Preview

Nike “Jordan Brand” a Blue Ocean Strategy

Satisfactory Essays
Open Document
Open Document
352 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Nike “Jordan Brand” a Blue Ocean Strategy
Froilan Mencias EEMBA: Strategic Management 2
Prof. Jesus Gallegos Jr February 12, 2013
Written Analysis of Case: Nike “Jordan Brand” a Blue Ocean Strategy
In 1983 Nike had revenues of $920m, this increased by $15m after the Air Jordan 1 was released in 1984. Air Jordan 1 actually sold $130m in 1984 or 13% incremental sales. In 1989, powered by further increase in Jordan’s popularity and the efficacy of his “Just Do It” campaign, Nike sales reached $1.7 Billion, with the Jordan brand contributing $200m annually since then. By 2011, Jordan brand already sell in excess of $1 Billion annually for Nike. The success of the Jordan brand allowed Nike to innovate their other portfolio of product offerings using the template that the Jordan brand created. http://www.forbes.com/sites/kurtbadenhausen/2011/09/22/the-business-of-michael-jordan-is-booming/ http://www.forbes.com/sites/kurtbadenhausen/2013/02/14/how-michael-jordan-still-earns-80-million-a-year/?partner=yahootix 1. Strategy Canvass of Jordan Brand vs Nike vs Adidas (1985) High | | | | | | | | | H/M | | | | | | | | | Mid | | | | | | | | | M/L | | | | | | | | | Low | | | | | Jordan brand created the premium sports shoe segment

| | | | | Price | Design Innovation | Innovative Marketing | Cost | Brand Passion | Perceived Functionality | Extensive use of Superstar/s | Annual Release | KSF Weight | 5% | 20% | 15% | 5% | 15% | 5% | 25% | 10% |

2. The ERRC for Nike Eliminate - Factors to eliminate that industry has competed on * Price (used to be important, but because what Jordan was selling was the brand, price became immaterial) | Raise - Factors that should be raised well above industry standard * Prestige * Marketing * Functionality | Reduce - Factors to reduce well below industry standard * Cost (cost of Jordan brand was spread within the Nike operations, so shared and lower) | CreateFactors to be created that

You May Also Find These Documents Helpful

  • Good Essays

    The Athletic shoe industry had its start in 1892 when U.S Rubber company invented Keds and by 1917 they were being mass produced. Over the years the athletic shoe industry in the United States has evolved from crude shoes with rubber soles to a multibillion dollar industry promoted by Athletes, celebrities, and many other organizations. Athletic shoes commonly referred to as sneakers are no longer just worn during athletic activities. Sneakers have become fashion statements with countless designs and colors. Sneakers are now collectors’ items that cause thousands of Americans to patiently wait in line for their favorite sneaker to arrive. In 1984 Michael Jordan signed a contract with Nike to wear Air Jordans. Even after years of retirement, Air Jordans are still the most famous sneakers ever made. This was a turning point for Nike which until this day holds the largest percentage of the athletic shoe market in the United States.…

    • 1412 Words
    • 5 Pages
    Good Essays
  • Powerful Essays

    Nike was incorporated in 1968 and has become arguably synonymous with elite footwear/apparel amongst the world population (Nike 10K, 2009). Nike’s primary business “is the design and development and worldwide marketing of high quality footwear and apparel” (2009, pg.1). In addition, Nike also designs/markets sports equipment and accessory products. Nike puts a heavy emphasis on investing in the innovation and design of their products to give their customers a high-quality product. Nike is the largest seller of athletic footwear and apparel in the world (2009). Nike sets the bar for other companies in the sports apparel/footwear industry, like Under Armour.…

    • 5144 Words
    • 21 Pages
    Powerful Essays
  • Good Essays

    By 1980 Nike dominated over half of the athletic footwear market. Yet never advertised until 1982. During the 1984 Olympic Games 58 athletes were seen wearing Nike footwear. Profits there after sky rocketed to a total of 919.8 million. The famous Nike ‘Air Jordans’ are born in 1985 by NBA athlete, rookie Michael Jordan. The next year revenues surpass 1 billion. Only two years after the Jordans were released, Nike introduced a new shoe with air filled cushions call the Air Max. Shortly after in 1988 Nike introduced its “Just Do It” slogan, boosting profits to 1.2 billion. Nike expected 8 billion in sales during the 1997 fiscal year. Through the 80’s and 90’s Nike yielded greater and greater profits quickly assuming the…

    • 670 Words
    • 2 Pages
    Good Essays
  • Better Essays

    During his time playing basketball Jordan had many endorsements none bigger than his Nike deal which changed the landscape of how endorsements worked in the NBA. “Jordan took the court his rookie year in 1984 in a pair of red and black Air Jordan’s, which matched the Bulls’ uniforms, but did not feature any white per NBA protocol. The league banned the shoes and fined Michael $5,000 every game for wearing them. Nike covered the fines and capitalized on the attention” (Badenhausen). Jordan continued to wear the Nike air Jordan shoes, then eventually get rid of the protocol and players were allowed to wear any shoe the player show fit. Air Jordan franchise yielded more than 100 million dollars in March 1985. According to SportsOnesource a retail tracking firm “In 2012, the Jordan brand sold $2.5 billion worth of shoes at retail. . . Air Jordan’s made up 58 percent of all basketball shoes bought in the U.S. and 77 percent of all kids ' basketball shoe”…

    • 1151 Words
    • 5 Pages
    Better Essays
  • Good Essays

    Everyone knows the world’s greatest basketball player Michael Jordan also has one of the highest sold brands and apparels. Soon Jordan will be 50 years old, and even though he is out of the NBA the economic impact of his commercial success is still felt worldwide. In the early 1980s Jordan came into the NBA, back then athletes did not have their own brands, they were not a business, and endorsements were hard to come by, but Jordan changed all that (unsportsmanlike.ca). As noted in New York PRNewswire article on June 1st, they stated that the estimate sold was about $10 billion and counting (PRNewswire). The Jordan brand endorses companies like the NBA, Nike, and Air Jordan. Included in the branded products Jordans sold things like socks, clothing,…

    • 749 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Nike’s “Just Do It” campaign was able to build off of the fitness craze of the 1980s. Their main competitor, Reebok, had already successfully tapped into this market and controlled a sizeable portion of the sneaker business. Nike used celebrity endorsements in their marketing to appeal to consumers and ensure them that if their product was good enough for celebrities that it was good enough for them. The “Just Do It” campaign and celebrity endorsements made wearing Nikes the hip thing to do for both the athletic and non-athletic consumers alike. As a result of the company’s marketing, Nike saw their market share jump from 18% to 43% in the 1990s, and their sales increase from $800 million a year in 1988 to upwards of $9.2 billion in 1998 (D. Drew Design,…

    • 813 Words
    • 4 Pages
    Good Essays
  • Good Essays

    Back in 1984 the Nike company was struggling to attract customers. They had to come up with a new idea and in came Michael Jordan. After signing Jordan to a 2.5 million dollar contract, the “ Air Jordan” brand was created.…

    • 1037 Words
    • 5 Pages
    Good Essays
  • Powerful Essays

    Nike Accounting

    • 3659 Words
    • 15 Pages

    Nike entered the 1980s on a roll, thanks to the successful launch of Nike Air technology in the…

    • 3659 Words
    • 15 Pages
    Powerful Essays
  • Good Essays

    Nike Stock Analysis

    • 833 Words
    • 4 Pages

    “Nike intends to grow its business from $19.2 billion to $27 billion by 2015. Nike plans to target the emerging global middle class, leverage digital media (including e-commerce and NikeID customization programs) and create more retail experiences, both with partners and in its own stores. Nike also plans to grow its Nike affiliate…

    • 833 Words
    • 4 Pages
    Good Essays
  • Good Essays

    trying to find ways to promote their products, and athletic wear titan Nike is a testament to the fruit that marketing can bear. To increase and improve its image, Nike signed Michael Jordan in 1984. The Jordan brand sold $130M in its debut year. In 1988, their "Just Do It" Campaign increased sales by 42% in 1989. (Johnson, 1998) From celebrity endorsements, to posters, to commercials, Nike took marketing seriously, and by seriously, it means they invested a good amount of money. Their success today can all be attributed to the promotional steps they took in the 80's.…

    • 323 Words
    • 2 Pages
    Good Essays
  • Good Essays

    Air Jordan is a brand of basketball shoes designed and created by Michael Jordan, a former professional player in the National Basketball Association (NBA). Over the duration of his career, Jordan broke numerous records, many of which still hold to this day. The Air Jordan line was first introduced to the world in 1985, a year after Jordan signed a hefty contract with Nike despite being a rookie in the league. The first shoe to debut was the Air Jordan I, which quickly transformed the realm of basketball shoes. The sneaker was outfitted with the traditional Nike swoosh and even carried a design similar to earlier Nike models, such as the Air Force I. Despite not being technologically advance perse, the Air Jordan I paved the way for colorful…

    • 487 Words
    • 2 Pages
    Good Essays
  • Powerful Essays

    Nike sells to approximately 140 countries around the world and currently boasts an approximate revenue of $8,776,900,000 These revenues are based on product sales of shoes, clothing, and other sports products. Advertising expenditures currently total $223,300,000 and include the following allocations: $64,975,000 for network television, $31,447,000 for consumer magazines, $7,700,000 for spot television, $343,000 for newspapers, $134,000 for outdoor postings, and $36,000 for radio. (Reed Elsevier) Most footwear products are made outside of USA. However apparel products are produced in the USA and abroad. (www.statcan.ca) In this article we will try to explore the interaction between the company Nike and its external business environment, as well as the internal strengths and weaknesses of the company. We will attempt to discover some of the significant changes and events in the external environment that have occurred in the last 5 years and have directly impacted Nike. We will describe how the company adapted and responded to these changes and what the effects of these events were. Also we will identify and describe some of Nike's internal strengths and weaknesses.…

    • 4587 Words
    • 12 Pages
    Powerful Essays
  • Powerful Essays

    Nike & Reebok

    • 4042 Words
    • 17 Pages

    The footwear industry is a complete package so the different stages of shoe design and manufacturing interact seamlessly. This means that design departments and supply chains can operate on different components within the same product family; it reduces the opportunity for error resulting in efficient and highly profitable production. For the first six months of Nike 's current fiscal year, they brought in $816.9 million in revenue, with a 35 percent increase over the same period a year ago. Meanwhile, the core Nike business grew from $5.26 billion to $5.89 billion, a 12 percent increase.…

    • 4042 Words
    • 17 Pages
    Powerful Essays
  • Good Essays

    A strong point of the advertisement is the reputation of the Air Jordan shoes brand, which comes from the well known name of Nike and Michael Jordan and the making of the Nike's Air Jordan basketball shoes brand. In 1984, Nike company had a hard time with how to get into the basketball shoes market. In 1985, Michael Jordan won the best rookie award of the NBA. Then, Nike found this as an opportunity to market these those through Michael Jordan. Thus, Nike and Michael Jordan together created the Air Jordan brand. The Air Jordan 1 was designed by Peter Moore. The Air Jordan 1 was first released in 1985.…

    • 977 Words
    • 4 Pages
    Good Essays
  • Powerful Essays

    Nike’s revenues since 1997 had grown from $9 billion, while net income had fallen $220 million. A study written by Douglas Robson printed in Business Week revealed that Nike’s market share in the U.S. athletic shoe industry had fallen from 48 percent to 42 percent since 1997. In addition, supply-chain issues and the effects of a strong dollar negatively affected revenues. In the meeting, management planned to increase revenues by developing athletic-shoe products in ranges varying between $70-$90 and push their apparel line. Nike’s executives expressed that the company would still continue with a long-term revenue growth target of 8-10 percent and earnings-growth target above 15 percent.…

    • 1030 Words
    • 5 Pages
    Powerful Essays

Related Topics