Nike's Marketing Strategy and Sustainability

This assignment delves into Nike's comprehensive marketing strategy, examining their digital marketing initiatives, brand image, and consumer engagement tactics. It further analyzes their approach to sustainability, including supplier audits, ethical sourcing practices, and environmental impact reduction. Students are expected to evaluate the effectiveness of these strategies, considering their influence on consumer behavior and identifying potential challenges and future directions for Nike.

Running head: STRATEGIC MANAGEMENT & MARKETING
Strategic Management & Marketing: NIKE
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STRATEGIC MANAGEMENT & MARKETING
Executive Summary
This report tries to analyze the management and marketing strategies of the leading footwear
company Nike, Inc. in the initial part the report tries to explore the background and existing
business performance of the company based on their current strategies. Then the report explores
its mission, vision statement, products, management structure and future plans in order to
understand how the management strategies work within the organizational structure of Nike.
Next part explores the SWOT, PESTLE and Five Porter Forces of the company that highlights
the various factors that influence the company’s business strategies. The key strategic issues are
explored and analyzed. The recommendation part suggested how the company by implementing
certain technological and effective business strategies can sustain their successful business
performance.

STRATEGIC MANAGEMENT & MARKETING
Table of Contents
Introduction......................................................................................................................................4
Strategic Foundations......................................................................................................................5
Mission Statement.......................................................................................................................5
Vision Statement..........................................................................................................................5
Strategic Managers......................................................................................................................6
Products.......................................................................................................................................6
Future plan...................................................................................................................................7
PESTLE analysis of Nike................................................................................................................8
Political Factors...........................................................................................................................8
Economic Factors........................................................................................................................8
Social factors...............................................................................................................................9
Technological factors...................................................................................................................9
Legal aspects..............................................................................................................................10
Environmental factors................................................................................................................10
SWOT Analysis of Nike, Inc.........................................................................................................11
Strength......................................................................................................................................11
Weakness...................................................................................................................................11

STRATEGIC MANAGEMENT & MARKETING
Opportunities.............................................................................................................................12
Threats.......................................................................................................................................12
Five Porter Forces for Nike, Inc....................................................................................................13
Suppliers’ bargaining power......................................................................................................13
Buyer’s bargaining power..........................................................................................................14
Threat of substitute....................................................................................................................14
Threat of new entrants...............................................................................................................14
Competition Rivalry..................................................................................................................14
Key Strategic Issues.......................................................................................................................15
Struggling Apparel Business.....................................................................................................15
Losing demand for certain products..........................................................................................15
Woman products market............................................................................................................15
Recommendation and conclusion..................................................................................................16
Non footwear products and manufacturing casual footwear along..........................................16
Building professional relationship............................................................................................16
Internet and social media...........................................................................................................16
Remuneration and rewards........................................................................................................16
Reference.......................................................................................................................................18

STRATEGIC MANAGEMENT & MARKETING
Introduction
Nike, Inc. is an American footwear manufacturing company that does business
worldwide. 47% of the global sports shoes market is covered by the company and it is at the top
of its business. The company generated 6% more revenue in 2016 than 2015 as total amount of
32.4 billion dollars were earned from worldwide revenue. In 1964 Phil Knight and Bill
Bowerman founded the Blue Ribbon Sports that transformed into Nike in 1972 (Gibson, 2012).
The company effectively promotes a strategic management and marketing campaign that
primarily focuses on innovating and inspiring athletes’ shoes (About.nike.com, 2017). The
organization operates in 700 stores in 45 countries outside USA. Their marketing strategies
focus on maximizing the number of buyers so they offer various ranges of products for diverse
number of people of different ages and background. Though the company promotes that
everyone is an athlete and their products are suitable for everyone but the price ranges mostly
highlights that the company aims for the high income groups. Reebok and Adidas are two main
competitors in the footwear market that demonstrates high competition for the company (Team,
2017).

STRATEGIC MANAGEMENT & MARKETING
Strategic Foundations
Mission Statement
Nike, Inc. is leading the global corporate market in the footwear manufacturing area
through their programs that are values their service providers, stakeholders, employees and
customers. Nike claims to be the biggest seller of sports footwear in the world (Kell, 2016). The
company acts as competitive enough in all the necessary areas footwear competition like
reliability, price, product, quality, marketing, promotion, customer- employee support and
performance. The mission statement of Nike says "To bring inspiration and innovation to every
athlete in the world."The mission statement echoes what the founder Bill Bowerman said “If you
have a body, you are an athlete.” The strategic goal of the company is well reflected by their
mission statement as it aims to reach out to maximum number of global consumers with their
sports apparel, shoes and equipments (Brohi et al., 2016). The analysis of the mission statement
highlights that the main three components of the mission statement are innovation, inspiration
and satisfying every athletes in the world. The management leadership sets a winner mindset for
all the team members through their inspirational goal that reflects the slogan “Just Do It”
(Anegon, 2014). Company strategic management involves continuous improvement of their
service through applying innovative technologies and bringing new products at regular intervals.
Vision Statement
The company is also careful about its corporate social responsibilities as the CRS vision
highlights that Nike is working in order to develop a sustainable economy that keeps the balance
among the profit, people and planet (Newell, 2015). The company highlights that in the process
of achieving desired sustainable profit the consumers takes a major role. The vision statement

STRATEGIC MANAGEMENT & MARKETING
can be broken down in three parts where the initial part focuses on the consumer importance and
satisfaction, then the stress is on the sustainable economy and third part is keeping the balance in
the business (Teckchandani & Schultz, 2014). The company ensures that it is not just the
company that benefits from the business but everyone gets the benefits as well.
Strategic Managers
Nike, Inc’s Board of Directors includes multiple internal and independent directors like
Philip Knight as chairman, Mark Parker as CEO and other independent directors like Timothy
Cook and John Donahoe (Investors.nike.com, 2016). There are both independent directors and
management directors present in the board of directors of Nike, Inc. the combination of both
kinds of director helps the company to gain internal and external experiences (Burgelman, 2015).
The outside helps the company to implement experiment and encourages the management to
think outside the box. In the formulation and implementation of the designed and proposed
strategies the board of directors plays the most significant role.
Products
Nike, Inc. produces various sports foot wears, sports related lifestyle apparel and other
sports equipments. The initial product was just the running shoes but now the company makes
shoes, shorts, and jerseys for various sports like Cricket, Football, Basket Ball, base ball and
Hockey. Few most popular products by the company are Nike 6.0, Nike Air Max, Air Jordon and
many others (Store.nike.com, 2017). The brand related itself with premium performance. Nike,
Inc owns various other important companies like Converse, Hurley X, Jordon, Cole Haan and
Bauer Hockey they together cover a significant part of the company annual revenue.

STRATEGIC MANAGEMENT & MARKETING
Future plan
By 2020 the company aims to generate 50 billion of revenue. In last 5 years Nike, Inc has
increased its sales revenue by 18 billion as it reached to 30 billion in 2015, therefore almost 4
billion sales increase in each year (Forbes.com, 2017). The company had set their goal of 36
billion revenue for the year 2017 which is about to get fulfilled as predicted by the market
analysts. The management has employed Adam Sussman as their first CDO or Chief Digital
Officer who the company expects that will help to increase the revenue in e-commerce by 6
billion by 2020 (GalbRaith, 2014). The company has designed various apps like Nike+ and other
fuel band apps that will help them to maximize the customer satisfaction through measuring it
properly. The women’s apparel is another area where the company aims to grow to 11 billion
within coming 4 years.
Figure: Nike’s financial growth (Source: Sec.gov, 2014)

STRATEGIC MANAGEMENT & MARKETING
PESTLE analysis of Nike
The macro environment which is external to any organizational structure is evaluated and
scanned through the PESTLE framework (Gillam & Siriwardena, 2013). Factors like political,
social, economic, technological, environmental and legal form the PESTLE framework.
Political Factors
For any large organization the political factors play signification role in their survival and
performance. The home country of the company that is USA government has always engaged in
growth oriented policies that helped the company to get benefitted from the nation’s market. The
American Government incorporates tax arrangements that are suitable for international
competitive market, stability in currency exchange and the effective low interest rates
(Whitehead, 2012). The government support is ever improving and supporting the organizational
infrastructure. The free trade policies are expanding as well that helps the company to utilize the
opportunity well (Houlihan, 2013). Most major markets where the company operates are
politically stable that helps the company to business smoothly. However as Nike manufactures
and sells physical materials, the changes in manufacturing or related tax laws are capable of
affecting the business. The rising political conflicts in certain countries affect the process of
importing and exporting difficult.
Economic Factors
The business performance of Nike, Inc. largely depends on the economic stability of the
business location. There are three aspects of the economic domain that influence the company’s
performance. The developed market like the economy of USA provides the company with
economic stability that develops a sustainable economic opportunity for the company (Summers,
2014). The developing countries like India is growing rapidly that creates opportunity for the

STRATEGIC MANAGEMENT & MARKETING
company financial benefits as well (Maddison, 2013). However the Chinese economy’s
fluctuation proves the company to become a threat for the company (Lu, Liu & Rahman, 2017).
The company utilizes the ever growing consumer demand through establishing brand equity. The
local labors are given financial opportunities in underdeveloped nations by providing job
opportunities and maintaining corporate social responsibilities (Whitehead, 2012).
Social factors
The world wide social awareness regarding health consciousness ensures the demand for
the sports foot wears are ever increasing (Tilman & Clark, 2014). The public wealth is expanding
in the developing countries which are creating great opportunities for the company. In the Asia
Pacific regions the company has exported most of its manufacturing. The use of labors with
minimum wages including children affected the company reputation and CSR (Plambeck &
Taylor, 2015). To resolve and minimize such issues the company has engaged itself in greater
transparency in keeping the manufacturing and human resource records and provides certain
facilities to the manufacturers of certain locations. Also the company had published
“Memorandum of Understanding” that clarifies its objectives and conducts to its subcontractors
and suppliers (Child, Rodrigues & Tse, 2012). In the modern globalized era of internet any
wrong doing or ethical misconduct is likely to reach global public rapidly.
Technological factors
Nike, Inc. is incorporating innovative technologies in their marketing activities in order to
ensure the sustainability of the good performance. The website like Nike iD assist the consumers
with the opportunity to compare the foot wears at various prices and help them to choose the
most suitable one (Yu & Park, 2014). The website has proved to be the top personalization
website in the sports wear industry (Nike.com, 2017). As the world has transformed itself into a

STRATEGIC MANAGEMENT & MARKETING
more digital based system so the online payment system via mobile phones, help the company to
achieve more customers (Purkayastha & Rao, 2015). The digitalization enhances the work speed
but also capable of reducing the employment and deteriorating the organizational work force.
Legal aspects
In countries like USA or UK the legislative framework is common for the whole nation
so the organization has to face less intervention from the government in their organizational
activities. However in countries like France or Germany the states operate in code based legal
systems so the organization there has to consider interests of wider stakeholders (Legendre &
Coderre, 2012). The health-safety regulations and the consumer laws are expanding in the
developing countries that are creating better opportunity for the company to perform better in the
developing countries. The legal challenges from the past help the company to analyze certain
situation and take precaution from any legal damages (Jennings, 2015).
Environmental factors
Most European countries and USA and in countries like Japan the environmental
consciousness is really high. Nike, Inc. appointed multiple sustainability champions who are
responsible to monitor the elimination of wastes and carbon emission in their projects in the
home country and in the overseas (Kaplan & Montiel, 2016). Most countries where the company
is operating are improving and expanding their environmental laws that create huge opportunities
for Nike. The climate changes also affect the lifestyle of the people that is potential to increase
the demand of the company’s products.

STRATEGIC MANAGEMENT & MARKETING
SWOT Analysis of Nike, Inc.
Strength
Nike has always proved to be a highly competitive organization with their innovative
management and marketing strategies. The “just do it” slogan is reflects their strong attitude
towards the business for maximizing the profit (About.nike.com, 2017). The company does not
own any manufacturing unit as it outsource all its manufacturing activities overseas that helps
them to gain maximum human and material resources at the cheapest price. By saving the high
labor cost the management focuses more on the research and development for innovating and
improving new services. The brand of Nike is globally recognized which proves to be a great
strength for the company. The consumers trust easily on the brand so do the stakeholders. The
resilience and quality of the Nike products is well known to the athletes and to the common man.
When its competitors suffer from the market fragmentation the Unique Selling Proposition of the
company helps it to race ahead of its competitors.
Weakness
The company majorly depends on the footwear this might prove to be problematic for the
companies as dependence on limited service makes the options for revenue generation are
limited. The outsourcing of manufacturing is strength for the company, but Nike, Inc has often
being criticized because of its labor management in foreign countries (Baldassarre & Campo,
2014). The sweatshops or the sweat labors have criticized by the global media that affected the
companies brand image. The company has not included retailers that are exclusive as their
business strategy but the retailers play major role in the business so the exclusivity might get
sacrificed. The products are often been criticized as too premium or expensive.

STRATEGIC MANAGEMENT & MARKETING
Opportunities
In the emerging markets of India and China Nike is seeing greatest opportunity to expand
its business. The consumers in such developing countries are in billions of number who are
adapting western lifestyle increasingly (Sun, D’Alessandro & Johnson, 2014). This provides the
company great platform to expand their business. The company is also expanding their business
in various other products going beyond just the foot wear and producing other diverse products.
The company engages in continuous modification of the existing designs that also creates great
opportunity for business expansion. The affordable price products are being offered by the
company though in limited numbers which bringing newer consumers to the company.
Threats
The trade laws and practices in the international market greatly influence Nike’s
international business. The international trade laws and regulations are subject to change so the
changes can prove to be threats for the company. The unethical business practices affected the
company’s reputation and brand and as the company performs on a global scale the similar
issues can arise. The competitors like Reebok or Adidas are also capturing the global market
rapidly that is becoming bigger threat for the company.

STRATEGIC MANAGEMENT & MARKETING
Figure: SWOT Analysis of Nike, Inc. (Source: Made by Author)
Five Porter Forces for Nike, Inc.
Suppliers’ bargaining power
The suppliers’ bargaining power in the case Of Nike is low. It operates in more than forty
five countries in more than 700 stores but the individual suppliers are not strong enough
compared to the company. That reduces the challenges from the supplier for the company.
Nike’s RSL or the restricted substance list and the codes and conducts have to b obliged by the
suppliers.

STRATEGIC MANAGEMENT & MARKETING
Buyer’s bargaining power
Buyer’s bargaining power is moderate for the company. The consumers’ switching cost is
low as there are other influential companies like Adidas and Reebok or Puma but there are other
local brands as well. However the quality of the company’s product is well known to global
consumers.
Threat of substitute
Threat of substitute is high for Nike. There are large numbers of competitive brands in
the market. There are competitors like Fila, Puma, and Converse, Under Armour, New Balance,
ASICS, Li Ning and K-Swiss. Except the main competitors Nike is experiencing challenges from
substitute sports footwear that are cheaper and gaining popularity.
Threat of new entrants
Threat of new entrants for the company is low to moderate. The company is quite
influential in the global market however there are still requirements that are yet to be fulfilled. Te
competitors might take advantage of it. However the supply chain management requires huge
investment that is in favor of the company. For a new entry it is quite difficult to create such
level of brand easily.
Competition Rivalry
Competition rivalry is strong for Nike in both home and international market. The other
two top sports footwear companies that are present in the market are Adidas and Reebok (Team
2017). Adidas earned revenue of more than 19 billion where Reebok earned 3 billion (Adidas-
group.com 2017). Though the strong rivals are in fewer numbers but they are expanding their
business fast as well.

STRATEGIC MANAGEMENT & MARKETING
Key Strategic Issues
Struggling Apparel Business
The apparel industry in this case the apparel related to sports or footwear is struggling in
global market. The consumers in most countries do not want to spend much money on
purchasing apparels. The apparel stores of Nike are suffering the challenges as well. A recent
report by Morgan Stanely demonstrated that the growth in the apparel stores will decrease by -
5% (Botter, 2017).
Losing demand for certain products
The company has created its brand over the years mostly based on certain high quality
products like Nike Air Jordon shoes. However the demand for the most popular products are
getting decreased day by day as the style is considered to be out of style and the newer
substitutes are failing to match their standard. Like the apparels for basket ball is alarmingly
losing its popularity.
Woman products market
The woman products are facing more challenges as many companies only produce these
products focusing more on the better quality and cheaper price. The companies like Lululemon
or Under Armour are dominating the global market in most of the global market in this domain
other niche brands like Bandier or Sweatbetty promotes more fun than the competition that Nike
products promote (Schlossberg & Lutz, 2017).

STRATEGIC MANAGEMENT & MARKETING
Recommendation and conclusion
Non footwear products and manufacturing casual footwear along
The money that the company spends in the signature footwear must be balanced with the
money that is spend in the non footwear products as the company is clearly struggling in keeping
the same standard in those products. Another good strategy could be manufacturing casual
footwear along with the sports foot wear.
Building professional relationship
Nike should build a personal and professional relationship with the world known
influential athletes that will bring more customer loyalty and new consumers as most consumers
idolize their favorite athletes.
Internet and social media
The internet and social media platform could be used more effectively by the company to
establish consumer relationship and retain customer sustainability. The company can implement
certain innovative technologies where dedicated consumers can design their own foot wears
online and the company should evaluate them and consider the most feasible one.
Remuneration and rewards
The employee satisfaction could be achieved through remuneration and rewards for the
deserving employees. The company must monitor and evaluate their organizatio0nal
management practice to eliminate any ethical misconduct within the organizational structure.
The company is leading the global market in the footwear business if the company
resolves the issues by implementing discussed strategies it will effectively maintain its
competitive edge in the global market with the assurance of improved business performance.

STRATEGIC MANAGEMENT & MARKETING
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