Nike’s History, its Position and Purpose in the Market

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Updated: Jun 23, 2022
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The human population is constantly growing and with that growth, come new minds whom have a vision for creating innovative products that will revolutionize the world. In the early 1970’s, there were two men with a vision who changed the athletic world forever. Phil Knight, a University of Oregon track student athlete, and his coach, Bill Bowerman, were the visionaries and creators for a brand of athletic gear recognized by the masses worldwide. This gear can be found in any continent, whether it be on people’s feet, clothing, bags, backpacks, etc.

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This brand is now known as Nike. The brand is a symbol for the ideal gear to use in order to achieve high performance in all sports.

The Nike swoosh became and continues to be this renowned brand and symbol. Most may believe the swoosh is simply a logo to give the brand, but it means much more. Most may not be aware that the Nike swoosh is a representation of a wing. This wing, inspired by the Greek deity, Nike. Nike is the goddess of victory and speed thus serving as the perfect image for Nike (Andrews, 2017). With this in mind, the company has done much work to live up to the victory expectation. Innovation continues to drive the corporation to keep steering towards success. To maintain their status as moguls in the athletic shoe industry, they must continue to make new innovative shoes with the goal of cutting costs and resources and increasing performance. Nike continues to improve their shoe by implementing new technology and programs while simultaneously embracing procedures to be eco friendly thus upgrading sustainablitity within the shoemaking industry.

Every aspect of the company is reviewed to reduce its environmental effect while simultaneously striving to enhance their social responsibility. They go to great lengths to achieve their their goals and have had great success by researching and implementing innovative ideas such as the latest shoe making material, reducing their carbon footprints by using renewable resources, limiting waste, and establishing recycling programs.Despite being a relatively new company and only being in the market for a little over 50 years, Nike has become a mogul, especially in the shoe market. As of 2017, there are 1,142 retail stores operating worldwide selling all nike products (Statistics Portal). They provide shoes for all sports including running, track, basketball, football, soccer, golf, and for other sports played around the world. Co-founder Bill Bowerman said, “ a shoe must be three things, it must be light, comfortable and its got to go the distance” (Nike News, 2015).

Nike shoes are primarily made in Asian continent and undergo the same process to create the final product (Kerns, 2018). The traditional shoes are typically made from leather, mesh, plastic, and other synthetic materials whereas modern day shoes are now being produced from flyknit yarn and leather. Flyknit material is a hi-tech material that along with fly-leather were introduced in 2017 and are now used in all nike shoes (Nike News, 2017). Since the introduction of this new material in 2012, it continues to be a desirable material. Flyknit is a strong lightweight material made from yarn that is weaved tightly thus creating a more lightweight, breathable and supportive shoe (Nike Flyknit).These new materials have successfully cut processing time. When processing flyknit shoes, employees no longer have to cut and form the ideal shape from leather to create shoes. Instead, Nike has incorporated large knitting machines into their factories to create the upper piece of the shoe (Shoe Dog).

The portion of the shoe that goes on top of the sole is a single piece which is knitted in approximately 30 minutes (Nike Flyknit:Ready… , 2012). Once the knitted portion is stuck to the sole, the shoe is reinforced with flywire to make the shoe sturdy(Nike Flyknit: Ready… , 2012). Since the implementation of flyknit, there is no longer excess material going to waste. Waste has been reduced by about 60% and has kept reducing nearly 3.5 million pounds of waste since 2012 (Nike News, Four Years of Flyknit, 2016). Flyleather is material made from 50% recycled leathers and water power. The leather used is cut more efficiently therefore reducing waste (Nike News, Nike Flyleather, 2017). The shoes are made from discarded scrap from tanneries and turned into the fibers used to make a lighter shoe. These newly created leather fibers are fused with synthetic fibers using the force of water to create the flyleather material (Nike News, Nike flyleather, 2017).

The results of flyleather shoes have been said to use 90% less water compared to the traditional shoe making process (Nike News, Nike flyleather, 2017). This leather material is proving to be efficient therefore continuing its use in the shoe manufacturing process. In order to stay at an ecological balance, a company is forced to introduce and implement new sustainability processes. Nike’s sustainability strategy requires constant innovation to avoid the use of the depletion of scarce resources. Nike’s sustainability strategy incorporates from raw materials to finished goods, to the end user and their disposal of the purchased good. Nike’s primary focus is to conserve water and energy, have less waste and release less CO2 into the environment (Nike News, Nike Flyleather, 2017). In regards to energy, Nike focuses on two concepts: energy efficiency and renewable energy. It has signed major contracts to be able to use 100% of their renewable energy across their companies. One of the big logistic center located in Belgium is surrounded with solar panels and wind turbines which allows the company to use more renewable energy (N, pg.48).

By using renewable energy, Nike is able to conserve earth’s scarce resources. An important factor about this site is that more than 95% waste generated on-site is recycled (N, pg. 48). Other projects such as an energy efficient resource toolkit for dyeing and finishing created a better footwear production, therefore, the footwear production was able to cut down their energy use per unit in half (N, pg. 38). Nike continues to improve sustainability by focusing not only on the material of the shoe but also strives to improve and impact other shoe making processes.Nike has established strategic partnerships with certain companies such as a textile dyeing facility in Taiwan. The company helped Nike reduce their water use. Together, they developed a formula, known as ColorDry, that reduces the need for process chemicals and does not require water during the dying process (Hudson). Instead of water, recycled Co2 is being utilized. Further up in the value chain at the raw material stage which leads to Nike is using a total of 65% of water (N). Cotton takes up 35% of water in the entire value chain.

Nike is sourcing from BCI, which is ‘a standard system that aims to make conventional cotton more sustainable – including less water-intensive’ (N, pg.34). (Need sentence here)Innovation will cause a change in the manufacturing. Usually overtime and issues of compensation comes along with it. The manufacturing process and labor becomes more automated through innovation and modernization. Many factory workers require different skills, compared to a couple years ago. Technology places a huge role in sustainability when it comes to the manufacturing of footwear. By the use of robotics technologies, it reduces overtime and creates more accurateness, and it saves time and money (N, pg 57). Nike is working on their sustainable labor innovation. New Balance and Nike are competitors with many similarities and some key differences. Both companies were founded in the USA, produce athletic wear, considered industry leaders, and have strong sustainable programs.

Their slogans are very similar – Nike – just do it™ and New Balance “we were born to move” (Inside). Ownership and manufacturing locations are key differences. New Balance remains privately held while Nike is publicly traded;New Balance “assembles more than four-million pairs of shoes in the USA, something that Nike does not do (Inside).     Nike is calling for innovation proposals to help advance its product sustainability. The Circular Innovation Challenge is one of several initiatives from Nike in pursuit of its circular economy goals and to double its business with half the impact. The Challenge invites entrants to develop new technologies to advance footwear recycling or create new products using Nike Grind materials. Nike’s Reuse-a-Shoe program, has seen more than 30 million pairs of used shoes (including shoes from other companies) collected and recycled. The Material Recovery branch of the challenge, run in partnership with Nine Sigma, seeks ‘innovations that can “substantially advance the physical footwear recycling process.’ Solutions are expected to complement or replace existing processes to recover purer material inputs, and the most promising entrance into the competition will be considered for implementation at a Nike footwear recovery site. (Nike)

The Nike Grind program was created in 1993. The main purpose of the program is to focus on the elimination of waste. The sneaker part of the collected shoes are used to create flooring for certain sport such as baseball fields, weight rooms, and so on. The Nike Grind focuses on reducing their environmental footprint by their product life cycle. That means that Nike will implement more lean manufacturing and shipping in their upstream but also down stream by finding new ways to recycle and reuse a product (Wang). As previously stated, Nike’s Flyknit uses recycled polyester in their yarn. This has diverted more than “182 million plastic bottles from landfills” (Nike, p. 39) New Balance’s effort to incorporate sustainable practices into their long-term goals focus on three key issues: reduction of materials, reuse of materials and recycling of materials. “The introduction of NewSky sneakers constructed from 95 percent post-consumer recycled plastic bottles is a notable effort. An average of 8 recycled plastic bottles goes into every pair” (Zimmer). Nike has a more thorough recycle and reuse program than New Balance.

Both companies are dedicated to recycling and reusing old shoes or plastic bottles, helping to reduce waste on our planet. Packaging is another area where Nike shines. The use of recycle material has been incorporated into the development of innovative packaging (i.e. the Air Max Bubble). Nike recently decided to switch up their packaging by replacing the brown cardboard box with the orange logo, with a more ‘futuristic’ shoe packaging, in efforts to attract more buyers and clients. Instead of the classic cardboard shoebox that most sneakers are sold in, this one is made out of plastic. The packaging takes on the form of a clear bubble, large enough to comfortably hold the shoes inside. This see-through bubble with the Nike Air logo appears incredibly futuristic, giving the impression of a sneaker floating in midair. (ESKO, Schroeder)A slightly different take on the bubble packaging is the “Air Max lightweight shoebox, made to neatly interlock for stacking or display. It is created using plastics derived from leftover consumer packaging and is manufactured with no added chemicals (Tucker). Nike has again innovated its packaging.

“Nike’s shoeboxes are now made from 100% recycled content and fully recyclable. Their improved packaging achieved optimized fiber reduction without compromising essential strength for transporting. Reductions in tissue wrapping and toe stuffing reduced the average weight box” (Chapman). New Balance appears to take a more traditional approach to their packaging. New Balance’s product packaging consists of a single sheet designed shoebox that integrates the top lid with the base, thus creating a single-piece box. Inside the box, is paper wrapping tissue to separate and protect the shoes, and paper toe stuffing tissue to protect the shoe tip. Their shoeboxes are made from 100% recycled paper consisting of pre- and post-consumer pulp and are 100% recyclable. All inks are soy-based. (NB)Both Nike and New Balance have reduced the amount unnecessary paper used in packaging their products.

Nike and New Balance are both founding members of the Sustainable Apparel Coalition (SAC), the apparel, footwear and textile industries alliance for sustainable production. These companies have implemented strong sustainable programs to address conservation, minimize impact on the environment, and support sustainable efforts for the future. Nike wasn’t always the ideal role model. In the early 1900’s Nike suffered a great blow to its image due to a labor scandal that originated in Indonesia for paying low wages, the scandal later escalated to child labor in 1996 (Nisen). These scandals quickly intensified and brought Nike many problems to face. According to the article “Six Cents an Hour,” not only was Nike, along with other well known companies, employing children in third world countries, the pay they were receiving was next to nothing, and the conditions were terrible (Schanberg).

The picture depicted by the article were repulsive. The backlash from the scandal was so overwhelming that Nike was forced to address the issue head on. Just two years later, the Industry giant vowed to end child labor and better working conditions by requiring their manufacturers overseas to comply with the “strict United States health and safety standards” (Cushman Jr). This was the tip of the iceberg for the apparel company. After dealing with such bad publicity, Nike had to do something drastic to reemerge as the great company it was before. After time, Nike realized it had to rebrand its image in the public eye. The company took three steps to do so. The apparel company took a huge risk and did the unthinkable. It declared transparency to its consumers, but by doing so it would also lose what is considered a major competitive advantage; it rallied together with other industry leaders to attempt to end sweatshops and improve working conditions in manufacturing factories in third world countries; and finally, it realized that innovation and sustainability worked well together (Kate Abnett).

With these three steps Nike came back bigger and better than ever. Nike began to invest more in Research and Development and found new innovative ways to improve their product while simultaneously improving their environmental footprint and responsibility (Kate Abnett). One prime example of this is the Airmax 360. In this shoe, the investment was made to “swap the gas in the sole of the Nike Air shoe from FS6 — a potent greenhouse gas, which contributes to global warming — to nitrogen” that not only was more environmentally friendly, but also led to a new performance discovery (Kate Abnett). It is also making major strides in its social responsibility with its labor standards. In a 2016 article, it was noted that “86 percent of Nike contract factories are rated bronze or above in Nike’s Sustainable Manufacturing and Sourcing Index (SMSI), an internal tool that rates factories on health, safety and the environment and indicates that legal wages are being paid” (Kate Abnett).

By implementing new management goals and redirecting its focus, Nike has managed to reclaim its “industry leader” title.Today, Nike is one of the industry leaders in sustainability. While there is still much to be done, the successful company is setting a precedent in hopes others will follow. Nike has managed to become successful where many have failed. Nike proved that it is possible to be environmentally and socially sound while having a positive impact on business. Through its dedication, the industry leader has managed to cut emissions to to environment, optimistically impacting the overall working unit of many supply chains, not just their own, and innovatively create products that consumers love. Although Nike has effectively accomplished many objectives, it is not satisfied until it is 100% sustainable and continues to work towards that goal in hopes to better the world.

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Nike’s History, Its Position and Purpose in the Market. (2022, Jun 23). Retrieved from