Nike Case Study Nike's Global Women's Fitness Business Driving Strategic Integration Case Study

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Nike Case Study

Scenario which Sparked Change

The scenario which sparked the need for change was the sheer success of Nike as a brand for athletic apparel, athletic shoes and equipment. However, this was a success that company experience only in terms of men and menswear. "According to Mindy Grossman, the company's former vice president of global apparel, 'some of the issues in the past was that there was a faction in the company that felt if we were successful in the women's business, it would erode our men's business and we would lose some of our testosterone'" (Nike case study). Thus, there was an overwhelming feeling that while the company was an accepted, trusted and popular brand, they were only successful with one-half of the population -- and there was a sense of reluctance to attempt to even try to be successful with women, for fear of losing the male consumers that made their company famous. Grossman gives another good example of this in the case study, saying that while their ad campaigns that were geared toward women were extremely well-received (such as the "If you let me play" campaign) these efforts still didn't translate into sales by women consumers. Thus, it was essentially a need to find an effective means of marketing and image and action to translate into actual sales by women for the company while not alienating their male consumers.

Business Case

The benefits of such a foray of making aggressive entendres into the female market are obvious: Nike could potentially double their profits and dominate the sector of athletic apparel and shoes for both men and women. However the costs and risks of this are indeed weighty. One false move could alienate women indefinitely -- such as a bad commercial. A bad commercial is a bad investment and costs more money to fix later in order to win back an alienated audience and section of the market. For example, "Nike's first foray into the field of targeted advertising for women was in 1987. How would you have reacted to this commercial? A remarkably fit female triathlete works out to the background strains of 'Just Do It, Just Do It.' At the end of the commercial, she turns to the camera and, in order to drive home the message about the body beautiful, says, 'And it wouldn't hurt to stop eating like a pig, either.' The ad was a flop and so Nike turned to women -- a team of about 40 drawn from both Nike and its ad agency -- to figure out ways of addressing women more sensitively and sensibly" (Pearson, 2010). This demonstrates a specific failure that Nike made in an attempt to reach women. However, this failure did lead the company to reach for success, finding more effective ways to reach out to this gender of consumers.

Personal Assumptions

For a company that was as accomplished as Nike was, they clearly saw themselves as being capable of forging a bond with the female market. The company was able to do so with men for many years, that the powers in charge most likely weren't able to accept the notion that perhaps, they didn't have what it takes to convince female consumers to purchase their products. This was most likely unfathomable a notion and unacceptable, particularly when they saw their competition as so successful with this sector of the market.

Cultural and Other Conditions for Change

The cultural conditions for change were solidified in the 1980s and 1990s: more and more women were reaching empowered positions in their lives and they were becoming a more empowered sector of the consumer market. Women were starting to work out more aggressively, and joining gyms and sports clubs, taking aerobics and other forms of exercise. This led them to need just as much gear as men. Women, being demanding and highly fashion-conscious, offered up the potential for the company to widen their market share.

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Since the 1970s, women were in the workplace in even higher numbers than before increasing their buying power in the economy at large (Goldman & Papson, 1998). Furthermore in 1972, Title IX made it illegal for athletic departments in the U.S. To discriminate against female athletes (Goldman & Papson, 1998). This move alone opened up the doors of opportunity for women and women's sports, thus increasing the interest of this particular market share in high quality athletic goods and apparel.

Financial Conditions for Change

"Throughout the 1980s, the Nike organization was routinely referred to as a 'men's club.' Nike lost significant ground to Reebok in the mid-1980s when it failed to recognize the importance of women's fitness market. Critics charged that Nike devoted over three-quarters of its annual advertising budget to its men's product lines" (Goldman & Papson, 1998, p.120). The fact of the matter was that Nike, a leader in athletic apparel, was losing business in the women's market to its competitors. This was a plain and simple fact and a highly motivating one that made the company want to win over this section of the market. They had done this with men, and it was highly profitable. There was a belief that they could do it with women.

Organizational/Operational

In the Nike case study, the advertising team learned that "women don't do fitness." Creating fitness gear for women was a bad approach because it was so non-specific. Instead, the team at Nike learned that women engage in specific activities, like running or yoga, and sought out gear to complement and meet those needs. This caused a change in the gear that was created for women and in the way that gear was advertised for women.

Stakeholders

The stakeholders in this scenario are the Nike Company and the female consumers that they've already won over. These stakeholders need to be engaged by recalling the victories of their past and the bonds that got them there. These victories were indeed significant. The Nike Company, fresh of the failure, humiliation and criticism of 1987's "stop eating like a pig" commercial, established the "empathy" campaign for women in the 1990s and this was how they were able to create a bond and lure in the female market. This move needs to repeat for a new generation.

Model Approach

The sense of urgency for this is necessary because the "Empathy" ads did so well in the 1990s, and the "Empowerment" ads are currently doing so well, there needs to be a new way to encourage women to feel empowered in a way that doesn't force them to scrutinize their bodies. For example, the "my butt is big" advertisement from a few years back was successful, but still controversial. Nike's tear-jerker ad of 2012 which celebrated the anniversary of Title IX was empowering, as it helped consumers recall how far we've come as a society, and the ability of women to be the best athletes they can be. The change team would be composed of the dream team comparable to what was formed back in the 1990s when Nike took back the female market: a team of 40 female Nike executives from the company and in the ad agency, along with professional female writers who have written the most successful commercials for goods targeted to women. The vision for the change would have to be the freedom that gave Nike success in the 1990s: "Nike hailed women in a therapeutic voice that resonated with middle-class consumers. These quiet, introspective ads advocated taking care of the self" (Goldman & Papson, 1998, p. 120). What was so interesting about these ads was that some of them had nothing to do with sports or even fitness. They simply valued the female experience as part of the human condition. This can easily be repeated again. Nike is currently doing this….....

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