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The case is set in January 2020 and the case protagonist is John Donahoe, Nike's new CEO. Nike is the largest company worldwide in the athletic footwear, apparel, and equipment business. The case…

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  • Publication Date: Oct 26, 2019
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The case is set in January 2020 and the case protagonist is John Donahoe, Nike's new CEO. Nike is the largest company worldwide in the athletic footwear, apparel, and equipment business. The case focuses on the challenges Donahoe faces as he attempts to drive Nike to the goal of $50 billion in annual revenues by 2021. The case focuses on Nike's competition, the convergence of technology with apparel and footwear, as well as the company's corporate social responsibility issues. Donahoe has to address internal as well as external challenges. Donahoe was appointed CEO at a time when the Oregon sports and apparel company faces a number of controversies, including when Nike-sponsored athletes were caught up in scandals; the ban of Alberto Salazar, Nike's top running coach amid doping allegations; as well as continued concerns about Nike's workplace culture after an internal employee survey leaked describing the company as run by a boys club that is hostile towards women. Nike faces tough competition in all of its market, as well as along the value chain. Rapid advances in mobile technology and the development of the Internet of Things (IoT) could fundamentally change the industry. Nike is also moving further into ecommerce to offset the "Amazon effect." The fast-growing Chinese market, moreover, may provide an avenue for needed future growth.

Oct 26, 2019


McGraw-Hill Education


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nike conclusion case study

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The Radical Strategy That Drove Nike’s Pandemic Success

Nike's latest retail concept in Guangzhou, China

  • Doug Stephens

Nike Case Study Article Banner

Amid the sea of turmoil in the retail sector and the weekly waves of disastrous news, at least one brand is not merely staying afloat but thriving. Nike has not only endured the crisis but also managed to accelerate through it. But far from being the result of a desperate pandemic-induced pivot or some happy accident, the seeds of Nike’s current resilience were planted deep into its strategy several years ago.

With a big unveiling on October 25th, 2017, with his company’s stock trading at roughly $51, then chief executive Mark Parker committed corporate suicide. At least that’s what many believed at the time. Because it was on that day that Parker revealed a dramatic culling of Nike’s distribution network. Out of a roster of more than 30,000 retail partners, Parker declared that the Nike brand would focus its time, attention and financial resources on a mere 40 of them. Relationships with the rest, comprising what Parker called “undifferentiated retail,” were very publicly cut off or pared back. Where most CEOs are reticent to fire even a single customer, Parker had just pink-slipped thousands in a single day.

The crucial realisation driving the decision was that while Nike was spending billions to pump equity into its brand, sub-optimal customer experiences at the hands of lacklustre merchants were simultaneously undermining the brand’s equity with consumers. While Nike worked to convince its customers that its products were unique, they were all too often being dumped next to competing labels in a manner suggesting anything but premium or exclusive positioning.

Parker knew that if Nike was to succeed it had to partner only with those retailers that had both the means and the desire to create more fulsome Nike buying experiences. Monies and effort previously squandered on counterproductive distribution would be redirected to what Nike was calling its “Consumer Direct Offense” — a radical strategic move away from wholesale distribution announced in June of the same year.


In a growth-at-all-costs retail world, Parker had stuck a finger in the eye of both investors and distribution partners, boldly launching what Nike captioned its “Triple Double Strategy” — doubling its innovation efforts, doubling its speed to market and doubling its direct connection to consumers.

With that, the brand poured itself into direct-to-consumer sales and in 2017 established a direct-to-consumer sales target of 33 percent of total volume by 2022. By 2019, three years ahead of plan, Nike achieved that goal. In fact, by that time, Nike’s direct-to-consumer trade was achieving a percentage growth rate more than double that of its wholesale volume.

Whether anyone at Nike was conscious of it or not, the organisation had awakened to a momentous reality: that wholesale was largely a manifestation of the industrialised era of retail, a time where true scale, for any brand, could only be achieved through vast networks of indirect retail distribution. Wholesale was, at its core, a devil’s bargain that often came with commodification, brand dilution and a fracturing of the relationship with the end customer. But it was all part of a dance that virtually all brands engaged in. Not because they liked the music or their dance partners, but out of pure necessity.

Wholesale was a devil’s bargain that often came with brand dilution.

By 2017 however, technology and innovation had brought Nike and every other brand full circle, to a place where relationships with individual consumers could indeed be directly formed, nurtured and well-serviced. A time where one pair of running shoes could be made in a bespoke fashion and created at scale. Research also pointed quite clearly in favour of direct selling. A focus on direct-to-consumer sales would — according to credible studies — generate up to 86 percent more revenue than through their wholesale channels, with better margins. All while retaining brand equity and achieving superior customer satisfaction.

At the time, all brands could vividly see these opportunities beckoning. Hardly a week went by between 2017 and now that I haven’t listened to a brand bemoan its hostage-like wholesale situation. Most threatened to launch direct-to-consumer efforts. But while the majority ruminated, vacillated and procrastinated, Nike Just Did It, setting off a brand reinvention that would pay dividends years later, when they needed it most.

The Everything (Except Nike) Store

Almost exactly two years after Parker’s Consumer Direct Offense was unveiled, Nike divorced yet another customer… Amazon. Referring to its work with Amazon as a “pilot project,” aimed at giving Nike more control over grey market and counterfeit Nike items being sold on Amazon, the brand ultimately decided to sever the arrangement .

According to those close to the breakup, even becoming part of Amazon’s brand registry program couldn’t allay the endless stream of third-party merchants that, who, like a game of whack-a-mole, would get whacked, only to pop up again on the platform under a different name. Nike faced a decision. It could either continue the charade or once again reclaim the resources being dumped into Amazon, and instead redeploy them to its direct-to-consumer channel. It chose the latter and never looked back.

Flipping the Funnel

By 2018, Nike began challenging retail paradigms in the physical realm. Its new House of Innovation 000 design in New York City departed entirely from anything the brand had done before. With a deep focus on hands-on engagement and product customisation, Nike’s stores were no longer the well-lit, mini warehouses that most big box shoe stores had become. Instead, Nike was creating beautiful and dramatic stages upon which its powerful brand and product stories could be told. Customers across major cities could not only see the unique store experience but become part of it, engage in it, play and be inspired by it. By October of the same year, House of Innovation 001 opened in Shanghai. But they didn’t stop to congratulate themselves. Instead, they continued to poke at the universe, and this time on a smaller scale.

Nike’s next innovative incarnation was a concept called Nike Live, a small, local and heavily technologically-integrated retail space, the prototype for which is located on Melrose Avenue in Los Angeles. What few recognised at the time was that the store was designed to be as much a hyper-local data point as it was a distribution point. Data from in-app transactions as well as in-store experiences would be parsed and deciphered into highly localised and curated selections of products, as well as unique and technologically integrated member services, such as curbside pick-up and returns, in-store events and even free products. Most notable however was the fact that the Nike By Melrose store was converting shoppers into Nike Plus members at a pace 6 times greater than any other Nike stores. Even more stunning perhaps was the fact that customers that visited the physical store prior to buying online spent 30 percent more on average than customers who enjoyed no such physical experience.

The store was no longer the end of the marketing funnel. It was the beginning.

What Nike had locked onto was a simple yet profound idea and something I wrote about at length in my 2017 book Reengineering Retail . They realised that stores were no longer simply distribution points for products. Brick-and-mortar spaces had indeed become powerful acquisition points for customers. In fact, physical stores had emerged as the most effective means of drawing shoppers into the brand ecosystem. Once acquired, shoppers could operate across any number of channels, all elegantly woven together with branded technology. Physical stores had become a media channel and media had become the store. Where the retail industry had spent centuries using media to drive people to stores, the future would be about using stores to drive people to media. The store was no longer the end of the marketing funnel. It was the beginning. And Nike knew it.

Tech as a Tether

Unlike so many other brands, Nike’s foray into technology was not simply a table-stakes move with the goal of “omni-channel” sales.

Instead, three consistent themes rang through every one of Nike’s technological endeavours: customisation, community and content. Whether through its Nike Running or Training Club, the subtext was always clear. Individuals with unique personal goals and achievements, brought together to form a global community of athletes, fed a never-ending stream of rich, powerful and inspiring stories of human performance.

Put a different way, Nike never viewed technology as simply another channel for transactions, but rather a means of creating an ongoing connection with their customers, while also connecting their customers to the community. The simple goal being, to create a specialty app that is so good it gets real estate on home screens. With over 100 million Nike+ members, logging billions of hours of workouts, and an in-app average spend that is three times greater than on, it’s was clear that the company and its app developers had hit the mark.

The True Product

In October of 2020, Nike competitor Under Armour announced that, like its swoosh-brandishing nemesis, it too would begin to trim its wholesale customer counts. As Nike had done three years earlier, Under Armour declared that it would exit thousands of its wholesale agreements to redouble its focus on its direct-to-consumer channel.

But what Under Armour will learn, if they don’t know it already, is that the foundation of Nike’s success extends far deeper than simply exiting or reducing wholesale relationships. Their resilience has much more to do with what Nike, unlike most apparel companies, sees as being its core product.

For most brands, the product is very clearly the physical objects they sell: shoes, apparel and accessories. For Nike it’s something much bigger. It’s about powerful human ideas. When we buy Nike, we’re buying into a cultural story. It may be a story about social justice and equality. It may be a story about perseverance against the odds, as was the theme of their memorable Find Your Greatness campaign. Or it may be a story about the many failures we all (even legends like Michael Jordan) experience en route to victory.

Nike is, above all else, a master storyteller that also happens to make well-designed products; products that become an emblem declaring one’s cultural alignment with the brand. The actual things Nike sells are simply the outward symbolism of that cultural affiliation. Thus, the relationship with a brand like Nike becomes transformational where the relationship with brands like Under Armour remains purely transactional.

Today, amid the pandemic, Nike’s stock sits at roughly $135 per share, a 150 percent increase in value since Parker’s momentous announcement in 2017. While Nike could never have predicted the pandemic, the decisions it made almost four years ago, have powered its performance through it and provided a roadmap for others.

The lessons for retailers across categories are clear. First, no single customer or level of sales volume is worth sacrificing your brand. The brand is really all you have. Second, direct-to-consumer sales aren’t a departure from the norm but rather a return to the way retail was done for millennia. Wholesale was the aberration.

Moreover, the true (and perhaps only) value of a brand rests in the power of the stories it tells. Lose the story and you lose the brand. Lose the brand and you lose everything. And lastly, while media in every form is now “the store,” physical stores have become the most powerful media channel on earth, real life stages from which those unique brand stories can be told.

Doug Stephens is the Founder of Retail Prophet and the author of three books on the future of retail, including the forthcoming ‘Resurrecting Retail: The Future of Business in a Post-Pandemic World.’

Related Articles:

Inside Nike’s Radical Direct-to-Consumer Strategy — Download the Case Study

Despite Setbacks, Nike Is Scoring with Direct-to-Consumer ‘Offense’

Why Branding Matters Now More Than Ever

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Nike: An Innovation Journey

  • First Online: 29 November 2017

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  • Michelle Childs 5 &
  • Byoungho Jin 6  

Part of the book series: Palgrave Studies in Practice: Global Fashion Brand Management ((PSP:GFBM))

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Nike is an American multinational company that has evolved to become a global leader in athletic wear with annual sales exceeding $21 billion in 2016, more than half of which is attributed to international markets. Since its inception in 1964, Nike has been an innovation leader in product development, marketing and consumer experience. Due to a dedication to continuous innovation, Nike has been able to sustain a competitive advantage within the athletic apparel and footwear marketplace. This case highlights key points in Nike’s journey of innovation and examines how Nike has successfully emerged as a global champion within the athletic wear industry. Based on these analyzed strategies, this case provides implications that are relevant for practitioners and academics.

  • Athletic wear
  • Product development innovation
  • Marketing innovation
  • Consumer experience innovation

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In 1928 in Chicago, IL, Cole Haan was established by two founders—Trafton Cole and Eddie Haan. The company focused exclusively on men’s footwear before expanding into women’s footwear in 1979 (Shoemetro, 2016 ).

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With roots in beach culture, Hurley was established in Southern California in 1999 by Bob Hurley. Initially, it was known for surf-related products but eventually became a youth lifestyle brand (Transworld Survey, 2002 ).

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Department of Retail, Hospitality, and Tourism Management, The University of Tennessee, Knoxville, TN, USA

Michelle Childs

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Byoungho Jin

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Childs, M., Jin, B. (2018). Nike: An Innovation Journey. In: Jin, B., Cedrola, E. (eds) Product Innovation in the Global Fashion Industry. Palgrave Studies in Practice: Global Fashion Brand Management . Palgrave Pivot, New York.

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Mix With Marketing

Nike Marketing Strategy: The Case Study (Just Do It)

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Nike is a popular and leading shoe brand serving its customers for around more than 3 decades has an amazing story from the past. Here in this article, we will discuss the marketing strategy and a detailed case study of the popular shoe brand Nike.

Table of Contents

Nike Just do it: a hymn to daily challenges

More than forty years have passed since the first shoes with the famous mustache appeared on the market, but Nike’s success does not stop. The Oregon company continues to lead its competitors with annual sales of close to $30 billion and growth of 10% over the past five years. The brand is unstoppable, just as customers want it to be unstoppable by wearing their shoes during sports. ‘ Just do it: Nike’s motto has been the same for almost three decades, and it will remain so for a long time to come.

It perfectly represents not only Nike’s consumer community but also the company itself, simply and quickly. By the way, recently it turned out that this slogan was proposed by advertiser Dan Wieden , who was struck by the last words of a death row inmate in Utah. “Let’s do it,” 

In a somewhat grotesque sense, the man had accepted his latest challenge. It was a short step from here to the famous ‘Just do it: The goal of Nike’s marketing strategy is, in fact, to make its products real allies in their consumers’ daily fitness struggles .

The principal was running and waffle

The way they came to market strongly and positively influenced Nike’s subsequent marketing strategy. The landmark, odd to say, was a waffle maker.

It all started when University of Oregon coach Bill Bowerman founded Blue Ribbon Sports with his athlete (Philip Knight). In addition to training some of the best American athletes and trading sneakers, Bill also developed an interest in running, a practice that was unpopular at the time.

He examines, he observes, he proposes: in 1966, together with a cardiologist, he publishes the book Jogging, which is today seen as the launch pad of the running craze that swept the United States in the 1970s.

The importance of creativity (and storytelling)

nike shoes case study - Mix With Marketing

Meanwhile, relations with Onitsuka, the manufacturer of the Tigers, begin to deteriorate: Bill is convinced that thanks to his running knowledge, he can do better and design and manufacture better, lighter running shoes. to guarantee athletes the highest performance. And at this point, in the early seventies, Blue Ribbon Sports changed its name to Nike ( referring to the mythological winged personification of victory ): The company, previously a simple sneaker distributor, has thus become a manufacturing company.

History tells us that the first soles designed by Bill were made through his wife’s waffle maker: Nike’s marketing strategy does not fail to evoke this humble yet brilliant origin at times. They didn’t eat waffles at Bill’s house anymore for several months, but that little sacrifice was definitely worth the candle.

Today, his company is actually worth $71 billion

$19.7 billion brand.

Nike Moon Shoes , the first product released under the umbrella of Nike , were developed from a handmade model printed with a waffle maker . Compared to current offerings, the simplicity of these shoes disarms: however, what will be the spirit of the company is already in this first running product, for which the famous ‘mustache’ was also created. we know today.

The creator of the symbol was a design student with a salary of $35 . It’s interesting and shocking to note that today this brand is worth $10.7 billion , and without it and under another name, the company’s value would drop from its current $71 billion to $52 billion . long on the value of a good designer in the birth of a business.

Nike’s marketing strategy before marketing

Nike marketing strategy case study

Nike running shoes hit the market at the very beginning of the running era, which Bill Bowerman’s book initiated and caused, at least in part. Was it a coincidence or was it the first bold move in Nike’s successful marketing strategy? Neither, or rather a bit of both.

What we need to understand is that Bowerman did not publish this book, among other things, to sell his product, which was conceived and brought to market only years later.

No: He wrote that brochure because he really wanted to promote running and its health benefits. Of course, this wasn’t a very witty snippet of Nike’s hypothetical, newborn, or even early marketing strategy, but it could have been, nonetheless, especially given the results it brought.

By Michael Jordan and the Beatles

However, from then on, each Nike marketing strategy was deliberately and rationally designed: as early as 1973, for example, the company signed its first sponsorship contract with a tennis star, Ilie Nastase . Since then, the faces of athletes that Nike has incorporated into its products are innumerable.

First of all, we all know Michael Jordan: In 1984 the most famous basketball player became the brand’s flagship man, sponsored by ‘ Air Jordan ‘, a line of apparel and footwear for basketball that he still bills to the company. with $2 billion every year.

Air Jordan’s first promotional release

Nike marketing strategy air jordan

Nike even managed to use a Beatles song for a television commercial on the occasion of the 1987 Air Max release to give more power to its marketing campaign : no one from Liverpool had ever managed to brag about a song by the band. commercial. The impact of this ad was enormous: imagine the Air Max line still being produced. To date, there are more than 40 models.

Focus on customers also through social media

Jordan, Ronaldo, Ibrahimovic, McIlroy: Over the years there have been many prestige faces to Nike’s marketing strategies, as mentioned, but the core message has never changed. Even better: from the seventies to the present, the brand’s voice and identity have remained true to themselves, always putting consumers’ needs before their products.

The aesthetics of communication have changed, and the media to convey their message to has multiplied, but the brand has never betrayed itself or its customers: take a look at the official Nike pages on the social network to understand this. The way the company interfaces with Facebook or Instagram shows that its presence on those platforms isn’t driven by new and shiny business goals: no, Nike is on Instagram because their customers are there too.

And communication on these pages is not limited to an aseptic commercia l offer, it is far from it: each post is designed and created to convey something of value to the user-consumer. So, in the spirit of the company, Nike’s social updates are mostly motivational messages for their athletes – yes, Nike’s philosophy is that anyone with a body can be an athlete too. That’s why the focus of corporate branding remains on helping clients do what they love to do best, whether it’s running, playing basketball, soccer, or tennis, anytime and in any situation.

Beyond shoes: technology to be closer to the consumer

Nike marketing strategy closer to consumer - Mix With Marketing

Athletes first, shoes second: this is the mantra of Nike’s marketing strategies , and it was this thinking that prompted the company to launch Nike, the first mass-produced high-tech product , in 2006. + iPod Sports Kit. It was a risky move designed to set the company firmly apart from its competitors: Once again, and more than ever in digital devices, the focus was on athletes rather than shoes. The kit allowed to measure the distance and speed of the race.

Oddly enough , yes, the product was Nike in every way, but everything was actually made by the iPod. Nike, on the other hand, was content to sell a chip to have ideas and put them in shoes, and a device for wireless connectivity.

In short, in this case, the partnership with Apple can be considered the best possible partnership. Over time, Nike+ devices have improved upgrade after upgrade, giving up first the iPod and then the chip: in 2010, everything was replaced by an iPhone ap p, and more than 6 million people are connected to a virtual community where they can analyze and share their sports. achievements.

In this way, as a complement, Nike had the opportunity to get closer to its customers, examine them closely, and communicate with them frequently. This technological lea p, which established a permanent relationship with the consumer, also made it possible to reduce advertising costs by 40% without compromising sales figures.

Nike’s goal

The final piece of Nike’s marketing strategy for a phased approach to the customer is the FuelBand bracelet , which calculates energy, and therefore – approximately – calories burned throughout the day. To make the data collected by the bracelet more reliable, Nike has created an online platform where customers can compare their energy consumption. Therefore, the athlete is in the center, the product is on the side, and the brand is always ready to motivate its consumers/athletes more.

This long-term strategy is explained above all by looking at the origins of the brand: it was born for running, not for team sports. That’s why Nike’s goal is the lone and even somewhat unruly runner who at times runs aggressively to overcome their physical and psychological limitations. The effectivenes s of this message was so effective that it persisted even as these lone athletes entered a community fueled by Nike through social media , which continues to differentiate the brand from its competitors.

Conclusion: selling shoes without selling shoes

That’s why the history of Nike’s marketing strategy teaches that in order to properly launch a product, it is necessary first and foremost to understan d what consumers need.

Once their desires are understood, a marketing campaign can be created through their products that can provide all possible solutions. For example, Nike realized that people needed a new way to stay fit, not shoes, so they offered to help them achieve this by selling shoes.

In addition, Nike’s marketing strategies teach that every consumer communication act of a company must create value, especially over the web: if you’re not solving problems, not providing real answers if you’re not helping your business. to improve the daily lives of viewers, then you inevitably have the wrong approach.

Marketing isn’t just about selling your product, or at least on the surface: Bill Bowerman didn’t start an empire by selling shoes, but by selling the art of running to customers who responded by purchasing billions of Nike Moon Shoes and by Air Max .

Other Related reads:

Electronics Giant Apple (Think different) Marketing Strategy

Puma Marketing Strategy Between Competition & Sponsorship

Red Bull Marketing Strategy: The Case Study

A go through into the marketing strategy of Starbucks

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