Nike: a Company that Never Stands Still

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Updated: Mar 28, 2022
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Nike is one of the world’s largest companies. Their brand is very complex, yet simple at the same time. They use many factors to make sure that the business side of things runs smoothly. Nike has had a very positive impact on many worldwide, and is very well respected by many.

Businesses now have to move very fast to keep up with the needs of its customers. If a company cannot provide the ideal product for the consumers, they will go out of business fast.

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The constant increase in technology and change in style in consumers nowadays requires companies to stay attentive and aware of what people want. Nike is great at coming out with new technology and gear that is appealing to one’s needs. They come out with new shoes and clothes that have the latest technology to help you perform at your best, while looking good. They even implemented a tool where you can customize certain shoes and different clothes to ensure you like it, and it also being exclusive to you. Every company needs to change with their customers and Nike is a great example of doing this well. Nike is one of the biggest athletic companies as of now and they definitely influence the economy and those around them. One of Nike’s main competitors is adidas. Each company is competing to be the best. This could be a good thing for the economy because it can get customers high quality gear, for the right price. Having a competitor is good for the economy because one company can’t control the means of that specific line of production: for example, apple controls the phone production. They can shoot up the prices on their phones and accessories because consumers will buy their product no matter what. If there was another company that was close enough to apple, they wouldn’t be able to mark up prices so much. This is not the case for Nike, as they have many competitors, which in turn is good for the economy.

As your business gets popular, it is important to keep expanding. This is where the global market comes into play. If a company can get its products to anywhere in the world, they have a great advantage over other companies just distributing products locally. Nike sells their products in 170 countries, and has over 30,000 worldwide employees. They started in a small town in Oregon and grew their brand to be one of the biggest in the world. They built their company on relationships. They now work with millions of players and teams worldwide. Anywhere in the world you go, if there are sports, there is Nike, and this is because they expanded their brand past just the United States, and are now seeing all of the benefits. In any company, you need to have a good relationship with your customers, and other brands around you. If you people now you are going to give them the best every time you produce something, they will be loyal to you and your brand. Another way a brand can be ethical is by helping the environment. Nike stated that they never use products that would affect the environment. People usually appreciate this because they care about their planet and if a company they are purchasing from helps them with that then they will be happy.

Nike has done a wonderful job of using communication in their brand. They have to be very efficient because they have very limited time. In meetings, they need to get to the point.

Annually, they have a meeting with about 100 shareholders, and it only lasts about 45 minutes. This is a perfect example on how the company does meetings. They don’t want to waste everyone’s time by talking about unnecessary things. They talk about what needs to be done, and when it needs to be done. In these meetings, the one leading this needs to be very good at what they do. They need to be motivational, while also being strict. It is a skill that very few people can actually do, but is very important for any company.

When starting a business, it is important to know how you are going to start your company. The creator of Nike, Phil Knight, convinced a group of Japanese businessmen to export their popular Tiger sneakers to the United States and grant him exclusivity in selling them. After selling Tigers out of the trunk of his car, Knight saw the demand was there. He kept ordering those sneakers and then began to expand. Every business needs some sort of financial help to get started, whether it is an investment or someone else helping them out, but Nike had a very interesting way of starting off their journey to the top.

Like every business, accounting is very important. It helps keep the company organized and tracks everything the company makes and spends. Accounting also helps you see how your company is performing. Another reason businesses such as Nike need to have proper accounting is because of all of the laws. It will ensure that liabilities such as sales tax, income tax, and pension funds, to name a few, are appropriately addressed. If these things are not all taken care of, your company will never be successful. Along with all of these things, a business also needs to have projections on how much they want to sell. If a company sets specific projections on how much they think they will make that period of time, they can see if they need to make any changes to improve sales. The main goal of any company is to maximize profit.

A company can do this in many ways. They can cut costs or they can make the best product on the market, or even do both. I believe there are 4 main reasons why Nike has such a high profit margin. The first reason is that they have the ability to control their prices. The prices of their shoes have raised significantly, and they are able to do this because they have built a good reputation. Another reason they can increase profit is manufacturing efficiencies. Nike is able to cut prices because of the use of technology. They can use machines instead of people, and that alone can cut the costs of manufacturing. The third reason is that they are growing direct to customer sales. They have their own website that customers can go on and get their products, without the middleman. Although they do sell products in stores, they can afford to do that. The last reason that Nike can create such a high profit margin is because of lower taxes. Nike pays 20 percent while to the competitor under armour’s 39 percent. Nike is able to do this because they ship to international countries. Nike is a perfect example on how to cut costs and maximize profits.

Nike uses great marketing strategies to ensure people know about their product. Firstly, they use advertisements to get people aware of their brand. The ads could be placed anywhere from banners in person, to super bowl commercials. Nike also uses direct advertising. They choose where to place the ads in order to connect to the right people. This could be by placing ads at sports tournaments or gyms. People there are more likely to buy Nike products than other people, so it is very smart to directly advertise to those people. Either way, Nike spends money to advertise their brand in many places. Another way they market is by personal sellers. If you go into a Nike store, they have workers who will personally help you find what you need, and in turn, get you to buy the product. Personal selling contributes to a positive customer experience.

Lastly, like any brand, they use sales promotions to get you to buy products. If you buy a product at a lower price than usual, that can do 2 things. It can make it seem like you are getting a great deal on a product so you are more likely to buy it. Another thing it does is make you buy their brand long term. If you like the item you bought on sale, you probably will buy more of their products. This makes could potentially make you a lifetime buyer, which is great for the company.

There are 3 main ways Nike gets their brand to its customers. The first way is by selling to wholesalers in the United States. If Nike can get their brand in sporting good stores and even regular clothing stores, they will expose their products to a wide variety of people. The next way they distribute is by direct customer sales. As talked about before, this is when people go in to Nike stores specifically and buy their product. Salesman help out with this process and make it more likely for you to buy something. The last way Nike distributes is by international shipping. This is essential for a big companies such as Nike because if they can get people around the world to buy their things, the growth will be exponential. None of this distribution would be effective if they didn’t price things correctly. The way they price things is by looking at the market, and seeing how high or low they can price something for the best value. If a product is too expensive, then not enough people will buy it, but if it is too low, your company won’t make enough money. The companies job is the find the sweet spot where your customers don’t think they are getting ripped off, but also think they are getting good quality products.

At any big company, it is important to have good leaders at the top, making sure the company runs smoothly. A leader needs to be motivating and also understanding, so people want to work for them. Nike has specific managers for different regions. It would be very difficult for one manager to manage the whole company, so they split up the work. Each leader has good qualities, and all have to work together. They all have to be on the same page, or it will not work. They also have different branches that they have to manage. For example, someone would manage pricing, another advertising, ect. This way, people can be organized, and informed on exactly what they need to complete. This is often an overlooked topic, but is the main reason the company looks like its ran effortlessly.

Technology is a major asset for Nike, and they use technology in two ways. They use technology to distribute products, and to make their products. If there was no technology, they wouldn’t be able to advertise as much and also would not be able to have online stores. These are two main sources of income for Nike, so without them, they would not be nearly as big as they are now. Nike also uses technology to make new products, whether it is to create the best breathable shirt for working out, or even making a basic sneaker. They use technology daily, and it is one of their main ways of advertising their products. They say things like “latest zoom technology”. This lets people know they are getting the best from Nike, and it is all from technology.

In conclusion, Nike has made its way to the top, starting with nothing. Now representing many athletes and teams, they have used smart but hard work, and are now reaping the benefits.

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Nike: a Company That Never Stands Still. (2021, Oct 20). Retrieved from