Nike is the innovative juggernaut that consistently sits on its throne as the largest sportswear multinational corporation among other diversifications. Nike is the giant who entered the game rather late, undertook massive innovations, picked up on and created trends, played around with strategies yet switched things up in time and even still, maintains processes that make it the household name it is. The white swoosh and the "Just Do It" can be recognised and acknowledged by most even if they don't own a product by Nike.
Nike's establishment in 1964 came much later than those of Adidas or Puma, who dominated the market for decades along with Converse and Reebok. With such a huge backlog in terms of time, Nike's major innovations made them an unprecedented giant in the sports industry. Here are some of the core differentiators that have carried Nike to this point.
How they got here:
Waffle Shoe Soles:
A great piece of innovation in the sports industry came through the odd inspiration of waffles for breakfast. Bill Bowerman, Nike's co-founder and athletics coach, had a moment of pure genius while seeing a waffle being made - creating a running shoe whose sole was in the same shape as that of a waffle. This "Waffle Trainer" was not only a great shoe that suited the new artificial track and field circuits but also proved to showcase Nike's internal culture that aimed to renovate the sport. The precedent was set by the "Moon Shoe" and future innovative designs like the Air Soles, and more recently the Vaporfly running shoe - all of these have the same theme in common. Shoes are made with the athletes and their performance in mind.
Strategic Offense:
"Category Offense" relates to Nike's shift from product-based operational categorization to a more sports-oriented categorization. The company shifted from using products as their focus to entire sports and fields in 2008. This entailed an alignment of the operations side and business side to better cater to their main consumers - the everyday athletes. As a retail professional, I can better understand their change of stances as they now look towards using the type of athletes who would use their products rather than using their products to match athletes. This "Category Offense" tactic has managed to launch them into greater revenues, and better designs. The same also applied to the store layouts to ensure that individuals visiting the retail outlets would have a vast array of options to choose from within the sport of their choice, further increasing profitability.
Later in 2017, Nike decided to further their profitability by shifting to a direct-to-consumer approach, dubbing this the "Consumer Direct Offense". This strategy entailed a tailor-made experience for Nike's online presence as a direct seller rather than having to go through other retailers. By removing the middleman who they would charge a wholesale fee, catering to the customer at the retail price favoured an evidently more profitable model.
Athletes as Nike's Faces:
The first real athlete that Nike, then better known as Blue Ribbon Sports, acquired as their face or sponsored athlete was Steve Prefontaine - a track and field athlete who was a star in Oregon. Over the years, Nike has gotten the very best athletes in their fields of expertise to be sponsored athletes. The list includes the likes of Tiger Woods, Serena Williams, Lebron James, Carl Lewis and Cristiano Ronaldo. The big break that Nike got was through Michael Jordan when he was a rookie, who wore the Air Jordan 1 which added great style, and exclusivity to the promised performance of the shoe. In football, Nike initially focussed on getting in the most top-level players on their payroll. Their aim was to have more eyeballs on Nike and it worked.
Enough about the past, let us take a look at how Nike continues their journey as a trailblazer in the current day and age.
How Nike is moving forward:
1) Smart Disinvestment strategy:
a. As a company:
Nike took control of the market with the help of their heavy investment in sporting personalities and acquisitions of niche competitors. Not all investments are equal though. As of now, Nike has been working towards itself, i.e., the core Nike brand. Considering this, they have already let go of Umbro and Cole Haan and seem to be flourishing in terms of focusing on the core Nike brand. This ensures increased time and efforts to go towards the brand's story, present and future.
b. Changing the Face:
Moving onto disinvestments in player faces, Nike let go of Brazilian superstar Neymar to their rivals Puma. They have been moving away from established superstars in favour of holistically branding themselves. This is partly a way to expand the brand's image without associating itself with any and every player, and partly to reduce the sense of agency. Nike obviously still holds onto a number of key players in different sports as its brand authors but has started shifting towards a more integrated approach to branding. Nike is now targeting players of the future like Kylian Mbappe and Jadon Sancho whilst letting important current players like Lewandowski and Neymar leave the company over the past 2 years.
2) Aware Marketing:
Any brand today has to be active and aware of the ongoings in the world. One may say that the world is more sensitive than ever. The world today is aware of things happening all over. Hence, the importance of moment marketing has seen an unprecedented rise. Nike has realised this to great success. Their media communications have been socially aware as well as empowering. Nike's communications are looked up to because it honours sportspersons and humanity, not just through champions but through people. Nike's emotional storytelling binds customers to the projected brand image.
One important factor that I didn't mention was a very efficient supply chain system. This was mainly because I wanted to focus on what was unique to Nike against its major competitors. Whilst an efficient supply chain is essential to any major corporation's sustenance and continued revenue margins, all of Nike's major competitors - Adidas, Puma, Asics, and Under Armour - have efficient supply chain management systems. Due to Nike's aforementioned Category Offense strategy, the already efficient supply chain received a massive boost in terms of gaining a better understanding of the consumer and how to better cater to them. This led to a more diverse yet focussed approach to product design, in turn leading to a synchronized operational model and business model. Following Nike will be a fun ride to see how the sportswear giants aim to keep up at the top and grow.
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