nike globalisation case study

• International Marketing

Decoding Nike’s Global Strategy: A Guide to Market Dominance

• January 16, 2024

Table of Contents

Introduction: decoding nike’s global strategy for market dominance, 1. nike’s international pricing strategy, 2. nike’s global market segmentation and targeting, 3. nike’s global marketing and distribution channels, 4. nike’s global manufacturing and outsourcing strategy, 5. nike’s global human resource management approach, 6. nike’s global social responsibility and sustainability commitments, 7. nike’s global strategy in action: a case study of china, achieving global success with adaptability, cultural sensitivity, and ethical practices, accelingo: your culturally sensitive ally in nike’s footsteps.

Nike, a name synonymous with athletic excellence, has firmly established itself as a global sportswear and apparel giant, boasting a rich history of innovation and success. With a revenue of over $51 billion in 2023, as reported by Statista , Nike’s dominance in the global market is undeniable . This remarkable achievement can be attributed to a combination of strategic approaches, including a well-crafted global pricing strategy, targeted market segmentation, effective marketing and distribution channels, and a commitment to ethical practices.

Nike’s global pricing strategy is a cornerstone of its success. The company employs a premium pricing strategy, positioning its products as high-quality, exclusive items (Hill & McKaig, 2015). This strategy is supported by Nike’s strong brand image, built on years of innovation and association with top athletes (Mahdi et al., 2015).

To cater to a wider audience, Nike employs value-added services, limited edition releases, and tiered pricing (Taylor, 2012). Value-added services such as customization options and personalized shopping experiences further enhance the customer experience and justify the premium pricing (Wang et al., 2016).

Nike’s global market segmentation is another key factor in its success. The company targets major sports markets like North America, China, and Western Europe (Arora & Aggarwal, 2012). This approach allows Nike to tailor its products, marketing campaigns, and distribution channels to the specific needs and preferences of consumers in each market, resulting in a more effective and personalized customer experience (Lund-Thomsen & Coe, 2015).

Nike’s global marketing and distribution channels are extensive and diverse. The company maintains a network of retail stores worldwide, emphasizing its direct-to-consumer approach (Soni, 2014). Additionally, Nike partners with wholesalers and distributors to reach a broader market (Arora & Aggarwal, 2012). The company’s use of digital marketing platforms, such as Nike.com and social media, further expands its reach and engages with consumers on a global scale (Samuels, 2014).

Nike’s commitment to ethical practices is evident in its global manufacturing and outsourcing strategy. The company carefully selects manufacturing locations based on factors such as labor costs, raw material availability, and government policies (Murphy & Mathew, 2012). Nike also maintains a code of conduct for suppliers and factories to ensure fair working conditions and ethical treatment of workers (Kell, 2016).

Nike’s success in the global market is deeply rooted in its well-defined pricing strategy, which effectively balances premium pricing with a touch of versatility to cater to a broad spectrum of consumers. The company’s pricing strategy is characterized by its emphasis on quality, exclusivity, and brand equity , while also incorporating value-added services, limited edition releases, and tiered pricing to attract a wider audience.

Premium Pricing: A Pillar of Brand Image

Nike has established itself as a premium brand, synonymous with innovation, performance, and athletic excellence. This positioning is reflected in its pricing strategy, which consistently places its products at a higher price point compared to competitors . This premium pricing strategy is driven by the company’s strong brand equity, built over decades of delivering high-quality products and associating itself with iconic athletes (Hill & McKaig, 2015).

Cultivating Exclusivity through Limited Edition Releases

To further reinforce its premium positioning and appeal to a discerning clientele, Nike strategically introduces limited edition releases of its products. These exclusive offerings, often collaborations with renowned designers or athletes, create a sense of scarcity and exclusivity, driving demand and justifying the higher prices (Mahdi et al., 2015). Limited edition releases also serve as a marketing tool, generating excitement and buzz around the brand, attracting new customers and enticing existing ones to purchase the coveted items.

Tiered Pricing for Wider Appeal

While maintaining its premium positioning, Nike also incorporates tiered pricing to cater to a broader audience . The company offers a range of products at different price points, from entry-level essentials to high-end performance gear. This tiered pricing strategy allows Nike to reach consumers across various income levels and preferences, expanding its market reach and increasing its overall sales volume.

Value-Added Services for Enhanced Customer Experience

Nike goes beyond traditional pricing strategies by offering value-added services that enhance the overall customer experience and justify the premium pricing. These services include customization options, such as personalized shoe designs, and personalized shopping experiences, providing unique and differentiated offerings to consumers. Customization options allow customers to tailor their products to their specific needs and preferences, increasing their perceived value and willingness to pay the premium price. Personalized shopping experiences, such as exclusive access to limited edition releases or tailored product recommendations based on individual preferences, further enhance the customer experience and create a sense of exclusivity.

Nike’s Pricing Strategy: Achieving Global Success

Nike’s international pricing strategy has played a pivotal role in its global success. The company’s premium pricing, coupled with value-added services, limited edition releases, and tiered pricing, has enabled it to attract a wide range of consumers while maintaining its brand image as a leader in innovation and performance. This strategic approach has allowed Nike to expand its market dominance and become a global icon in the sportswear industry.

Nike’s global success is not solely attributed to its innovative products and premium pricing strategy; it is equally driven by its strategic approach to market segmentation and targeting. The company has effectively identified and targeted major sports markets , such as North America, China, and Western Europe, understanding the specific needs and preferences of consumers in each region.

North America: A Core Market with Diverse Preferences

According to Statista , North America remains Nike’s largest and most established market, accounting for over 44% of its total revenues. This region comprises a diverse population with varying athletic preferences and lifestyles. To cater to this diverse audience, Nike employs localized marketing campaigns that resonate with local trends and cultural nuances . For instance, the company has partnered with prominent NFL and NBA athletes to connect with sports enthusiasts in the United States and Canada.

China: Surging Demand with Cultural Sensitivity

China has emerged as a significant market for Nike, driven by a growing middle class with an increasing interest in fitness and sports (Ko et al., 2012). To penetrate this market, Nike has adapted its products and marketing strategies to align with Chinese cultural preferences . For example, the company has introduced products that incorporate traditional Chinese design elements, such as the use of red and gold colors. Nike has also partnered with Chinese celebrities and influencers to promote its products and connect with local consumers.

Western Europe: A Market of Established Athletics

Western Europe, with its rich sporting heritage and passion for athletic performance, has been a key market for Nike. The company has tailored its products and marketing campaigns to appeal to the region’s discerning consumers. For instance, Nike has partnered with European soccer clubs and athletes to leverage their popularity and enhance brand recognition . The company has also developed products specifically designed for European consumers, considering factors such as weather conditions and athletic preferences.

Localized Marketing for Global Reach

Nike’s success in these diverse markets is attributed to its strategic approach to localization . The company recognizes that simply translating marketing materials and products into different languages is not enough. It actively engages with local communities, understands their cultural nuances, and adapts its messaging and products accordingly. This localized approach enables Nike to connect with consumers on a deeper level and build a strong brand presence in each market.

Product Development Tailored to Local Needs

Nike’s product development process is also guided by market segmentation and targeting. The company recognizes that consumers in different regions have varying needs and preferences. For instance, Nike has developed lightweight and breathable apparel for hot and humid climates, while also offering waterproof and insulated gear for colder regions . This focus on adapting products to local conditions has been instrumental in Nike’s global success.

Nike’s Global Market Segmentation Strategy: Achieving Omnipresence

Nike’s ability to segment and target global markets has been instrumental in its expansion and dominance. By understanding the specific needs and preferences of consumers in each region, the company has tailored its marketing campaigns, products, and distribution strategies accordingly . This localized approach has allowed Nike to connect with consumers on a deeper level, foster brand loyalty, and achieve omnipresence across the globe.

Nike’s global success has been fueled by a sophisticated and multifaceted marketing and distribution strategy that encompasses both physical and digital channels . The company leverages its extensive network of retail stores, strategic partnerships with wholesalers and distributors, and innovative digital marketing tactics to connect with consumers worldwide and drive sales.

Direct-to-Consumer Approach: A Gateway to Customer Connection

Nike’s commitment to a direct-to-consumer (DTC) approach has been instrumental in its global expansion. The company operates over 1,000 retail stores in over 190 countries, as per Statista , providing a direct connection with consumers and allowing for personalized customer experiences . These stores serve as experiential hubs, showcasing Nike’s latest products and engaging with customers through various interactive features.

Partnerships with Wholesalers and Distributors: Reaching a Wider Audience

While Nike’s DTC strategy plays a crucial role, the company also collaborates with wholesalers and distributors to reach a broader market. This partnership enables Nike to expand its reach into smaller towns and cities, particularly in emerging markets . Wholesalers and distributors play a vital role in stocking Nike products in various retail outlets, providing consumers with convenient access to the brand’s offerings.

Leveraging Digital Platforms for Global Reach and Engagement

In today’s digital age, Nike has embraced the power of digital marketing to connect with consumers worldwide. The company utilizes a variety of online platforms, including its website, social media channels, and mobile apps, to reach a global audience and promote its products. Nike’s digital marketing efforts are data-driven , allowing the company to tailor its messaging and campaigns to specific demographics and interests.

Nike App: A Multifaceted Platform for Customer Engagement

Nike’s mobile app serves as a central hub for customer engagement. The app allows users to browse products, make purchases, track their workouts, and access personalized recommendations. Additionally, the app provides exclusive content, such as behind-the-scenes access to Nike athletes and events. This comprehensive platform has been instrumental in fostering brand loyalty and driving sales among Nike’s global customer base.

Nike’s Global Marketing and Distribution Strategy: A Winning Formula

Nike’s combination of direct-to-consumer stores, partnerships with wholesalers and distributors, and innovative digital marketing strategies has been a driving force behind its global success. By leveraging these channels effectively, Nike has been able to connect with consumers worldwide, build brand loyalty, and achieve market dominance in the sportswear industry . The company’s commitment to understanding local markets and adapting its messaging and products accordingly has been key to its success. As Nike continues to expand into new markets, its well-defined marketing and distribution strategy will be instrumental in its continued growth and global reach.

Nike’s global manufacturing strategy has been a cornerstone of its success, enabling the company to produce high-quality products at competitive prices . The company’s decision to outsource most of its manufacturing to overseas countries has been driven by several factors, including labor costs, raw material availability, and government policies.

Outsourcing for Efficiency and Cost-Effectiveness

Nike’s outsourcing strategy stems from the desire to optimize production processes and reduce costs. By manufacturing its products in countries with lower labor costs, such as China and Southeast Asia, Nike can minimize labor expenses and maintain its competitive edge in the global market (Murphy & Mathew, 2012).

Access to Specialized Materials and Infrastructure

Outsourcing also provides Nike with access to specialized materials and infrastructure that may not be readily available in its home country. Many overseas manufacturing centers possess advanced manufacturing capabilities and expertise in producing high-quality athletic footwear and apparel (Lund-Thomsen & Coe, 2015).

Government Policies and Incentives

Government policies and incentives in various countries have also played a role in Nike’s outsourcing decisions. Many governments offer tax breaks, subsidies, and favorable labor regulations to attract foreign investment in their manufacturing sectors (Arora & Aggarwal, 2012).

Addressing Ethical Labor Concerns

Nike’s outsourcing practices have not been without scrutiny. The company has faced accusations of labor abuses, including low wages, excessive working hours, and unsafe working conditions in its overseas factories (Kell, 2016). In response to these concerns, Nike has implemented various initiatives to improve labor standards and ensure ethical practices in its supply chain.

Code of Conduct and Supplier Monitoring

Nike has established a comprehensive Code of Conduct that outlines its expectations for labor practices among its suppliers. The code prohibits forced labor, child labor, discrimination, and unsafe working conditions. Nike also conducts regular audits of its suppliers to monitor compliance with the code.

Fair Labor Association Partnership

In 1999, Nike joined the Fair Labor Association (FLA), an independent monitoring organization that promotes ethical labor practices in global supply chains . The FLA audits Nike’s suppliers and provides recommendations for improvement.

Community Initiatives and Worker Empowerment

Nike has also implemented community initiatives to improve the lives of workers and their families in its supply chain regions. These initiatives focus on education, healthcare, and economic development . Nike also encourages worker participation and empowerment through training programs and feedback mechanisms.

Nike’s Commitment to Ethical Sourcing

Nike remains committed to ethical labor practices and fair working conditions in its global supply chain. The company recognizes that ethical sourcing is not just a matter of legal compliance but also a strategic imperative for building a sustainable and responsible business . Nike’s efforts to enhance labor standards and empower workers are essential for maintaining its brand reputation and ensuring its long-term success in the global market.

Nike’s success as a global leader in the sportswear industry is not solely attributed to its innovative products and marketing strategies; it is also deeply rooted in its commitment to building a strong and talented workforce around the world . The company recognizes that its employees are its most valuable asset, and it invests heavily in their development and empowerment.

Investment in Local Talent

Nike places a high value on building the skills and capabilities of its local employees. The company recognizes that cultural understanding and local expertise are crucial for success in diverse markets . Nike’s global HR approach focuses on providing training, development opportunities, and mentorship programs to its employees worldwide.

Employee Training and Development

Nike invests heavily in training and development programs to equip its employees with the skills they need to excel in their roles. The company offers a variety of training programs, ranging from technical skills training to leadership development courses. Nike also encourages employee participation in professional development activities and encourages networking opportunities.

Empowering Employees for Success

Beyond training and development, Nike also fosters a culture of empowerment among its employees. The company believes in giving employees the autonomy and authority to make decisions and contribute to the company’s success . Nike encourages open communication, feedback mechanisms, and employee participation in decision-making processes.

Standards for Ethical Treatment of Workers

Nike’s commitment to ethical practices extends beyond its direct employees to its suppliers and factories in the global supply chain. The company adheres to a strict Code of Conduct that outlines its expectations for labor practices among its partners. The code prohibits forced labor, child labor, discrimination, and unsafe working conditions. Nike also conducts regular audits of its suppliers to ensure compliance with the code.

Collaboration with Ethical Organizations

In addition to its own Code of Conduct, Nike collaborates with organizations like the Fair Labor Association (FLA) to promote ethical labor practices in its supply chain. The FLA conducts independent audits of Nike’s suppliers and provides recommendations for improvement.

Nike’s Global HR Approach: A Catalyst for Success

Nike’s global HR strategy is a key pillar of its success. By investing in local talent, providing training and development opportunities, and fostering a culture of empowerment, Nike cultivates a workforce that is well-equipped to drive innovation, adapt to local markets, and contribute to the company’s global growth. Nike’s commitment to ethical labor practices and fair working conditions further reinforces its reputation as a responsible and sustainable corporate citizen . As Nike continues to expand its global footprint, its strong HR practices will remain essential for attracting, retaining, and developing the diverse talent required to achieve sustainable success in the ever-evolving global marketplace.

As a global leader in the sportswear industry, Nike recognizes its responsibility to go beyond profit and contribute to a more sustainable and equitable world. The company has made significant strides in integrating social responsibility and sustainability into its business practices, demonstrating its commitment to making a positive impact on the communities and environments it touches .

Minimizing Environmental Impact: A Sustainable Future

Nike has taken concrete steps to reduce its environmental footprint, aligning with its vision of “ Move to Zero ” by 2040. The company has set ambitious goals to achieve zero carbon emissions from its operations and supply chain, zero waste to landfill, and 100% sustainably sourced materials.

• Energy Efficiency: Nike has implemented energy-efficient practices in its facilities, including installing LED lighting, optimizing HVAC systems, and utilizing renewable energy sources.
• Materials Innovation: The company is constantly exploring innovative materials that reduce environmental impact, such as recycled polyester and organic cotton.
• Waste Reduction: Nike has implemented waste reduction initiatives across its operations, including recycling, composting, and reducing packaging.
• Supply Chain Sustainability: Nike is working with its suppliers to implement sustainable practices, such as reducing water consumption and adopting cleaner production processes.

Supporting Social Causes: Impacting Communities

Nike’s commitment to social responsibility extends beyond environmental sustainability to encompass initiatives that empower communities and address social issues. The company supports a range of causes, including education, economic empowerment, and gender equality .

• Education Initiatives: Nike has partnered with organizations like the Nike Foundation to provide educational opportunities for underserved communities, particularly girls in developing countries.
• Economic Empowerment: The company supports initiatives that promote entrepreneurship and job creation in underserved communities, such as microfinance programs and vocational training.
• Gender Equality: Nike is committed to gender equality and has implemented initiatives to promote women’s leadership and economic participation in sports and beyond.

Transparency in Reporting: Accountability and Stewardship

Nike is committed to transparency in reporting its environmental and social performance. The company publishes annual sustainability reports that detail its progress towards its sustainability goals and its efforts to support social causes. Nike also engages with stakeholders, including employees, customers, and investors, to communicate its sustainability commitments and progress.

Nike’s Global Social Responsibility and Sustainability Strategy: A Blueprint for the Future

Nike’s commitment to social responsibility and sustainability is not just a marketing ploy but a fundamental part of its business strategy. The company recognizes that sustainable practices not only benefit the environment but also contribute to long-term profitability, attract talent, and foster a positive brand reputation. As Nike continues to expand its global footprint, its commitment to social responsibility and sustainability will be crucial for maintaining its position as a leader in the sportswear industry and building a more sustainable future for all.

Navigating the Chinese Market: A Success Story of Adaptability

Nike’s expansion into the Chinese market serves as a compelling case study of the company’s ability to adapt its strategy to suit local preferences and cultural nuances. With a population of over 1.4 billion people and a rapidly growing middle class, China represents a significant market opportunity for global brands like Nike . However, entering this complex and diverse market also presents unique challenges and requires a deep understanding of local consumer behavior.

Challenges and Opportunities in the Chinese Market

Nike faced several challenges when entering the Chinese market, including:

• Establishing Brand Recognition: In a market dominated by local brands like Anta and Li-Ning , Nike had to establish its brand identity and gain recognition among Chinese consumers.
• Adapting Products to Local Preferences: Chinese consumers have different tastes and preferences for sportswear than those in Western markets. Nike had to adapt its product offerings to suit local preferences, such as incorporating traditional Chinese design elements.
• Building a Strong Distribution Network: Establishing a robust distribution network in China was crucial to reach a wide audience and provide a seamless shopping experience for Chinese consumers.
• Navigating Cultural Differences: Effective cross-cultural communication was essential for Nike to build relationships with Chinese partners, suppliers, and consumers.

Nike’s Strategies for Successful Market Entry

To overcome these challenges and capture market share in China, Nike implemented a multi-pronged strategy:

• Strategic Partnerships: Nike formed partnerships with local distributors and retailers to gain access to the market and build trust with Chinese consumers.
• Localized Marketing Campaigns: Nike tailored its marketing campaigns to resonate with Chinese consumers, using local celebrities, sporting events, and cultural references.
• Product Innovation: Nike developed products specifically for the Chinese market, incorporating traditional Chinese design elements and catering to local preferences.
• Digital Engagement: Nike embraced digital marketing, leveraging social media platforms and e-commerce channels to reach a wider audience and connect with Chinese consumers.

Nike’s Success in China: A Testament to Adaptability

Nike’s strategy proved to be successful, as the company has become a leading player in the Chinese sportswear market . In 2021, China accounted for over 20% of Nike’s global revenue (Ko & Zhang, 2022). Nike’s success in China highlights the importance of understanding local markets and adapting strategies to suit cultural preferences. The company’s ability to navigate the complexities of the Chinese market and establish a strong brand presence serves as an inspiration for other global brands seeking to expand into emerging markets.

Nike’s journey to becoming a global powerhouse is a testament to the company’s strategic approach to international expansion. By embracing adaptability, cultural sensitivity, and ethical business practices, Nike has successfully navigated the complexities of diverse markets , establishing a strong brand presence and achieving remarkable growth.

Key Takeaways from Nike’s Global Strategy

• Adaptive Pricing Strategy: Nike’s premium pricing strategy has been crucial in maintaining its brand image while also catering to a wider consumer base through tiered pricing and value-added services.
• Targeted Market Segmentation: Nike has effectively segmented global markets, understanding the specific needs and preferences of consumers in each region. This has enabled the company to tailor its marketing campaigns, products, and distribution channels to local tastes.
• Omnichannel Marketing Approach: Nike’s combination of direct-to-consumer stores, partnerships with wholesalers and distributors, and robust digital marketing has ensured a seamless customer experience across various channels.
• Global Manufacturing Strategy with Ethical Sourcing: Nike’s outsourcing approach to manufacturing has allowed for cost-efficiency and access to specialized expertise. However, the company has also prioritized ethical labor practices and fair working conditions, ensuring a sustainable supply chain.
• Commitment to Human Resource Development: Nike invests heavily in developing the skills and capabilities of its local employees, fostering a global talent pool that drives innovation and contributes to the company’s success.
• Global Social Responsibility and Sustainability: Nike’s commitment to environmental sustainability and social responsibility has earned the company a positive reputation and contributed to long-term profitability.
• Effective Cross-Cultural Communication: Nike has demonstrated a deep understanding of cultural differences, building relationships with local partners, suppliers, and consumers through effective cross-cultural communication.

Nike’s remarkable journey to global dominance is a testament to its strategic approach to international expansion , emphasizing adaptability, cultural sensitivity, and ethical business practices. As Nike continues to conquer new markets, Accelingo stands as a trusted partner, providing the professional translation services that are essential for success in diverse cultural landscapes.

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Global Sourcing at Nike

• Format: Print
• | Language: English
• | Pages: 31

About The Authors

Nien-he Hsieh

Michael W. Toffel

Related work.

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• Global Sourcing at Nike  By: Nien-he Hsieh, Michael W. Toffel and Olivia Hull
• Global Sourcing at Nike  By: Nien-hê Hsieh, Michael W. Toffel and Olivia Hull

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Nike Globalization Issues: The Good and the Bad

Introduction

Welcome to The Knowledge Nest, your trusted source of insightful information on various topics. In this article, we delve into the impacts of globalization on Nike's international operations. Globalization has significantly influenced Nike's business model, supply chain, and social and economic dynamics. We will explore both the positive and negative aspects of Nike's globalization strategy and its effects on communities and society.

The Positive Impacts of Globalization on Nike

Globalization has presented Nike with numerous opportunities to expand its brand worldwide. Through offshore manufacturing and sourcing, Nike has been able to reduce production costs, increase profit margins, and maintain competitive pricing for its products. This has allowed the company to offer affordable and high-quality athletic footwear and apparel to a global consumer base.

Expanding Market Reach

Nike's globalization efforts have enabled the brand to reach new markets and tap into new customer segments around the world. By establishing manufacturing facilities in different countries, Nike has been able to cater to the unique needs and preferences of local consumers. This localized approach to product development and marketing has helped Nike gain a competitive edge and increase its market share globally.

Job Creation and Economic Growth

One of the significant positive impacts of Nike's globalization strategy is the generation of employment opportunities in the regions where the company operates. Nike's manufacturing facilities create jobs for thousands of individuals, providing them with stable income and supporting local economies. Additionally, Nike's presence can stimulate economic growth by attracting investments and fostering the development of ancillary industries in the supply chain.

Technological Advancements and Innovation

Globalization has facilitated knowledge exchange and collaboration among Nike's global network of suppliers, designers, and researchers. This exchange of ideas and expertise has accelerated technological advancements and innovation within the company. Through leveraging the expertise of talented individuals worldwide, Nike has been able to develop cutting-edge products and deliver superior athletic performance.

The Negative Impacts of Globalization on Nike

While globalization has brought several benefits to Nike, it has also raised concerns and criticisms related to labor practices, environmental sustainability, and socio-economic inequality. It is important to address these negative impacts to ensure responsible and sustainable business practices.

Labor Exploitation and Sweatshops

Nike has faced criticism in the past for its labor practices in some developing countries. Reports of low wages, long working hours, and unsafe working conditions in Nike's supply chain have raised concerns about labor exploitation and sweatshop conditions. Although Nike has taken steps to address these issues, ensuring fair and ethical practices throughout the supply chain remains a challenge.

Environmental Footprint

The expansion of Nike's global operations has resulted in increased carbon emissions, waste generation, and resource consumption. As a responsible global citizen, Nike needs to prioritize sustainability and reduce its environmental footprint. The company has made efforts to adopt eco-friendly manufacturing practices and invest in sustainable materials, but continuous improvement is necessary to mitigate the negative environmental impacts of globalization.

Socio-Economic Inequality

On a broader scale, globalization has contributed to socio-economic inequality in various regions. The concentration of wealth and power in the hands of multinational corporations like Nike can lead to disparities in income and opportunities. Nike must take proactive measures to support local communities, promote fair trade practices, and ensure that the benefits of globalization are more evenly distributed.

In conclusion, the impacts of globalization on Nike's international operations are both positive and negative. While it has allowed Nike to expand its market reach, create jobs, and foster innovation, it has also raised concerns about labor practices, environmental sustainability, and socio-economic inequality. It is crucial for Nike to address these challenges and uphold ethical and responsible business practices. As consumers, we should also be aware of these issues and support companies that prioritize sustainability and social responsibility in their globalization strategies.

References:

• "Nike's Globalization Strategies and Impacts" - Journal of International Business Research
• "The Effects of Globalization on Labor Practices in the Apparel Industry" - International Journal of Business and Social Science
• "Globalization and Sustainable Development: A Case Study of Nike" - International Journal of Business, Humanities, and Technology

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How Globalization Impacts Operations Management

• Nike: a TNC

Drawing diagrams

This article uses Nike as a case study of globalisation and looks at the social and economic impacts of industrial development by TNCs

• Volume 24, 2012/ 2013
• Globalisation
• Human Geography
• People and the Environment

Alexander Cooke

Nike is a transnational corporation (TNC) founded nearly half a century ago. It is world famous for its trainers and sportswear, which feature the globally recognised ‘swoosh’ symbol.

Globalisation occurs as more connections are made between countries through trade and communications. It can bring wealth but it also causes inequalities.

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12E.6 Nike and Globalization

This set uses Nike as a case study of globalization to examine the costs and benefits of a worldwide business on the individual workers and on the national economies involved.

• HSS 12.6.1 Identify the gains in consumption and production efficiency from trade, with emphasis on the main products and changing geographic patterns of twentieth-century trade among countries in the Western Hemisphere.
• ELD.PI.11-12.1.Em Engage in conversational exchanges and express ideas on familiar current events and academic topics by asking and answering yes-no questions and wh- questions and responding using phrases and short sentences.
• ELD.PI.11-12.2.Em Collaborate with peers to engage in short, grade-appropriate written exchanges and writing projects, using technology as appropriate.
• ELD.PI.11-12.3.Em Negotiate with or persuade others in conversations (e.g., ask for clarification or repetition) using learned phrases (e.g., Could you repeat that please? I believe…) and open responses to express and defend opinions.
• ELD.PI.11-12.4.Em Adjust language choices according to the context (e.g., classroom, community) and audience (e.g., peers, teachers).
• ELD.PI.9-10.6c.Br Use knowledge of morphology (e.g., derivational suffixes), context, reference materials, and visual cues to determine the meaning, including figurative and connotative meanings, of unknown and multiple-meaning words on a variety of new topics.
• CCSS.ELA-Literacy.RH.11-12.7 Integrate and evaluate multiple sources of information presented in diverse formats and media (e.g., visually, quantitatively, as well as in words) in order to address a question or solve a problem.
• CCSS.ELA-Literacy.RH.11-12.8 Evaluate an author\'s premises, claims, and evidence by corroborating or challenging them with other information.
• CCSS.ELA-Literacy.RH.11-12.9 Integrate information from diverse sources, both primary and secondary, into a coherent understanding of an idea or event, noting discrepancies among sources.

Investigative Question

How does globalization affect international and national economies, and individuals.

Due to trade liberalization policies (the lowering of trade barriers between countries), along with advances in technology, communication, and transportation that speed up trade between countries, all economies throughout the world are more closely integrated with one another today than at any other time in the past. As part of understanding what globalization is, students consider the question: How does globalization affect international and national economies, and individuals? Students explore how changes in government policy, technology, information, and the rise of global markets contributed to this process. A sign that the U.S. economy is more globally integrated is the large percentage of exports and imports in GDP. Students will learn what exports and imports are, examine a trade deficit and surplus, and examine the balance of payments. They learn how the United States economy can be influenced by external factors, such as an increase in the price of oil on the global market or major changes in the incomes of its trading partners.

Trade occurs between individuals and firms globally due to differing comparative advantages. To address the uneven consequences of globalization, students consider this question: Why are there critics of globalization? International trade can be mutually beneficial to countries as it encourages specialization based on comparative advantage, increases overall productivity and employment, and lowers prices for consumers. The growth of world trade has contributed to an overall increase in personal income in our recent history, but this increase has not been uniform across nations and within nations. Critics of globalization assert that freer trade does not equate with fair trade; certain nations and classes within nations benefit while other nations and classes within nations do not share in the prosperity. Students can analyze protectionist measures used to reduce imports and examine the positive and negative impacts upon different groups, such as the effect of trade restrictions implemented during the Great Depression. Students might collect data, evaluate the sources of the data, and use the data to analyze particular trade restrictions of the United States and its trading partners. They might use the same process to defend or argue against current trade agreements and disputes between the United States and other countries.

Globalization refers to the faster and freer flow of goods and services, inputs, money, and ideas around the world, as well as the emergence of a global production system used by multinational corporations. Financial transactions, whether in the form of credit, stocks, or bonds, also flow quickly around the world and cause economies to be closely integrated with one another. Students learn that trade liberalization, technology, information, and lower costs of transportation have all fostered globalization. Students can trace the impact of globalization for themselves, for different groups in their own economy, and for groups in other countries. Students can also use their knowledge from tenth-grade world history in examining developing countries and studying how they have been impacted by globalization.

• Historical Background
• English Language Development extension activity
• Teaching Tools
• Potential Sensitive Issues, Topics, and Information
• The Library of Congress . The Library of Congress’ Primary Source Analysis Tool supports an inquiry model of instruction by asking students to first observe, then reflect, then question. Their customizable tool includes specific prompts for student interrogation of books and other printed materials, maps, oral recordings, photographs and paintings, and many other types of primary sources.
• The National Archives and Records Administration (NARA) . NARA has developed a vast collection of document analysis worksheets, ready for classroom use. Their website offers teachers a wide collection of customizable tools – appropriate for working with photographs, maps, written documents, and more. NARA has also customized their tools to meet the needs of young learners, and intermediate or secondary students.

Related Inquiry Sets

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Home » Management Case Studies » Case Study of Nike: Building a Global Brand Image

Case Study of Nike: Building a Global Brand Image

Brand history.

The idea of Nike began way back in the 1950s. A track coach by the name of Bill Bowerman was at the University of Oregon training his team. Bill was always looking for a competitive edge for his runners, like most of us today look for any advantage we can get. Bill said he tried using different shoes for his runners as well as trying other things to try and make his athletes better. Bill tried to contact the shoes manufactures in attempt to try out his ideas for running shoes. This however failed. In 1955 a track runner by the name of Phil Knight enrolled at Oregon. Phil was on the track team under Bill. Phil graduated from Oregon and acquired his MBA from Stanford University. Phil went on to write a paper that talked about how quality shoes could be made over in Japan and they would be cheaper. Phil called a company in Japan and became a distributor of Tiger shoes in the United States of America. Phil sent some pairs of shoes to his old track coach trying to get Bill to buy the shoes. Instead of buying these shoes Bill offered Phil a partnership to create better running shoes. In 1964 Bill and Phil shook hands and formed Blue Ribbon Sports. The companies’ first move was to order three hundred pairs of shoes from the company in Japan. While Bill examined these shoes and tried to make them better Phil was out selling the shoes. Bill had his track team at Oregon try out his new creations. This became the foundation of Nike. Due to the fact that Bill and Phil still had a full time job, they hired Jeff Johnson as their first full time employee. Jeff soon became a invaluable utility man for the company. In 1971 Jeff created brochures, marketing materials and even shot photos for a catalogue. The very first Blue Ribbon store was opened by Jeff. Meanwhile the relationship between Blue Ribbon and the company from Japan was starting to deteriorate. Bill and Phil made the jump to manufacturing and designing their own footwear. The trade marks swoosh which was introduced at this time. The Nike line of footwear was unveiled in 1972, during the U.S. Track and Field Trials. One pair of the shoes had a huge impression on a dozen multiple runners that wore the new shoes. These shoes incorporated a new style of soles that that had nubs on them that resembled the ridges of a waffle iron. These shoes were also a lot less heavier than most running shoes at the time. With the new image Nike started looking for athletes to wear, promote and elevate the new shoes. The first athlete they found was Steve Prefontaine. Prefontaine never lost a race that was over a mile in distance in his college career between 1969 and 1973. Prefontaine challenged Bill , Phil and their new company to stretch their talents. In turn Prefontaine became an ambassador for Blur Ribbon Sports and Nike. In 1975 Prefontaine died at the age of 24, but his spirit still lives on within Nike. Prefontaine became the “soul of Nike”. When 1980 hit Nike entered the stock market and became a publicly traded company. Once this happened many of the people that started the company moved on with their lives. This included Phil Knight who resigned from his president spot for over a year. In the mid-1980s Nike started to slip from top of its industry. This started to change when Michael Jordan released a new shoe through Nike. When this happened Nike’s bottom line got a boost. In 1988 the slogan that we all know today “Just do it” was introduced as a way for Nike to build on its momentum from their “Revolution” campaign. The Just do it campaign included three advertisements in which a young athlete by the name of Bo Jackson was involved in. By the end of the decade Nike was at the top of their industry once again. The 90’s brought a series of outreach for Nike. At this point in time Nike deepened their commitment into others sports such as soccer and golf. In 1995 Nike signed the whole World Cup wining Brazilian National Team. This also allowed Nike to create jerseys for the team. Nike also landed contracts with both the men’s and woman’s teams for the United States. The biggest thing that Nike was criticized for was when they signed a young golfer by the name of Eldick “Tiger” Woods for huge deal. All of the competition said this was a dumb idea till Tiger won the 1997 Masters by a record 12 strokes. In 2000 a new shoe was introduced. This shoe went by the name of the Nike Shox. This shoe combined more than 15 years of dedication and perseverance. Nike is still the industry leader in their markets and continues to grow more and more each year around the world. This company will have much more to offer in the future.

Brand Equity

Having and holding customers is likely to be a competitive battle which each brand tries all efforts to win. They compete for functional attributes, distinctive services or innovative technologies. So what are emotional and functional benefits which Nike provides for their customers?

Since Nike was set up by someone who has a deep passion for athletics and running, it should come no surprise that product is important. Products that are comfortable, authentic, functionally innovative and uniquely designed. The innovative technology is considered as one of the defining dimensions of Nike’s brand identity and corporate culture.

The simple driving concept has led to some impressive innovations which is considered as one of the defining dimensions of Nike’s brand identity and corporate culture. The first highlight was Air cushioning, using pressurized gas to cushion impact and new materials such as Urethane, that was used first with the Air Max running shoes. More recently, to obtain maximum performance, Nike Sport Research laboratory has discovered the innovative technology such as Shox, which are made mostly of rubber and spring back adding more power to a runner’s stride and Total 90 Concept, a range of equipment to help players perform over 90 minutes of a soccer match. Such innovative technology which Nike has used has gained the strong hold in consumers’ perceptions.

Clearly, functional benefit is the fundamental and classical features to communicate with customers. However, if Nike just provided high quality running shoes to enhance athletic performance, Nike would not be strong brands. Big brands need to be beyond the purely functional relationships. They should create a more strong emotional attachment with core consumers because emotional benefits add richness and depth to the brand and the experience of owning and using the brand. Nike offers emotional benefits which are “the exhilaration of athletic performance excellence; feeling engaged, active, and healthy; exhilaration from admiring professional and college athletes as they perform wearing “your brand” – when they win, you win too”.

Associated brand with the top athletes, Nike tells story of brands which the main themes is sportsmanship and unrelenting effort. These are the story of Michael Jordan who won a record 10th scoring title and was selected as one of the 50 Greatest Players in American’s National basketball association championship. Lance Armstrong survived and won a second straight Tour de France while Tiger Woods completed the career Grand Slam, ensuring his place in golf history at the age where most of us are still wondering what we will do when we grow up. The most three prominent athletes has generated the inspiration for young and next generation of athletes. Nike has succeeded to transfer their inspirations to every single purchaser. Wearing every pair of Nike shoes is to engage a passion for excellence and encourage to do your own thing. “Just do it” – the tagline could sum up all the greatest values of brand which is.

“Just Do It” Campaign

Products are no longer just products, they move beyond the functional meanings. Nowadays, they are definitely social tools serving as a means of communication between the individual and his significant references. Products are considered as a symbol of individuality and uniqueness, and also symbol of affiliation and social identification. It is particularly trued with the fashion brands. Fashion brands such as clothes, bags, shoes and etc satisfy opposing functions, both social identification and distinction among individuals.

Nike must have understood the recipe well. The “Just do It” campaign in the early 1990s would be a perfect example. Losing ground to archival Reebok which was quick initiative on designing “style”, “fashion” aerobics shoes in 1980s, Nike responded dramatically and forcefully by launching the “Just do it” campaign which was mainly focused on person wearing on products instead of product itself.

Purchasing an athlete-endorsed product is one means of symbolically and publicly demonstrating aspirations to be a part of the group and such behaviors are directly influenced by the extent to which a fan identifies with an athlete endorser. Heroes and hero worship was being built as the main themes of advertising. Celebrity endorsements such as Bo Jackson, John McEnroe and Michael Jordon appealed to the consumers sense of belonging and “hipness”. In other words, Americans consumers were convinced that wearing for every part of your life was smart (the shoes are designed for comfort) and hip (everyone else is wearing them; you too can belong to this group). “Just Do It” campaign succeeded (Nike increased its share of the domestic sport shoe business after launching this campaign in America from 18 percent to 43 percent, regained the leader position) because it could fascinate customers in both separating ways. Wearing Nike as a self fulfilling image declaration – “if you are hip, you are probably wearing Nike”. But perhaps most importantly, it could create the desirable needs -“if you want to be hip, wear Nike” .

Brand Loyalty

Luring by good shoe with innovative functionality and athletic aspiration value, Nike has indeed come to mind and heart of its customers. By the mid of 1990s, 77 percent of male Americans from the age of 18 to 25 chose Nike as their favorite shoe. The figure still remains stably despite of that “up” and “down” year Nike has been experience, gaining the high score of customer satisfaction at 79 percent rated by The American Customer Satisfaction Index Organization .

It could be said that loyalty to the Nike brand is driven by many external and internal factors such as brands’ subjective and objective characteristics and loyalty building programs. One visible example of creating innovative method to capture the strong relationships with Nike users is that creating Joga.com, a social network site for foot ball fans. Launching quietly in the early 2006, the site became an instant hit, peaking at 7.5 million viewers when Nike showed Ronaldinho video clips. More than 1 million members from 140 countries signed up by mid July. In this site, fans can create their personal blogs, build communities around favorite teams or players, download video and organize pickup games. By enrolling consumers in building and shaping the content of the website, Nike pulled their loyal customers closer, nurtured deeper bonds of loyalty and advocacy.

Brand Awareness

Brand awareness is the first and crucial stage of consumer’s preference. It refers to the strength of a brand’s presence in the consumers’ mind. Nike has been successful in building awareness. The “Swoosh” symbol has been appeared everywhere, on shoes, hats, billboards and soccer balls across the globe too remarkably to such extent that one author used the title “The Swooshification of the World” on Sports Illustrated column that imaged a future in which the swoosh could surpass sports to become a letter of the alphabet and the new presidential seal, among other things. True be told, the recognition of the ‘swoosh’ is extremely high.

As of 2000, 97 percent of American citizens recognized the brand logo, as the strong brand penetration. Nike could be recognized consistently without identification of brand name, even by the youngest group (aged from 4 to 6 years old). This perhaps may reflect the general level of advertising and promotion that children are exposed to.

How has Nike done to build brand awareness? Sponsorships, advertising and experience focused retailing (Nike town) are three vivid channels that Nike has applied to enhance its brand image and awareness. Among these strategies, athlete endorsements could be considered as the most significant success of Nike brand.

Nike has been invested millions of dollars to associate their brand names with easily recognizable athletes with the aim of brand image building. Athletes at the top of their respective sport such as Micheal Jordan, Tiger Woods, and Lance Armstrong who are well – liked and respected by members of the brand’s target audience are chosen as endorsers to associate the Nike brand with the athlete’s celebrity image. This strategy has been paid off, for example, since Tiger Woods and Nike cooperated, annual sales for Nike Golf have exceeded to nearly $500 million dollars with an estimated 24 percent growth per year in the first five years of the agreement.

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