The company paid $5,000 to distance runner Steve Prefontaine to run in the company’s shoes.
A tiny deal compared to the ones it closes now.
Steve Prefontaine represented the athlete who crystallized the approach that Nike would use later on to generate demand for its products.
Today (as I’ll show you), Nike has scaled this approach, but at the time, it had to re-invent it from scratch, as athletes didn’t know who Nike was (the Nike brand shoe was launched in 1972).
Prefontaine was also a pupil of Nike’s co-founder, Bill Bowerman.
Bill Bowerman was a coach at the University of Oregon; he was the product guy, always experimenting with new shoes and making technology a key component of the shoes.
Bill Bowerman opened the way to technology as a key component to differentiate the product, thus a key element of Nike’s marketing strategy for decades.
Yet, the most staggering part of Nike’s demand generation is the iconic side.
In 1984 Nike closed a deal with basketball player Michael Jordan.
Now, Nike has been doing it for decades, leveling up its game, but initially, it did it with minimum budgets.
Breaking down Nike’s vision statement
Nike’s vision statement can be summarized as follows:
To bring inspiration and innovation to every athlete in the world
Therefore, there are three elements to Nike’s vision and mission:
Inspiration
As a consumer company, Nike has learned how to leverage marketing to generate and stimulate demand.
This is at the core of the Nike business model. Indeed, Nike spends billions of dollars yearly to boost product demand.
Innovation
Nike positions itself as an innovative company that is willing to innovate its products over and over.
This is another critical element, as innovation implies the substitution of the old for the new.
Thus it enhances its sales over time; this is part of Nike’s flywheel
To every athlete: Who’s an athlete for the company? According to Nike, “if you have a body, you are an athlete.” This connects to the inspirational element.
Most of Nike’s slogan follows an inspirational tone, part of its demand generation strategy.
Breaking down Nike’s mission statement
Nike’smission in detail is described as:
To do everything possible to expand human potential. We do that by creating groundbreaking sport innovations, by making our products more sustainably, by building a creative and diverse global team and by making a positive impact in communities where we live and work.
In this mission, we can extract three key elements:
Human potential
Once again, Nike has to inspire, and it needs to leverage consumers’ psychology to be always on top of their minds when making the purchase of a sports item. Making a person believe it can get better by wearing the shoe is part of that strategy.
Groundbreaking sports innovations
If you innovate, you can come up with new products, and those products will generate more demand
Sustainability
New generations follow mission-driven companies, and Nike has made sustainability a crucial part of its management
Nike defined its purpose as:
To use the power of sport to move the world forward. We believe in a fair, sustainable future—one where everyone thrives on a healthy planet and level playing field.
Demand generation isn’t an easy game
In Nike Business Model, I highlighted how Nike’s strategy moves around demand generation.
It is important to remark that when I say Nike, I refer to the company which owns several brands in six categories Running, NIKE Basketball, the Jordan Brand, Football (Soccer), Training, and Sportswear (our sports-inspired lifestyle products).
To have an idea of how expensive it can be to demand generation, one of the critical strategies that Nike uses is to stipulate endorsement contracts with athletes.
As you can see from the table above, until 2023, Nike has over $10 billion planned for spending on those endorsement contracts.

Those amounts might be way higher over the next years.
Indeed, Nike highlights:
The amounts listed for endorsement contracts represent approximate amounts of base compensation and minimum guaranteed royalty fees we are obligated to pay athlete, public figure, sport team and league endorsers of our products. Actual payments under some contracts may be higher than the amounts listed as these contracts provide for bonuses to be paid to the endorsers based upon athletic achievements and/or royalties on product sales in future periods. Actual payments under some contracts may also be lower as these contracts include provisions for reduced payments if athletic performance declines in future periods.
Nike objectives
Like most companies, one of Nike’s primary objectives is to make a profit and ensure its long-term viability.
More broadly speaking.
However, there are certain business objectives that define results or outcomes the company endeavors to meet as it grows.
Business objectives are also dictated by a company’s particular strengths, weaknesses, opportunities, or threats and should define how it acts or behaves in the market.
In most cases, objectives do not change until a company’s circumstances change.
Let’s now return to Nike and analyze its four key objectives below to get a feel for how the company intends to position itself moving forward.
Create groundbreaking sports innovations
Nike is synonymous with sports innovation.
The company spends vast amounts of time liaising with professional sports athletes and consumers to increase performance and deliver a better product experience.
The Nike Sports Research Lab (NSRL) in Beaverton, Oregon, is a research and development institute that opened in 1980. It has been responsible for innovations such as:
- Cold-weather running apparel that provides temperature regulation and visibility in low-light conditions.
- Nike React technology that provides better cushioning to runners while also being lightweight and delivering better energy returns.
- GO FlyEase sneakers are lace-free, hands-free shoes for consumers with disabilities.
Make products more sustainably
Nike’s sustainability objectives are based on more than 30 years of research into reducing its environmental impact.
By 2025, some of the company’s targets include:
- A 70% reduction in greenhouse gas emissions in owned or operated facilities.
- A 50% increase in the use of environmentally preferred materials across cotton, leather, rubber, and polyester.
- A 10% reduction in per-unit manufacturing waste, is an ambitious goal that encompasses manufacturing, distribution, packaging, and even headquarters.
Build a creative and diverse global team
Nike believes that diversity and creativity in the workplace are intertwined and accelerate innovation.
The company also uses its love of sports to overcome cultural barriers and bring people together.
This is particularly important for Nike as a global company whose teams share and work toward a singular goal.
To help Nike become a leader in diversity and inclusivity, it has set the following 2025 targets:
- At least 45% of global VP positions and above are occupied by women.
- At least 35% of the U.S. corporate workforce is occupied by racial and ethnic minorities.
- 30% representation of racial and ethnic minorities at the Director level and above in the United States. Minorities include American, Indian or Alaskan Native, Asian, Black or African American, Hispanic/Latino, Native Hawaiian, or Other Pacific Islander.
Make a positive impact on communities
Nike serves local communities all over the world through the power of sport.
The Nike Community Impact Fund (NCIF) funds local programs to get kids active in communities where employees live, work, and play.
Each one-year grant ranges from $5,000 to $10,000 per neighborhood.
In Portland, Oregon, where Nike headquarters is located, this number increases to $25,000.
Grants are awarded to local organizations that make a positive impact on the community via sports, play, and other initiatives.
The NCFI also operates in the southern states of Tennessee, Mississippi, and Arkansas to allow children from disadvantaged areas to realize their potential through sports.
Nike’s redefinition of its business model
Nike’s business model is all about demand generation.
In short, if you sell shoes, an item that can be easily commoditized, you need to be able to differentiate your brand from the other brands.
That’s what creates a long-term advantage in a market that is skewed toward commoditization.
Nike has been very good at that by also launching new brands and limited collections (and by acquiring other brands).
An example of that is a Jordan shoe, which for many, it isn’t just a shoe; it’s a piece of art!
And as such, people are willing to get into long lines to get one.

Jordan shoes are not only extremely expensive (some pieces) but very high in demand.
This is the power of demand generation!
The Jordan Brand made Nike over $5 billion in revenues in 2022.

Nike invented influencer marketing way before social media.
And the way Nike did it with the Jordan Brand really creates a business impact.
Jordan isn’t just a brand.
It’s a cultural phenomenon that defines various generations of our times.
This is what demand generation is about.
When you build up a business model from scratch, the most important element to start with, and the element that will work as a glue for your overall business, is value.
And value is comprised of two critical elements: one is about how you help me practically solve an issue, and another one is about perception and desire.
At a commercial level, the latter is as important as the former to enable a brand that survives in the long run.
Key takeaways
- Like most companies, one of Nike’s primary objectives is to profit and ensure its long-term viability. However, business objectives define results or outcomes the company endeavors to meet as it grows.
- One of Nike’s key objectives is to create innovation in sports which it does in the Nike Sport Research Lab (NSRL). The company has also set several ambitious environmental targets to meet its sustainability objectives.
- With a global workforce, Nike also realizes the importance of diversity and inclusivity in the workplace. Moreover, the company seeks to positively impact communities and improve outcomes for children through sportss and play.
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Read next:Nike Business Model, Nike Mission Statement, History of Nike, Nike Organizational Structure, Nike PESTEL Analysis, Nike Competitors, Nike SWOT Analysis, Who Owns Nike, Value Proposition Canvas And Design.
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