In its vision statement, Nike aims to “bring inspiration and innovation to every athlete in the world.” Its mission statement, however, aims to “do everything possible to expand human potential.” Our mission is to create breakthrough sport innovations, to create products that are more sustainably made, to build a creative and diverse global team and to make a positive impact in the communities where we live and work.”
Breaking down the Nike mission and vision statements
A brief summary of Nike’s vision is as follows As Nike’s vision and mission state, we are committed to bringing inspiration and innovation to every athlete in the world by using three key factors Source of inspiration The Nike business model is built upon using marketing to generate and stimulate demand. Nike has learned how to leverage marketing to generate and stimulate demand. Nike spends billions of dollars every year in order to increase the demand for its products. With Nike, innovation is encouraged by the fact that they are willing to innovate their products continuously. Innovation implies the replacement of the old with the new, so this is another critical element. As a result, it enhances its sales over time, this is part of Nike flywheel. Can you tell me about the company’s athlete? As Nike notes “if you have a body, then you are an athlete.” The inspirational element is associated with this statement. Its slogans are most often inspirational in tone, and this is part of the company’s
Nike mission in detail is described as:
The goal is to enhance human potential by all means possible. Currently, we do this by making sport innovations of the future, by making our products more sustainable, by building a global team of creative and diverse individuals and by making a positive impact on the communities we live and work in. Here are three important things we can learn from this mission Potential of the human being It is crucial for Nike to inspire, so that its products are always at the forefront of the consumer’s mind when it comes to making a purchase related to a sport. In order to convince someone it can work out better with a shoe, we have to convince them that wearing the shoes will make it better. By innovating, you will be able to develop new products that will generate more demand. Since the introduction of mission-driven companies (new generations) Nike has incorporated sustainability into its management strategy
A Nike spokesman said the company’s purpose is We believe that sport can engage minds, move hearts and move the world forward. We envision a world where everyone thrives on a healthy planet, with a level playing field for all.
Demand generation isn’t an easy game
I discussed how Nike’s strategy moves around demand generation in the Nike Business Model. We should clarify that when I use the words Nike, I mean the company that owns brands in six categories, namely Running, NIKE Basketball, the Jordan Brand, Football (Soccer), Training, and Sportswear (products inspired by sports). One of the strategies Nike uses to drive demand is stipulate endorsement contracts with athletes. This gives you an idea of the costs related to demand generation. From the table above, it is clear that Nike has over $10 billion planned for spending in those endorsement contracts up until 2023
There is a possibility that those amounts could increase significantly in the coming Here are some highlights from Nike We are required to pay a minimum guaranteed royalty fee for each athlete, public figure, sports team and league we endorse. The amount listed for endorsement contracts represents an approximate amount of base compensation for our endorsers. Under some contracts, actual payments may be higher than the listed amounts because these contracts provide for bonuses that are paid to athletes based upon their achievements or royalties earned from product sales in the future. There is also the possibility that payments under some contracts may be lower regardless of performance levels, as the contract may include provisions for reduced payments at a later point in time.
As an example, over three billion dollars were spent spending money to create demand in 2018. The Nike brand contributed over 10% of 2018 revenues, a 7% increase over 2017 and they represented over 10% of Nike brand revenues.
Breaking down Nike business model
According to Nike’s vision, it aims to enhance the sporting experience of every athlete around the world. As for its mission statement, it states “do everything possible to expand human potential.” “Throughout the world, we make a positive impact in the communities where we live and work by creating groundbreaking sport innovations, making our products more sustainable, building creative and diverse global teams and working to make sport a reality for all.”
In terms of individual shareholders, Travis A. represents the largest stake. A 12.9% stake in Class A stocks, and a 3.2% holding in Class B stocks, belongs to Philip Knight, son of Nike founder Philip Knight. However, the Knight family also maintains tight control over Nike, as described by their trusts and an LLC referred to as Swoosh (the shape of the Nike logo is a swoosh). Over 97% of the market value of Class A stocks and over 22% of the market value of Class B stocks are controlled by the Knight family, through individual shares, Swoosh LLC, and Travis Knight’s irrevocable trust.
The Nike organization is divided into geographical divisions via a matrix structure. As Nike grows into more regional markets and subdivisions, its matrix structure will be reflected. The responsibilities of managers are segmented according to the business unit (apparel, footwear, and equipment) and function (human resources, finance, marketing, and sales).