Nike
Executive Summary

Nike’s decision to tap into “woke culture” and turn the out of work former NFL quarter Colin Kaepernick into a brand ambassador has been a controversial one since the sportswear company launched its Colin ad campaign in 2018. This paper discusses the strategic issue underlying Nike’s controversial campaign and shows how it was intended to leverage “woke culture” and gain competitive advantage in an industry that had largely stayed quiet on socio-political issues. This paper provides an external analysis, internal analysis, and financial analysis before addressing the strategic issue. Alternatives are also discussed along with a recommendation and an implementation plan. Before beginning, background information on Nike is provided here below.

Company Vision/Mission

Nike’s Vision is to “to bring inspiration and innovation to every athlete in the world.” Its mission is to create “groundbreaking sport innovations, by making our products more sustainably, by building a creative and diverse global team and by making a positive impact in communities where we live and work” (About Nike, 2020).

Company Goals

The goals of Nike are to focus on innovation, sustainability, and form strategic partnerships that will enhance the brand and lead to brand loyalty among consumers (Nusser, Mahle & Pätzmann, 2015).

Company Policies/Values

Core values at Nike are: performance, authenticity, innovation and sustainability. Creating iconic brand campaigns aligns with these values (Storey, 2019).

Corporate and Competitive Strategies

Nike’s competitive strategies focus on product differentiation, market niche, and building customer loyalty. Its corporate strategy focuses on diversification, international appeal, and developing partnerships.

External Analysis

Industry/Competition—Five Forces

Current Rivalry Opportunities

· Online sales represent a great growth area, as the shift to e-commerce has caused brick and mortar retail shops to fold in recent years. Nike has an opportunity to leverage its brand equity to draw e-commerce consumers to its website for online sales.

Current Rivalry Threats

· Supply chains may be disrupted by Covid-19, and rivals that can leverage supply chains in other parts of the world will benefit while Nike suffers from supply chains being crippled in Asia.

Potential Entrants Opportunities

· Nike’s brand is dominant across all sports and its partnerships with professional athletes make it difficult for new entrants to break into the market. The Big Baller Brand of Lonzo Ball is an example of how difficult it is for new entrants.

Potential Entrants Threats

· Upstarts like Under Armor and New Balance have partnered with star players like Steph Curry and Kawhi Leonard. This takes some of the shine off Nike’s dominance. If more stars turn to other brands, Nike could lose its control of the market.

Bargaining Power of Buyer Opportunities

· Numerous brands are available, thus brand appeal through star power, image and partnerships has the biggest impact on buyers. Buyers have a handful of brands to choose from.

Bargaining Power of Buyer Threats

· The Internet has allowed buyers to have more information about products than ever before. Influencers on social media have a big impact on who makes purchases according to Freberg, Graham, McGaughey and Freberg (2011).

Bargaining Power of Supplier Opportunities

· Suppliers can make shoes but the power is in the brand and only major competitors like Nike and Adidas are true brand players at the international level

Bargaining Power of Supplier Threats

· The suppliers in Asia are major inputs in the industry and if Asian markets collapse from Covid-19 as is currently happening, major players in the market will be hurt. Suppliers from other parts of the world will have leverage in this situation.

Substitute Products Opportunities

· The industry is always growing in multiple directions and opportunities for substitute products grow as sports and exercise culture grows.

Substitute Products Threats

· There is no substitute for quality, as the recent debacle of Big Baller Brand has shown. Athletes want footwear that is high quality and they will not accept substitutes.

General External Environment

Economic Opportunities

· The economy appears to be growing under the Trump administration, which means consumers have more disposable income to spend on designer products like Nike gear.

Economic Threats

· A market recession is forecasted and the effects of Covid-19 spreading like wildfire in Asia could seriously...…many have taken to social media to voice their displeasure with the brand—some even burning their Nike gear and posting the videos of this anger online. This is bad negative attention for the company and hurts its brand.

Cutting ties with Kaepernick would not hurt Nike. It would help the company to save face with the majority of consumers and it would allow Nike to turn the page and move on from its woke culture experiment. The saying among consumers now is “go woke, go broke,” and many consumers are boycotting corporations like Disney that seek to promote progressive values that they do not appreciate.

Nike also could benefit from bringing production back to America. This is something the Trump administration has been vocal about and making shoes in America would bolster its image among majority populations.

Implementation

Changes in Organizational Culture

Nike’s organizational culture has embrace progressivism in recent years but by bringing back a focus on more traditional values, it could enhance its brand image among workers, communities and consumers and restore its value in the eyes of consumers who were affronted by its latest ad campaign strategy.

Changes in Organizational Structure

Nike’s organizational structure relies too heavily on foreign-based labor. Offshoring labor has decimated communities here in the US as they have lost jobs to overseas. Nike could be a Made in America company, which would boost its image and allow it to maintain operations as the virus outbreak in Asia is likely to worsen as the year goes on. By bringing production back to America, Nike will engineer a win-win scenario. It will show that it is an American company and that it embraces American values. It will also be able to reduce the risk of exposure to Asian supply chains.

Nike should also develop a strategy for expanding its brand in other parts of the world by doing culture-based research using Hofstede’s model of cultural dimensions and making inroads with power brokers in other regions, such as the Middle East, Europe, and Latin America.