Nike, Inc.: Comprehensive Business Strategy and Analysis Report

This report provides a comprehensive analysis of Nike, Inc.'s business operations, product strategies, and supply chain management. It begins with a company background, including its history, product portfolio, and product strategy, highlighting its differentiation and cost leadership approaches. The report then delves into Nike's product lifecycle planning, including the introduction, growth, maturity, and decline stages, and its approach to good and services design, particularly its Closed-Loop Business Model and customer involvement strategies. A SWOT analysis is presented, evaluating Nike's strengths, weaknesses, opportunities, and threats. Finally, the report examines Nike's quality management strategy, emphasizing the importance of product quality in meeting customer expectations and maintaining a strong brand reputation.

INTRODUCTION/ COMPANY BACKGROUND
Operational strategy
Product design
Process design
SUPPLY AND CHAIN MANAGEMENT
Quality management
Conclusion
references

Introduction
History
Formerly known as Blue Ribbon Sports, Nike, Inc. was founded in 1964
with its headquarters in Beaverton, Oregon by Bill Bowerman, a field
coach at the University of Oregon, and his student Phil Knight. Originally
started as a sportswear company, Nike launched their first shoe in 1972
shortly after which it was officially renamed to its present name in 1978
and went public in 1980. Even though they opened their first retail outlet
in 1966, they have numerous outlets and distributors today in more than
170 countries. Soon after being recognized in the industry during the late
1980s, Nike slowly expanded its footprint by branching out their lines of
products by acquisitions and mergers – a few prominent ones being Cole
Haan, Converse, Canstar Sports and Umbro. Officially designed in 1971,
the “swoosh” or the curved checkmark is recognized worldwide as Nike’s
logo today (Britannica, February 2019).
Product Portfolio
The flagship product of Nike, Inc. is shoes. Along with manufacturing
shoes specific to many on-field games like baseball, golf, soccer,
basketball, tennis and volleyball, Nike also produces shoes meant for
consumer fashion such as Mary Janes or flip-flops. They have numerous
other offerings when it comes to shoes meant for running, cross-training,
bicycling, wrestling, cheerleading, auto-racing, aquatic activities or any
other athletic and recreational purposes. Moreover, Nike also
manufactures apparel for sports activities for both men and women. Nike
features a wide variety of collection for its apparel line, including Nike
Free, Livestrong, SPARQ and Nike Pro as part of campaign initiatives.
Additionally, sports equipment is also a part of Nike’s business. These
include yoga mats, swimming caps, gloves, baseball bats, rackets, balls,
golf clubs, protective wear etc. (Writer, C). They even expanded to Nike
ACG (All Conditions Gear) for extreme sports products like equipment for
snowboarding and mountain biking. Their accessories such as bags,
watched and socks are also well-known. As of today, their product lines
also offer portable heart-rate monitors and high-altitude wrist compasses
(Britannica, February 2019). Consumer technology such as the Nike+ app
that includes physical education classes, music, and other competitive
activities are also part of Nike’s product portfolio (Writer, C). For every
brand and product offering associated with Nike is a clearly defined,
different customer which branches out opportunities for Nike’s long-term
growth (Nike, Inc., 2019).

Product Strategy
Given the vast amount of product offerings, Nike implements a
combination of Differentiation and Cost Leadership strategies. This is a
mix of two or more of Porter’s generic strategies which aim to reduce
costs of production while maximizing profitability or reducing selling
prices. In the late 1990’s, this generic strategy has helped Nike recoup its
customers from the industry competitors, especially Adidas. Nike’s cost
leadership strategy is also used to build lasting customer relations and
develop brand loyalty by providing rewards for premium customers. From
saved costs through their cost leadership strategy, Nike uses their budget
on developing innovative and unique products as part of their
differentiation strategy. Their aim through innovation is to become more
sustainable and keep up with competition through creating highly
differentiated products and product lines (Miller, D., 1992).
Nike’s mission statement focuses on innovation implemented by means of
new designs for shoes and all related products that they manufacture.
Going in line with their mission statement, product development acts as a
crucial strategy for Nike’s intensive growth which simply involves the
introduction of new products for the purpose of increasing sales revenues.
Since customer preferences are constantly changing, product
development through new technology ensures that these products remain
appealing to the consumers by being set apart from Nike’s competition.
Additionally, this product innovation strategy implemented in the design
of sport shoes, apparel and equipment also fulfils their financial objective
by increasing Nike’s market share (Parnell, J.A., 1997).
Product Lifecycle Planning
The stage sequence of growth and development of an organization or a
product is called as the Product Life Cycle. It is characterized by four basic
stages: Introduction, Growth, Maturity, and Decline (Kopp, C., 2019). In
this section, we will go over the lifecycle analysis of Nike, Inc.
During the Introduction stage, Nike launches a new product accompanied
by a wide range of advertisements in the form of posters, billboards and
magazines. Because Nike knows that many consumers demand that new
product, the cost of advertisement is covered up by selling even a small
quantity of the new product which are usually expensive for the
consumers. In fact, some products get so popular during the introduction
phase that Nike pushes up the prices to get more profit. As this process is
repeated, the company generates more profit and that is when Nike
enters its Growth phase. Presently, Nike is in the growth state of its life
cycle which allows it to develop the skill for value creation and obtain
more resources. This increase in resources helps the company to upgrade
their labor and use them as competitive advantage. With this skilled labor,
each team focuses on a specific product for developing and completing
the demand of the customers for that market segment. After growth

comes the Maturity stage. In this stage, the customers are not as excited
about the product as they were during the introduction stage. The shoes
sales might be hitting up, but it does not last long. This is the critical point
for any company. If Nike doesn’t take any step in introducing new
products with exciting features and innovation, the company would go to
decline phase and eventually death. During the Decline phase, the shoes
are out in the market but the hype among the customer is not as
expected. So, the price of product goes downhill and hence, so does the
profit. For any company in the maturity phase, it is very important to
retract back to the growth phase as soon as possible to ensure their
position stays intact in the market. As depicted in Fig. 1, it is evident that
Nike obtained the growth phase soon after the maturity phase. This
requires a proper product cycle planning which is why the company is still
flourishing in spite of being in a huge competition. This planning starts
well before the growth stage, where the development of the business plan
is done. This phase includes various aspects like SWOT analysis, market
segment analysis, product opportunity, resource statement, feasibility
checking and a detailed plan of business goal (Writer, C., 2019).
Good and Services Design Approach
In order to keep product design consistent with business goals, Nike
concentrates on advanced technology and market preference, and
implements a strategy called the Closed-Loop Business Model. This
strategy reuses and recycles all materials to ensure zero waste. Under this
strategy, Nike’s products are produced by recycling waste materials as
innovators create new product designs that can also be easily
disassembled. Nike’s Considered Design range of products includes the
newest products that integrate sustainability and current sport needs
using the Closed-Loop business model. In the long run, Nike attempts to
design products that utilize fewer materials from nature and that can
safely go back to nature at the end of their lifecycle. The ultimate goal of
Nike Considered Design is to think about sustainability from the beginning
of the design process. Instead of designing a new shoe, Nike creates a
new model of design which thinks about manufacturing process of shoes.
One example of the implementation of this strategy is the Nike Fly-Knit
Racer, which is considered to be more environmentally friendly while
decreasing long-term production costs. Nike also broke its old rules of not
fixing something which is not broken as with this product, they capture
50% of the running shoes market and 92% of basketball shoes market
(Writer, C., 2019).
Customer Involvement
Nike is very adept at maintaining customer relations and incentivizing new
customers to join the Nike family. Not only do they provide member
benefits, but they also provide excellent customer service to all
customers. Nike’s Nike+ app provides personalized recommendations and
offers to users under ‘Featured Picks’ based on customer data and
purchase history. Using smart recommendations, Nike makes the
purchase process for users easier thus increasing chances of sales and

building brand loyalty. Additionally, they also provide benefits to Nike+ app
active users by using their goals and interests to offer access to fitness
classes, guided meditation and even music. Thus, users can earn and
receive rewards digitally based on their physical engagement with Nike
products through non-transactional behavior. For example, in November
2017, Nike rewarded its consumers for a non-purchase behavior by
inviting them to run a 25-minute 5K through the Nike+ app. The area of
interest for consumers was a pair of Nike Zoom Fly trainers which would
be given out free of cost to all those who complete the 5K run in under
twenty-five minutes. Nike also boasts excellent customer service as they
utilize their social media platforms answer all support questions in a
timely and friendly manner. Their Twitter account, @NikeSupport, is
functional all day, every day and the customer service agents are
proficient to assist customers in numerous languages included Dutch,
Spanish, German, French, and Italian. In their flagship store, Nike is also
building a fifth floor that is exclusive to Nike+ members, thus further
encouraging customer engagement with the brand outside of
transactional behavior and incentivizing membership. This floor will be
characterized by events, special gear, and even one-on-one assessments
by Nike experts. Nike keeps the membership free and uses it solely to
capitalize on customer relations rather than fee profits (Langrock, S.,
2018).
SWOT Analysis
Nike has a very strong brand name and it is well known all around the
world. They operate in more than 160 countries. Nike also uses rapid
prototyping and innovation techniques to stay ahead of the competition.
Nike has a large number of suppliers and subcontractors. Nike also has
great customer relation. It provides outstanding customer service. Nike
doesn’t manufacture any of their products on their own. They get it done
offshore. Because of this they cannot constantly inspect them on a regular
basis. This lead to variance in quality. Nike isn’t focusing more on
developing countries like China for their sales. They image went bad
because of labor controversies. This was because of offshore contractors
exploiting workers. Nike has less product line. They should try to explore
more sections like formal wear, electronic section etc. Nike has the
opportunity to invest in new product development and innovation to get
ahead in the competition by releasing different products. There are a lot
of developing countries where Nike can focus on to increase their
customer base. Nike can also try to improve sustainability by recycling
shoes to make them shoes again as customers nowadays are more
inclined towards environmentally friendly products. Nike can also try to
integrate their sportswear with fashion wear so everyone can wear them.
Nike has faced a lot of competition but has able to cope up with it but now
because of internet age, many new online based companies can face as a
threat to Nike in near future. Nike also face the problem of duplicate
products being produced and sold as Nike. This reduces the sales of
original Nike product. Nike is mostly dependent on footwear for it revenue.

They need to change this strategy. With rapid technological change, Nike
is not able to cope up with it. Also it requires a large initial investment.
Quality Management Strategy
Quality and Strategy
The degree to which a product lives up to its endurance, maintainability,
order characteristics and performance that a customer expects to get
from the product is defined as the quality of that product (Goetsch and
Davis, 2014). Nike products are known for their high quality as they
successfully meet the demands of consumers from all around the globe.
Nike recognizes that the quality characteristics of products and services
can be defined in terms of their functionality, appearance, reliability,
durability, recovery and contact. To meet the quality standards Nike
focuses on various strategies various strategies like TQM (Total Quality
Management) and Lean Manufacturing (Shanley, 2004).
Nike Focuses on quality during the manufacturing process to meet the
customers’ demand and maintain high standards of quality. Nike’s
manufacturing process is inclined towards TQM (Total Quality
Management). While other companies’ TQM restrict innovation and
creativity, Nike uses it to motivate creativity which lets it to be in the
position of continuous improvement and development of new products.
TQM helps the company to maintain its image, improve working
conditions along the supply chain and encouraging new processes and
development. The combination of these three elements through TQM
enables Nike to secure market share, differentiate themselves from its
competitors and create value for its customers. TQM at Nike also focuses
on the production and deliverable capability of the products and services
that the market demands in the short and long run. Therefore, Nike ends
up utilizing quality management in the entire production facet (Shanley,
2004).
When it comes to the design of Nike products, the concept of design
management plays a crucial role in the implementation of TQM. Various
methods and techniques are examined to ensure the development of an
active system and an organizational structure best suited for product
development – Computer Aided Design, Robust Design, Value Analysis,
Modular Design and Environmentally Friendly Designs to name a few
(Shanley, 2004).
According to Nike, the number of faults in a design along with the
efficiency of achieving market demand numbers is a strong indicator of
the quality of the design process. For the last few years, Nike has vowed
to eliminate waste during production processes by developing
environmentally friendly designs. In a world where resources are limited
and the threat of water scarcity, climate change and other resource
constraints are a much greater threat than the financial crisis, Nike is
implementing Green Manufacturing to conserve water, increase energy
efficiency and reuse and recycle (Shanley, 2004).

According to Nike, a quality product is one that can be obtained on the
basis of current knowledge and technology. Engineers and designers who
are proficient in the field find this method very appealing which in returns
ends up enhancing their productivity and motivation. In manufacturing
processes, Nike strongly endorses teamwork by means of implementing
product teams. The designers at Nike work with each other to produce
design choices which are smart and eco-friendly right at the beginning of
their creative process, while proceeding and solving problems. Designing
the product exactly right at first means lesser re-work later as it results in
products which are either less defective or not defective at all. Once the
quality has be defined and measured, processes will need to conform their
quality to proper quality standards. Nike to make its vision achievable, has
set Considered Design Standards that every product should meet. Nike’s
assurance to the customers is to create innovative performance products
while managing its business within nature’s boundaries. So, innovative
design is used to design out waste, chemicals, and energy into new
materials through various techniques. Nike calls this method Considered
Design. When it is implemented alongside the traditional design process,
it maximizes the value and quality of the product and reduces the waste
during production. It also minimizes carbon dioxide emissions across the
whole supply chain (Nike, Inc., 2019).
Nike constantly tries to find ways in order to minimize the utilization of
raw materials and to handle them responsibly throughout the entire
manufacturing process. By constantly improving their processes by
reducing the quantity of waste and increasing their overall output, Nike
attempts at managing costs, improving quality and complexities in the
design phase and in the supply chain (Nike, Inc., 2019).
The Pursuit of Quality
One of the important goals of Total Quality Management is to achieve
long-lasting success by means of customer satisfaction. This perspective
of TQM is entirely dependent on the participation of all members of an
organization in order to proceed and improve the quality of goods,
products, services and processes of the organization (Distelhorst, et al.,
2014). Often times, it means incorporating various technical tools and
management approaches while simultaneously working towards
improving existing tools and techniques for consistent improvement
within the company (Davrajh and Bright, 2013).
In order to implement TQM in an organization, various practices play an
important role which are coaching, communication, involvement,
motivational incentives, recognition, team-work promotion etc. The same
process goes for the implementation of lean manufacturing in an
organization. Like many other brands that believe in the power of their
human capital, Nike strongly invests in the workers involved in their
supply chain. The industry of footwear and apparel was considered to be
tremendously low-technology based, low-skill utilizing and lower-paying
jobs for many years in the past. However, this assumption is now being
questioned because of the switch to lean manufacturing as it required

workers to be highly skilled, knowledgeable and with a decision-making
power. Initially, many contractual manufacturer partners of Nike did not
have the potential to develop any skills needed for lean manufacturing
among their workers. That is when Nike stepped up to assist with Human
Resource Management (HRM) training and other aspects to their
contractual manufacturers so that they could invest in their workers. In
fact, in 2012, Nike fully transitioned to Sustainable Manufacturing
Training, which is an integrated model that addresses an entire range of
issues, including lean manufacturing, HRM, health and safety,
environmental compliance, energy management, environmental
sustainability and freedom of association (Shmula, 2014).
Additionally, team meetings play an important and an inevitable role in
developing proper method to spread the formulated plan in the entire
company. In these meetings, various pathways and methodology are
discussed, which helps in communicating the plan to the employees of the
company. Also, various conferences and seminars are organized to spread
the plan more effectively (Goetsch Davis, 2014). In addition to all of this,
numerous other training sessions are given to all the employees and
various reading materials like manuals is also provided to enhance their
knowledge about the formulated TQM plan. On the other hand,
implementation of TQM may pose a few challenges to Nike. Employee
resistance and production disturbance resistance may be considered as
one of the biggest challenges, which is directly associated with TQM. It is
very important to identify these risks which can weaken the
implementation of the TQM but this weakness can be eliminated by
motivating employees with the help of training workshops and feedback
or one-on-one meetings (Oakland, 2014).
The Implementation of Quality
As we discussed above, Nike Inc. is using Total Quality Management
(TQM) and Lean Manufacturing for achieving high quality level of product.
According to Davrajh Bright, Total Quality helps the organization to
enhance and improve their operations while ensuring environmental
integrity. Which means, applying total quality management for Nike Inc.
can help the company gain more credibility and reputation on consumers
and improve the efficiency of daily operation process. There are four steps
are included in total quality management of Nike, Plan, Do, Study and Act
(Davrajh Bright, 2013).
Plan is the first step, where top managers overview their current operation
condition, and indicate the problems, collect data and file all current
procedures in operation (Distelhorst, Hainmueller Locke, 2014). In other
words, under this step, managers make an operation strategy plan which
will solve current problems and make a significant improvement. The
second step is Do. Basically, managers record the changes they made,
and make documents for these changes in order to collect data in next
step Study. During Study step, they will testify these changes by
collecting data and evaluate it for ensuring they can achieve their certain
goals. Last step is Act. After the strategy plan pass the testify process,

Nike will implement this plan and try to get feedback and suggestions
from their stakeholders (Distelhorst, Hainmueller Locke, 2014).
In the implementation of Lean Manufacturing, Nike believes that
executing minimal changes to reduce the time taken to complete a task is
rather troublesome in a large company. And therefore, the entire work is
contracted to numerous smaller agencies where it is easier to supervise
every task being performed and the presence of multiple agencies
ensures that time and capital are spent efficiently. When it comes to
vendor selection, Nike follows a strict and rigorous screening process to
ensure that the quality of raw materials is apt and is provided in lesser
time. Additionally, Nike now takes 38% less time to assess a
manufacturer’s partnership capabilities, which is equivalent to 152 days
as compared to 246 days in the previous days. Once approved, Nike
safeguards its trust with the vendors by qualifying them for long term
contracts, provided the vendor consistently maintain the same efficiency
in their production processes (Int J Prod Res, 2014).
Process Strategy
As we know, Nike combine competitive strategy which includes cost
leadership and differentiation. The key point is keeping lower cost during
production and research process for competitive advantage. Under this
purpose, Nike used Product Focus as their process strategy in the first 15
years of the 21st century and captured 25.44% of sports shoes market by
2017 as seen in graph below (O’Connell, 2019).
According to Edward Ferguson, Nike’s OM must focus more on
streamlining and increase their quality of production. This objective is to
make sure that the system is efficient (Ferguson, 2017). Product Focus
strategy, maintained high production and low variety of product, can help
Nike reduce variable cost and enhance efficiency. Even though Nike has
several product categories, such as footwear, apparel and sport related
accessories, all of its product share most of materials, technologies and
design model. To keep Nike’s differentiation, it focus on short-term
research and product development since it will introduce new products
fast and cut down the payback period. (A.J. Almaney, 2000)[1]
The Nike top management board shifted its plan from being a athletic
wear brand to becoming more personalized products. During the meeting
at the company's headquarters they placed a strong focus on the
consumer decides theme and introduced some interesting ways of
customizing their shoes and other apparel. (Piller, F. T., 2018)
Process Design and Redesign
As we know any process is a candidate for design, any successful redesign
demands for training and proper action, coordination from departments
like technical staff, management and answer to why the change is
required (Varun, SeungWilliam, 1995).
Redesign allows the company to bring variation in technology, quality,
innovation. It’s kind of represents the shift to horizontal view of business

and shift from conventional hierarchy vertical based model. There are
various types of redesign tool which are project management,
coordination, modeling, business process analysis, human resources
analysis and design, system development (GroverMaholtra, 1997).
Nike uses twenty seven tools for managing its supply chain. It was
planning to implement Enterprise resource with the objectives such as
manufacturing efficiency, increase profit, reduce lead time and improve
timed delivery, reduce stock in inventory and the most important was to
implement a new enterprise resource planning system built by them. As
adapting to new changes doesn’t always give good result. The same way
Nike faced many challenges after adopting SAP Enterprise Resource
Planning System. The new system couldn’t be customized according to
the company’s requirement which caused problems within the company.
The problems were mostly related to supply chain management and
forecasting which had a great effect on the company. Some of the effects
were decreased revenue overtime, improper production and demand,
demand couldn’t be fulfilled and wrong order shipping.
These problems within the process can be solved if the process were
redesign. Learning from the mistake Nike decided to redesign the process
as they required better system for supply chain, forecasting and various
improvements in the current system. Nike implemented SCM (Supply
Chain Management) which clearly defined the ideology shift from make to
sell à make to order. The only mistake while implementing the ERP system
earlier was they took it way too fast. To incease the productivity of the
system, Nike should adopt the roll out approach rather than the quick big
bang approach. One of the most important things is Nike should generate
business process template that approved globally (Grover, V. and
Malhotra, M., 1997).
In short, we can say that the method of redesigning the process usually
include designing the flow of work within an organization for its smooth
flow. It gives the company the data about how they can improve the
consumers satisfaction, customer service and how to cut cost of
operation. (Fitts Aziza, 2010) Nike in the start did not think about the
variation in the footwear department and the changes in consumers
preference and taste which lead to companies decline. But after properly
redesign the process the company has moved to mass-customization.
They produced customized footwear by shaking hand with Flex which is
based in Mexico. It is not leaving Asian countries, but is moving towards
their shoring because of the requirement of the mass customization and
meet other demands of the customers. Nike created a three-tiered
customized supply chain for their shoes. The process to manufacture the
shoes requires complex assembly so they outsource it from China where
Nike owned factories. They appointed a manager to go over there and
approached to buy them over as they made a move to complete off-shore
provider. They also made some redesigning within the firm which would
bring great benefits in terms of profit, time and increase customer
satisfaction by providing them the right product at the right time. We can
see what changes are made by them. (Grover, V., Jeong, S., Kettinger, W.

and Teng, J.,
1995)
Nike also moved into online strategy where they decided to offer three
levels of customization. In first level they let customer decide their
preference for customization and had many choice around fifteen. But
later they realized that customers are producing bad designs. The second
tier had around eight choices and they were delivered in fourteen days of
order. The third tier had light modification and was not customer
preference. It was stocked in inventory nearby for fast delivery within a
week. They also started personalization on t-shirts, socks, shorts etc. So
customers can write any number, name and get them customized as they
like (Handfield, R., 2016)
Nike is considered one of the pioneers of mass customization in footwear
industry, the company launched NikeiD in 1999 which offered designer
footwear on internet. The Air Force One was one of the first personalized
shoe and after realizing the public liked this concept, the brand further
developed the idea. Today Nike offers countless customizable shoes, not
only online but also in person at studios across the world. The online
system is professionally designed to make the design process user
friendly for customers. NikeiD website also offers customizable apparel.
When an order is placed, the manufacturing process begins immediately
thus preventing cancellations or modifications to the design, nevertheless
their standard return policy of 30 days still applies.
In 2017, Nike introduced a new corporate initiative called Consumer Direct
Offense with 3D printing at the core of the process. This initiative was
developed to reduce the average product creation timeline by 50% by
implementing additive manufacturing. Additive manufacturing allows this
facilitation of speed through the rapid prototyping process. Rapid
prototyping enables Nike production team to produce a personalized
footwear in some hours as compared to months. Nike began
experimenting with this technology in 2013 through their football cleats.
By 2016, Nike had invested a lot more in additive manufacturing and
began developing customized shoes for elite athletes for the Olympics. In
2018, Nike expanded their investment as they developed the Nike
Flyprint. The product development team was able to translate complex
athlete data into prototype iterations with unprecedented quickness and
precision. Nike is planning to commercialize this initiative and monetize
over it with heavy investments over the next five year. As a result, we can
see the company propelling in the direction of cosmetic mass
customization as they are beginning to use individual performance data
from movements to translate into their products (Ruffin, M).
Nike also came up with the Triple Double Strategy (2X) in mid-2017 in
which they decided to increase the efficiency by using innovation as a tool
by doubling the speed of distribution of its products to market along with
doubling its connections with the consumers. (Nike, Inc. News. 2017, June
15). A disrupt yourself way, the entire focus of this process redesign is the
Nike Consumer Experience (NCX) which feeds the 2X initiative by

including a wide chain of Nike’s wholesalers along with its own direct-to-
consumer partners. (Nike, Inc. News. 2017, June 15).
The main idea behind 2X is to “edit to amplify” (Michael Spillane. Nike,
Inc. Investors. 2017, October) wherein Nike will be putting 25% lesser
styles in the market to turn up the sales by restricting distribution
channels to only the ones that deliver the fastest and grow with most
profits. Before the Triple Double Initiative, Nike had a massive 30,000
slate of retailers which were planned to be cut down to only a special 40
that offered superior customer experiences, quality services and a
storytelling that differentiated the brand along with Nike own direct retail
online and offline platform. (Nike, Inc. News. 2017, June 15).
By the end of 2018, the revenues of Nike increased by 9% followed by a
10% increase in the beginning of 2019. Overall, Nike, Inc. was celebrating
a double-digit international growth earlier this year alongside gaining high
pace in the North America region, which is considered to be its premier
market. (Forbes. 2018. December.). In fact, Nike gives the credit to NCX
for 100% growth in 2018 virtually. (Euromonitor. 2018, November).
Mentioned below is how Nike did it:
Nike picked up from a pool a total of 40 outstanding retail performers who
knew their customer segments inside out. These retailers were meant to
provide exceptional customer experience to the buyers on behalf of Nike,
both through physical shopping experience or online. These retailers were
meant to gain the most access to Nike most popular products and limited-
edition products along with the most budget for marketing so as to draw
buyers away from the remaining undifferentiated sellers. (Forbes. 2018.
December.).
These were carefully crafted steps to drive 80% more sales by the end of
2023 in North America region through differentiated NCX retailers, up
from 40% in 2017. The challenge was 60% sales in this region were
through undifferentiated sellers, which are not destined to survive. (Trevor
Edwards. 2018). Even though the categorization criteria for Differentiated
v/s Undifferentiated retailers has not been defined, Nike, Inc. gives
examples of Nordstorm and Foot Locker to provide an understanding.
(Forbes. 2018. December.).
Simultaneously with the initiation of 2X Strategy and aligning with the
principles of NCX, Nike worked to enhance their shopper’s experience by
revamping the Nike mobile app. Before this, like any other loyalty
program, NikePlus rewards would account for easy access to exclusive
products. However, with the software upgrade, members now have access
to personalized work-outs, free entry in evens , free delivery, one month
return policy and access to Nike experts – all for a little extra charge. The
more a customer spends on the app or uses the fitness app, more are his
benefits for additional services, access to VIP experiences, unlocking of
limited-edition products or personalized discounts. (Forbes. 2018.
December.).