Nike’s vision is “To bring inspiration and innovation to every athlete in the world.” At the same time, its mission statement is to “do everything possible to expand human potential. We do that by creating groundbreaking sports 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.”
Aspect
Details
Analysis
Vision
“To bring inspiration and innovation to every athlete in the world.”
– Emphasizes inspiration and innovation as core values. – Inclusive vision defines “every athlete” globally, extending beyond professionals.
Mission
“To do everything possible to expand human potential. We do that by creating groundbreaking sports 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.”
– Comprehensive mission encompassing various facets of Nike’s approach. – Focus areas include innovation, sustainability, diversity, and community impact.
Objectives
1. Create groundbreaking sports innovations. 2. Make products more sustainably. 3. Build a creative and diverse global team. 4. Make a positive impact on communities.
– Objectives align with Nike’s mission. – Innovation drives product excellence. – Sustainability addresses environmental responsibility. – Diversity fosters innovation. – Community impact reflects corporate social responsibility.
Key Takeaways
– Nike’s vision inspires athletes globally through innovation. – Mission combines innovation, sustainability, diversity, and community impact. – Objectives align with mission, emphasizing innovation, sustainability, diversity, and social responsibility. – Demand generation leverages branding and athlete endorsements.
– Vision and mission reflect Nike’s core values and global impact. – Objectives provide specific areas of focus. – This is achieved via nnovation, sustainability, diversity, and community engagement. – Demand generation remains central to Nike’s success strategy.
The turning point for Nike came when it mastered how to close brand partnerships with athletes.
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 marketingstrategy 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.
Jordan follows a demand generation business model, where its iconic brand works as a propeller for the sale of its footwear and apparel, which in 2023 generated $6.59 billion in revenue for Nike or 12.8% of its total revenue.
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:
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.
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
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.
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.
Nike’s business model and strategy is based on creating demand for its products. Indeed Nike combines product development and demand creation to build a footwear empire that generated over $51.22 billion in revenue in 2023, and yet this was based on a demand creation strategy, in which Nike spent over $4 billion in deals with athletes and demand creation to generate demand.
Those amounts might be way higher over the next years.
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.
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.
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.
The Jordan Brand made Nike over $5 billion in revenues in 2022.
Jordan is one of the most influential brands within Nike. Indeed, the Jordan brand generated $6.59 billion in revenue for 2023, compared to $5.1 billion in revenue in 2022, and $4.8 billion in 2021. The Jordan brand represents 12.8% of Nike’s total revenue; this has become over 1/10 the size of Nike’s business model, which also comprises Converse as a separate brand.
Nike invented influencer marketing way before social media.
And the way Nike did it with the Jordan Brand really creates a business impact.
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 sports and play.
Key Highlights
Nike’s Vision and Mission:
Vision: Nike’s vision is to “bring inspiration and innovation to every athlete in the world.” This vision focuses on inspiring individuals and driving innovation across the globe.
Mission: Nike’s mission is to “do everything possible to expand human potential.” This mission is achieved through creating groundbreaking sports innovations, sustainable product development, building a diverse global team, and making a positive impact in communities.
Early History of Nike:
Blue Ribbon Sports: Nike’s history began as Blue Ribbon Sports, founded by Bill Bowerman and Phil Knight. They started by importing and selling Japanese running shoes.
Nike Rebranding: In 1971, the company rebranded as Nike, named after the Greek goddess of victory. The iconic Swoosh logo was also introduced.
Innovation, Expansion, and Endorsements: Nike’s success grew as it focused on innovation, introducing new technologies into its products. The company expanded its reach and captured the market’s attention through athlete endorsements.
Athlete Endorsements and Demand Generation:
Nike’s pivotal moment came when it established partnerships with athletes like Steve Prefontaine, utilizing their influence to generate demand for its products.
Athlete endorsements like Michael Jordan became a cornerstone of Nike’s strategy, creating an iconic brand that drove sales.
Jordan’s influence and Nike’s innovation led to the creation of the Jordan Brand, generating significant revenue and establishing demand generation as a core business strategy.
Breaking Down Nike’s Vision Statement:
Inspiration: Nike aims to inspire through its marketing efforts, stimulating demand for its products and associating its brand with motivation and aspiration.
Innovation: Nike’s commitment to continuous innovation sets it apart, allowing the company to consistently introduce new and improved products.
To Every Athlete: Nike defines “athlete” broadly, embracing everyone with a body. This inclusive approach aligns with Nike’s inspirational tone.
Breaking Down Nike’s Mission Statement:
Human Potential: Nike’s mission revolves around helping individuals reach their potential, using sports and innovation to drive progress.
Groundbreaking Sports Innovations: Innovation is a central part of Nike’s mission, enabling it to push boundaries and deliver cutting-edge products.
Sustainability: Nike’s mission includes sustainable practices, emphasizing a commitment to reducing its environmental impact.
Nike’s Objectives:
Create Groundbreaking Sports Innovations: Nike invests in research and development to enhance performance, leading to innovative products that captivate consumers.
Make Products More Sustainably: Nike sets ambitious targets to reduce its environmental footprint, focusing on materials, waste reduction, and greenhouse gas emissions.
Build a Creative and Diverse Global Team: Diversity and creativity are core to Nike’s culture, fostering innovation and collaboration among its global teams.
Make a Positive Impact on Communities: Through initiatives like the Nike Community Impact Fund, Nike aims to inspire and support communities through sports, play, and active lifestyles.
Nike’s Redefinition of Business Model:
Nike’s business model is centered around demand generation, differentiating its brand through innovative products and iconic endorsements.
Jordan Brand exemplifies Nike’s demand generation strategy, creating a cultural phenomenon that contributes significantly to the company’s revenue.
Nike’s approach to value includes practical problem-solving and perception, with value built through meeting consumer needs and fostering desire.
Key Takeaways:
Nike’s primary objectives include profitability and long-term viability, but it also focuses on key business objectives that define its growth strategies.
Innovation, sustainability, diversity, and community impact are central to Nike’s mission and objectives.
Demand generation through athlete endorsements, innovation, and branding has been a key driver of Nike’s success over the years.
The Knight family owns Nike. Indeed, the top individual shareholder is Travis A. Knight, son of Philip Knight, co-founder of Nike, with a 7% stake in Class A stocks and a 2.4% stake in Class B stocks. On the other hand, the Knight family also controls the company tightly through their Trusts and an LLC called Swoosh (the Nike logo’s shape is a “swoosh”). Through individual shares, Swoosh LLC, and Travis Knight’s irrevocable trust, the Knight family controls over 97% of Class A and 21% of Class B stocks.
Nike follows a wholesale strategy combined with a very strong direct distributionstrategy. The company makes money primarily from footwear, which represented over 64% of its total revenues in 2023, followed by apparel (27%). The most successful Nike brand is the Jordan Brand, which in 2023 generated $6.6 billion in revenue. Nike is the master of demand creation and generation through its influencer campaigns, where athletes become an inspiration for everyday people.
Nike leverages both a wholesale and direct distributionstrategy. Indeed, while still in 2023, most sales come from wholesale distribution, in reality, since 2020, Nike has been ramping up its direct distribution through its NIKE stores and e-commerce platform (SNKRS).
Nike generated most of its revenue from footwear. Indeed, in 2023, Nike generated over $33.13 billion in revenue from footwear, $13.84 billion in apparel, $1.73 billion in equipment, and $2.43 billion from the Converse brand.
Nike generated $51.22 billion in revenue in 2023 and over $5 billion in net profits, compared to over $46.71 billion in revenue and $6.05 billion in profits for 2022.
Nike’s vision is “To bring inspiration and innovation to every athlete in the world.” At the same time, its mission statement is to “do everything possible to expand human potential. We do that by creating groundbreaking sports 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.”
Jordan follows a demand generation business model, where its iconic brand works as a propeller for the sale of its footwear and apparel, that in 2022 generated more than $5 billion in revenue for Nike or more than 10% of its total revenue.
Converse is an independent brand part of Nike’s family of brands. Indeed, Converse generated $2.35 billion in revenue in 2022. And like Nike, it follows an heave Wholesale distributionstrategy, where most of its sales are made, through footwear. However, Converse follows also a direct distribution approach where it sells directly via its monobrand stores.
Michale Jordan is a billionaire but doesn’t own the Jordan brand, which is part of Nike. Yet, he gets 5% royalties on the sales of Jordan. For instance, as of May 31, 2023, Nike had endorsement contract obligations of $7.6 billion, of which over $330 million were to be paid out to Michael Jordan as royalties on the sales of Jordan in 2023 (the company made over 6$ billion in sales in that year). We estimated that between 2018-2023 alone, Nike paid (or is paying) Michael Jordan over one billion dollars in royalties for Jordan’s brand sales.
Adidas’ mission is “To be the best sports brand in the world.” Adidas AG is a German multinational initially founded in 1924 by Adolf Dassler who developed spiked running shoes out of his mother’s house. Today, the company is the largest sportswear producer in Europe and the second largest globally behind rival Nike.
Tesla’s vision is to “create the most compelling car company of the 21st century by driving the world’s transition to electric vehicles,” while its mission is “to accelerate the advent of sustainable transport by bringing compelling mass-market electric cars to market as soon as possible.” Tesla used a transitional business model as its ecosystem grows.
Amazon’s mission statement is to “serve consumers through online and physical stores and focus on selection, price, and convenience.” Amazon’s vision statement is “to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices.”
Apple’s mission is “to bring the best user experience to its customers through its innovative hardware, software, and services.” And in a manifesto dated 2019 Tim Cook set the vision specified as “We believe that we are on the face of the earth to make great products and that’s not changing.”
Netflix’s core mission, strategy, and vision are that of “improving its members’ experience by expanding the streaming content with a focus on a programming mix of content that delights members and attracts new members.”
Coca-Cola’s Purpose is to “refresh the world. make a difference.” Its vision and mission are to “craft the brands and choice of drinks that people love, to refresh them in body & spirit. And done in ways that create a more sustainable business and better-shared future that makes a difference in people’s lives, communities, and our planet.”
Starbucks highlights its mission as “to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.” And its vision is to “treat people like family, and they will be loyal and give their all.”
Microsoft’s mission is to empower every person and every organization on the planet to achieve more. With over $110 billion in revenues in 2018, Office Products and Windows are still the main products. Yet the company also operates in Gaming (Xbox), Search Advertising (Bing), Hardware, LinkedIn, Cloud, and more.
Walmart’smission can be summarized as “helping people around the world save money and live better – anytime and anywhere – in retail stores and through eCommerce.” While its vision is to “make every day easier for busy families.” Walmart defines “busy families” as the bull’s eye of its business strategy.
Nike vision is “to bring inspiration and innovation to every athlete in the world.” While its mission statement is 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.”
Google mission statement is to “organize the world’s information and make it universally accessible and useful.” Its vision statement is to “provide an important service to the world-instantly delivering relevant information on virtually any topic.” In 2019, Sundar Pichai emphasized a renewed mission to allow people “to get things done!”
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
