Nike Way Case Study

A sustainable domination with minimal impact - Nike way

Introduction

When you ask managers what is their primary goal - nearly all of them would say that it is to find new growth opportunities. Interestingly, only a few companies ' managers have a strategy in place, so that not only they can provide sustainable growth, but are able to dominate a market or create a niche, that was not spotted before. Companies such as Apple, Kraft Food, Nestle or General

Electric, often were created as a family or garage businesses and due to an influence of great leaders were able to become a world known international brands. What fascinates researchers and young managers around the world is HOW did the garage businesses make it to Fortune 500 in a relatively

But it took 15 years for roles to switch - While Reebok was struggling to make $247 million, Nike was the market leader with $ 1,1 Bn [4].

What is a secret that created Nike power to become a 44.000 Employee giant, and did it succeed to cope with responsibility regarding society?

Description of an international management issues pt. I - International growth strategy

When in 1995 Nike management decided to extend the range to golf gear they were believed to fail, even though a firm was well recognised among consumers. This is due to the fact how demanding the market in golf gear is. But just after five years, a living legend, Tiger Woods decided to abandon well known and commonly used Titleist balls and started playing Nike. Just a couple of months later David Duval won an important tournament - shortly after switching to Nike clubs. It was a resounding success of a company.

But when looking closely on how do Nike expands to new markets a pattern can be easily observed.

The company starts off by becoming a leader in a footwear branch of the discipline. Then, they focus on an apparel, (this step is supported by marketing campaigns supported by world famous sports champions - for example a $100.000 million worth contract with Tiger Woods,

A number of companies, including Nike, which has factories in Vietnam, were accused of making use of sweatshops - facilities with extremely poor working conditions, in which hundreds of people

(including children) were manufacturing Nike’s products for just $2 a day. A world was shocked not only by sexual harassment and discrimination of women working there, but also by the enforcement of children labour (a picture from 1996 of Pakistani boy sewing a Nike ball led to a series of protests in USA)[6].

Since then, the companies decided to introduce a series of codes and regulations supporting the workforce rights. The factories of contractors were audited, new regulations implemented and problem seemed to be solved. At their webpage Nike Boasts that „has always been a company focused on human potential. (…)When the Nike Foundation started in 2004, we sought the best investment to end global poverty with the highest returns. We traced poverty back to its roots.”[7]

However, the problem was not solved, as last year Nike moved to Bangladesh, forced to do so by competitors, who already signed their contracts with local producers. Our competitors were