Nike Strategy: Indian Context

GROUP NO. 2

Group Members:Elizabath Paul

Saranya SNeha Raj

Abdul Nafiy AShipin P

Can you recognise this?

HOW WE PROCEED?

Birth of Nike Inc.Company Strategies

Marketing StrategyManufacturing StrategyInnovation StrategyBusiness StrategyHuman Resource Strategy

BABY TO GIANT

• Nike, Inc. is an American multinational corporation engaged in the business of footwear, apparel, equipment, accessories and services.

• Born as Blue Ribbon Sports in 1964 by Bill Bowerman and Phil Knight and officially became Nike.

• The Nike brand is valued at $10.7 billion, making it the most valuable sports brand.

COMPANY STRATEGY

• Nike is listed among the best marketed brands.

• Nike’s strategy has kept it as the most valuables sports brand

MARKETING STRATEGY

1. REGION-WISE SPORTS CONCENTRATION

• Nike follows a strategy of concentrating in sports which is widely followed in a particular region.

• In India Cricket is widely followed, so Nike has endorsed the brand called Nike Cricket.

2. SELLING STRATEGY

a) Nike Stores– Nike stores are the flagship direct retail outlets of

Nike. – Nike Stores are strategically located in the busiest

and most posh commercial areas of major towns and inside big malls.

b) Counters in High-end Retail Outlets– Nike follows the Store-within-a-store concept

inside Fashion retail outlets like Lifestyle and Central.

– This helps Nike to capture customers who wish to satisfy all their apparel needs under one roof.

3. Promotional Strategy

a) Sponsorship of Teams and Players– Football (Clubs): Manchester United, Arsenal,

Barcelona– Football (National Teams): Brazil, England,

Netherlands, France– Cricket: India

b) Nike Sponsored Events– Nike sponsors major sports events like

Marathons. For example: The Nike We Run 2014, Bangalore Marathon is scheduled this month.

– Nike has an advantage to sell apparel for this marathon as it has given a common dress code for the event.

4. PRICING STRATEGY

• Nike follows a prestige pricing strategy. • This strategy is widely successful because of its

brand value and brand loyalty. • For example: Volkswagen has 15 times

turnover of Porsche, but in profit margin Porsche has 7 times more than Volkswagen.

MANUFACTURING STRATEGY

1. LOW-COST CONTRACT MANUFACTURERS

• Due to its Supply Chain capability Nike has concentrated its manufacturing hub in low-cost countries like China, Vietnam.

• In India, Nike procures widely from garment producing hubs like Tirupur.

• The advantage of this for Nike is that they get products made cheaply due to the economies of scale experienced by these low-cost contract manufacturers.

2. PATENTS

• Nike uses patents to protect their innovations and brands.

• For example: Nike Dri-Fit, Nike Stay-Cool, Nike Free and Nike Flyknit.

• These patents not only protect their innovations but also create a quality perception and brand value in the minds of consumers.

•Dri-FIT is a high-performance, microfiber, polyester fabric that moves sweat away from the body and to the fabric surface, where it evaporates.

• As a result, Dri-FIT keeps athletes dry and comfortable.

INNOVATION STRATEGY

1. EXTENSIVE R&D

• Nike R&D comes up with constant innovations in sports goods and these come in at the right time.

• For example, Cristiano Ronaldo has unveiled his 2014 world cup boots, the Nike Mercurial Superfly.

2. INVOLVING PLAYERS IN INNOVATION

• Nike gets athletes involved in their innovations.

• This helps them to customize products according to their needs and in turn bring new products to the customers with these innovations.

3. COUPLING TECHNOLOGY WITH SPORTS

• Example: Nike+ is a Sports tracking equipment which involves a sensor kept inside a shoe.

• Technology enhances the brand value of the firm.

BUSINESS STRATEGY

1. ACQUISITIONS

• Nike acquired Converse for US$ 309 million. This would allow Nike to try a “buy rather than build” strategy and to develop leisure shoes separately from the hard-core Nike sports image.

2. FINANCIAL STRATEGY

• Nike proposed to buy back $8 billion of its class B stock in 4 years. This strategy will generate long-term profitable growth and strong cash-flow and will deliver value to shareholders.

HUMAN-RESOURCE STRATEGY

1. TAKING CARE OF LABOUR OF CONTRACT MANUFACTURERS

• Nike as a part of its responsibility takes care of the health and education of labour working in the Contract Manufacturers.

• Nike can influence the wages provided by the contract manufacturers as the wages are influenced by the prices they pay to these manufacturers.

• Such a sustainability strategy will add to the brand value of Nike

• Can you guess the biggest but the simplest strategy of Nike?

Nike THANKS TO ALL