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A major research initiative at the MIT Sloan School of Management

Nike: From Separate Digital Initiatives

to Firm-Level Transformation
 Nike is the worlds leading units pursued digital initiatives
designer, marketer and distributor in typical Nike fashion: launching
Until recently, of athletic footwear, apparel, their own digital efforts to
enterprising business equipment and accessories for a meet specific needs. Marketing
units pursued digital wide range of sports and fitness embraced social media and
activities. It is headquartered in the firm started embedding
initiatives in typical Nike Beaverton, Oregon, and employs technology into products. Product
fashion: launching their about 34,000 people around the Development embraced digital
own digital efforts to world. Founded in January 1964 design processes and enabled
meet specific needs as Blue Ribbon Sports, the extensive collaboration across the
company created the Nike brand supply chain.
name and the Swoosh trademark
in 1971. Nike complemented Getting closer to always-more-
its organic growth by acquiring connected consumers
sport apparel companies such as Nikes social media strategy was
Converse in 2003 and Umbro in driven by changes in the way
2007. As a major global brand, consumers interact with brands.
Nike has paid attention to Nikes Global Digital Brand and
emerging digital technologies Innovation Director Jesse Stollak
and innovations such as mobility, explained, the goal hasnt
social media, analytics, and smart- changed since the beginning of
products since the late 1990s. Nike we want to connect with
athletes to inspire and enable
Adopting digital them to be better. The rise of social
media provides new ways to do
technologies this. 1 To accompany that shift,
Nike has traditionally built its Nike built dozens of social sites
business through a combination dedicated to specific sports or
of strong innovative products, products in Facebook and Twitter,
intensive brand-building through and launched a presence in social
multiple media, and efficient platforms that dominated specific
operational processes. As the geographies such as Orkut in
possibilities of new digital media Brazil, Weibo and RenRen in China
emerged, Nike was fast to and VKontakte in Russia
capitalize in all three areas. Until (see figure 1).
recently, enterprising business

Figure 1: Nikes corporate presence in major social platforms all over the world (date: February 1st, 2012)
Orkut (Brasil) RenRen (China) VKontakte (Russia)

Source: Nike, Capgemini Consulting analysis

2
In addition to joining public social Mass-customizing products: a tools instead of pen and paper
communities, Nike developed its new model becoming reality to create new products. The
own social offerings for the runner In the early 2000s, Nike started transition did more than improve
community. The Nike+ concept selling customized shoes under the the firms design capability. It
includes multiple connected NIKEiD trademark. As technology also supported sustainability
components: a shoe, an Internet improved in the 2010s, the firm policies and appealed to younger
platform, and a device (such as significantly improved its mass- designers who expected digital
an iPod, iPhone, GPS watch and customization capabilities. As design capabilities. CEO Mark
FUELband) that can geo-track a with the case of Nike+, NIKEiDs Parker explained Materials,
runner (see figure 2). Runners can social media capabilities play a componentry, construction
share their performance online dual role: providing consumers an methods, manufacturing methods,
and even receive customized opportunity to engage with the the whole digital revolution.
advice from coaches. Nike+ is also product online by sharing designs Knitting technology that
an opportunity for the firm to and voting on them, and providing allows you to make completely
improve its understanding of the Nike a rich source of consumer sustainable design and footwear
consumers needs and tastes.2 A data (see figure 3). By listening without any cutting and stitching,
Wired Magazine article described to online conversations, Nike can without any archaic manufacturing
Nikes capabilities as early as 2008, identify the most popular designs, processes. We are embedding all
With such a huge group, Nike is and sense new trends.4 that thinking into the product.5
learning things weve never known
before. In the winter, people in the Designing products digitally
US run more often than those in Digital technologies have Digital technologies have
Europe and Africa, but for shorter transformed internal processes
distances. The average duration
transformed internal
in addition to consumer-facing
of a run worldwide is 35 minutes, processes. One major internal
processes in addition
and the most popular Nike+ change was moving from paper- to consumer-facing
Powersong, which runners can set based to fully digital product processes
to give them extra motivation, is design. In the early 2000s,
Pump It by the Black Eyed Peas.3 Nike started using 3D design

Figure 2: The Nike+ platform leverages multiple components to connect runners to the company and each other

Runners environment Online environment

Share Information
Recording and
positioning device information Advices/coaches
(Phone, watch) Portal
Etc.

Linking
Connection with

Customers online Nike online

Connected communities presence
shoe
Sharing running Promoting Nike products
experience online with
friends (Facebook, Twitter, Links to events, websites or
Nikes community) social platforms animated by
Nike (Facebook, Twitter, etc.)
Source: Nike, Capgemini Consulting analysis

3
Figure 3: NIKEiD offers many options to design a customized pair of shoes

Choose colors and some materials Add personal information and

for different parts share in social media

Source: Nike, Capgemini Consulting analysis

Raising digital through synchronized operations. highly competitive digital world.

This enabled the company to Looking to the future, Nike plans
transformation to the respond to - and even shape to continuing using technology
corporate level - rapidly-evolving consumer to become ever-closer to each of
Recently, Nike executives preferences. Most customer- its customers. Connecting used
recognized the need to coordinate facing digital projects are now to be, Heres some product, and
and integrate its digital efforts. led by this unit, which releases heres some advertising. We hope
Although digital transformation products and services under the you like it, said CEO Mark Parker,
was proceeding successfully in Nike+ brand. Teams of marketers, Connecting today is a dialogue.7
silos, the firm was missing the designers and IT people work
synergies between them. together to think holistically about
physical and online products and
In 2010, Nike created a digital develop new digital capabilities The connected products
division called Nike Digital and innovations. Innovation
groups investigate new digital
developed under the
Sport. The new unit provides
skilled resources, budget, technologies and practices to Nike+ umbrella leverage
and coordination across the identify potential applications vast amounts of very
enterprise.6 However, executives in products and customer accurate customer data
had an additional goal: create engagement.
a unified consumer experience
This organizational change did not
just enable new digitally-enriched
In 2010, Nike created products to fit customers tastes
and needs. The connected
Nike Digital Sport a products developed under
digital unit providing the Nike+ umbrella leverage
skilled resources, budget, vast amounts of very accurate
customer data a key strategic
and coordination across asset for marketing and product
the enterprise development in the new and

4
Sources
1 http://mashable.com/2011/09/22/nike-social-media/
2 In 2012, Nike+ had over 4 million members, the worlds largest runners community. http://jobs.nike.com/oregon/
product-development/sustaining-engineer-digital-sport-jobs
3 Article published in 2008 when Nike+ had 1.2 million members: http://www.wired.com/medtech/health/
magazine/17-07/lbnp_nike?currentPage=all
4 See Nike Digital Privacy Policy at http://help-en-us.nike.com/app/answers/detail/article/
privacy-policy/a_id/16378/p/3897
5 http://www.fastcompany.com/1676902/how-nikes-ceo-shook-shoe-industry
6 Adapted from http://management.fortune.cnn.com/2012/02/13/nike-digital-marketing/
7 http://management.fortune.cnn.com/2012/02/13/nike-digital-marketing/

Authors

Mael Tannou George Westerman

Managing Consultant at Capgemini Consulting Research Scientist in the MIT Center for Digital Business
Former Visiting Scientist in the MIT Center for Digital Business georgew@MIT.EDU
mael.tannou@capgemini.com

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About Capgemini Consulting
Capgemini Consulting is the global strategy and transformation consulting organization
of the Capgemini Group, specializing in advising and supporting enterprises in significant
transformation, from innovative strategy to execution and with an unstinting focus on
results. With the new digital economy creating significant disruptions and opportunities,
our global team of over 3,600 talented individuals work with leading companies and
governments to master Digital Transformation, drawing on our understanding of the digital
economy and our leadership in business transformation and organizational change.

For more information: http://www.capgemini-consulting.com/

Follow us on Facebook: http://www.facebook.com/capgemini.consulting.global
Follow us on Twitter: @CapgeminiConsul

About the MIT Center for Digital Business

Founded in 1999, the MIT Center for Digital Business (http://digital.mit.edu) joins leading
companies, visionary educators, and some of the best students in the world together in
inventing and understanding the business value made possible by digital technologies.
We are supported entirely by corporate sponsors with whom we work in a dynamic
interchange of ideas, analysis, and reflection intended to solve real problems. The Center
has funded more than 50 faculty and performed more than 75 research projects focused
on understanding the impact of technology on business value, and developing tools and
frameworks our sponsors can use for competitive advantage.

101011010010
101011010010
101011010010

A major research initiative at the MIT Sloan School of Management