Term Paper

Strategic Marketing

Strategies followed by Nike

Submitted by-
Kashis Prasad
US22007

Submitted to-
Prof. Nirali Shah

18TH December, 2023

MBA- SM
2022-24
No. Content

1 About the Company

2 Nike Product Portfolio

3 Mission & Values

4 Nike’s Competitive Advantage

5 Porter’s 5 Forces of Marketing

6 VRIO Analysis

7 Nike’s Value Chain

8 Corporate Strategies Followed

9 Marketing Strategies Followed

About the Company
Nike, Inc. is a multinational corporation best known for its sports footwear, apparel, accessories,
equipment, and services. Bill Bowerman and Phil Knight founded Blue Ribbon Sports on January 25,
1964, and it became Nike, Inc. on May 30, 1971.
Nike's headquarters are located near Beaverton, Oregon, in the United States. The famous swoosh
emblem and "Just Do It" motto of the firm have become some of the most recognisable and long-
lasting in the worlds of sports and fashion.
Nike's major concentration is on athletic shoes and gear, catering to a variety of sports including
running, basketball, soccer and tennis. They work with notable sportsmen and sports celebrities to
create and promote their products, which helps to boost their brand image and market presence
dramatically.
The company works internationally and has a large presence in several locations, offering its
products through retail shops, internet sales, and numerous authorised retailers. It has also grown its
digital reach, providing e-commerce platforms and creative technical innovations like as the Nike+
app to meet consumers' changing demands.
Nike has been active in a variety of social and environmental programmes, emphasising
sustainability, diversity, and community participation, in addition to its financial success. They have
pledged to reduce their environmental impact, promote equality, and engage in initiatives that benefit
underserved areas through a variety of programmes and collaborations.
Nike has developed from a footwear firm to a worldwide recognised lifestyle brand over the years,
retaining its position as one of the world's leading sportswear manufacturers and a symbol of
innovation, performance, and style in the athletic clothing sector.

Nike’s Product Portfolio

Nike provides a wide array of products in several areas, such as clothing, accessories, equipment, and
footwear. An outline of Nike's product line is provided below:
1. Shoes:
o Running Shoes: Made to accommodate various surfaces, lengths of time, and running
techniques, such as track, road, and trail running.
o Basketball Shoes: Signature styles created for support, style, and performance on the
basketball court, endorsed by NBA players.
o Football boots/soccer cleats: Cleats designed for various player positions and playing
surfaces, providing improved traction, control, and agility.
o Training Shoes: Supportive, cushioned, and stable footwear appropriate for a range of
exercise activities.
o Lifestyle trainers: Trendy, casual shoes made for daily use that are frequently influenced
by sports fashions.

2. Apparel:
o Athletic Apparel: Sportswear with an emphasis on performance for a range of sports,
such as basketball, soccer, running,
o Casual Wear: Trendy and cosy items for everyday wear, such as jackets with the iconic
Nike style and hoodies, T-shirts, leggings, and joggers.
o Outerwear: Performance coats, windbreakers, and jackets appropriate for various
weather circumstances.
 3. Accessories:
o Backpacks & Bags: Sturdy and practical backpacks for daily use, travel, and
sports.
o Headwear: Beanies, hats, and caps with a range of styles and features for
functionality and comfort.
o Socks: Performance socks with moisture-wicking, cushioning, and supportive
qualities that are tailored for certain sports.
o Athletic Equipment: Add-ons for particular sports, such as arm sleeves, gloves,
and balls.
4. Apparatus:
o Sports Gear: Items include soccer balls, basketballs, training gear and accessories
made specifically for a certain sport.
▪ Weights, resistance bands, training kits, and gym accessories are examples of
fitness equipment.
▪ Online Services:
o The Nike Training Club (NTC) app offers fitness tracking, training plans, and
exercise routines.
o The Nike Run Club (NRC) app provides runners with tracking tools, guided runs,
and individualised coaching.
o Nike App: Online store offering Nike merchandise, first access to new releases, and
customised content.

Nike continuously expands its product offerings and maintains its position as a leader in innovation
within the athletic and lifestyle industry by releasing new collections and collaborating with
athletes, fashion designers, and cultural icons.

Mission, Vision, and Values

Mission:

• Official statement: "To bring inspiration and innovation to every athlete in the world."
• Breakdown: Nike defines everyone with a body as an athlete, aiming to inspire and equip
them with innovative products and experiences to reach their full potential, no matter their
skill level.

Vision:

• Official statement: "To do everything possible to expand human potential."

• Breakdown: Nike goes beyond simply selling products; it strives to push the boundaries of
what humans can achieve through sport and movement.

Values:

• Win: Striving for excellence and pushing boundaries in everything they do.
• Team: Working together collaboratively and fostering a supportive community.
 • Innovation: Constantly seeking new ways to improve products, experiences, and the world
around them.
• Passion: Fuelling their work with enthusiasm and dedication to sport and humanity.
• Honesty: Building trust and transparency in all their relationships and dealings.

These core values guide Nike's decision-making and actions across all aspects of their business,
from product development to marketing and social responsibility initiatives.

SWOT Analysis of Nike’s Mission, Vision, and Values

Nike Competitive Advantage

Nike boasts a powerful arsenal of competitive advantages, allowing it to reign supreme in the
sportswear market.

Unrivalled Brand Power:

 • Cultural Resonance: Nike goes beyond selling shoes; it connects with
aspirations, dreams, and cultural movements. Think Colin Kaepernick kneeling or Serena
Williams' powerful persona.
• Emotional Storytelling: Nike's marketing campaigns are masterclasses in evoking
emotions like overcoming adversity, pushing limits, and celebrating individuality. Just Do
It is more than a slogan; it's a call to action.
• Athlete Collaborations: From Michael Jordan to Cristiano Ronaldo, Nike strategically
partners with iconic athletes, leveraging their fame and achievements to solidify its own
image.

Innovation Engine:

• Material Science Prowess: Nike's research labs tirelessly develop new materials like
Flyknit and React foam, leading to lighter, more responsive footwear.
• Biomechanical Insights: Nike collaborates with sports scientists to understand human
movement and translate these insights into product design, improving performance and
injury prevention.
• Digital Innovation: Nike embraces digital tools like the Nike Run Club app to personalize
training experiences and build deeper customer engagement.

Distribution and Marketing Dominance:

• Omnichannel Presence: Nike's network of flagship stores, partner retailers, and robust
online platform ensures its products are accessible to any consumer, anywhere.
• Social Media Mastery: Nike leverages platforms like Instagram and TikTok to create viral
trends, showcase athlete stories, and reach younger generations.
• Direct-to-Consumer Strategy: By investing in its own stores and online platform, Nike
bypasses intermediaries, controls branding, and gathers valuable customer data.

Advantages under the Microscope:

• Financial Muscle: Nike's profitability fuels its R&D, marketing campaigns, and strategic
acquisitions, allowing it to stay ahead of the curve.
• Product Diversification: Beyond footwear, Nike ventures into apparel, equipment, and
accessories, catering to diverse athletic needs and lifestyle choices.
• Sustainability Push: While still facing critiques, Nike's increasing focus on recycled
materials and eco-conscious practices resonates with ethical consumers and potentially
attracts new segments.

Challenges and the Road Ahead:

• Competition Heats Up: Adidas, Puma, and others are not sitting idle. Nike needs to stay
nimble and constantly innovate to retain its market share.
• Ethical Concerns Linger: Past labor and environmental controversies can resurface. Nike
must demonstrate transparency and commitment to ethical practices.
 • Trend Shifts Demand Agility: Consumer preferences for sustainability, inclusivity, and
personalized experiences require Nike to adapt its strategies and offerings.

By leveraging its strengths, addressing challenges, and embracing agility, Nike can continue
leading the pack and inspiring athletes across generations.

Porter’s Five Forces of Marketing

Porter's Five Forces is a model that helps organizations understand what makes an industry profitable.
It encourages organizations to consider broader environmental forces when assessing strategy.
Nike, the swoosh-emblazoned behemoth of the athletic
apparel industry, has carved its dominance through a
strategic understanding of the competitive landscape. Let's
delve into the five forces outlined by Michael Porter's
framework to dissect Nike's success:

1. Threat of New Entrants:

• Moderate: While the athletic apparel market

attracts aspiring brands, significant barriers to
entry exist. These include:
o Capital requirements: Establishing manufacturing, distribution, and marketing
infrastructure demands substantial investments.
o Brand recognition: Nike's established brand loyalty and powerful marketing
machinery make it challenging for newcomers to compete.
o Technology and innovation: Nike's constant R&D efforts and cutting-edge
technologies like Flyknit and React foam create a high bar for new entrants.

2. Bargaining Power of Suppliers:

• Weak: Nike's massive scale affords it significant leverage over its suppliers. Key factors:
o Multiple sourcing options: Nike diversifies its supplier base across
countries, reducing dependence on any single entity.
o Vertical integration: Owning factories in Vietnam and Indonesia gives Nike greater
control over production quality and costs.
o Strong brand reputation: Suppliers are eager to collaborate with Nike's prestigious
brand, giving it additional negotiating power.

3. Bargaining Power of Buyers:

• Moderate: While individual customers have limited bargaining power, some factors
influence buyer power:
o Price sensitivity: Budget-conscious consumers might opt for cheaper alternatives
like Puma or Adidas.
 o Online retail: E-commerce platforms like Amazon give buyers more price
comparison options and bargaining leverage.
o Direct-to-consumer strategy: Nike's growing network of physical and online stores
strengthens its control over pricing and customer relationships, mitigating buyer
power.

4. Threat of Substitutes:

• Moderate: While other forms of exercise (cycling, swimming) or athleisure wear from
different brands exist, substitutes pose a moderate threat:
o Brand loyalty: Nike's strong brand association with athletic performance and
cultural relevance discourages some consumers from switching.
o Product differentiation: Nike's continuous innovation and diverse product portfolio
cater to various athletic needs and lifestyle choices, making it hard to find perfect
substitutes.
o Price sensitivity: For budget-conscious consumers, cheaper alternatives might be
attractive for basic exercise needs.

5. Competitive Rivalry:

• Intense: The athletic apparel market is fiercely competitive, with major players like
Adidas, Under Armour, and Puma constantly vying for market share. Key factors:
o Product innovation: All major brands invest heavily in R&D and technological
advancements to differentiate themselves.
o Marketing and sponsorships: Intense competition for athlete endorsements and
effective marketing campaigns is crucial for brand visibility.
o Pricing strategies: Competitive pricing and discounts play a significant role in
attracting and retaining customers.

Nike's Strategic Manoeuvres:

By understanding these five forces, Nike has implemented several strategic measures to maintain
its competitive edge:

• Continuous innovation: Investing in cutting-edge technology and materials keeps Nike

ahead of the curve in product performance and design.
• Targeted marketing: Powerful campaigns featuring iconic athletes and inspiring narratives
solidify Nike's brand image and emotional connection with consumers.
• Diversification: Expanding beyond footwear into apparel, equipment, and accessories
caters to diverse customer needs and preferences.
• Direct-to-consumer focus: Growing its own stores and online platform increases brand
control, customer data collection, and profit margins.
• Sustainability efforts: Addressing environmental concerns through recycled materials and
eco-conscious practices attracts ethically conscious consumers.
VIRO Analysis
VRIO analysis is widely used for assessing the current situation of the company. It is used for internal
analysis and to determine the organization’s resources, competitive advantages and improvement
potential. This analysis further helps in the strategic management of the company and in decision-
making about internal and external competitive advantage. VRIO is an acronym for Value, Rarity,
Imitability and Organization. Here is the detailed VRIO analysis of Nike Inc.

Nike Value Chain

Nike's success can be attributed to its strong and well-managed value chain, where each step
contributes to creating value for its customers and generating profit. Let's break down the key stages:
Nike’s Corporate Strategies: A Multi-Pronged Approach
Nike's success stems from a potent blend of corporate strategies that address both internal strengths
and external market dynamics. Here are some key pillars:

1. Differentiation:

• Product Innovation: Constant R&D drives cutting-edge materials, technologies, and

designs, like Flyknit and React foam, separating Nike from competitors.
• Performance Focus: Products cater to athletes of all levels, enhancing performance and
experience with features like Zoom Air cushioning and Dri-FIT fabric.
• Brand Storytelling: Emotional marketing campaigns connect with aspirations, dreams, and
cultural movements, imbuing Nike with iconic status beyond just athletic apparel.

2. Cost Leadership:

• Vertical Integration: Owning some factories in Vietnam and Indonesia provides greater
control over production costs and quality.
• Global Supplier Network: Diversifying sourcing across countries offers leverage for
competitive pricing and material availability.
• Efficient Operations: Streamlined production processes, automation, and advanced
logistics minimize costs and waste.

3. Growth Strategies:

• Direct-to-Consumer Focus: Expanding online and physical stores strengthens brand

control, customer relationships, and data collection, enhancing profitability.
• Product Diversification: Going beyond footwear to apparel, equipment, and accessories
caters to diverse athletic needs and lifestyle choices, driving revenue growth.
• Expansion into New Markets: Targeting under-penetrated regions like China and emerging
economies unlocks new consumer segments and growth potential.

4. Sustainability Push:

• Eco-Friendly Materials: Increasing use of recycled polyester and bio-based foams reduces
environmental impact and resonates with ethically conscious consumers.
• Sustainable Manufacturing: Investing in clean energy and water conservation practices
demonstrates commitment to environmental responsibility.
• Transparency and Traceability: Implementing digital tools and tracking systems to
increase supply chain transparency and ensure ethical sourcing practices.

Nike’s Marketing Strategies for Staying Ahead of the Game

Nike's iconic swoosh isn't just a logo; it's a symbol of marketing prowess. Let's dissect the key
strategies that keep Nike at the forefront of the athletic apparel world:
1. Brand Storytelling:

• Emotional Resonance: Nike goes beyond selling shoes; it connects with

dreams, aspirations, and cultural movements through inspiring campaigns like "Just Do It"
and Colin Kaepernick kneeling.
• Athlete Endorsements: Partnering with iconic athletes like Cristiano Ronaldo and Serena
Williams leverages their fame and achievements to solidify Nike's image as the
champion's choice.
• Cultural Relevance: Embracing trends and social movements keeps Nike's brand fresh and
relevant, engaging younger generations and resonating with diverse audiences.

2. Digital Dominance:

• Social Media Mastery: Nike excels on platforms like TikTok and Instagram, leveraging
viral trends, influencer collaborations, and user-generated content to reach targeted
audiences and create buzz.
• Direct-to-Consumer Focus: Investing in its own online store and physical flagship stores
gives Nike greater control over brand messaging, customer relationships, and data
collection.
• Mobile App Engagement: Nike Run Club and other interactive apps personalize training
experiences, foster community building, and keep customers engaged with the brand.

3. Innovation and Differentiation:

• Product-driven Storytelling: Launching innovative products like self-lacing Hyperadapt

shoes or Flyknit technology creates excitement and reinforces Nike's image as a cutting-
edge brand.
• Limited-Edition Releases: Exclusive collaborations and drop culture generate hype and
scarcity, fueling demand and creating collector's items.
• Performance Focus: Emphasizing the functional benefits of Nike products through athlete
testimonials and scientific research solidifies its claim as the choice for serious athletes.

4. Global Reach and Localization:

• Tailored Marketing Campaigns: Adapting campaigns to resonate with local cultures and
preferences ensures relevance in diverse markets.
• Community Engagement: Supporting grassroots sports initiatives and collaborating with
local athletes builds brand loyalty and connects with communities on a deeper level.
• Embracing Diversity and Inclusion: Featuring athletes and stories from various
backgrounds in marketing campaigns demonstrates Nike's commitment to inclusivity and
attracts a wider audience.
References
o https://www.nike.com/in/
o https://online.visual-
paradigm.com/app/diagrams/#diagram:proj=0&type=ValueChainAnalysis&gallery=/repository/b2eca
9cf-a537-438a-bf70-e8653d2a16c9.xml&name=Amazon%20Value%20Chain
o https://coschedule.com/blog/nike-marketing-strategy
o https://www.academia.edu/35803557/Business_level_Strategies_corporate_level_and_Functional_Le
vel_Strategies_of_Nike
o https://www.hivelr.com/2023/05/nike-porters-five-forces-industry-and-competition-analysis/
o https://about.nike.com/en
o https://seekingalpha.com/article/4090902-nike-to-begin-selling-products-on-amazon