Nike's Global Business Management

Essay , 2022 , 15 Pages , Grade: A

Business economics - Miscellaneous

Nike, Inc., is the former Blue Ribbon Sports, an American sportswear organization whose headquarters are in Beaverton, Oregon. The company was first founded in 1964 by Bill Bowerman, a coach in track-and-field at the University of Oregon, together with Phil Knight, his former student. It opened its first retail outlet in 1966 while the first Nike shoe was launched in 1972. In 1978, it was rebranded Nike, Inc. By the end of the 20th century, Nike had established shops and distributors in at least 170 countries. Additionally, Nike's logo which is a curved mark known as the "swoosh" is recognized the world over. Since the late 1980s, the company has steadily expanded business and diversified various product lines through acquisitions of companies such as Cole Haan, Converse, Inc, sports-equipment producer Canstar sports, Inc., and athletics apparel and equipment firm, Umbro.

Part 1: Brand Creation and Management

Nike, Inc., is the former Blue Ribbon Sports, an American sportswear organization whose headquarters are in Beaverton, Oregon (Childs & Jin, 2018). The company was first founded in 1964 by Bill Bowerman, a coach in track-and-field at the University of Oregon together with Phil Knight, his former student. It opened its first retail outlet in 1966 while the first Nike shoe was launched in 1972. In 1978, it was rebranded Nike, Inc., (Goldman & Papson, 1998). By the end of the 20th century, Nike had established shops and distributors in at least 170 countries. Additionally, Nike's logo which is a curved mark known as the "swoosh" is recognised the world over. Since the late 1980s, the company has steadily expanded business and diversified various product lines through acquisitions of companies such as Cole Haan, Converse, Inc, sports-equipment producer Canstar sports, Inc., and athletics apparel and equipment firm, Umbro (Knight, 1998).

Consequently, Nike ACG was created in 1996 to specifically market products targeting some of the extreme sports such as mountain biking and snowboarding (Ramaswamy & Ozcan, 2016). The company began selling sports and technology products such as heart-rate monitors, and wrist compass for high altitudes in the early 21st century. Part of the company's success could be attributed to endorsements by renowned athletes for example Mia Hamm, Michael Jordan, Tiger Woods, and Roger Federer (Kornum et al., 2017). Nike’s chain of stores, NikeTown started operations in 1990 and has paid tribute to these and other spokespersons while providing customers many other company products (Rosenthal & Brito, 2017). Further, the company's reputation and image suffered briefly during the 1990s due to revelations of poor working conditions, particularly in offshore factories.

The Nike Brand Identity

Nike sells apparel, footwear, accessories, equipment, and services. Its name Nike is taken from a Greek goddess associated with victory (Ramaswamy, 2008). On its website, Nike records its brand has over the years delivered innovative products and services, and experiences that always inspire athletes. Bill Bowerman started as field and track coach. He was dissatisfied with running shoes during his time, something that would inspire his quest of redefining athletic footwear (Mahdi et al., 2015). Nike's original business model could be described as importation, tinkering, and sale of ready-made running shoes from Japan. In 1971, the company achieved a milestone and created a new shoe, The Cortez, a brand later called Nike. It has become a maker and designer of athletic footwear. The company has made shoes that have become a leading brand in the US and around the world (Stonehouse & Minocha, 2008). Bowerman’s vision is what became Nike and still remains the engine behind the company’s culture of innovation.

As a brand, Nike is known for the swoosh logo and its tagline that states “just do it” (Angioni et al., 2012). Today, it's among the most recognized visual brand elements. Initially, Nike’s styled version served as the company logo but was combined with a swoosh later. However, Nike started using its stand-alone as the official logo in 1995 (Chang, 2014). Carolyn Davidson designed the logo. For the better part of its history, Nike used white and red color palette on the logo. Red exemplifies energy, passion, and joy while white is purity, charm, and nobility (Rizun & Kucharska, 2018). White and black have in recent years become the two main colors the company uses in displaying its logo on its products.

Moreover, the company uses an original font which is similar to a more advanced version of Futura Family Font (Alazzawi, 2019). A closer font currently available is the Futura Condensed Extra Bold Oblique. The company’s vision and mission are about creating innovation, community impact, and sustainability. Nike's official purpose is about the unity of the world through sports, effectively establishing a healthier planet, active communities, and an equal playing field for all (Liu et al., 2021). Thus, Nike’s values include innovation, sustainability, and responsibility in sourcing, building a diverse community, and equality.

Nike Brand Awareness

This world keeps changing, recording disparities often but some key brands have always kept their top position in the industry they operate (Marques, 2020). Since its creation in 1971, Nike swoosh remains among the world's most valuable brands. The brand is well established with a strong brand identity because of its well-recognized brand name and logo. It has been easy for customers to memorize the brand name (Iglesias et al., 2020). Nike’s brand equity has been established through brand association. Some of the notable achievements for Nike include its high quality and stylish products, innovative technologies, celebration and joy in sports, self-empowerment and inspiring, maximum performance, involvement locally and internationally, and global responsibility (Ramaswamy & Gouillart, 2010).

Nike has always associated the brand with athletic celebrities and uses the same personality in branding itself (Do et al, 2015). These celebrities are winners, achievers, determinants, non-traditional, and accomplishment oriented. Additionally, the brand has capitalized on an idolised perception of the American especially for its heroes in athletics, with young people being the company's main target (Boyle, 2007). The most notable brand association that helped enhance Nike's brand awareness was its collaboration with Jordan. This association personified the company as an achiever, a successful, and an amazing brand that is top-performing. Besides, advertising, sponsorships, and experience-focus retail, there are vivid channels the company applies in enhancing its brand awareness and image (Ramaswamy & Ozcan, 2016). Nevertheless, athlete endorsements can be viewed as the most crucial for Nike's brand success.

Nike has invested millions in associating its brand name with easy-to-recognise athletes to build brand image (Kornum et al., 2017). For example, since it cooperated with Tiger Woods, Nike Golf's sales annually have exceeded $500 million and realised nearly 24 percent growth annually during the first 5 years of their agreement. Another source of Nike brand awareness has been its perceived high quality among athletes and members of the public (Rosenthal & Brito, 2017). A large market is a public who use its shoes for walking yet Nike is committed to designing high standard shoes for them. Likewise, they listen to athletes and design their shoes to satisfy the need for durability and high performance (Ramaswamy, 2008). An athlete racing to victory in Nike shoes especially in professional competitions authenticates quality perceptions by customers about the brand.

Accordingly, Nike does not follow some trends that other shoemakers such as Rebook who use garments in fabricating their shoes in place of leather since it's more fashionable but less durable (Mahdi et al., 2015). Nike has stuck with leather in fulfilling its commitment to quality. Its brand awareness has been enhanced through good relationships with customers. The relationship started way back when the company began and Knight would speak to the athletes through a language they could understand and get their feedback (Stonehouse & Minocha, 2008). Knight often met athletes in the tracks, schools, and colleges and the approach helped establish more attachment to the Nike brand and to establish brand loyalty. More expansion saw the company use "Finger on the pulse strategy" where some of its employees would hit the streets to find out what customers think about their company and the brand in order to follow their desires and track their perception (Angioni et al., 2012). Currently, Nike + website is helping build a two-way traffic engagement with customers considering customers benefit by maintaining their fitness and interactions.

Nike’s Contemporary Management

Nike management has succeeded in designing, developing, and even marketing diverse products including footwear, apparel, and other accessories (Nica et al., 2021). The company's operations involve contracting the manufacture of most products to firms located overseas. Through this strategy, Nike has attained high supply bargaining power and effectively positioned itself to market its products globally (Larson, 2011). In the US, Nike’s management has built a strong distribution network via many of its retail outlets. For instance, the company runs over 20,000 retail accounts in 110 countries where it has established operations (Choi et al., 2015). Most of the products including bats, bags, gloves, sportswear, and other equipment are usually marketed under the Nike brand name.

Nike’s success story is attributed to efficiency in the implementation of an internationalisation strategy (Nica et al., 2021). A study in 1998 of at least 132 organizations by Veronica Wong and Professor Peter Doyle revealed marketing is a core driver particularly on the performance of business enterprises. The Apparels industry in the US is large and in its maturity age because of the current slow growth rate and high fragmentation level (Larson, 2011). In addition, apparels demand in the US is satisfied by the domestic and international market. Likewise, the footwear industry in the US is experiencing significant growth mainly because of growth in demand. Further, Nike's management has created a high-level customer loyalty, which has made it a global leader in the footwear and apparel industry. To enhance its competitiveness, the management team recently diversified operations targeting the golf industry (Choi et al., 2015. It has been attained by signing Tiger Woods as its spokesperson, a renowned golf personality.

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• Course: BDM 1242
• Grade: A
• Author: MBA Armstrong Odiwuor (Author)
• Publication Year: 2022
• Pages: 15
• Catalog Number: V1237082
• ISBN (PDF): 9783346664006
• ISBN (Book): 9783346664013
• Language: English
• Tags: Global Business Management, Nike inc.