Nike Brand Analysis

Nike brand has been around since the 1960s. This brand has become known as one of the top brands of sports gear. This has not happened because of an accident. A lot of work has gone into making this brand what it is today. The amount of different brands that Nike makes help them reach out to every kind of person in the world today. The competition for Nike has also helped them succeed by making them try and stay ahead of their competition. Also if you take a look at their SWOT analysis you can see the different things that make Nike one of the top brands in today’s world.

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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.
Nikes products do not just cover one area like some companies products. Nike prides itself in having a product for most every sport out there. Also they do not just stick to shoes. They also produce everything from socks and compression shorts to sunglasses and hats. Nikes first products started with track shoes. Today they still are huge into the shoe industry but Nike also makes jerseys, shorts, baselayers etc. Nikes products never stop involving. As a person who wears a lot of Nike gear, my favorite thing about the brand is that they always find a way to make the products better. Take their basketball shoe line for example. When Nike made their first pair of basketball shoes they probably had no idea what they were doing. Today Nike has one of the best lines of basketball shoes out there with the Air Jordan line. These shoes are always light weight and they feature great support and breathable leather which are both needed in a good basketball shoe. Also Nike makes their products stand out with their brilliant use of colors and unique designs. Everyone in today’s society wants to be seen in the swoosh. In 2009 Nike introduced the Nike+ products and teamed up with Apple. This allows runners to sink their shoes with their IPods and it will allow them to see how far they have run, how many calories they have burned and also keeps time for them. Nike has also done this with their basketball shoes which allow players to link up through their IPods again. However this new design helps measure a player’s vertical, quickness, and other aspects of their game. Nikes products keep improving with the time and there is no end in sight to what Nike can do with their products.
Nike has many competitors in their industry. These companies include but are not limited to Puma, Underarmor and Addidas. These competitors drive Nike to strive for new innovations every day. Nike competes with Addidas in the basketball market. Nike owns over 80% of U.S. basketball market to as where Addidas owns only about 14%. Addidas is trying to keep up with Nike in innovation but is having a really hard time in doing so. Nike and Underarmor are major competitors in the work out clothing industry. Both of these companies make very good products that will help an athlete get better in their sports. In this industry I would have to give the advantage to Underarmour because when you go to a gym you always see people working out in Underarmor clothes. Puma and Nike compete in the shoes market. They are both big in the track shoes industry. Both of these companies make extremely comfortably light weight shoes. If you watch the Track and Field events at the Olympics you will see most runners are wearing Nike shoes or Puma shoes. In this competitive match up I would have to say Nike has the clear edge. If you look at the past Puma use to have every track athlete in a pair of their shoes. Over the past decade that has shifted towards the shoes that are produced Nike. Nike has the overall competitive advantage in their industry.
The people that buy Nike brand differ immensely. The target Market for Nike clothing and other accessories are people between 18-35 years of age. Some characterists about the people that buy the Nike brand include many things. One main thing for most of the Nike customers are that they watch or play a lot of sports. This is said because Nike uses major sports icons to promote their products. These athletes include Lebron James, Tiger Woods, Mia Hamm and many more athletes from all different sports. By using these athletes it makes people want to wear the brands that their favorite athletes wear. Some more characteristics of Nike consumers are that they are into extreme sports. Nike has come out with the 6.0 line to appeal to the younger generation’s thrill of extreme sports. These are just a few characteristics that Nike buyers have in common.
Nike is a great company in its industry and it will be a very long time till anyone ever knocks them off of the top of their industry. However Nike has had issues with violating Human rights. Their factories are under scrutiny in countries like Mexico and Vietnam. Their factories in Vietnam have been in violation of minimum wage and overtime laws. Nike states that these violations are no longer happening. In the 1990s Nike’s use of faced child labor in Cambodia and Pakistanis was being closely monitored. However Nike still has factories in places where the monitoring of child labor has bad regulations.. In 2001 BBC documentary uncovered the use of child labor by Nike. The documentary was based around 6 little girls, who worked every single day and were all working over 14 hours shifts. In July 2011 Nike admitted that 66% of their factories do not meet regulations for worker treatment.
I conducted a SWOT analysis on the Nike Brand. One of Nike’s key strengths is their use of popular athletes to help promote their products. The idea behind this is that most individuals will remember what a star athlete is wearing. A major weakness is that the market that Nike operates in is very price sensitive. Most of Nike’s income comes retailers purchasing the products they produce. This indicates that margins tend to get squeezed as retailers try to get low price competition on Nike’s products. Opportunities include things such as the constant change in technology. The ability to generate more money by having a wide range of products helps Nike a lot. Nike is not just involved in sports wear they are also in regular clothing and sunglasses. Also Nike has a huge base all over the world which allows them to have a larger global market. Finally some of the threats are that the retail sector is becoming substantially price competitive. This means that shoppers are looking around for better deals rather than just buying the top brands. The consumer now controls the manufacturing. If a consumer wants to find the lowest price on identical products, then they will go store to store in order to find the lowest price.
In conclusion Nike has a lot going for it. It started with a track coach and a track runner. This brand has become known as one of the top brands of sports gear. This has not happened because of an accident. A lot of work has gone into making this brand what it is today. The amount of different brands that Nike makes help them reach out to every kind of person in the world today. The competition for Nike has also helped them succeed by making them try and stay ahead of their competition. Also if you take a look at their SWOT analysis you can see the different things that make Nike one of the top brands in today’s world. Their number one position in the world is will continue far into the future if they stick with what they know.
Work Cited
“About NIKE, Inc.” NIKE, Inc. -. N.p., n.d. Web. 22 Oct. 2012. .
“History & Heritage.” NIKE, Inc. -. N.p., n.d. Web. 22 Oct. 2012. .
“Nike, Inc.” Wikipedia. Wikimedia Foundation, 22 Oct. 2012. Web. 22 Oct. 2012. .