’s wider strategy in conquering the next frontier of commerce: the metaverse. In 2021, Nike started making strategic investments to grow and protect its brand in the metaverse. First, Nike submitted several trademark applications with the United States Patent and Trademark Office for virtual goods. Second, Nike announced a partnership with Roblox , an online gaming platform, to create a Nike-branded virtual world where gamers can play virtual games and dress their avatar in digital versions of Nike’s products. Third, Nike acquired RTFKT , an organization that creates unique digital sneakers. John Donahoe, Nike’s President and CEO, described the acquisition as “another step that accelerates Nike’s digital transformation and allows us to serve athletes and creators at the intersection of sport, creativity, gaming and culture.”

Nike is not the only brand exploring the metaverse. Other brands are now offering virtual merchandise through NFTs, including other sportswear brands like Asics and Adidas , luxury fashion brands like Hermès and Gucci , and even fast-food chains like Wendy’s and Taco Bell . Despite these companies’ growing activity in the space, the application of current intellectual property protection to branded NFTs is still unclear. A recent complaint filed by Nike against StockX, a popular sneaker resale platform, illustrates this uncertainty. The outcome of this case could determine the scope of trademark protection in the metaverse and will have serious implications on the commercial viability of brands’ significant investments in the space.

The Nike StockX Lawsuit

In February 2022, Nike sued StockX , a popular sneaker resale platform, after StockX began selling Nike-branded NFTs alongside physical Nike sneakers. The complaint, filed in the United States District Court for the Southern District of New York, laid out several causes of action, including trademark infringement. Nike stated that it “did not approve of or authorize StockX’s Nike-branded Vault NFTs. . . Those unsanctioned products are likely to confuse consumers, create a false association between those products and Nike, and dilute Nike’s famous trademarks.”

In its answer , StockX raises two key defenses. First, it claims that its “use of images of Nike sneakers and descriptions of re-sale Nike products in connection with StockX NFTs is nominative fair use. It is no different than major e-commerce retailers and marketplaces who use images and descriptions of products to sell physical sneakers and other goods, which consumers see (and are not confused by) every single day.” Second, StockX raises a first sale defense, arguing that “Nike’s claims are barred, in whole or in part, by the first sale doctrine permitting purchasers of lawfully trademarked goods to display, offer, and sell those good under their original trademark.” Thus, the outcome of the case turns on how courts will apply traditional intellectual property doctrines to more modern trademark issues.

StockX’s Nominative Fair Use Defense

Nominative fair use is an affirmative defense for defendants who use another’s trademark deliberately to refer to that party, for purposes such as advertising, commentary, and news reporting. To raise a successful nominative fair use defense, the user must meet three requirements : “First, the product or service in question must be one not readily identifiable without use of the trademark; second, only so much of the mark or marks may be used as is reasonably necessary to identify the product or service; and third, the user must do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder.”

     StockX can likely meet the first and second requirements but will struggle to meet the third. StockX can argue that it would be difficult to sell the virtual NFT Nike sneaker without using Nike’s trademarked logo and that it is only using the Nike logo as much as reasonably necessary for the consumer to identify the product. As StockX’s argues in its answer, “the image and product name on the Vault NFT play a critical role in describing what goods are actually being bought and sold.” As some have pointed out , the Nike logo “does not appear to be used by StockX separate and apart from its appearance in the photo of the shoes corresponding to the NFT.”

At issue is the third requirement regarding an implied sponsorship or endorsement. StockX’s website includes a disclaimer of any affiliation with the Nike brand, but it is unclear if this adequately safeguards against consumer protection. Nike’s complaint characterizes the disclaimer as “comically and intentionally small” and “difficult to read.” As evidence that the disclaimer does not prevent consumer confusion, Nike points to numerous social media users who expressed uncertainty as to whether Nike endorses, approves, or gets a commission from StockX’s NFT sales. This confusion is further compounded by the fact that Nike sells its own NFTs. Thus, StockX will likely have difficulty in succeeding on its nominative fair use defense.

StockX’s First Sale Defense

The success of StockX’s first sale defense requires a more complex, fact-intensive analysis. The first sale defense establishes that “the right of a producer to control distribution of its trademarked product does not extend beyond the first sale of the product.” Whether or not this rule applies to Nike’s case, however, depends on how the court characterizes the NFT. On one hand, StockX will argue that its NFTs are each tied to the resale of a physical Nike shoe – similar to a receipt –  and thus fall under the first sale doctrine. On the other hand, Nike will argue that the NFTs are standalone, separate products and thus are not protected by the first sale doctrine. To succeed on the trademark infringement claim, Nike must establish that the NFT and the physical shoe are two independent products.

On its website , StockX added a disclaimer in an attempt to address this issue directly, “Please note: the purpose of Vault NFT is solely to track the ownership and transactions in connection with the associated product. Vault NFTs do not have any intrinsic value beyond that of the underlying associated product ” (emphasis added). However, this disclaimer does not preclude Nike from demonstrating that there is a separate value and that the shoe and the NFT are independent products.

First, Nike can point to the fact that the NFTs being sold on StockX are generally more expensive than the value of the sneaker itself (even if one accounts for the markup of sneakers that is common in the resale market). Nike points to this divergence in monetary value: “Thus far, StockX has sold Nike-branded Vault NFTs at prices many multiples above the price of the physical Nike shoe.” For example, as of October 25, 2022, the Nike Dunk Low Off-White Lot 50 was on sale for $715. The NFT of that very same shoe , however, was on sale for $8,500. This significant divergence in price suggests that there is an independent economic value of the NFT beyond the ownership of the physical shoe.

Second, Nike can argue that the NFTs are an independent product because NFT ownership gives consumers unique perks. When the program initially launched, StockX’s website explicitly stated that NFT “owners may also receive exclusive access to StockX releases, promotions, events, as a result of ownership.” Since the lawsuit, this language has been removed, likely because it could be used as ammunition by Nike to defeat the first sale defense. But NFT owners still get some exclusive perks. For example, the ownership of the NFT means that StockX will store the physical shoe in their “brand new, climate-controlled, high-security vault” and NFT owners will be able to flip/trade the shoe instantaneously, rather than waiting for the shoes to be shipped or paying shipping fees. The storage and the ability to bypass shipping costs associated with flipping sneakers are benefits that are unique to owners of the NFTs but are unavailable to those who only own the physical show.

The Nike-StockX litigation highlights the uncertainty of how traditional intellectual property law applies to more modern trademark issues. The outcome of the case will have serious implications for how companies can protect their brands in the growing world of virtual commerce.

Jeanne Boyd is a second-year JD student at the Northwestern Pritzker School of Law.

Nike Corporation: Case Study for 2022

Nike corporation has become the absolute leader in sporting goods since the brand’s creation. However, the number of Nike products’ users is limited by the number of citizens living on Earth, their demand, and their budget. Due to these factors, the company has both positive and negative prospects for 2022. The most influential challenges for this year will be the political issues with the Chinese government, supply chain disruptions, and the significant fall of market demand.

On the one hand, three major benefits would bring significant short- and long-term success in Nike’s traditional markets. Firstly, Nike corporation committed to women’s sports development and became an official representative of the woman national basketball association (WNBA) (Nike Corporation, 2022b). The association has significant potential in terms of sponsorship products sales due to the direct connection with men’s NBA. Secondly, the corporation implemented new supply chain techniques, such as regional diversity, automation increase, and decreased sustainability pressure on their packaging (Nike Corporation, 2022). As a result, the company reduced the average price of product deliveries even though the average waiting time still significantly deviates from the normal one. Finally, the company gradually shifted many product lines to the luxury segment (Felsted, 2022). As a result, the company will be able to increase its average gross margin and hold net profit at the same level.

On the other hand, four of Nike’s current problems might significantly worsen Nike’s financial results. Firstly, as the largest market for the company, China begins to push Nike out of the market using propaganda about the support of responsible brands at the national level (Hong et al., 2022). Over the last year, sales of cross-country and sportswear in China have fallen by 24 percent and 33 percent, respectively. Despite the coronavirus restrictions, the market leader cannot just lose such a significant market share (Rowsell, 2022). At the same time, Nike has been actively promoting sports in China, especially basketball and baseball, where the company has the most influence in the market. However, in recent years, the Chinese people are still trying to abstract away from imported goods, which leads to significant import substitution of goods by fast-growing sportswear manufacturers such as Anta or Li-Ning. Thirdly, one of the main Nike distributors, Foot Locker, experienced the largest financial plunge in the distributor’s history (Larkin & Bhasin, 2022). The main factor in the revenue drop was a significant drop in sales from Nike, which cannot help but worry investors about the future growth in sales over the next few years. The competition in the different sports markets is getting stronger every year, and in this case, Nike is only making things worse by focusing on certain product lines. For example, Lululemon recently released cut-edge shoes for women, a major setback for Nike, traditionally positioning itself as a company with equal gender priorities (Bhasin, 2022). Last but not least, recent closures of strategically important trading ports in England and China due to coronavirus proliferation could call into question the company’s ability to diversify distribution without the presence of major distribution points from manufacturing to the sale points (Bloomberg News, 2022) (Gallagher, 2022). This could trigger a serious drop in the company’s operating revenue, which is too important a part of the company’s net income.

To conclude, Nike is facing a very difficult year in terms of market demand, but the corporation will still be able to survive the hurdles thanks to the brand strength and the continuous development of the product lines. Moreover, the succession of sporting events and the gradual lifting of coronavirus restrictions will also be a positive factor in the company’s short-term development in 2022. Despite the crisis in the political situation, Nike will be able to generate constant cash flows in the most developed and populated countries of the world.

Bhasin, K. (2022). Lululemon debuts first sneakers as it takes on Nike, Adidas. Web.

Bloomberg News. (2022). Shenzhen lockdown eases as Xi seeks to soften covid impact. Web.

Felsted, A. (2022). Nike should be the next luxury fashion house. Web.

Gallagher, J. (2022). Nike’s supply-chain snags bring pain to sneakerhead shops. Web.

Hong, J., Saito, Y., & Leung, A. (2022). How nationalism in China has dethroned Nike, Adidas. Web.

Larkin, C., & Bhasin, K. (2022). Foot Locker plunges most in over 40 years as Nike pulls back. Web.

Nike Corporation. (2022). How Nike is transforming its supply chain to best serve consumers. Web.

Nike Corporation. (2022b). The Nike athlete think tank invests in the future of women’s sport. Web.

Rowsell, J. (2022). How Nike transformed supply chains to survive Covid. Web.

Cite this paper

• Chicago (N-B)
• Chicago (A-D)

StudyCorgi. (2023, March 7). Nike Corporation: Case Study for 2022. https://studycorgi.com/nike-corporation-case-study-for-2022/

"Nike Corporation: Case Study for 2022." StudyCorgi , 7 Mar. 2023, studycorgi.com/nike-corporation-case-study-for-2022/.

StudyCorgi . (2023) 'Nike Corporation: Case Study for 2022'. 7 March.

1. StudyCorgi . "Nike Corporation: Case Study for 2022." March 7, 2023. https://studycorgi.com/nike-corporation-case-study-for-2022/.

Bibliography

StudyCorgi . "Nike Corporation: Case Study for 2022." March 7, 2023. https://studycorgi.com/nike-corporation-case-study-for-2022/.

StudyCorgi . 2023. "Nike Corporation: Case Study for 2022." March 7, 2023. https://studycorgi.com/nike-corporation-case-study-for-2022/.

This paper, “Nike Corporation: Case Study for 2022”, was written and voluntary submitted to our free essay database by a straight-A student. Please ensure you properly reference the paper if you're using it to write your assignment.

Before publication, the StudyCorgi editorial team proofread and checked the paper to make sure it meets the highest standards in terms of grammar, punctuation, style, fact accuracy, copyright issues, and inclusive language. Last updated: March 7, 2023 .

If you are the author of this paper and no longer wish to have it published on StudyCorgi, request the removal . Please use the “ Donate your paper ” form to submit an essay.