Nike’s Journey to Success
Sanaa North
Coastal Carolina University
CBAD 290
Carol Borisuk
Nike’s Journey to Success
Introduction
Nike, Inc is an American sports corporation that has business operations in many countries. The company develops and manufactures athletic footwear, equipment, apparel, services, and accessories. Their marketing strategy is considered “some of the best, if not the best” marketing in the world. Nike’s success is a result of great innovation and has led the company to see billions and many business ventures.
Size and Growth
Nike is one of the most popular company within the sport apparel industry across the globe. It is also a key manufacturer of sports equipment. In the previous fiscal year, the company was worth not less than $37.4 billion. It has more than 76,700 employees in all its branches across the world. In 2020, Nike was ranked as the most valuable brand since it was worth more than $32 billion. In the early 21st century, the company had already opened branches in more than 70 countries across the world. Its logo, which as a curved check mark known as swoosh became popularly internationally (White, 2021). In the early 19th century, the Nike Inc. had already started diversifying its product lines and expanding its business through many acquisitions. The company formed Nike ACG in 1996 that helped it to market products for extreme sports such as mountain biking and snowboarding. It gradually progressed into selling sport technology accessories such as high-altitude wrist compasses and heart-rate monitors in the early 21st century. Some of the renowned athletes such as Roger Federer, Mia Hamm, Tiger Woods, and Michael Jordan endorsed the company, contributing heavily to its success and significant performance. Nike Inc. has acquired many footwear and apparel companies over the course of its history. Some of such companies have been sold. Cole Haan was its first acquisition in 1988. The company was the upscale footwear company. After this, Nike Inc. purchased Bauer Hockey in 1994, and late in 200, it bought surf company Hurley International from Bob Hurley.
Direction and Planning
In the current world, the international revenue of the sports apparel is bigger than any other fiscal year before. The technological advancements have massively led to the expansion of several companies and the Nike Company has not been left behind. This implies digital transformations have been the key driver of the industry resulting to numerous digital innovations in the industry. The market leaders have declined when creating new opportunities for the new market entrants since they capture market shares by adopting the new technologies. In the entire sports apparel industry, Nike Inc. has been ranked as leader for a couple of years (Nica, Chiriță & Ionescu, 2021). Indeed, the digital transformation has greatly influenced and impacted the sports industry and will continue to shape the future of the industry. It is important for researchers to examine how customers are likely to perceive the changes and scrutinize their potential expectations and digital needs.
Competitive Profile
The competitors in the sports apparel industry is classified into seven main players; Nike, Adidas, Puma, Under Armour, New Balance, Sketchers. And Asics. Nike is the leading company with a total revenue of 430 billion. It captures about 30% of the total market share. Nike is closely followed by Adidas that has a total revenue of about $20 billion and it occupies about 20% of the total market share. Puma follows Adidas with a net revenue of $5 billion. The sportswear in the current world cannot be compared with sportswear in the previous generation. They have multiple tasks. They are made from fabrics that are breathable and allow easy evaporation of sweat leaving a player or an athlete fresh.
Most companies in the sports apparel industry produce generic shirts and sports but with different logos. In the United States, the revenue for sports apparel products was $115.6 billion in the fiscal year 2018 (Derevianko & Ivanova, 2020). Out of the $115.6 billion, more than 60% was made from the sales of sports apparel while the remaining 30% was made from the sales of footwear. Indeed, the sports apparel industry is comprised of some of fastest-paced companies globally. This means that customers are willingly spending more on sports accessories and apparel. The industry was introduced in the early 19th century through evolution of early active wear. Because of the increasing popularity of sports such as soccer, cycling, and athletic where specific apparels are needed. From then, the passionate and competent fashion designers have fueled the development of functional, innovative, affordable, and fashionable apparel.
The rivals in the business have fused the procurement as the principle procedure to build their efficiency and productivity. They contend to remain applicable in the worldwide market by embracing the item dispatch to improve their item portfolio. In this day and age, contest is furious, and to be cutthroat, one should be imaginative with thoughts. On the off chance that you continue to give a similar item without development, your adversary may fundamentally improve, captivating the client to utilize their merchandise. A venture should be adequately imaginative to draw in purchasers and meet their day by day needs for an undertaking to succeed. The manner in which people impart characterizes the way of life of an association. To get positive results and support, successful correspondence is required. Negative or equivocal correspondence might harm an expert bond.
Culture and Reputation
Poor reputation is intensified by lack of management experience, use of low-quality materials, and minimal oversight of the company. A positive reputation is linked with good corporate governance mechanisms. It is important for companies to maintain a positive corporate reputation for their growth and survival, however; the pressures to change in order to maintain the reputation vary from company to company (Kim, 2020). To maintain good reputation, the Nike company begun by changing and restructuring their governance and practices. The company has specific committees that only deal with reputation management. By definition, corporate reputation is a collective representation of a company’s results and past actions that describe the company’s ability to deliver high quality and valued outcomes to several stakeholders.
Information networks have turned into a fundamental part to the worldwide economy. Systems administration permits one to build up new roads for the business that one's earlier model might not have permitted. Online media has empowered many individuals to publicize their items and administrations and furthermore acquaint their business with individuals across the globe which has been a significant lift to the worldwide economy. Systems administration empowers one to stand apart by presenting new administrations and items which consequently draws in new likely customers and teach the current ones. Systems administration additionally empowers one to run over profoundly powerful individuals who might be of extraordinary assistance checking out the present place of employment contest that the globe is confronting. This prompts expansion in open positions across the world which helps in expanding the worldwide economy.
History
Nike Inc. is a multinational corporation located in the United States that deals with the development, design, marketing, sales, and manufacturing of global footwear, accessories, apparel, equipment, and services. The head-quarter of the company is geographically located in Beaverton, Oregon. It is ranked as the worldwide biggest and largest supplier of apparel and athletic shoes (Almani & Nobanee, 2020).
The company was originally founded by Phil Knight and Bill Bowerman, who were all employees of the University of Oregon by then. It began operating in Eugene, Oregon as the major distributor and supplier for Japanese shoe maker Onitsuka Tiger
. The company was originally named as Blue Ribbon Sports. Bill Bowerman was a track and field coach at the University of Oregon, while Phil Knight was his student. The two partnered and started their first retail outlet in 1966 and in the next couple of years, they launched the Nike brand shoe.
Financials
Based on market share and net revenue, Nike company is considered the largest company in the industry. The Company has a global brand value of about $35 billion. The value is twice the value of its key competitor, Adidas that has a brand value of about $16 billion. Nike has faced a lot of setbacks as far as digital transformation is concerned. The sports apparel industry is important, especially to the current generation.
In the past few decades, the effect of digital transformation has been witnessed in the sports apparel industry affecting companies such as Nike Inc. Traditionally, the innovations that were made primarily focused on the product design. The sports-based companies that offered innovative products were able to participate competitively in the market share (Khan, 2020). The Nike Inc. has developed into a $37 billion market for the past few decades. However, the industry is not the same as it was in the past. Currently, the company is strongly propelled and controlled by business-model innovations and digital products of the value chain. The inceptions of new technologies and products dominate the non-fashionable traditional products. In other words, digitalization in the sports apparel industry has immensely increased the profitability and productivity of the industry.
Conclusion
The Sports Apparel industry comprises of a few local and worldwide organizations. Probably, the most well-known organizations in the business include; Puma, Adidas AG, Armor, Nike, Colombia Sportswear Company, Lululemon Athletica, Anta International Group Holdings Ltd, VF Corporation, Lil Ning Company Limited, and Amour Sports Corporation. In 2018, the value or worth of Nike Inc. was more than 27.7 billion. Concerning this worth, it is relied upon to increment to $124.1 billion by 2026. By definition, active-wear are pullover and footwear worn by members during a difficult proactive tasks such as during sport exercises or during physical exercises for body fitness. They are patched such that they offer solace and nimbleness during such proactive physical exercises. They are made from breathable materials that permit simple and faster vanishing of sweat consequently; permitting a person to stay fresh and comfortable for a more extended period.
References
Almani, M., & Nobanee, H. (2020). Financial Statement Analysis of NIKE. Available at SSRN 3675026.
Derevianko, O., & Ivanova, T. (2020). Brand Storytelling as a Factor of Product Value Acquisition (in the Context of the Company «Nike»). State and Regions. Series: Social Communications, (3 (39)), 98-102.
Kim, M. (2020). How Phil Knight made Nike a leader in the sport industry: examining the success factors. Sport in Society, 23(9), 1512-1523.
Khan, S. (2020). Nike and Adidas: A Rivalry Made in Heaven? SAGE Publications: SAGE Business Cases Originals.
Nica, I., Chiriță, N., & Ionescu, Ș. (2021). Using of KPIs and Dashboard in the analysis of Nike company's performance management. Theoretical & Applied Economics, 28(1).
White, J. (2021). Nike loses bid to overturn EU state aid probe. International Tax Review.