20 - file · web viewhowever, the firm also faces a challenge when several of its product...

Nike’s Core Competency

Team innovIIXrs

Morgan McGrath Pam BarringtonJason Cumiford Dan Hockaday

Tran Pham

BMBA-523 Pacific Lutheran University

2.29.16

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1.0 Executive Summary

1.1 Background & IssuesToday, not only do firms need to keep up with the innovative environment, the passage of time has long urged them to find ways setting itself from the threats of rivalry. Besides a thorough understanding of the external environment, regarding to industry structure, competitive forces, and strategic groups, firms also need to evaluate its strengths and weaknesses (Rothaermel, 2015, p.99). This knowledge should help them to sustain its position within the industry as well as make a crucial impact on its success. Born roughly twenty years after Adidas, once was the world’s largest athletic shoe company, Nike has now made its way to own 60 percent market share, leading the athletic shoe and apparel industry (Adidas Group History; Rothaermel, 2015, p.97). Nike’s achievement represents the idea of excelling a strong marketing strategy by mythicizing the everyman. However, the firm also faces a challenge when several of its product representatives committed wrongdoing acts, crimes, and scandals. In order to sustain its success, Nike needs to take some suggestive actions to keep its true value and avoid failures. In this case write-up, team InnovIIXrs will analyze the importance of identifying core competencies in firms’ success as well as a set of recommendations for Nike to stay in the game.

1.2 AnalysisFirm’s managers often evaluate a set of competitive advantage, such as capabilities, core competencies, and activities based on the VRIO framework to evaluate its position in the industry. This framework includes a comprehensive assessment answering to a set of questions in regard to valuable, rare, costly to imitate, and organized to capture value. Managers would use this information to make a decision “upon formulating and implementing strategy” (Rothaermel, 2015, p.105). In addition, another concept that managers often deploy to determine its strengths and weaknesses is SWOT analysis. This tool helps managers to estimate the firm’s present value as well as predict the future prospects. Although SWOT analysis can act as an instrument delivering a strong internal analysis, firms’ strengths could also be weaknesses, and opportunities could sometimes create threats (Rothaermel, 2015, p.119).Thus, along with implementation of SWOT analysis, a thoughtful strategic alternative is also crucial to managers.

1.3 ConclusionBy understanding the position within the athletic shoes and apparel industry, strategically, Nike has differentiated itself from other competitors through a well-analysis of value and cost (Rothaermel, 2015, p.98). Nike’s success strongly explains the importance of core competencies, internally making up a company’s competitive advantage. However, there are also negativity in every strategies, in this case, the stars’ scandals and crimes often push Nike’s marketing strategy off track. In order to sustain its competitive advantage, team InnovIIXrs suggests that Nike should follow the redefining of heroes guiding policy. This policy would ensure that Nike can keep up with the innovative environment, its industry rivalry, as well as create a strong emotional brand attachment backed up its strong customer base.

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TABLE OF CONTENTS

1.0 Executive Summary…………………………………………………………………..……….2

1.1 Background & Issues…………………………………………………………..……...2

1.2 Analysis……………………………………………….……………………...……......2

1.3 Conclusion……………………...……………………………………………………..2

2.0 Introduction…………………………………………………………………………………....4

2.1 Case Background ……..……………………………………………………………....4

2.2 Diagnose the Problem……………………………..…………………………………..5

2.3 Analysis……………………………………………………………………....………..5

3.0 Case Questions…………………………………………………………………….…………11

3.1 Question #1…………………………………………………………………………..11

3.2 Question #2…………………………………………………………………………..12

3.3 Question #3…………………………………………………………………………..12

3.4 Question #4…………………………………………………………………………..13

4.0 Recommendations………………………………………………………………….………..13

4.1 Guiding Policy #1……………………………………………………………………13

4.2 Guiding Policy #2……………………………………………………………………14

5.0 Managerial Implications……………………………………………………………………..16

6.0 Case Update………………………………………………………………………………….17

7.0 References..………………………………………………………………………………….19

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2.0 Introduction

2.1 Case Background

“Just do it.” Everyone knows this saying, and the symbol that goes along with it. Nike

has created brand recognition and has been able to gain and sustain competitive advantage. But

how did Nike get there? How are they able to sustain their competitive advantage? What

strategic moves allowed them to get there?

Nike has come a long way since its beginnings. The company was founded by Bill

Bowerman and Phil Knight in 1964 and was originally named Blue Ribbon Sports. The company

was renamed in 1971, and the infamous “swoosh” was created by a Portland State University

student. Bowerman was a true innovator by consistently seeking ways to enhance running

performance. Knight was completing his MBA at Stanford and wrote a paper about how to

disrupt the (at the time) leading shoe maker Adidas. In 1971, the company hired a Seattle

advertising agency which helped create the first “brand ad” called “There is no finish line” where

no Nike products were shown. By 1979, Nike had captured more than 50 percent market share

for running shoes in the US and a year later the company went public.

Through the 1990’s and 2000’s Nike sponsored superstars in a variety of sports. This

closely held sponsorship led to the idea of “creating heroes.” Nike picked many superstar

athletes that challenged the odds of success through defeating cancer and coming from

disadvantaged backgrounds. This strategic alignment and core competency allowed Nike to be

very successful, but the strategy also has many risks. Some of Nike’s “heroes” have “fallen”

through wrongdoings or crimes. Will Nike’s alignment of creating heros and then falling heros

cause Nike’s brand to fail?

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2.2 Diagnose the Problem

Nike has focused on sponsoring many sport superstars and was able to endorse a variety

of athletes in a wide range of sports. This closely held sponsorship led to the idea of “creating

heroes.” Many of the athletes that Nike sponsored were athletes that had defeated the odds of

failure- from defeating cancer to coming from a disadvantaged background. The problem with

this idea of “creating heroes” is that it is a slippery slope. What happens when you mythicize the

everyman? Everyone is human and flawed. When Nike’s heroes are unmasked as cheaters,

criminals, or frauds the company has to attempt to sidestep or anticipate the backlash and the

affect it could have on the brand. Nike has placed too many eggs in the hero’s basket which

could eventually reach the tipping point of being associated with too many fallen heroes.

2.3 Analysis

The fragile nature of hero creation appears to leave Nike in a vulnerable position moving

forward. Maintaining a core competency centered on the elevation of athletes to heroic stature,

leaves the company open to the possibility of a devastating fall from grace by these heroes in the

eyes of the public. With the likes of Tiger Woods, Oscar Pistorius, and Kobe Bryant, Nike was

able to sidestep the public relations storms that followed. The concern from a managerial

standpoint is that without innovative upgrades to the core competency of the firm, there exists a

chance that a scandal might occur that will be massive enough to tarnish Nike’s image right

along with the athlete in question.

With the diagnosis in place, the next step is to analyze the setting of Nike’s current core

competency and to propose a guiding policy to solve the problems the company faces. The

specific innovation management theories that will be employed to complete the analysis are the

AFI strategy framework, the VRIO framework, and Porter’s Five Forces. With an assessment

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through these lenses of where Nike excels, and where there is room for growth, a comprehensive

strategy for innovation can be formed.

To begin, we must examine the setting of the original core competency of Nike as well as

its most recent core competency and the role they have played in giving competitive advantage

to Nike over its rivals Adidas and Reebok. Early in Nike’s existence, Knight and Bowerman

were able to innovate the style and function of its shoes and apparel to set itself apart from rivals

(Rothaermel, 2015, p. 97). This component innovation led to competitive advantage as the

products Nike offered were not initially easy to replicate or imitate. Unfortunately for Nike, the

component innovation only led to temporary competitive advantage as Reebok and Adidas began

to seek ways to update their products style and functionality as well. Competitive parity was

created by this limit to component innovation. In an effort to combat this declining advantage,

Nike needed to alter its original core competency of designing innovative products.

The first of the innovation management tools to come into play can introduced here as

Knight and Bowerman sought ways to regain competitive advantage. The AFI framework

appears to be the perfect lens to apply to as its Analysis, Formulate, and Implement steps were

used to alter the core competency of Nike. Knight and Bowerman’s first step was to analyze the

current state of the market in which their company operated, and come up with possible future

scenarios. The two most clear among these scenarios were that Nike would continue to focus on

product enhancements and component innovation, and that it would focus on putting its apparel

and footwear into the public view by endorsing athletes who would wear the product. The

problem with these future scenarios as they stood, were that component innovation was

incremental, and as time went on, without radical innovation the advantage gained from shoe and

clothing upgrades would be temporary and limited. The issue with the second scenario is that is

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enforced the status quo in the industry. Endorsement contracts where pro athletes were

encouraged to wear products as they competed in their sports was common among all three

major companies. While it was important for Nike to maintain endorsements to keep up with

Reebok and Adidas, there was no measurable competitive advantage being gained.

The next step within AFI was to formulate a strategies to change the landscape of

competition within the market. Of the two scenarios being examined, the first of component

innovation could only be upgraded as quickly as technology for building components grew. The

second scenario of endorsements was where the real opportunity for innovation existed. This

took the form of using endorsements not only to give exposure to the products they were selling,

but to highlight the stars wearing the products themselves. The implementation portion of this

strategy was made manifest through the concept of hero creation, elevating athletes to higher

levels than that of merely stars on the field or court. The first major step in this strategy came

with the initial “hero creation” endorsement for Nike, the contract they signed with Michael

Jordan in 1984 (Rovell, 2013).

The emphasis that Nike placed on highlighting Michael Jordan’s early failures in high

school sports, his successful college career, and star power as he entered the NBA were far more

impactful than previous endorsements. The harrowing story of perseverance against the odds

Nike was able to tell pushed Jordan into not only the spotlight in the eyes of sports fans, but

helped to make him into a household name and cultural icon. While in retrospect a shift from one

type of endorsement deal to another might not seem groundbreaking, the actions taken by Nike

in the mid 1980’s were disruptive to the status quo of the industry. With the meteoric rise of

Michael Jordan, Nike was able to push its basketball shoes and apparel both onto the amateur

basketball player and the casual fan. Expanding its base in the Basketball sector was a huge first

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step, but following the success of the hero creation strategy, Nike began to look for opportunity

in other sports as well.

This was accomplished through contracts with Tiger Woods for golf products, Lance

Armstrong for cycling, Oscar Pistorius for track and field, and Kobe Bryant as a successor to

Jordan for basketball. Through this approach, brand equity became a driving force behind the

success of Nike within the market. With intangible resources like brand equity from the visibility

of its “heroes” Nike had built a powerhouse in its core competency that allowed it to outperform

its competitors on a yearly basis.

The success of this new paradigm can be properly examined through the second

innovation management lens, the VRIO framework (Rothaermel, 2015, p. 105). The tenants of

VRIO suggest that for the resources of a company to lend competitive advantage they must be

valuable, rare, costly to imitate, and that the firm must be organized to capture the value of the

resource. These hero creation stories were valuable in that they aided Nike in marketing its

products to the casual fan as well as the sports enthusiast. They were rare in that authentic stories

of “ascension to greatness against the odds” could not be easily replicated by other companies.

The idea that this sort of brand equity could be costly to imitate was also apparent, because the

brand equity Nike had created took decades, and several campaigns to gain the market share they

had. Finally within VRIO, Nike had preexisting coordination between its capabilities and

resources to take advantage of the competitive advantage that the hero creation strategy gave

them. The shift in marketing paradigm was able to effectively be capitalized on with the plants,

distribution, and capabilities already in place within the company.

The core competency it had formed was working famously, and only appeared threatened

when the image of its heroes became tarnished. The falls from grace referred to in the case came

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in the form of infidelity with Kobe Bryant (Johnston, 2004) and Tiger Woods (Zinser, 2013),

performance enhancing drug use with Lance Armstrong (Linden, 2013), and even more serious

accusations like murder in the case of Oscar Pistorius (Curnow and Pearson, 2013). The issue

created by the scandals is that when the intangible resource of brand equity was weakened by

bad publicity, the “Value” tenant of the VRIO framework lessens. Each time another scandal

arose related to one of the heroes it had created, brand equity for Nike suffered.

Considering this fatal flaw in the “hero creation” strategy, our team decided it would be

wise for Nike to again consider innovative actions related to its core competency. The third

innovation management concept, SWOT analysis, would be helpful for Nike in deciding how to

move forward (Rothaermel, 2015, p.117). The concept of SWOT seeks to outline the strengths,

weaknesses, opportunities, and threats a company faces both from within and without.

The strengths of its current model of hero creation are that by emphasizing not only its

products but the stars who wear them Nike is able to create value in its products independent of

the quality of the products themselves. The weakness inherent in this approach is that when

reliance is too heavy on the image of a sports star, any bad publicity can weaken the advantage

the endorsements provide. Additionally, the marketing driven approach that is currently being

used creates a lag in component innovation, allowing competitors to close the gap in that area of

advantage. Opportunities that exist outside of the current framework however that would allow

Nike to improve its current approach. To offset the damage causing potential of single star

endorsements, Nike has the opportunity to highlight teams as a whole, amateur sports athletes,

and focus on viral video advertising with virtually unknown athletes who show the sort of

potential Nike is focused on spotlighting. Threats to Nike appear to be the potential for a public

relations disaster that cannot be recovered from, and the lack of component innovation. The

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likelihood of impact of these threats can decreased if the strength of its marketing power are

leveraged are used to quickly shift away from the idolatry of stars to its new paradigm of

defining amateur athletes and whole teams as heroic.

If the SWOT analysis is employed by Nike management, and if our diagnosis is to be

believed, Nike should innovate its marketing approach by shifting the way it uses its

endorsement deals and elevation of individual stars, and it look into new and unique places for

its next “hero”. With concerted effort toward identifying heroic qualities in amateur athletes, and

using their accomplishments in concert with the successes of the endorsement giants they have

contracts with, Nike can bridge the gap between the everyman and the hero. This relatability can

also offer the potential to lessen the shock of any scandalous revelations that may come to light

about currently endorsed heroes that Nike has created. On the production innovation side we

believe that Nike needs to ensure that they continue to at least marginally innovate the apparel

and equipment they offer to increase the gap between Nike products and competitors such as

Reebok and Adidas. This can be accomplished by focusing on innovations both to the apparel

and shoes, as well as technological integration with accessories.

SWOT Analysis Helpful Harmful

Internal Strengths:-Established as number one footwear seller in the world.-High brand equity based on current competency.-Major foothold in basketball and football with licensing contracts

Weaknesses:-Contracts terminated with Pistorius and Armstrong.-Lack of drastic component innovation.

External Opportunities:-Viral Marketing-Amateur Sports-Team endorsement

Threats:-Reebok and Adidas catching up in component innovation.-Potential future scandals involving endorsed athletes.

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3.0 Case Questions

3.1 Question #1: The case indicates that Nike’s core competencies is to create heroes. What does this mean? How does Nike build its core competency? Does it obey the VRIO attributes?

Nike has based its core competencies in creating heroes out of some of the popular

athletes of our time. This strategy calls for the identification of an athlete relatable to the general

public who is then, through careful advertising campaigns, portrayed as an almost godlike figure.

Individuals have been carefully selected from various sports with the sole intention of turning

them into an Icon (Peter, 2015). Since the early days of Nike, some of these ad campaigns

highlight the hardships and roadblocks that athletes have overcome in order to solidify their

status as something greater than the average man.

In the case of Nike and its heroes all of the VRIO attributes seem to be followed. Each

Hero is handpicked from a pool of coveted athletes. This allows Nike to exploit a resource that is

not available to its competitors thus rendering them less of a threat. The rarity of the hero is high

as no other company or firm has access to them in the way that Nike does. Each Hero’s contract

makes them an exclusive resource for Nike. The idea of procuring a highly skilled and well

known athlete to represent the company or product is in essence imitable. Yet, in this instance

the imitations may or may not match the skill level being exploited by Nike. Nike is well

organized to support and exploit its valuable resources allowing them to sustain competitive

advantage and dominate the market share. It is important to note that even with the VRIO

framework attributes being met, Nike should still consider their advantage to be a fleeting one.

Shifts in the perception of their Heroes can cause irreparable damage to the overall value of the

resource rendering their sustained competitive advantage obsolete.

3.2 Question #2: What would it take for Nike’s approach to turn from a strength into a weakness? Did this tipping point already occur? Why or why not?

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In order to make someone a legend large financial investments are made in order to shape

public view and acceptance. When these individuals are found to act in ways contrary to what

they have been portrayed as, the public reacts negatively. The tipping point has occurred in the

past for this company but Nike is successful at navigating what is and what is not acceptable to

the public regarding its Faux Heroes. While the company continues to remain financially

successful, Nike will not be able to sustain its competitive advantage based on the sole usage of

its Heroes to sell their products. Each scandal linked to the company systematically decreases the

public perception of the implicated Hero and in turn damages the reputation of the company as

whole. Some of the more notorious cases that have contributed to Nike’s tipping point include,

Tiger Woods, Michael Vick, Kobe Bryant, Lance Armstrong, Manny Pacquiao and Oscar

Pistorius. While Woods, Vick, and Bryant had relatively mild scandals involving cheating and

other actions devoid of moral reasoning, Armstrong, Pacquiao, and Pistorius found themselves in

such legal dilemmas that the company could no longer continue with their contracts in good

faith. Tiger Woods found his contract decreased as a consequence of his infidelities (Roberts &

Snyder, 2014). Manny Pacquiao found his contract terminated after making vulgar comments

referring to homosexuals and animals (Rovell, 2016) and Oscar Pistorius lost his endorsements

when he was indicted for and subsequently convicted of the murder of his girlfriend (Onishi,

2015).

3.3 Question #3: What recommendations would you have for Phil Knight and Nike? Can you identify a way to “reframe” the competency of creating heroes? Or a new way to think of heroes that would continue to build the brand?

Phil Knight and Nike must reframe the legendary hero that they currently base their

campaigns on by focusing on the everyday hero (i.e. students in middle and high school, and

college/universities). A highly specific focus on athletic contributions and various physical feats

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would prove to be beneficial in allowing the company to spread its financial investments among

a broader pool of people who the general public will, no doubt, find more relatable.

3.4 Question #4: If you are a competitor of Nike would could you exploit apparent vulnerability? Provide a set of concrete recommendations.

● Begin creating heroes at a younger age by using technological advances to identify up

and coming athletes and savants

● Begin Ad campaigns focused on the quality of their product as compared to a Nike

product

● Exploit the past failures of Nike endorsed athletes and Nike’s continued support for

individuals who time and again fall short of the company’s own created mythology.

4.0 Recommendations

Companies are wise to create two guiding policies, generating multiple ways ahead, and

through a painstaking process come to agreement on one way forward. Doing so allows for the

generation of ideas, ensuring all concerns and insights are visited; developing a better path

towards sustainable change. Nike would be wise to develop the following guiding policies, 1)

Re-positioning the brand towards product innovation; and 2) Re-define what it means to be a

hero. The best choice to ensure continued success is guiding policy number 2. For transparency

both guiding policies will be discussed; policy number two in greater detail.

4.1 Guiding Policy #1

The first guiding policy is a complete repositioning from “creating heroes” to “product

innovation”. Nike could implement four coherent actions pertaining to this policy. First,

increasing research and development by 1 - 2 % of net revenues each year; roughly $32.73 -

$65.46 million based on the 2015 net income of $3.273 billion (Yahoo Finance). The aim is to

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gives Nike a great opportunity to develop the “next big thing”. The capital is available to

implement this action without affecting the bottom line. Second, Nike can identify small,

emerging companies to acquire. Doing so enables Nike to theoretically speed up the process of

developing a superior running sole, better moisture wicking shirt/short combo, or a lighter golf

club. Third, Nike would be wise to focus on strategic partnerships that provide value to both

parties, and have a clear defined way ahead. Nike already partners with the National Football

League (NFL), furthering that partnership to help develop the most protective helmet can help

shape a positive image, as one example. Finally, creating a new marketing campaign for this

policy is not to be forgotten. Creative, coherent, yet still ethically based marketing ensures the

message is packaged, sent, received, and opened in a manner that maintains the brand identity,

brand image connection.

Guiding Policy #2

The best guiding policy is to continue to utilize the creation of heroes, but re-defining

what that means; ensuring continued success. There are four basic, yet effective steps in support

of this policy. The first action is to create a section within the company operations department

title “social media research cell”. This cell is comprised of technologically savvy individuals

(possibly millennials) whose chief duty is to find and highlight schools, and every day adults to

bring into the family. Finding schools who are raising the bar in excellence - both academically

and athletically. Schools with rich traditions, in small areas, with very little exposure. This

allows for entire schools, and districts to gain recognition. Devoting 0.05% ($16.365M) of

yearly of net revenue would be sufficient in building this cell. The Social Media Research cell

will aid in many distinct arenas, college recruiting; school and district awareness; higher sport

participation; among others. This cell will not just focus on the athlete. It is apparent that in

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today’s society making a concerted effort to bring the mom and dad who push the stroller on a

Saturday morning will bring more positive attention to this guiding policy.

Action number two builds off the efforts of action number one. Creating partnerships

with schools, city park and recreation departments, and smaller universities throughout the

country accomplishes this. It would allow for all of the benefits of action number one, and ten

take it to the next level. Nike could - in partnership with above mentioned entities hold camps

for younger kids, and seminars for working adults and the like that are looking to develop

themselves further. They can then run skill drills in many sports highlighting very gifted athletic

individuals, and informational seminars to help those moms and dads better themselves. Using

sponsored athletes, and trainers to run said seminars and camps would create a connection to the

Nike brand and would only take roughly 2%, or $63.46M of net yearly revenue. This also allows

Nike to give back to the community.

Nike can give back to communities throughout the United States and the world by taking

action number two and in conjunction with high school camps and seminars by instilling

outreach programs at all levels. The primary focus of this is at the junior high and below level in

schooling, and the mom and dad at the adult level. Giving back to the community further and

helping all to participate - no matter the income level - is one that will provide benefits for years

to come. Contributing 0.5% ($16.365M) to this initiative would be enough to make this a

success.

Nike should distribute test gear - action number 4 - to local school districts, and through

local camps and seminars. Many school districts do not have the revenue, and/or sponsors to buy

needed equipment for students. Working moms and dads could use test gear to help Nike

develop their product further. Nike would provide that avenue to more districts than they already

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do now. When Nike expands any program they already have in place that has this aim, it will

better link the brand identity, and brand image.

The final action is one that will show the effects of their efforts in actions one through

four above. Nike should feature both schools, and local citizens in many ads that run locally.

The world has seen a significant rise in social media usage and awareness in recent years,

however, there are still areas throughout the United States and the world who are unknown.

Cities that are some of the farthest north in the country are far and away out of the realm of

thinking for companies who operate in New York, or Los Angeles. Nike can also expand its

brand through these ads. The ads can run in normal commercial spots, and a dedicated YouTube

channel(s). In the not too distant future, Nike can create a yearly award for excellence called the

“Everyman Award for Excellence”. Devoting approximately 2% or $65.46M in implementing

this initiative.

While guiding policy one may seem as the more logical choice moving forward, Nike

would be wise to stick with the path that brought it to the top; the “creation of heroes”. Proper

positioning is arguably one of the best competitive advantages a company can have. Nike has

positioned itself in a way no other company has; leveraging that to almost twice the revenue as

the nearest competitor, Adidas ($25B - $15B) (Rothaermel, 2015). The slight alteration will help

the company in giving back more and re-defining what it is to be a hero.

5.0 Managerial Implications

Every strategic adjustment provides new lessons learned to be able to shape effective

managerial decision-making. Nike was able to succeed through finding the “sweet spot” in the

market. The sweet spot consists of competitor’s offerings, customer’s needs, and company's

capabilities; where a company can meet the customer's needs in a way that rivals cannot (Collins

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and Rukstad, 2008). For future managerial decision-making it is important that managers look to

see if what they are pursuing has any tipping points, if there is another potential avenue worth

going down, or if they missing a potential market. It is also important to look to see what the

competition isn’t doing. In this case, Nike was able to find a unique position in the market based

off of what competition was not doing.

6.0 Case Update

Since late 2014 Nike has made some major changes to its approach with regard to

endorsements and marketing, as well as experiencing additional scandals with endorsed stars.

Two major scandals resulted in the termination of contracts for Baltimore Ravens running back

Ray Rice, and professional boxer Manny Pacquiao. Rice was dropped by Nike in September of

2014 after news of a domestic violence scandal led to Rice’s suspension from the NFL. Manny

Pacquiao is the most recent on the contract terminations, having his contract terminated on

February 17th, 2016 after the boxer became embroiled in a scandal regarding derogatory remarks

made by Pacquiao (Rovell, 2016). A major change from scandals of the past, in both of these

instances Nike strayed away from trying to manage the public relations storms that followed

these incidents, and instead came out quickly to terminate the contracts of the two stars in an

effort to distance themselves from the incidents.

Aside from a change in how they deal with scandals among existing endorsements, Nike

has also made an effort to showcase amateur and college athletes with its commercial campaigns.

The commercial campaign for Nike’ Air Zoom Structure 18 shoes of late 2014 highlights not

only the component innovation rolling out with the shoe, but also featured amateur track and

field stars Mary Cain and Galen Rupp. A second example of this new approach can be found in

the “American Woman” advertisement released by Nike in June of 2015. The American Woman

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ad juxtaposes the United States Women’s National Soccer Team with middle school, high

school, and college female soccer teams to blur the lines of greatness drawn between amateur

sports and professional sports. A final example of this shift in paradigm is present with the Nike

commercial “Last” from October of 2015. Showcasing a large field running a marathon, the

advertisement is focused the runner who appears to be in last place. This final commercial

example shows Nike’s commitment to redefining what it means to be a hero, abandoning the

accolades that come from professional sports, and dialing in on the personal achievements of the

everyman.

Given these examples, Nike appears to making headway with respect to strengthening its

core competency. When coupled with the continued financial strength of the company, five

percent revenue growth in Q1 of 2016 (Nike, 2016), the newly redefined “hero creation” model

Nike is emphasizing should continue to help them maintain the competitive advantage in their

industry. As long as the pitfalls addressed in this case study are avoided, Nike will likely remain

the leading provider of athletic apparel and footwear.

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Whipp, L., & Shotter, J. (2015, August 7). Adidas struggles to catch up with Nike’s runaway success. Financial Times. Retrieved from http://www.ft.com/cms/s/0/bf86344a-3c9a-11e5-bbd1-b37bc06f590c.html

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Zinser, L. (2013, March 2). Pushback on Nike Ad Celebrating Woods. On Par: The New York Times Golf Blog. Retrieved from http://onpar.blogs.nytimes.com/2013/03/26/nikes-congratulatory-woods-ad-sends-questionable-message/

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20 - file · web viewhowever, the firm also faces a challenge when several of its product...

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