What is an informed analysis of the company Nike, Inc.? Does it appear to have a positive outlook for the future? What are three recommendations one could make for the company's future?
Founded in 1971, Nike, Inc. has grown into the largest sports apparel dynasty in the world. Its trademark “swoosh” has become the most recognizable brand in sports and one of the most prominent in all of business. It has profited from its relationships with star athletes including Michael Jordan and Tiger Woods, and weathered the storm involving the latter’s publicized record of marital infidelity and subsequent divorce. Having reached the top of a highly-competitive industry, its main challenge has involved maintaining a positive public image while fighting off that competition.
Nike built its empire largely through its business relationships with athletes. By signing Michael Jordan at the start of his professional career, Nike was able to ride the future legend’s star to the top of its industry. Its line of “Air Jordan” athletic shoes became the most successful such line in history. Jordan’s retirement and Woods’ widely-publicized personal troubles caused Nike’s image to diminish, but it continues to be highly competitive in attracting major professional athletes to its brand. While its list of celebrity endorsers speaks well of Nike’s ability to continue to sign such individuals to contracts, however, none have been able to duplicate the early Michael Jordan-Tiger Woods success.
Nike continues to maintain a positive outlook for its future, but that future is more competitive. Measures the company could take to ensure it retains its position atop the industry might include better screening its athletes’ backgrounds to minimize its association with stars with off-the-field issues that reflect poorly on its brand. Nike might deserve credit for standing by Tiger Woods when many of the golfer’s other endorsement deals fell apart amid the allegations of infidelity, and the company has weathered storms associated with revelations of the poor conditions at its overseas factories, but the industry is sufficiently competitive that it can afford only so many negative stories in the media.
Another measure could involve expansion into new business lines, including within the apparel industry. While it made a great deal of money marketing expensive shoes to low-income communities, it could experiment with apparel designed for additional areas of human activity, for example, business wear. While few outside of its Oregon headquarters would want to be seen walking around in a business suit with the “swoosh” on the lapel, the high-end suit market is very lucrative and a more discrete design plan could prove profitable.
Finally, whereas Nike received negative publicity for its’ overseas business practices, it does receive very high grades for the way it runs its domestic operations, especially at its headquarters complex. Work conditions for Nike employees in the U.S. are reported to be among the best in the country, and greater focus on that aspect of its operations could help to dispel criticism regarding other less-attractive business practices. Nike has long taken pride in its reputation for being willing to “rock the boat” and to take unpopular stands, for example, standing by athletes with questionable reputations. However, shifting its manufacturing base from Southeast Asia, especially Vietnam and Indonesia, to the United States would burnish its image considerably, albeit at the short-term expense of its profit margins.