Nike, Inc., a multinational company from the United States that designs, develops, manufactures and markets sportswear apparel, footwear, accessories and equipment. The company was named Blue Ribbon Sports when it was established in 1964. In 1971, the company officially changed its name after its namesake, the Grecian goddess of victory, Nike.
Aside from sportswear and its signature product, Nike shoes, the company has several subsidiaries. It sponsors various sports teams and top athletes and sports celebrities. It also operates its own retail stores, aside from supplying stores and distributors worldwide.
Nike is known worldwide for its ''Swoosh" logo and its tagline – ''Just Do It."
Since the early 70s, people have aspired to wear sports shoes with the swoosh logo. The highly popular and very recognizable trademark is the ''sign of being cool," sign of "being in" or being like their idol. It was not only in the United States that wearing a pair of Nikes makes one the envy of his or her peers, rather it has become a global phenomenon.
But How Did Nike Start?
Philip Knight, a track athlete from the University of Oregon and Bill Bowerman, his coach, founded the Blue Ribbon Sports in 1964. Initially, the company was just a distributor of Onitsuka Tiger sports shoes, manufactured by Onitsuka Co., Ltd. of Japan. Onitsuka later merged with JELENK and GTO and became ASICS Corp.
Two years later, Blue Ribbon Sports or BRS opened its first retail store, located in Santa Monica.
With his interest in sports shoes, Bowerman often ripped apart the different models of sports shoes manufactured by Tiger and analyzed the parts. He wanted to create running shoes that are lighter, getting feedback from university track runners who participated in testing his own designs. By 1971, the business relationship between Onitsuka and BRS was no longer healthy, which led to the two companies parting ways later.
BRS renamed the company Nike, Inc. in 1973. In the same year, it signed an endorsement contract with Romanian ATP tennis player Ilie Năstase. It was the start of many product endorsement packages that have become part of the growth of the Nike brand.
Did you know that the swoosh logo was patterned after the wings of Nike? It seems hard to imagine, right? Look at Nike from the side; now rotate the logo so the pointed tip is facing downwards. Here's an interesting trivia. The designer of Nike's swoosh logo was Carolyn Davidson. At the time when she created the design (1971), she was still a student. It took her 17.5 hours to design and finalize it. At $2 per hour, she was paid $35 for it.
Global Marketing Strategies
The inception of the company strategy of Nike was born when was Phil Knight was still a university student. He already thought that it would be beneficial to the company if it used manufacturing plants in other countries outside the United States, because the labor costs would be much lower. He thought that South Korea and Taiwan were viable locations. Those ideas became a reality. Later, the manufacturing plants were moved to Indonesia and China. Today, the athletic shoes, apparel, equipment and accessories are manufactured in more than 700 plants located in 42 countries. Nike does not own any of the factories. Instead, the manufacturing processes are all outsourced, which is more economical.
At the core of international marketing strategies is creative innovation, which proved to be a very strong edge for the brand to maintain superiority over competition.
It has its own formula to come up with its strategic marketing thrusts.
· It needs new business ideas to enable the brand to expand in a sustainable economy.
· It should have road map for the future evolution of the brand and solutions to overcome the hurdles blocking its path.
· It should define ways to allow the brand to continue evolving and make the current business model while undergoing a transformation.
For the international expansion of Nike, it acknowledges that it should know how to collaborate and be flexible when approaching innovation.
The brand has several goals in order to reach their marketing strategies.
· Put investing in sustainability a priority for R&D and innovation on the agenda of consumer brands
· Use collaboration and investment to fast track brand innovation
· Share intellectual property to efficiently fast track the changes through GreenXchange
· Create an advocacy agenda to develop large-scale investments and policies for sustainable innovation to ensure that the brand can be competitive in the global economy
Innovation – The key to the growth strategy of Nike
Their persistence to be better helps them to innovate, which guides them to handle their corporate responsibility. They take a close look at risk management by working to improve social, environmental and labor impacts of their business models.
To ensure its international expansion, Nike is likewise focused on sustainability. Nike recognizes the fact that to sustain its market dominance, it has to continue delivering innovative products as well as consumer experiences. Sustainability means profitability. Consumers worldwide create new markets as well as demand new products and services. This means Nike has to move closer to the market and continue creating new solutions and product customization.
Nike is aware of the conditions that affect the workforce, communities, products, supply chains and people, from rising fuel prices, population growth, climate change and reduction in the availability of natural resources. To counter these factors, Nike creates designs and products that depend on the availability of energy, water, raw materials and more.
New Business Model
The company believes that in the future, companies would try to achieve zero waste, which is a closed-loop business model. This means that the company will fully reuse, recycle or compost their materials. One of the approaches envisioned for the new business model is manufacturing products from reclaimed materials from the different manufacturing processes and at the end of the life of the product.
Nike thinks this can be achieved if companies think of more and better ways to reuse and recycle waste, which can in turn create new products. Product designers should look for raw materials that are more sustainable while business leaders should analyze its impact on the workforce and supply chains.
Adapting and Answering to the Demands of the Market
The innovative approach to product and marketing started in 1979 for Nike. While their sports shoes are already enjoying worldwide consumer demand and huge sales, it does not stop devising and thinking of new ways to improve its main product.
In 1979 Nike introduced the air cushioning technology to its running shoes. Plastic membranes filled with gas could be inserted into the soles of the running shoes to make them more comfortable. The technology was invented by an engineer from NASA. While it helped increase the company's revenues, competitors were tapping on the boom in aerobic exercise, which Nike failed to consider.
To regain its market share, it introduced Air Max in 1987, a new model of athletic shoes where two interdependent compressed air-filled bags that act as shock absorbers could be inserted. The brand customized the shoes by inserting different bag sizes. Thus consumers can choose the right pair of shoes based on their height and the pressure then exert on the shoes. Nike produced 40 different models under the Air Max series.
In 1988, it launched its "Just Do It" campaign, which the brand has maintained until today.
For the younger generation and people who lead active lifestyles, Nike developed an apparel line, taking inspiration from the trends in street fashion. The company came up with innovative and trendy apparel, including tracksuits, baseball caps, shell suits, compression shorts, socks, sweatpants, leggings and sneakers.
The brand realized that even the technology it poured on the creation of its athletic shoes is not enough to attract more customers. The company had to think of new things to offer to make Nike different from other brands. This means moving away from the main business and creating something more appealing to consumers. This led the company to focus on accessories for the athletes.
In May 2006 it launched the new gadget for the U.S. market – the Nike + iPod Sports Kit. The tool enables the athlete to measure his/her speed and distance during a walk or a run. It was a very good collaboration between Nike and iPod.
In 2008, Nike launched the Nike + Sportband Kit that could be directly connected to a computer to see the results, which can be downloaded. In 2010, the brand introduced the
Nike + Sportwatch, which is also based on the original electronic chip that Nike developed initially for the running/walking shoes.
These innovations made a huge impact on the market, providing a community of Nike users with millions of members. The digital tools encourage not only athletes but other people who want to be athletes and those who wish to have a more active lifestyle. Users share, compare and discuss their results from using the different gadgets sold by Nike, helping the company reduce its spending on traditional advertising and maintain brand awareness more effectively through the community. In the process, it brought the brand closer to its consumers.
Social Media Presence
The company keeps a keen interest in what's going on in the marketplace. It is one of the early users of email marketing, Internet marketing, broadcast communication technologies and narrowcasting (target marketing or niche marketing) for marketing campaigns utilizing multimedia.
Nike makes effective use of social media platforms to interact with its millions of users and attract new customers since it started creating its Facebook pages for its different products.
Strategic Partnerships and Sponsorships
Other methods that make the international expansion of Nike very successful are its strategic sponsorships and partnerships. Through the years, Nike has been associated with many athletes and sports personalities such as:
· Michael Jordan
· Kobe Bryant
· Sebastian Coe
· Jackie Joyner-Kersee
· Carl Lewis
· Tiger Woods
· Rory McIlroy
· Cristiano Ronaldo
· Wayne Rooney
Sponsorship deals are not only for sports personalities. Nike is present in almost all sports and sporting activities. It sponsored all the uniforms of the NFL teams, several association football clubs in Africa, Asia, the Middle East, Europe, Oceania, North America and South America. It is also a sponsor of the national football teams around the world.
Nike is also present in different football associations worldwide, athletics, basketball, Australian football, boxing, cricket, figure skating, golf, gymnastics, mixed martial arts, handball, rugby union, tennis and swimming. The sponsorships likewise extend to sports teams in different colleges and universities in the United States.
The partnership of Nike and Apple, Inc. has increased brand awareness, helping consumers decide to choose the brands they want to patronize. It allowed the two companies to provide heightened user experience – a pair of Nike's for their sport activities and enjoying music while measuring the results of their activities on their iPhone or iPods.
Nike is an innovator, which helps maintain its continuous international expansion. It's always pushing its creative boundaries to come up with new products and set the brand apart from competition. The company is quick to seize new technologies and opportunities to widen its customer base. Being able to connect closely with its customers gives the company the chance to collect valuable information, which leads to product innovation.
We'll Help You Adapt to the International Market
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