Ch. 2: Strategic Planning for Competitive Advantage Nike Inc.

Phil Knight

Nike co-founder Phil Knight was once famously quoted as saying, "Business is war without bullets.", and with that statement, Nike Inc. runs its business on the idea that they are, "Dedicated to inspire every athlete to reach peak performance." And of course to continue to spread their mission: "To bring inspiration and innovation to every athlete in the world." With that being said, Nike Inc. core beliefs and practices are to strive for :

- Innovation to serve the athlete.
- Innovation to grow the company.
- Innovation to inspire the world.

SWOT Analysis:

Strengths:  Nike Inc. has many strengths as a business, one in particular is that they are a global brand, having over 750 retail stores in the world, and having contact factories all throughout the world including the US, Europe, Asia and Africa. Nike has the strength of attracting and sponsoring the top athletes in the world, and having the ability to use those athletes as spokespersons in ads for their new sneakers and related apparel. Possibly one of the biggest factors of strength in the Nike Inc. arsenal is the signature "swoosh" logo. The logo is recognized worldwide and easily stands above the rest since it's inception in 1971. Most importantly, Nike Inc. heavy belief in "innovation" has to be the most unique strength they have out of all. Nike Inc. idea of "innovation" and "innovating" runs through more than just to the customer through their products, as Nike Inc. is known to instigate innovation within the corporation, to the employees, to the contact factories and to the retailers they sell their product to. Innovation is very much the base for success in the Nike Inc. The wholly owned subsidiaries that Nike Inc. includes is a huge strength  for sales, as Cole Haan, Hurley International, Umbro, Nike Golf and Jordan Brand all account for and contributed to $2.7 billion out of the $20.9 billion revenue.

Weaknesses:  While Nike Inc. has many strengths, there as weaknesses as well, including the counterfeit sale of fake Nike sneakers on websites from overseas, which only damages the quality and opinion of Nike Inc. sneaker product based on customers and their satisfaction, and can effect the company's sales. Nike Inc. while they do have a retail store in Nike Town, still rely heavily on and make most of their income of their products off of retailers.

Opportunity: Nike Inc. continually reaches abroad in their pursuit to interest the markets outside the USA. Nike Inc. has contact factories in countries such as Asia, Africa and Europe. Nike Inc through its many athletes they sponsor have overseas ties and relations in the media, an example being Kobe Bryant's tour of China this past Summer. As far as the actual products, although Nike Inc. strongly considers it self an athletic apparel manufacturer their products aren't only bought by athletes, and is somewhat becoming a fashion thing. Nike Inc. not only makes their athletic shoes but also creates casual and skateboard shoes and apparel. With that in mind, Nike Inc. will be able to capitalize off of the non athletes that purchase their apparel and shoes.

Threats:  Besides the sales of fake and counterfeit sneakers, the market for athletic sneakers and shoes being extremely tight and competitive is a threat. Since Adidas had purchased Reebok and made is a subsidiary to its company in 2005, it has been Nike Inc. main competitor in the shoe and apparel market.

Competitive Advantage :
Nike Inc. has a competitive advantage suited not only for the consumer but also for the environment and people and culture around it all. Nike Inc. has been known and continues to make known their efforts to produce products only in a manner using goods and supplies and fabrics that further prevent harm on the environment as a whole. Nike Inc. for example has a concept called Nike MSI, which primarily was designed to help create products with lower harm to the environment, and also have other programs such as being considerate of the environmental and social impacts around them, and doing works through Nike Better World on Nikebetterworld.com, whose main goal is to serve the athlete and serve the environment at the same time. Nike Inc. overall is able to improve the environment while still using products that will maintain the absolute highest standard of performance. Another advantage is Nike Inc. appreciation for the people and culture around them. Nike Inc. both within and outside the incorporation, producers and consumers alike, Nike Inc. considers the people their most powerful source of innovation and change. Nike Inc. ownership of the NFL's uniform licensing rights only becomes even more of a strength, as the NFL is the most marketable professional sports league in America. Finally a huge advantage Nike Inc. has, is the top athletes they sponsor and have advertise their products that they use. Specifically in Basketball shoes and apparel, Nike is king in that market, having worldwide and renown basketball stars such as Kobe Bryant, Kevin Durant and LeBron James on their team, to not only advertise within the US but outside the US as well. Being worldwide superstars, Bryant, Durant and James only help maximize Nike Inc. horizon worldwide even more, through both their advertisements and sneaker and apparel deals with the incorporation, and having their products being widely coveted and purchased by consumers.

 (Bryant #24 , James #6, Durant #35)

Strategic Directions: While Nike Inc. continues to produce new products for the same market and consumer base, its current plans are to have a completely new and improved clothing, apparel and sneaker line of products by as early as projected in 2015. Nike Inc. prides itself on the terms "Make today better" and "Strive for the Future". While these new and current productions go on, Nike Inc. still keeps intact its ability to properly serve the athlete and the environment at the same time. For example, recently Nike Inc. started an Amazon Leather Policy, where the corporation does not use leather from cattle in the Amazon because of the cattling leading to Tropical Deforestation in the region. Another thing is the use of recycled bottles and plastic to create products, most recently notable were the 2010 World Cup Jerseys made from recycled plastic.

The 4 P's

Nike Elite "Superhero" Collection

Product: While Nike Inc. offers a wide number of unique and inspired sneaker designs, color ways, collections and sport packs, they have set names of sneakers and colors making them more of an individually designed sneaker, and even work technology into their shoes. Nike + being a key component to technology being placed into a shoe. Specifically Nike +, which is a component that records and tracks miles ran or walked in a setting. Nike Basketball is the most successful and coveted of all sneaker products, with Nike Running behind it. Nike Inc. also has 6 wholly owned subsidiaries specifically : Cole Haan, Converse, and Jordan Brand which also produce athletic/casual shoes and apparel.

Place : Though Nike Inc. does distribute to retailers, they do have all of these contact factories in the US and around the world and even

Price : Nike Inc. prices vary, but accordingly follow the code of the best product being available for purchase for the lowest and best price possible.

Kobe Bryant at Bishop Loughlin

Promotion : Nike Inc. is known worldwide through Social Media (Facebook, Twitter), but also from television ads and billboards, as well as public and private special in person events and world tours. Examples of the in person promotions are specifically the recent tour of Kobe Bryant through China over the summer, and one of personal experience. It was when Kobe Bryant and Nike Basketball came to my job to sponsor the schools basketball team, giving them sneakers and socks and having a Q&A and meeting and photo op with the kids from the two teams being sponsored. The term "Just Do It" is widely known as often used by Nike as one of their main slogans, and can be seen all over or in any Nike ad or commercial.

Ch. 1 - Overview of Marketing (Brief History and Mission Statement) Nike Inc.

Before there was the Swoosh, before there was Nike, there were two visionary men who pioneered a revolution in athletic footwear that redefined the industry.

Bill Bowerman was a nationally respected track and field coach at the University of Oregon, who experimented with different track surfaces, re-hydration drinks and – most importantly – innovations in running shoes. But the established footwear manufacturers of the 1950s ignored the ideas he tried to offer them, so Bowerman began cobbling shoes for his runners.

Phil Knight was a talented middle-distance runner from Portland, who enrolled at Oregon in the fall of 1955 and competed for Bowerman’s track program. Upon graduating from Oregon, Knight earned his MBA in finance from Stanford University, where he wrote a paper that proposed quality running shoes could be manufactured in Japan that would compete with more established German brands. But his letters to manufacturers in Japan and Asia went unanswered, so Knight took a chance. 

He made a cold-call on the Onitsuka Co. in Kobe, Japan, and persuaded the manufacturer of Tiger shoes to make Knight a distributor of Tiger running shoes in the United States. When the first set of sample shoes arrived, Knight sent several pairs to Bowerman, hoping to make a sale. Instead, Bowerman stunned Knight by offering to become his partner, and to provide his footwear design ideas to Tiger.

They shook hands to form Blue Ribbon Sports, pledged $500 each and placed their first order of 300 pairs of shoes in January 1964. Knight sold the shoes out of the trunk of his green Plymouth Valiant. In essence, the foundation for what would become Nike had been established.

But Bowerman and Knight each had full-time jobs - Bowerman at Oregon and Knight at a Portland accounting firm - so they needed someone to manage the growing requirements of Blue Ribbon Sports. Enter Jeff Johnson, whom Knight had met at Stanford. A runner himself, Johnson became the first full-time employee of Blue Ribbon Sports in 1965, and quickly became an invaluable utility man for the start-up company.

Johnson created the first product brochures, print ads and marketing materials, and even shot the photographs for the company’s catalogues. He also designed several early Nike shoes, and even conjured up the name Nike in 1971. Around this same time, the relationship between BRS and Onitsuka was falling apart. Knight and Bowerman were ready to make the jump from being a footwear distributor to designing and manufacturing their own brand of athletic shoes, and went and selected a brand mark today known internationally as the “Swoosh,” which was created by a graphic design student at Portland State University named Carolyn Davidson. The new Nike line of footwear debuted in 1972, and the rest is history from there....... 

Overall, Nike is an innovative, top flight incorporation that caters to any type of athlete, and any type of person. Not only does it cater to athletes everywhere but also to an everyday person. They represent and make products for professional sports leagues, most notably the NBA and ownership of the Licensing Rights to the NFL for the next 10 years.

As President and CEO Mark Parker once  said: “At NIKE, Inc. we run a complete offense, and it’s based on a core commitment to innovation. That’s how we stay opportunistic, serve the athlete, reward our shareholders, and continue to lead our industry.” Nike as a power in the merchandise in sports market have a simply put, concise mission statement that reads : "Our Mission: To bring inspiration and innovation to every athlete* in the world."  The asterisk meaning, as said by founder Bill Bowerman: "If you have a body, you are an athlete."