HOW WE PROCEED?
Birth of Nike Inc.
Human Resource Strategy
BABY TO GIANT
• Nike, Inc. is an American multinational
corporation engaged in the business of
footwear, apparel, equipment, accessories and
• Born as Blue Ribbon Sports in 1964 by Bill
Bowerman and Phil Knight and officially
• The Nike brand is valued at $10.7 billion,
making it the most valuable sports brand.
• Nike is listed among the best marketed
• Nike’s strategy has kept it as the most
valuables sports brand
1. REGION-WISE SPORTS
• Nike follows a strategy
of concentrating in
sports which is widely
followed in a particular
• 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 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
– 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,
– Football (National Teams):Brazil, England,
– 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.
1. LOW-COST CONTRACT
• 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
• Nike uses patents to protect their innovations
• 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
Dri-FIT is a high-
polyester fabric that
moves sweat away from
the body and to the fabric
surface, where it
• As a result, Dri-FIT keeps
athletes dry and
1. EXTENSIVE R&D
• Nike R&D comes up
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
2. INVOLVING PLAYERS IN
• Nike gets athletes involved in their
• This helps them to customize products
according to their needs and in turn bring new
products to the customers with these
3. COUPLING TECHNOLOGY WITH
• Example: Nike+ is a
involves a sensor kept
inside a shoe.
• Technology enhances
the brand value of the
• 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
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
1. TAKING CARE OF LABOUR OF
• 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
• Such a sustainability strategy will add to the
brand value of Nike
• Can you guess the biggest but the
simplest strategy of Nike?