Nike's Expansion Strategy

Explain how Nike came to that situation through its expansion strategy.

The case of Nike Inc. has been a unique and spectacular situation of tremendous growth and expansion. Established in 1964 with the name ‘Blue Ribbon Sports (BRS)’ by Phil Knight and Bill Bowerman, the company began as a distributor and importer of Japanese running shoes before embarking on its project to design its brand, which has become a household name in footwear. First, Nike Inc. discovered that producing its products (footwear) in the U.S was extremely expensive and to export those products to distributors out the U.S would be a challenge because price affordability was a major concern. However, Nike Inc. decided to take advantage of the Japanese high-quality low-priced

would have broken into the wider market and gain its market share. This strategy was effective as Nike sold millions of products and profiting from the outsourcing. However, when the Japanese production price began to increase in the 1970s, Nike Inc. strategically relocated to alternative lower-cost producers in countries like china, Taiwan, Korea, and Thailand. This outsourcing development led Nike Inc. to close its faction and relied solely on importing from Korea and Taiwan. However, when the cost of production began to similarly increase in Korea and Thailand, Nike Inc. encourage its suppliers to transfer their operation to countries of lower costs of production in other to maintain its expansion strategy. Interestingly, this strategy was efficient and effective that today, Nike’s products are produced in more than 700 locations with about half a million of employees in more than 51 countries of the world. While it is essential to realize that the outsourcing strategy was very effective, it is also important to know that Nike Inc. did not rely on footwear production and importation alone, rather the company diversifies to producing and selling apparel. This diversification, no doubt, in combination to outsourcing its

The strategy Nike Inc. applied has positive because while the company outsourced its products to low-cost producing countries, the company made enormous profits and expanded almost everywhere. Secondly, Nike Inc. out-performed its competitors like Adidas and Reebok who were still producing with higher cost but not able to hold the market to participate and patronize their products. Third positive of the strategy was that Nike Inc. made friends or partnered with various international producers and vendors in whose wings and influence, Nike’s products spread exponentially to the wider world. The fourth positive of the strategy is that with Nike’s profits from low-cost production, the company effectively outpaced its competitors and started innovation of which designing and redesigning of it brand is part of the innovation. The fifth positive was that Nike Inc. introduced a magnificent marking campaign that brought its products to every