Nike product development strategy

Nike product development strategy

Nike Inc. In this business case, Nike has a marketing mix that involves athletic products. For example, the company specializes in shoes that are designed to satisfy the needs of professional basketball and football athletes. Such evolution is a critical success factor that enables the business to use its marketing mix to respond to market trends and changes that influence local, regional, and international market demand for its products.

Through its marketing mix, Nike Inc. The company competes against various firms involved in the footwear, apparel, and athletic equipment markets. This element of the marketing mix enumerates the organizational outputs offered to target consumers. These outputs are known as the product mix. For example, the business continues its investment in research and development to produce new products and enhanced versions of its current products. Originally a distributor of shoes, the company now manufactures various shoes, apparel, and equipment for different sports.

Based on Nike Inc. Shoes are the most popular products from Nike Inc. The business gradually adds more product lines in this category. For example, the company now offers running shoes, tennis shoes, and shoes for a variety of other sports, including cricket. Nike also sells apparel, such as jerseys, shorts, and related products. Based on this element of the marketing mix, Nike expands its product mix to address the needs of its target markets and market segments.

For example, these products are available at major retail stores. Retail stores are the most significant places where Nike products are sold because these venues are strategically located and easily accessible in various markets around the world. In addition, the business operates its Niketown retail outlets. These outlets are company-owned and allow access to business and market information that supports corporate strategic management with regard to marketing strategies and tactics for current, new, and emerging products.

Based on this element of the marketing mix, Nike Inc. However, the company has limited control on the distribution and sale of its products via other retail outlets. This element of the marketing mix is also known as the marketing communications mix, and involves the tactics that Nike uses to communicate with its target markets. The company depends on the effective promotion of its products to maintain a strong brand image, which is one of the strengths determined in the SWOT analysis of Nike Inc.

The company uses promotional tactics to communicate with target customers about its products, and persuade these consumers to purchase the products. The company heavily relies on advertisements, especially those that involve high-profile celebrity endorsers, such as professional athletes and sports teams.When we think of Nike, we think running. We think swoosh. We think shoes. We think digital sports engineering. It is this unconstrained testing that, beginning inenabled Nike to leap beyond swoosh and shoes and successfully launch an innovative electronic device, FuelBand, that measures movements.

Nike also has completely reinvented its shoe manufacturing process. Rather than setting out to design a new shoe, the company designed a new way to think about the manufacturing of an athletic shoe. Nike resisted a status quo existence and instead, reportedly relied on four rules to standardize innovation:. Nike earned their innovator crown the hard way: it took tries using the reinvented manufacturing process before the Flyknit Racer was born. It appears that innovating is not for the impatient.

Corporate buy-in is key at a relatively early stage in the prototyping process. How else can one explain prototypes before Flyknit came about? On the other hand, CEO Mark Parker nixed an early prototype of the FuelBand—yet he still let testing continue until the right product was developed. Now, that is a CEO committed to innovation. Parker went leaps and bounds further. He recognized that increasingly, no one company can possibly have all the skillsets for every aspect of each innovation.

Fast Company puts it this way:. Just as Google needed Android to attack mobile and Apple needed Siri to give it a foothold in search, successful businesses need to constantly evolve, either through partnerships, new talent, acquisitions — or all three. A partnership developed between San Francisco industrial design firm Astro Studios and Nike engineers to work on the electronic movement measuring device that became FuelBand.

Nike directed its new partner through hundreds of prototypes. They appear to be the personification of persistence, leading one to ask, what drives the continuous prototyping? Nike probably would argue that it is its emphasis on the Nike corporate culture. Inside the company, the Nike mystique is as critical to its success as its external brand. Product Mastery Roadmap.

IDEA Framework. Innovation Stories. Innovation Roundup. Learn about it in the Product Mastery Roadmap.

nike product development strategy

They deliver value to customers. They're also exciting responsibilities for those properly equipped. That is my job - equipping product managers and innovators.Nike Inc. An intensive strategy shows how a company grows. Founded inNike Inc. To keep its position and competitive advantage, Nike must ensure that its generic strategy and intensive growth strategies are always suited to current business conditions. In this generic strategy, the company minimizes production costs to maximize profitability or reduce selling prices.

In the late s, Nike reduced costs and the selling prices of its athletic shoes and other products. This generic competitive strategy helped the company regain its competitiveness, especially against Adidas. For example, the company integrates cutting-edge designs for its shoes. Product Development. This intensive strategy involves the introduction of new products to grow sales revenues. New technologies enhance the products and set them apart from the competition. In product development, these products remain attractive despite changing consumer preferences.

Market Penetration. In this strategy, the company grows by increasing sales revenues in existing markets. For example, Nike increases its stores and retailers in the United States to sell more athletic shoes to American consumers. However, market penetration is just a secondary intensive growth strategy because the company already has significant presence in the global market. The cost leadership generic competitive strategy empowers Nike to penetrate markets based on product affordability.

Market Development. For example, Nike enters new markets in Africa and the Middle East to increase its shoe sales revenues. Alongside product development, the company applies the market development intensive growth strategy by investing in new technologies to penetrate new market segments, such as segments composed of bodybuilders.

The generic competitive strategy of differentiation helps the company enter new markets, based on product attractiveness. This strategy involves developing new businesses to achieve growth. Nike implemented this intensive strategy in its early years, such as when it introduced apparel and sports equipment to its product mix.

Initially, the Nike brand was on athletic shoes only. We use cookies for website functionality and to combat advertising fraud.

nike product development strategy

See our Privacy Policy page to find out more about cookies or to switch them off. Skip to content. A pair of Nike Blazers shoes, Italian version. Photo: Public Domain Nike Inc.

The Art of Nike Product Management

Previous Post Previous Nike Inc. Next Post Next Nike Inc. Organizational Structure Characteristics Analysis.March 25, — In addition to dramatically reducing its carbon footprint, shifting from SF6 to nitrogen encouraged Nike engineers and designers to imagine new shapes and sensations of Air.

Episode 1: A Design Evolution

March 19, — How a little mystique and strategic partnership helped to push the envelope for materials and other critical elements of making Air-Soles. March 11, — Janett Nichol, VP of Apparel Innovation at Nike, shares her vision for how Nike can use its tremendous insights to engineer product for all women who want to be fit and healthy.

March 11, — Combining athlete feedback, data and a deep knowledge of different breast shapes and tissue densities, Nike designs high-performance sports bras with women-specific innovation for athletes of every level.

October 03, — At Nike Shanghaithe digitally-enabled innovation, design and personalized service is unlike any other Nike retail experience. March 26, — This game-changing evolution of Nike Flyknit construction - now featured in basketball, running and football - offers a more precise fit that enables ultimate agility and quickness. January 23, — In short, it's the softest, smoothest and most resilient foam Nike has ever delivered.

It launched in basketball and this February it comes to running shoes. Find out how it can help runners of all levels want to do more and go farther. September 02, — Nike co-founder Bill Bowerman's quest to create footwear to improve athlete performance is a driving force for Nike's ever-evolving approach to product innovation. Terms of Use Nike Privacy Policy. CA Supply Chains Act. Nike News.Strategic Analysis of Nike, Inc. Nike Inc.

Our modest goal then was to distribute low-cost, high-quality Japanese athletic shoes to American consumers in an attempt to break Germany's domination of the domestic industry. Today inNike Inc. Nike maintains traditional and non-traditional distribution channels in more than countries targeting its primary market regions: United States, Europe, Asia Pacific, and the Americas not including the United States.

We utilize over 20, retailers, Nike factory stores, Nike stores, NikeTowns, Cole Haan stores, and internet-based Web sites to sell our sports and leisure products. We also sell athletic apparel carrying the same trademarks and brand names as many of our footwear lines. Among our newer product offerings, we sell a line of performance equipment under the Nike brand name that includes sport balls, timepieces, eyewear, skates, bats, and other equipment designed for sports activities.

In addition, we utilize the following wholly-owned subsidiaries to sell additional sports-related merchandise and raw materials: Cole Haan Holdings Inc. Our most popular product categories include the following:.

As illustrated in the graph below, this marked the first time since that revenues have declined. Regardless of this year's decline, Nike Inc. As the graph below illustrates, net income has been volatile in the latter half of the 90's. Sharp decreases in and net income were due to restructuring charges.

If these charges had not been incurred, income would have been flat for both years. Efficiency in cost control and inventory management has allowed net income to increase while revenues decreased in Our greatest challenge in will be to maintain the operational and financial initiatives we worked so hard to implement in and We must maintain our inventory levels low enough that will allow us to adapt to quickly changing market trends. Financially, we must remain conservative in our cost structure.

With the gradual economic recovery in the Asia Pacific region, we can capitalize on customers who are financially stronger. Our sponsorship of the Olympic Games in Sydney, Australia, and the World Cup in Japan and Korea will be the start of many opportunities to bring sports events into the mainstream for regional and global markets.

With added exposure, we are challenged to respond to a market demand for fashionable athletic footwear and apparel. In this quest, we will succeed if we keep quality and performance at the core of our business. The Internet is a rapidly changing medium. As the first company in our industry to offer e-commerce capabilities, we must proceed with caution and stealth in order to select an enduring strategy that will complement our existing distribution channels.

While attending Stanford University, Knight wrote a paper about breaking the German dominance of the U. In an attempt to realize his theory, Knight visited Japan and engineered an agreement with the Onitsuka Tiger company, a manufacturer of quality athletic shoes, to be their sole distributor in the United States.

InBowerman, who had previously designed shoes for his university athletes, worked with Tiger to design the Cortez running shoe. InBRS, with creditor support, started manufacturing their own line of shoes. Later that year, the first BRS shoe was introduced. The shoe was a soccer shoe that bore the Nike brand name, referring to the Greek Goddess of Victory, and the Swoosh trademark. The Swoosh was meant to symbolize a wing of the Greek Goddess. BRS soon changed its name to Nike, Inc. InSteve Prefontaine was the first prominent track star to wear Nike shoes.

A year later with 2, employees, Nike went public selling 2 million shares on the New York Stock Exchange. Nike also expanded its product line to include specialty apparel for a variety of sports. These revenues grew based on improvements in shoe technology and successful marketing campaigns.Of the Four P's of marketingproduct is often thought to be the linchpin, the element that holds all other elements together.

It is an extremely important element in the marketing mix. Furthermore, today's marketing thinking focuses not only on the product but on the customer's experience with the product.

nike product development strategy

It is now thought that the customer's interaction with the product is what marketers must address, not just product design. Read the article and respond to the following questions. Please provide guidelines on creating a 3 page paper: The PTSTP process is a method used to focus on what a product means to potential consumers of that product.

In trying to obtain a sustainable competitive advantageshould a soft drink manufacturer for example: Coke or Pepsi use PTSTP to develop new products? Wall Street Journal. Eastern edition.

Nike’s Brilliant Marketing Strategy – Why You Should Be (Just) Doing it Too

New York, N. Coca-Cola Co. But Coke will have to show it can preserve the upstart's innovative culture. Launched inFuze is known for its fruit-flavored drinks in colorful, clunky glass bottles that promise to "refresh your soul" or deliver "a shield of protection against the rigors of an active lifestyle.

Pepsi, of Purchase, N. Some Coke bottlers have grown so worried about the company's noncarbonated offerings that they distribute brands from other beverage concerns. Twenty Coke bottlers already handle deliveries of Fuze. John F. Brock, president and chief executive officer of Coca- Cola Enterprises Inc. Coke has had mixed success with niche acquisitions in the U. After buying Barq's inCoke turned the root beer with a small but loyal following into a nationwide brand that now is a staple on supermarket shelves.

Sales of juice maker Odwalla Inc. Coke said Fuze will operate as a standalone unit, which is similar to the structure used for Odwalla, based in Half Moon Bay, Calif. The Fuze purchase is subject to regulatory clearance and expected to close in the first quarter. A unit case contains the equivalent of 24 eight-ounce drinks. Coke sold about 5. Coke reports fourth-quarter and full-year results Feb. Introduction The Coca-Cola Company is a beverage manufacturer.

Its beverages consist of energy drinks, juices, juice drinks, soft drinks, sports drinks, tea and coffee drinks, and water. John Stith Pemberton invented Coca-Cola in Today, Coca-Cola is a worldwide brand and an instantly recognizable household name. Goals Coca-Cola Enterprise's primary goal is to increase shareholder value over the long term.

This goal is one that has been evident in the company for a number of years.Oregon-based Nike NKE is one of the most recognized brands across the globe. The company, founded in as Blue Ribbon Sports, is still going strong even today. Known for its iconic slogan—"Just Do It"—Nike is the largest supplier of athletic apparel and footwear. It also designs, manufactures, and markets its own line of sports equipment as well. Nike has a series of brand names under its banner including Air Jordan, Nike Golf, and Nike Pro, as well as several subsidiaries such as Converse and Hurley International.

Converse designs, markets and distributes athletic lifestyle apparel, footwear, and accessories. Hurley, on the other hand, designs, markets, and distributes surf and youth lifestyle footwear, apparel, and accessories. Geographically, Nike's revenue for the fiscal year was broken down as follows:.

As such, the company's board of directors approved an increase to its annual dividendraising it from 88 cents to 98 cents per share. That translates to an increase from 22 cents to Some of the things investors should be aware of that impact Nike's financial and its stock include currency fluctuations, consumer tastes, geopolitical tensions, new technology, and personnel among others.

Analysts agree, though, that Nike is poised for continued growth, which should have an impact on the company's share price. That's because it is consistently focused on product and marketing innovation. The company remains committed to upgrading its digital footprint through its Nike Direct business, through which the company sells and launches new products online and also makes improvements to its supply chain.

Nike's consistent focus on product and marketing innovation should help keep it poised for growth. Additionally, the growing middle class in emerging markets, as well as greater China, should keep the demand for its products growing. There may be a few hiccups, though. In Octoberthe company announced that its chief executive officer CEO Mark Parker, who led Nike sincewas stepping down, handing over the reins to John Donohoe.

China is another key factor investors should keep an eye on. Because it is one of the company's largest growth markets, any detrimental news out of the country could have a big impact on share prices. For example, the stock took a hit after the company announced it had to shut down half of its stores in the countr y in February because of the coronavirus outbreak. The company reduced the hours at its other locations in China because of lower foot traffic.

But there is no risk-free stock—not even Nike. A slowdown in China, currency movement and growing competition are always concerns that could put a dent in the company's growth numbers.

Although the positives should outweigh the negatives, the stock may seem expensive, especially when it trades around its week high.

There is potential in the company to justify those levels, but it would be wise to let it take a breather before you pick this sporting stock. Company Profiles. Top Stocks. Your Money. Personal Finance. Your Practice. Popular Courses. Stocks Growth Stocks. Key Takeaways Nike is the world's largest supplier of athletic apparel and footwear in the world. The majority of Nike's revenue is derived from North America.

The company's share price and financial performance is dependent on currency fluctuations, consumer tastes, growth in emerging markets, as well as technology. The author has no holdings in the stocks mentioned. Compare Accounts.

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