NIKE

Nike's Background

Nike Continued

Managing Cultures Across Borders - Nike

• Nike, originally known as Blue Ribbon Sports (BRS), was founded by Phil Knight, a University of Oregon track athlete and his coach, Bill Bowerman in 1964.

• Opened the first retail outlet in 1966

• Headquarters in Washington County, Oregon

• Nike is now the largest sports brand in the world, valued at 29.6 billion U$D (2018)

• Owns extremely successful subsidiaries (Converse, Hurley, Jordan Brand)

• Global revenue increased 13% to 9.8 billion

(U$D) in the fourth quarter of 2018

• Launched the Nike brand shoe in 1972

• The company was renamed from Blue Ribbon Sports to Nike Inc. in 1978

Sweatshop Culture

• Nike is infamous for sweatshops
• Scandals in 1991, 1996 and 2001
• Noticeable improvements since, recent step backwards
• Given "C" in 2017 Ethical Fashion Report
• Growing disparity between athletes and factory workers

Footwear Revenue

Alternative Response

• Nike manufactures in China because of cheap labour.

• Nike has recently conducted internal pay review in USA and 7,000 employees will be getting a pay raise

Nike's Ethics

• The solution is to treat all employees equally. Maintain the corporate culture “in which employees feel included and empowered,”

• Nike operates on Kant's 'Duty of Care' - "Do as you would be done by"
• Followed this after initial scandals
• Nike has regressed in recent years
• Leads to company appearing fundamentally dishonest
• The code of conduct violations

MARKET DESCRIPTION

Total Revenue

"Every Culture has rules that its members take for granted, those unwritten rules affect how we think and act in business"

Kinsy Goman, 2014

Breakdown of Revenue

CUSTOMER

PROFILE

"Everything we do starts with the consumer," CEO Mark Parker​

• NIKE is the biggest sponsored in the NBA, which is considered as the TOP 3 sport viewed in North America.

• It has become also to be the 1st company to be able to sponsor NBA players wearing the company logo on the t-shirts they play with​.

​

CHINA

(Foreign Market)

NIKE US

(Domestic Market)

China

U.S.A

RUNNERS

WOMEN

YOUNG ATHLETES​

• Nike+ has been one of the apps that have suppose the differentiation on the running world where NIKE competes.​

• Nike+ lets runners share photos and compare progress with their friends. Also, it lets track the routes, distance, time and calories done.​

• NIKE has released a new couture-style collection ​

• Women in their 20s and 30s have promoted a new way of lifestyle known "athleisure trend" ​

• NIKE has a strong potential on which refers to sponsorships through the sport world(local leagues, federations and clubs).​

• The majority of NFL and NBA teams currently wear NIKE equipment, as to promote the brand to young costumers who are interested on these sports.

NIKE ISSUES IN CHINA

A Political Stance by an A-Political Company

NIKE. CO stablished

BEIJING OLYMPICS

1978

2008

Nike expansion into Europe was based on the strategy of targetting key players for sponsorships, and leverage those sponsorships to forge reationships with large-scale commercially organized leagues.

NO POSSIBLE IN CHINA due to...

No opportunities similar in scale to those in Europe.

ETHNOCENTRIC ATTITUDE

GEOCENTRIC ATTITUDE

Nike took a political stance supporting Colin Kaepernick with the 30th anniversary of their "Just Do It" advertisng campaign

EDUCATION

Increase partnerships with government as to develop sport programs and expanding rubbing clubs at universities

"An awareness and an honest caring about another individual culture" Deresky, 2011

HOW DID NIKE DEAL WITH THESE ISSUES?

EXPANSION

The China Success

Nike's expansion into second and third tier cities in China will help boost its sales in the long run. (2009)

Such as Shanghai

How Nike dealt with the issue.

NIKE ISSUES IN CHINA

NIKE ISSUES IN CHINA

Nike supported Kaepernick in his stand by creating the campaign 'Believe in something even if it means sacrificing everything.

NIKE is based on encouraging young people on its majority with iconic sport-stars. In a culture where parents are focused on academic achievement, such a strategy has limited appeal.

NIKE running and training categories have not received much success in China by the main reason health clubs are percieved as an activity only affordable by rich people

• The campaign was backed by other athletes that Nike sponsor.
• Nike athletes such as O'dell Beckham Jr. and Serena Williams also supported Kaepernick in this campaign.

Conflict potentially caused

The Kaepernick stand could have potentially caused conflict within the work place between a supporter of the flag and someone aware of how bad the Police brutality problem. Understanding the original reason of the protest.

The store manager could use Friedrich Glas'ls conflict escalator.

Preferably the situation should be dealt with while it's in the win-win spectrum before it escalates any further.

Brand Value compared to Competitors

Revenue Breakdown

The Kaepernick Affect

• Despite the backlash, Nike's sales went up 31% the week after the advert launched

Andrew Hill (N0674767)

Kieran Wade (N0724872)

References

Juan Carlos Martínez (N0826802)

Mohammed Ateeq (T0070671)

Cowley, S. (2018). Nike Will Raise Wages for Thousands After Outcry Over Inequality. [online] Nytimes.com. Available at: https://www.nytimes.com/2018/07/23/business/nike-wages-raises.html [Accessed 15 Jan. 2019].

Deresky, H., 2017. International management: Managing Across Borders and Cultures: text and cases. 9th. Boston: Pearson Education Limited

Doh, J., P., & Luthans, F., 2018. International management: culture, strategy, and behavior. 10th. London: McGraw Hill Education.

Ell, K. (2019). Nike departures reflect a larger cultural shift in #MeToo era: Retail analysts. [online] CNBC. Available at: https://www.cnbc.com/2018/03/16/nike-exec-departures-reflect-a-larger-cultural-issue-retail-analyst.html [Accessed 8 Jan. 2019].

eMarketer Retail. (2019). Nike | Revenues & Sales | eMarketer Retail. [online] Available at: https://retailindex.emarketer.com/company/data/54a3012c0596151820f9305e/54a301390596162d7ccdb671/lfy/false/nike-revenues-sales [Accessed 8 Jan. 2019].

Facts, N. (2019). Topic: Nike. [online] www.statista.com. Available at: https://www.statista.com/topics/1243/nike/ [Accessed 15 Jan. 2019].

Facts, N. (2019). Topic: Nike. [online] www.statista.com. Available at: https://www.statista.com/topics/1243/nike/ [Accessed 15 Jan. 2019].

Good On You. (2019). How Ethical is Nike? - Good On You. [online] Available at: https://goodonyou.eco/how-ethical-is-nike/ [Accessed 8 Jan. 2019].

Keith Rathbone, (2018) Nike's courageous new ad campaign mixing racial politics with sport will be vindicated. Available at https://theconversation.com/nikes-courageous-new-ad-campaign-mixing-racial-politics-with-sport-will-be-vindicated-102707.

Lauren Thomas, (2018) Nike shares fall as backlash erupts over new ad campaign featuring Colin Kaepernick. Available at https://www.cnbc.com/2018/09/04/nike-shares-tumble-after-company-reveals-new-ad-campaign-featuring-colin-kaepernick.html.

Luthans, F., 2014. International management: culture, strategy, and behaviour. 9th. London: McGraw Hill Education.

Steers, R.M., Nardon, L. and Sanchez-Runde, C.J., 2016. Management Across Cultures. 3rd. Cambridge University Press.

Vox. (2019). Companies used to stay quiet about politics. In 2018, social causes became integral to their branding.. [online] Available at: https://www.vox.com/the-goods/2018/12/17/18139699/companies-nike-patagonia-dicks-politics-kaepernick-trump-ads [Accessed 8 Jan. 2019].

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