The Nike Growth Case
In my previous blog, I have discussed seven ways of growing your business. There are only a few companies that are able to grow their business over a longer period of time. Nike is one of those exceptional companies. Transformed from a seller of sport shoes to a prominent global lifestyle brand with a variety of goods and (digital) services.
Especially the Nike case is interesting, because it was and is using different ways of growth. Consistently. Let me explain.
Customers
The first market that Nike was targeting was of course the Athletics market. With spectacular sponsor deals, different markets were served like Basketball, Soccer, Ice Hockey, Golf, Tennis and Skating. Later, other sports and outdoor activities were targeted. The launching of more casual shoes was stretching the proposition and did fail. Recently, Nike is also targeting female customers as separate target group.
Nike also bought different companies to have access to other market and/or target groups. Cole Haan was the 1st acquisition, Hurley and Converse followed. Apparently, this was not the most effective strategy, Umbro, Cole Haan and Bauer were all divested.
Product
Nike started to produce and market running shoes and extended their offering consecutively with clothing, sport accessories (also sold) and also digital services.
Geography
Nike started actually as an importer of Japanese sport shoes under the brand Ble Ribbon Sports. After conquering the US market, Nike start selling her sport shoes in Europe from 1978. Today, Nike is serving 190 countries.
Distribution
Nike today has different forms of distribution but actually started with own stores in 1968. Nike Town as a flagship store was introduced in 1990. Nike stores, Factory outlets, Wholesalers, Nike direct, the Nike app and e-commerce via 3rd parties are the most used channels.
Business Model
The most dominant business model is of course a one-time transaction fee. With the introduction of her digital initiatives like the Nike Training Club and the Nike Run Club (apps), subscription fees are added.
Value Chain Position
Nike transformed itself form a seller of shoes to a global lifestyle brand that is supporting and empowering different groups and communities.
Other Applications
Nike is not just selling shoes. A forward integration by creating engaging experiences (using AI and sensors), leveraging gamification in its apps and stores, and creating platforms, Nike builds lasting relationships with customers that translate into increased revenue.