Nike is indisputably a giant in the athletics industry. The Portland, Oregon, company is known worldwide for its products, none of which it actually makes. It has thrived by knowing how to stay small, focusing on core competencies, and outsourcing manufac
management
Description
University of Phoenix Material
Nike Case Study Analysis
Nike: Spreading Out to Win the Race
Nike is indisputably a giant in the athletics industry. The Portland, Oregon, company is known worldwide for its products, none of which it actually makes. It has thrived by knowing how to stay small, focusing on core competencies, and outsourcing manufacturing.
But if you don’t make anything, what do you actually do? If you outsource everything, what’s left? A lot of brand recognition, as it turns out.
Behind the Swoosh
Nike continues to outpace the athletic shoe competition while spreading its brand through an ever-widening universe of sports equipment, apparel, and paraphernalia. The ever-present Swoosh graces everything from bumper stickers to sunglasses to high school sports uniforms. Nike products embody a love of sport, discipline, ambition, practice, and all other desirable traits of athleticism.
The company has cleverly kept its advertising agency nestled close to home, but has relied extensively on outsourcing many non-executive and back office responsibilities to reduce overhead. Nike is structured around its core competency in product design—not manufacturing. It has taken outsourcing to a new level, with sub-contractors producing all of its shoes.
Whoops
Although outsourcing production hasn’t hurt product quality, it has challenged Nike’s reputation for social responsibility, especially regarding work conditions and labor practices at some suppliers. In a move designed to turn critics into converts, Nike posts information on its website detailing every one of the hundreds of factories that it uses to make shoes, apparel, and other sporting goods. It released the data in conjunction with a comprehensive corporate responsibility report summarizing the environmental impact and the labor situations of its contract factories.
Nike also encourages designers to develop environmentally sustainable designs like the Nike Free, a lightweight running shoe that boosted sales dramatically. Nike’s Sustainable Business & Innovation Lab funds outside startups focused on alternative energies, more efficient approaches to manufacturing, and the promotion of healthy lifestyles.
