Why Nike Is a Marketing Genius : NIKE’s Unusual Business Strategy | The Nike Business Case Study

How Nike Built an Empire

Despite being one of the most well-known brands in the world, Nike was actually just one of many companies founded by Phil Knight and his team. In 1962, Knight started Blue Ribbon Sports with his former track coach and two other University of Oregon students, and together they began selling athletic shoes out of Knight’s father’s basement in Oregon. The early years were not easy on the company: during its first decade in business, Blue Ribbon lost over $1 million dollars on sales of less than $20,000 per year.

A brief history of Nike

This story starts in 1960, When two people “Phil Knight & Bill Bowerman”, Together starts a shoes trading company. This partnership for a shoe company was very good. Because Phil did MBA in Finance. And during his college days, he was an athlete. And there on the other side, In Phil’s college, Bill was his college coach. So from start, He has good knowledge about running fields & shoes. Phil, A Japanese company named “Tiger” Who manufactures shoes, To sell their shoes in the US market they approached him. And luckily, They give Phill Exclusive contract of selling their shoes in US market. After this deal was final,

Phil goes to Bill And starts a company named “Blue Ribbon sports” In the start, they imported shoes from japan, And store them in their storerooms And started selling them in their cars. Some years passed, After some years they opened their store. The business was successful but not scalable. Because Japanese people, The remaining shoes that left after fulfilling their own demand, They use to export that to the US. Because of this NIKE was not able to expand the business. Because their demand was not fulfilled. And finally, that year arrived, In 1972, by raising money from a Japanese trading company, They both started the brand name “NIKE”. 

How Nike became successful

The company first started by importing Onitsuka Tiger running shoes from Japan. From the beginning, they were committed to making the best product possible and improving athletes’ lives through their footwear. They also had a long-term perspective on how their success would grow, so they invested heavily in research and development. 
Nike’s business model was simple: create the best product for athletes, sell those products at a fair price, and provide world-class customer service with honesty and integrity. When it came to marketing their products, Nike relied on endorsements by famous athletes like Michael Jordan, Tiger Woods, and Maria Sharapova as well as strategic partnerships with professional sports teams to build awareness of their brand.

How Reebok Defeated Nike 

Everything was fine, except for one glitch. The issue was that running was a fairly popular sport until the late 1970s. And NIKE’s whole line was solely for running shoes. And until 1983, this market was becoming saturated. Nike’s sales have ceased. Their earnings were declining. At the same time, a massive bomb burst. Reebok was NIKE’s main rival at the time, and they released freestyle aerobic shoes. As soon as these shoes arrived, people began moving from running to aerobic. And the popularity of these aerobic sneakers changed everything for NIKE in an instant. People used to adore NIKE, but now no one asks about them. And Reebok’s sales rose to the point that it became the world’s leading athletic brand.

NBA Banned Nike shoes in NBA Matches

The Air Jordans were gleaming crimson. They looked fantastic. However, the NBA has prohibited the use of Air Jordans. But, you know what, Nike was so astute that they took advantage of the situation. Following this occurrence, NIKE produced a commercial starring Micheal Jordan. “The NBA kicked us out,” he said, “but you don’t have to be a member of the NBA to wear Jordans.” And this commercial was a tremendous smash. Because Air Jordan sneakers were extremely limited edition. And now that they’ve been prohibited, they want more of it. Finally, in 1985, Air Jordan was made accessible to the public, and within three days, all of the sneakers were sold out. This is where Air Jordan’s success may be found now. After only two months on the market, Air Jordan has sold more than 70 million dollars. And by watching NIKE announce a 10-year deal extension with Michael Jordan. Whenever he promotes, he just promotes NIKE sneakers. Following that, NIKE struck more exclusive partnerships with sportsmen in the following years. The lifetime contract of Michael Jordan, Tiger Woods, LeBron James, and Ronaldo is worth one billion dollars.

Why Nike Is a Marketing Genius : NIKE's Unusual Business Strategy

The Nike business model

Nike’s business model focuses on designing footwear and clothing for the athletic market. They also have a deep understanding of how to brand themselves, which is evident in their slogan, Just Do It. For example, their now-famous swoosh was created by Carolyn Davidson when she was only a student at Portland State University. The company has since developed into one of the world’s largest and most profitable sporting goods manufacturers. They offer products that are affordable and well-made; their shoes are made with quality materials such as rubber soles, leather uppers, cotton laces, nylon netting and cloth linings. Nike shoes come with cushioning or support that is necessary for athletes’ activities like running or basketball. With great design coupled with functionality and affordability, it’s not surprising that Nike has grown so quickly in the sports industry . In 1979, after the huge success of its Nike Shox shoe line, Nike expanded its manufacturing capabilities by building a new factory outside Portland called Niketown USA. In 1983 they ventured into apparel and soft goods production. That same year they introduced sweatshirts bearing the famous ‘swoosh.’ It wasn’t until 1986 that Nike opened its first store outside Portland : Nike Town in San Francisco. These stores are more than just retail outlets for merchandise; they include spaces for children’s play areas, clinics where customers can be fitted for shoes, and conference rooms where athletes can train and compete with others on specialized equipment from top brands like Wilson and Reebok.

The Nike marketing strategy

Nike has a strong brand and marketing strategy. They believe in the power of advertising, but they also know that it’s important to create a relationship with the consumer. The company spends billions on advertising, which is largely how they’ve become one of the most recognizable brands in the world. However, they also invest in ways to make their customers feel like they’re part of something bigger than just buying shoes. One way they do this is by hosting races where customers can enter for free and then buy apparel from the store if they complete the race successfully. Another example is Nike+, which allows people who are training to track their progress, share photos and connect with others who share the same goals.

The Nike brand

The company’s initial focus was on importing Japanese sneakers to America, but soon they created their own line of footwear. In 1971, the company changed its name to Nike after the Greek winged goddess of victory. The first Nike retail store opened in Oregon in 1990; by 1995, there were more than 100 stores across North America. 
Nike has been a leading innovator of athletic footwear and apparel since day one. From signing Michael Jordan to a groundbreaking endorsement contract in 1984 (one of the first ever) that catapulted both Nike and Michael Jordan into global stardom, to creating revolutionary shoes like Air Force 1 (1982), POGUE ONE (1994), AIR JORDAN III (1987), SPARQ CUSTOM TRACK SUIT (2008) , NIKE MAGISTA TOUCH PROXIMO IIIC ADVANCE-2 MESSI NEGRO – BLANCO TOTALCAMBIO COMPOSITE WINGPRINT KEVLAR SOCCER CLEAT BLACK-WHITE-BLUE-PINK EUROPEAN UNION, THEY HAVE INNOVATED ON QUALITY AND PERFORMANCE.

Business Lessons 

1. Your foundation defines the strength of your business.

The most significant function in establishing the foundation of every organisation is the “Business structure,” like NIKE does. Simply put, one employee is responsible for more than one management. For example, if you are a sales supervisor, you will notify the sales director as well as the footwear head if there is an issue. This little detail expedites communication inside the company. As a result, every problem is resolved swiftly. And the consumer receives excellent service. In reality, NIKE shifted their structure from product base to category best in 2008. Nike now primarily supports four sports divisions. Running, international football, basketball, and training

In reality, NIKE’s shop layouts are built such that whether you buy shoes or not, if you’re in the store, you’ll buy something.

2. Learn to accept sometimes you are ahead, And sometimes you are behind.

Ego has no place in business. It is not a terrible thing to have competition. However, we must constantly understand that we will be ahead of the competitors at times and behind them at others. When NIKE was defeated by Reebok, they admitted that they were behind the times. They had to improvise. And today, where is NIKE and where is Reebok?

3. Learn to make a castle with every stone thrown at you.

In life or in business Stones will constantly be thrown at you. Criticism is a necessary part of the process. NIKE has been through a lot. They were prohibited in the NBA. Or people began burning their shoes and protesting. They were also stripped of their Olympic sponsorship. NIKE, on the other hand, saw a chance in every problem. And NIKE’s profit from all of these instances That much was never accomplished through conventional processes.

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