Nike's Situation Analysis: Primary and Secondary Research
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Nike’s Situation Analysis: Primary and Secondary Research Team 5: The Fifth Dimension Sydney Corbitt, Alexa Anderson, Christina Cook, Madeline Matthews, Benjamin Wasser 1 Table of Contents Overview of research………………………………………………………………2 Situation Analysis………………………………………………………………….4-20 Introduction & Brand History……………………………………………………… 3 Product Evaluation………………………………………………………………….5 Consumer Evaluation……………………………………………………………….7 Competitive Evaluation…………………………………………………………….11 Marketing Environment Evaluation………………………………………………...14 S.W.O.T Analysis …………………………………………………………………..17 Research Questions and Hypothesis………………………………………………..19 Qualitative Study: Focus Group………………………………………………….21-28 Overview …………………………………………………………………………...21 Focus Group 1……………………………………………………………………....21-27 Focus Group 2……………………………………………………………………....21-27 Conclusion…………………………………………………………………………..27-28 Qualitative Study: In-Depth Interview…………………………………………..29-32 Overview……………………………………………………………………………29 Interview Responses………………………………………………………………..30-31 Conclusion……...…………………………………………………………………..32 Quantitative Study: Online Survey………………………………………………32-39 Overview……………………………………………………………………………32 Survey Details……………………………………………………………………….33 Analysis …………………………………………………………………………….34-39 Conclusion…………………………………………………………………………..39 Overall Conclusion: Just do it……………………………………………………40-41 References………………………………………………………………………….42-46 Appendix…………………………………………………………………………...47-112 Research Overview 2 Secondary Research: In order to determine what questions we needed to answer for our primary research, we first set off in search of information already gathered regarding the current state of the athletic apparel industry. It quickly became apparent that there are two trends currently dominating the world of athletic apparel: Athleisure, a powerhouse in both sales and adoption, and wearable technology, a budding segment of the industry. We found that millennials are one of the fastest growing market segments in the athletic industry. More specifically, female millennials are a major target for athletic brands. They have adopted athleisure organically, before the industry even had a chance to pivot their branding. On the wearable technology side, sales have been steadily increasing for a few years and the market is only predicted to grow. Products such as the Apple Watch and FitBit go hand in hand with the athletic apparel industry, but adoption among millennials has been slow to catch on. This research provided us with information that we used as the foundation of our primary research. Primary Research: In order to learn more about the future of the athletic apparel industry and the Nike brand, we set out to conduct our own research. Our plan for gathering this information was to implement three separate research methods. These methods included an online survey with at least 100 respondents, two focus group sessions consisting of at least five people, and fifteen individual in- depth interviews. The data was able to express a variety of consumer habits within the millennial generation. Their data helped us to draw conclusions and analyze the inferential population regarding consumer's habits on Athleisure and wearable technology. Not only we’re we able to see these patterns through consumer consumption, but we were also able to observe the different perspectives towards the Nike brand. Based on our findings from the secondary research, we focused on answering three main questions: 1. How does millennial interest in athleisure apparel differ between genders? 2. How do millennials feel about the move towards casual attire in American fashion? 3. What is the general perception of wearable technology among millennials? By conducting this research, we were able to understand the reasons behind consumer attitudes and behaviors through millennials. This research provided us with an abundant amount of data and information that helped us determine the purchasing habits of Athleisure and wearable technology among the millennial generation. Nike’s Situation Analysis (Secondary) 3 I. Introduction Paragraph: In order to have a successful company, you need to know the ins and outs of its past, present and future. First, knowing the background and the history of how the company developed into a multibillion dollar corporation is essential when it comes to evaluating the brand. When a large company develops new and cutting-edge products, knowing the brand’s core values and missions are key. Bill Bowerman spearheaded Nike’s innovative trend with the development of the company’s first revolutionary product: the waffle bottom shoe. Having a product that influenced the history of sports gear pioneered Nike’s dominance of the sports market. This spirit of innovation continued into their revolutionary products. Consumer loyalty and allegiance is what makes a brand victorious. Nike fostered this loyalty through ingenious marketing techniques and practices that consumers recognize and remember for years to come. However, with innovation comes competition. It is paramount to know who your competitor is and what products they’re producing. Knowing their strengths and weakness can help your brand when opportunities arise, and evaluating your own assets against theirs can allow you to adjust your operations. Not only is it important to know your competitors, it is also crucial to be aware of other other forces that might affect your company. Things such as market trends and the economy can alter the well-being of your company. If your brand wants to succeed in this industry, it is critical to know all internal and external factors acting on your company. By determining these factors and being aware of your company’s past, you can affect the present and alter your future. II. Nike History & Evaluation: Before Nike was the powerhouse company that it is today, it was just an idea. The two founders of Nike were University of Oregon track coach, Bill Bowerman, and his former athlete and CPA, Phil Knight. They originally operated as a distributor for a Japanese company called Onitsuka Tiger (now Asics). The Nike company we know today was founded in 1971 with just $1,200 in the bank. Employee Jeff Johnson came up with the idea of naming the company Nike, after the greek goddess of victory (Nike Inc, 2014). When they were trying to find a logo for Nike, they approached a student named Carolyn Davidson at Portland State University to come up with an idea. She designed the iconic “swoosh”, and was paid just $35 (now around $200). However, she was later given stock in the company which is now worth $640,000 (Creative Market, 2016). Figure 1. “Swoosh Design” Source: Creative Market (2016) A. Bowerman’s Eureka Moment 4 For years, Bowerman had tried to find lighter track shoes that still had plenty of grip on the sole for his athletes, so that they could run faster. He had experimented with making shoes before, but couldn’t get the soles of the shoes right. His “eureka” moment came one morning in 1971 when his wife was making waffles. He realized that the pattern on a waffle iron would be perfect for the soles of track shoes, and thus Nike’s famous grooved sole pattern was created. In 1974, Bowerman released the “Waffle Trainer” (Nike Inc, 2014). B. Nike’s Famous Campaigns Part of the reason that Nike is so prominent today is thanks to its many famous campaigns. Perhaps the most notable being their iconic phrase “Just Do It”. It was inspired by the infamous serial killer Gary Gilmore’s last words “Let’s do it” before his execution in 1977. The first “Just Do It” campaign launched in 1988. It was a commercial that featured Walt Stack, an 80 year old running icon at that time, running across the Golden Gate bridge. Probably the next most famous Nike campaign was the addition of the Michael Jordan line in 1984. Despite the fact that Jordan hasn’t played professional basketball since 2003, he still earns $60 million annually in royalties from the Jordan line, making him the biggest Nike endorsement deal ever. Advertisements like the Spike Lee “Mars Blackmon” commercials in the late 1980s launched the Jordan line forward, and spurred its popularity (Taube, 2013). C. Sweatshops Controversy Still, no company’s history is without a low point. For Nike, it was it’s controversy with overseas sweatshops. Nike began focusing its product labor in China and Vietnam where labor unions were prohibited, and therefore promised cheaper labor. When the public found out, there was an immediate uproar. Many people made stands in the form of protests, hunger strikes and boycotts. Many groups were also formed to try and make a difference, including the Worker Rights Consortium. This group organized hunger strikes to protest universities’ use of Nike products for their athletic programs. Feminists groups also mobilized boycotts of Nike products and stores after learning about the unfair working conditions of their female employees. In the 1990s, they employed the “Just Don’t Do It” boycott campaign to inform women of the poor working conditions in factories where women were employed. Social media also enabled this controversy to spread around the world with little to no regulation. However, Nike was able to come out of this crisis by remaining transparent and honest with the public. To this day, Nike still publishes public reports on the conditions of their factories. They also raised minimum wage, increased oversight, and ensured clean air for workers (Nisen, 2013). Figure 2. Source: Nike Inc (2016) D. Conclusion 5 Nike’s brand history