Strategy
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"There is no value in making things any more.
The value is added by careful research, by innovation and by marketing."
– Phil Knight, CEO of Nike, Inc.
- Nike does not make shoes; it designs and markets them.
- Manufacturing is contracted out to suppliers, usually Korean, Taiwanese or Hong Kong companies located in cheap labor countries like Indonesia, the Philippines, Thailand or China.
- Nike develops its technology domestically, but foreign labor services are used exclusively in order to keep production costs low. As a result of its global practices, Nike supports GATT and NAFTA, agreements, which promote global trade.
- Nike’s cheap production costs facilitate a quick product turn around – Nike develops new shoe models every week.
- Nike uses "auto-replenishment," a term that refers to Nike’s anticipation of product demand. Instead of waiting for retailers’ orders that reflect the consumer’s demands, Nike anticipates consumers’ desires and supplies specific shoes in accordance with these predictions. Nike changes its product line every six weeks in order to remain ahead of its competitors.
- To establish itself as a dominant name brand, Nike has relied heavily on its sponsorship of athletes.
In the late ‘80s and early ‘90s, campaigns starring Michael Jordan and Bo Jackson established Nike’s swoosh logo as the premiere sign in the consumer marketplace and the corresponding Nike slogan, "Just Do it," became a part of the language of every day life.
- Nike Team Sports
- In 1996, Nike signed a deal with the Brazilian soccer team and its star forward, Ronaldo, in effort to build brand recognition in soccer crazy South America.
- Nike is the exclusive sponsor of many collegiate athletic teams including The University of North Carolina, The University of Arizona and Ohio State University.
- Nike sponsors professional athletic teams, such as the Philadelphia Flyers, Denver Broncos, San Antonio Spurs.
- Nike is an active sponsor of women’s athletics.
- Nike is the exclusive sponsor of the US women’s soccer national team and that team’s star player, Mia Hamm.
- Nike sponsors some of the WNBA’s marquee athletes including Dawn Staley, Lisa Leslie and Dawn Staley
