Nike - Case Study
Nike - Case Study
Nike - Case Study
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NIKE ADAPT: FUTURE OF SPORTS FOOTWEAR 2
Table of Contents
History of Nike – “IF YOU HAVE A BODY, YOU ARE AN ATHLETE”............................3
Theoretical Background.............................................................................................................7
1) Brand Value...................................................................................................................8
Market Overview.......................................................................................................................9
Competitive Landscape........................................................................................................13
Recent Developments...........................................................................................................14
Objectives.............................................................................................................................16
Question Answers....................................................................................................................24
References ...............................................................................................................................28
Table of Figures
Figure 1: Bill Bowerman (left) and Phil Knight (right).............................................................4
Figure 2: Headquarters of Nike, Beaverton...............................................................................6
Figure 3: Subsidiaries of Nike....................................................................................................7
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Figure 4: Athletic Footwear Market: Sports Participation, 2020 (Source: Mordor Intelligence)
..................................................................................................................................................12
Figure 5: Athletic Footwear Market Size, 2020 (Source: Mordor Intelligence)......................13
Figure 6: Global Athletic Footwear Market (Source: Mordor Intelligence)............................14
Figure 7: New Balance M991Pat x Patta.................................................................................16
Figure 9: Adidas Solarthon......................................................................................................16
Figure 8: ZoomX Invincible Run.............................................................................................16
Figure 10: Nike's revenue in the United States from 1988 to 2021 (Source: Statista, 2021)...18
Figure 11: Examples of Nike's segmentation, community building and endorsements..........19
Figure 12: Nike Adapt Auto Max (left) & Nike Adapt BB (right)..........................................20
Figure 13: FitAdapt technology (Source: Nike News)............................................................21
Figure 14: Nike Adapt tests (Source: Nike News)...................................................................22
Figure 15: Jayson Tatum endorses Nike Adapt BB 2.0 (Source: Clutchpoints)......................23
Figure 16: Find your Greatness campaign - Nike....................................................................24
Figure 17: Motivation for buying running footwear (Source: Statista, 2021).........................26
Figure 18: Puma Autodiscs......................................................................................................28
Figure 19: Powerlace P-One………………………………………………………………28
Figure 20: Digitsole Smart shoe...............................................................................................28
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A handshake between Bowerman and Phil Knight; two visionary Oregonians started
the revolution of Nike. The company went from a U.S. based footwear distributor to global
markets of athletic and sports footwear, equipment and apparel. Nike holds supremacy in its
related markets and is considered to be unrivalled by any of its competitors around the world.
The workforce of Nike, Inc. retains around 1 million people with 35,000 employed in each of
the six continents globally.
1950s – Bill Bowerman started to improvise footwear for running athletes. In 1955, a
talented and middle-distance running athlete Phil Knight took part in the Bowerman’s track
program. Phil wrote a letter to Bowerman asking for a pair of quality athlete footwear which
can compete against the highly recognized German brands.
1944 – The world cup winning team of Brazil signed Nike for its footwear demand.
Furthermore, there were a lot of other men and women sporting teams around the world
which signed Nike for an official shoe sponsorship.
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1996 – Nike was signed by professional golfer Tiger Woods for $5 million.
Furthermore, Nike was also signed for its footwear in the sport of road cycle racing by Lance
Armstrong.
2002 – Nike started its first ever integrated marketing campaign. Alongside, it also
supported world cup and developed complex consumer experience.
2011 – Nike came on to the top of the list of companies addressing climate change
and sustainability practices. The company is a world-leader in the footwear, apparel and
sports industry where a wide range of strategic implementations works with the alignment of
corporate objectives, supply chain and market demand.
Nike is a globally recognized brand which has achieved a cult classic status with its
remarkable quality and innovation. Phil Knight, the co-founder of Nike had a firm motive
towards the simplicity of company’s logo conveying speed and motion. The Nike “swoosh”
logo symbolize the sign of victory and is one of the most recognized logos in the footwear
industry worldwide (Kelly, 2017). The prime motive of Nike was to bring revolution and
identify best possible potential in every athlete and continue to work towards the legacy of
quality, innovation and development. The company resides over its strong position to satisfy
its potential shareholders apart from competition and brand image. Apart from this, Nike has
established a wide range of products and brand portfolio which is much challenging for any
competitor to outrival. Nike have a dedicated range of self-acquired subsidiary businesses
which mainly includes; Converse Inc., Nike Golf, Umbro Ltd, Cole Haan, and Hurley
International LLC.
marketing capabilities and operational competence. In the 21st century, sporting footwear
companies are highly adaptive towards the obsession of product development and quality.
There are various brands in the market including; Puma, Adidas, Slazenger and Asics which
competes head-to-head with the brand image of Nike. In the early 20 th century, 1906 a
Japanese brand “Mizuno” joined the portfolio of competition in footwear market; however,
Nike altered the landscape of the company in 1964 (Smith, 2007). Nike had a vision of
compelling demands from amateur level athletes and people who uses sports as a medium to
challenge themselves (Hollister, 2008).
The global footwear market is projected to rise over $16.85 billion with a CAGR of
1.13% from 2021 till 2025. Nike is expected to be the primary choice in every consumer
segment. Nike is capable of attracting and fulfilling the demands of amateur and experienced
athletes around the world (Lima, 2007). In December, 2016 Nike released its most
technologically advanced range of footwear Hyperadapt 1.0 designed by Tinker Hatfield
who was accompanied by a young designer at Nike, Mark Parker. The self-lacing shoe
innovation have been released on many occasions with exclusive quantities. The initial price
of Hyperadapt 1.0 in 2016 was $720 at retail. In 2019, Nike introduced a dedicated
Hyperadapt shoe range for basketball sport called Adapt BB (Li et al., 2020).
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Theoretical Background
Nike has engaged itself in various marketing concepts to build and retain its customer
base. The following case study will be based upon two conceptual ideologies where the
significance of Nike and its innovation will be necessarily supported and comprehended. The
concept of Nike Hyperadapt can be entailed by two concepts; Brand value and Innovation
practices.
1) Brand Value
Brand value or brand equity is termed as the value premium which a business
develops over its products with a distinctive name incomparable with other generic products.
Nike is associated with the creation of brand value by making its products notable, high
quality, innovative and attractive. Effective marketing mix and mass marketing strategies
help Nike to generate considerable brand equity for its products (Aaker, 2009).
Till date, Nike is considered to be an industrial icon with the most successful story for
its effective utilization of marketing tactics based on a variety of marketing elements which
mainly includes; sponsorships, endorsements, diversification, market penetration and many
other.
Apart from its Electro Adaptive Reactive Lacing (E.A.R.L) technology, Nike has
always been a key player in the footwear industry to gather the attention of its customers. The
brand value of Nike products is usually fostered by the relationship between brand and
consumers. The strong consumer interest is the main reason which pushes the factor of
innovation and quality as a part of brand’s essence. Nike Hyperadapt 1.0 campaign was
closely related to the documentary based on the principles of narration (Mckee & Fryer,
2003). A good narration signifies the tussle between reality and expectation in all of its
malice. The existence is based over an irony that a good living does not come from an
impeccable side. These principles of narration are regularly used by Nike, Inc., for their
utmost desires of achievements and success around the world.
businesses form a team of specialists to be employed with the Research and Development
(R&D) department of the company which results in many innovative ideas and insights for
product improvement and development (Standaert, 2021). According to Lockwood (2010), a
process which accentuate over collaboration, observation, fast learning, rapid concept
prototyping and business analysis is called human centred innovation. The creation of Nike
Hyperadapt was ultimately a joint effort between Nike and external professionals.
Market Overview
The running shoe market is considered to be a segmented part of footwear industry.
According to Mordor Intelligence the global scenario of footwear industry is as follows; the
market value of footwear sector was $99.61 billion in the year 2020. However, an
exponential growth over the year 2021 to 2026 is highly anticipated over a projected CAGR
rate of 4.56%.
In contrast to this, people from all around the world are becoming zealous and
enthusiastic towards games and sports which could be positive driving factor towards the
development and high profitability of the market. An increased level of awareness towards
fitness and health can be a beneficial factor towards the similar prospect. As per the regional
growth, the state of North America is considered to be the highest grossing region of the
footwear market, which is followed by the European region where strong and vertically
integrated distribution channels also heavily support the growth and operational efficiency of
the footwear market.
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In the modern-day world people are in the quest of designer athletic footwear which
includes the element of sport. The athleisure trend is continuously shifting the active
lifestyles with an increased enthusiasm towards sports like cycling and running which
requires sports footwear. Hence, it is a major support towards the growth of footwear industry
around the world.
Sports activities profoundly encourage the consumers around the world with
numerous factors such as; healthy lifestyle, celebrity endorsements and international sporting
events. The female gender is foremost the primary section to have supported the growth of
footwear market over a macroeconomic level. The sports activities in the modern-day world
such as; aerobics, yoga, swimming and sprinting has raised the bar of women participation
and involvements in sports activities. Thus, footwear manufacturers have a vivid focus to
innovate comfortable and elegant styled footwear suitable for female consumers. Moreover,
athleisure is much pervasive to encourage millennial parents towards athletic footwear.
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A significant sporting culture has been established by the state of Brazil. The human
population of the region is not only engaged in sports for playing or involvement, but they are
much miscellaneous in nature. Henceforth, Brazil can be categorized as the hub of sports
footwear which drives the sales of footwear manufacturers in the South American region.
The change of lifestyles, awareness of a healthy life and increased demand of athletic
footwear has supported the innovation processes for new footwear designs and high spending
on footwear. The factors are major influences to raise consumer preferences of athletic
footwear in South America during the last few years.
Many of the footwear brands working on a global level are majorly interested in
expanding their business in Brazil due to its highly favourable market position. Brazil has
become a feasible option for many of the international brands and companies with
investments opportunities all across the sports and athletic industry. The targeted audience of
the company is high-to-middle income population.
Competitive Landscape
The nature of the running footwear industry is highly competitive due to the presence
of many industrial players working over a regional or global level. The companies are
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engaged in various practices with different factors such as; quality, price, promotion, and
public offering to gain a competitive advantage over the existing rival brands in the market.
Likewise, most of the footwear introduced by vendors are targeted towards the
population concentrating young adults and women. On the contrary, most of the industrial
manufacturers are firm with their motive of expanding in foreign markets for an evident
presence over a wide geographic area.
Increasing brand awareness is one of the most common strategies among the
companies using social media advertisements and digital marketing platforms. The
companies are widely engaged over ecommerce distribution channels to operate in the
market. The major companies which are operating in the market are; Puma SE, Nike, Inc.,
Adidas AG, Under Armour, Inc., and Asics Corporation.
Recent Developments
A collaboration between New Balance and Patta in January, 2021 to launch a new
product known as New Balance M991Pat x Patta with a dusty light/pink petrol theme
colour.
In June 2021, a golf shoe by Adidas called ‘Solarthon’ which exhibits two features;
comfort and lightweight. Adidas launched the product in a variety of limited-edition
colours such as; white, grey and blue. Adidas’ Primeblue textile upper was featured in
the new product. The manufacture of the new shoe contained 50% Parley Ocean
Plastic in the recycled yarn to support Adidas’ initiative of ‘End Plastic Waste’.
NIKE ADAPT: FUTURE OF SPORTS FOOTWEAR 13
Objectives
Branding and innovation has been revolutionized throughout decades and Nike has
adapted several modern-day innovation and marketing tactics to gain a competitive advantage
in the running footwear industry. Till date, Nike Inc., has never been product maker but
instead having a broad and comprehensive understanding about the consumer perspective and
preference and due to this customer-centric approach Nike has been a cultural icon among the
masses. Nike has been listed as the 18 th most valuable brand all around the world. The annual
revenue of Nike in the year 2021 is about $17.36 billion and increasing 18% from 2020
(Epstein et al., 2010).
Figure 10: Nike's revenue in the United States from 1988 to 2021 (Source: Statista, 2021)
NIKE ADAPT: FUTURE OF SPORTS FOOTWEAR 15
During the era of 1970s, Nike observed a rapid increase in the customer interest
towards the sport of running. Hence, the company started to segment its product range to
deliver the best suitable product for the relevant targeted audience. In the era of 80s and 90s
Nike accelerated in terms of its endorsement and marketing strategies. Moreover, with the
beginning of 21st century Nike was involved in the ongoing trend of building communities
around brands. Despite the fact, in the present-day Nike is profoundly active towards its
marketing arsenal along with its price, segmentation, community platforms and endorsement
strategies (Valjakka, 2013).
Nike have an undisputable impact over the running footwear industry having its very
own features. Previously, the professional and amateur runners have diversified brand
perceptions and preferences. The company had a major growth due to its range of casual
running shoes but it was essentially perceived that Nike brands are targeted towards the
classification of casual runners only. Nike has subordinately worked over this factor because
purchasing behaviour and preferences are built over recommendations and amateur level
sportsmen tend to imitate professional and experienced athletes (Scheerder, Breedveld &
Borgers, 2015).
The objectives behind the launch of Nike Hyperadapt were consequently pervasive
towards the profitability, market share and commercial presence. Being a renowned name in
the industry, Nike had the approach to cater an elevated level of Return on Investment (ROI)
from this electro-lacing technology. Unlike any other product it would be a great boost
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towards investor attraction and increasing the brand value to a considerable level. Secondly,
in terms of the marketing aspect, Hyperadapt shoe range is an evident burden to the company
due to its relatively high prices and probable convenience of the consumers. The product was
initially launched over limited quantities in 2017, however the Nike Adapt series re-launched
in 2019 with the name Nike Adapt BB, majorly concentrating upon the sport of Basketball,
by consequence can influence a vast majority of basketball professionals in the sport
("Breaking Down the Nike Adapt BB", 2021).
Figure 12: Nike Adapt Auto Max (left) & Nike Adapt BB (right)
feet by controlling the fit setting during a break or time out just to resume and re-enter the
game. Furthermore, the FitAdapt tech allows the users for a dedicated control over internal
temperatures for warm-ups. The mobile phone application has constant updates to offer the
user with the best digital services and experiences over time (Myers et al., 2019).
Nike Adapt BB was tested over a series of dedicated tests and systematic procedures
like Hyperadapt 1.0. The tests consisted of relative temperature check, useful life, waterproof
and end-of-life tests to simulate a favourable verdict over the innovation of E.A.R.L
technology.
The following figure highlights the series of tests the Nike researchers conducted over
Nike Adapt BB, making it the most tested footwear product in companies throughout history;
NIKE ADAPT: FUTURE OF SPORTS FOOTWEAR 18
Jayson Tatum had a verdict on to the new Nike Adapt BB, where he said:
“First of all, I feel completely honoured for the invitation and being the first athlete for
stepping in to the future of Nike basketball. It is just meticulous to see the interface of the
mobile application where you can just change the colours in one touch, see the percentage
on the battery. It is just so cool”
Figure 15: Jayson Tatum endorses Nike Adapt BB 2.0 (Source: Clutchpoints)
It is quite evident from the previous discussion that the purchase of any product
heavily depends upon a recommendation from professionals. It is widely regarded as a
snowballing effect where amateur or beginner level athletes are greatly attracted towards the
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In terms of marketing, Nike Adapt has always been a centre of attraction for most of
the runners and general public. The limited quantity releases have helped Nike to maintain its
Public Relations throughout along with a definitive hype of any new product. Nike stands
with a concept where it does not matter having a best product as long as you don’t know how
to market it.
In the modern-day world, most of the marketers are strongly active towards good
storytelling. Stories are the medium through which most of the information can be indexed,
retrieved and stored (Woodside, Shood & Miller, 2008). Till date, screenwriters and
philosophers have gained knowledge about creating a good story, perhaps the concept of
storytelling in terms of marketing is of a significant milestone.
Nike is a good story teller ever since day one and engaging public towards its
products through marketing and storytelling tactics. A very good example of Nike’s
captivating marketing campaigns is “Find your Greatness” campaign which was launched
back in 2012. The campaign used the element of storytelling to motivate people and enlighten
the athlete inside them. The campaign holds an immense legacy till date having spread the
same message constantly across many touchpoints of the brand.
Question Answers
1. Is Nike compatible to enter the footwear market of professional runners and
athletes?
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Figure 17: Motivation for buying running footwear (Source: Statista, 2021)
2. If somehow Nike Adapt fails to deliver or gets banned, would the project have paid
itself?
A product should be capable enough to cover its costs and return benefits to the
company. Nike’s 2019 Adapt version was an immediate success. Consequent to the
official release, Nike Adapt 2.0 were put on secondary market for sale having 216
pairs sold at a price of $460. Nike added ‘Air Zoom Turbo’ in the 2020 range of Nike
Adapt 2.0 to provide a significant upgrade to basketball players. Unquestionably, due
to advanced technology and research Nike Adapt series is the most expensive
footwear line-up. Nike recruited experienced and well-aware specialists to ensure
quality production. Furthermore, the conducted test sessions and trail by Jayson
Tatum can also be accounted for the overall costs. It is quite evident that Nike Adapt
could possibly be unable to cover this high level of expenditure not to mention the
extravagantly high retail pricing.
However, having no close competitors and brand loyalty it is most probable
for Nike to cover its cost through limited edition sales and exclusive distribution in
the mass market. Most of the consumers have an irresistible urge of owning Nike
whether it is a $500 pair. It could also be added that Nike Adapt series is a revolution
NIKE ADAPT: FUTURE OF SPORTS FOOTWEAR 22
which will motivate other industrial brands to launch their own line-up of E.A.R.L
based footwear.
References
Aaker, D. A. (2009). Managing brand equity. simon and schuster.
Epstein, M. J., Buhovac, A. R., & Yuthas, K. (2010). Why Nike kicks butt in
sustainability. Organizational Dynamics, 39(4), 353.
Hollister, G. (2008). Out of nowhere: The inside story of how Nike marketed the culture of
running. Meyer & Meyer Verlag.
Kelly, M. (2017). Analysing the complex relationship between logo and brand. Place
branding and public diplomacy, 13(1), 18-33.
Li, S., Jia, Z., Zhao, Z., Jiang, X., Li, X., & Huang, B. (2020). Digital Ecosystem for NIKE"
Adapt Future" Series. Frontiers in Economics and Management, 1(11), 104-112.
Mckee, R., & Fryer, B. (2003). Storytelling that moves people. Harvard Business Review,
81(6), 51-55.
Myers, C. A., Allen, W., Laz, P. J., Lawler-Schwatz, J., & Conrad, B. P. (2019). Motorized
self-lacing technology reduces foot-shoe motion in basketball shoes during dynamic
cutting tasks. Footwear Science, 11(sup1), S189-S191.
Nike News. 2021. Breaking Down the Nike Adapt BB. [online] Available at:
https://news.nike.com/news/nike-adapt-bb [Accessed 25 August 2021].
Scheerder, J., Breedveld, K., & Borgers, J. (Eds.). (2015). Running across Europe: the rise
and size of one of the largest sport markets. Springer.
Smith, B. (2007). Pitch invasion: Adidas, Puma and the making of modern sport. UK:
Penguin.
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Trout, J., & Ries, A. (1986). Positioning: The battle for your mind. McGraw-Hill.
Selvakumar, D., Stauffer, G., Gryaznov, D., Gabriel, E. L., & Khalaf, W. (2020). Project-
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Breaking Down the Nike Adapt BB. (2021). Retrieved 25 August 2021, from
https://news.nike.com/news/nike-adapt-bb