Sustainable business growth at Nike

26 03 2011

Last week, Nike announced their quarterly results. Constant dollar revenues grew 9%, with growth in every geography except for Japan. But it wasn’t the results themselves that interested me; but rather, how they explained their strategy for creating sustainable business growth.

Mark Parker, NIKE Inc.’s President and CEO, said “everything we do at Nike is based on delivering long-term sustainable growth. At the same time, we’re focused on delivering value to our shareholders in the near term. This is the balance you’ve come to expect from Nike, and it remains our commitment going forward.

We strike this balance by leveraging our significant competitive advantages, and chief among them are our authentic emotional connections with consumers, innovative product and retail experiences that lead the industry and a strong NIKE Inc. portfolio that gives us tremendous opportunities for growth and significant levers to drive profitability.

Consumer-driven companies with strong brands and compelling products will be in the best position to maintain their margins, and disciplined companies who are lean and focused on how they use their resources and who are aggressively seeking new ways to grow will prosper. Those who don’t won’t. In that sense, the roadmap for success in the future is no different than it’s always been”

Later in the call Charlie Denson, President of the Nike Brand, added: “As always, we’re focused on managing the business for sustainable long-term profitability. For the Nike brand, that means staying laser-focused on innovation, first at the product and brand level to drive the top-line growth and also driving innovation and discipline into how we run the business.”

While Nike is a multi-national commercial business, I believe there are some important messages here for the UK sports sector; whether the goal is increased profitability, more fans on seats or more participants on pitches, courts and roads.

Nike see their competitive advantages as including “authentic emotional connections with consumers, [and] innovative product and retail experiences”. And the Nike store environment and the style and tone of Nike’s services and communications would confirm this. They lead the market by listening to what consumers say about how they play sport – what it means to them, how it makes them feel and how they want to ‘consume’ it. They’re not bound by the rules of each sport, but rather by the needs of their consumers.

Many people associate Nike with product innovation, whether it’s Nike Air in the 80’s or Nike+ in the 00’s. But innovation also runs through how they manage their business processes and costs. Innovation and discipline is a powerful combination, as the likes of the Barcelona football team or the British cycling team regularly demonstrate. But how often do these twin traits of innovation and discipline emerge within the organizations and processes running sport?

So according to Nike, sustainable business growth comes from:
– being a consumer-driven company (clarity about why you exist, and where your strategic priorities are)
– creating authentic emotional connections with consumers (knowing who you exist for, and why you are still relevant to them)
– delivering innovative and compelling products (aligning what you provide to the people you exist for)
– providing innovative retail experiences (differentiating how you deliver your innovative products)
– embedding innovation into all aspects of the business (creating continuous improvement in both what you produce and how)
– being disciplined, lean and laser-focused (all business processes have a clear and relevant purpose, and are carried out both efficiently and effectively).

These traits exist across elite sport, and no doubt also reflect Nike’s origins with Bill Bowerman and Phil Knight. But they are just as relevant to how sports organisations across the market place could be operating. Can you share a good example of how these principles are being applied within the UK sports market…?

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No friends, no access – no problem!

11 08 2009

Ever wish you could have an exercise buddy to train with? Or wish there was a mass participation race near-by? In the old ‘real world’ you’d be stuck with no friends and no access. But not any more.

MapMyRun have partnered with the Columbus Half Marathon, to bring Columbus to the world. On August 30th, MapMyRun members around the world will join those in Columbus, running the 13.1 mile race. But they won’t just be there in spirit. By registering in advance, and entering the route they will run, they will be able to ‘compete’ with runners in the race and around the world. Better yet, if they succeed, they’ll even get a finishers hat, shirt and medal!

This is brilliant. Never again will race organisers have to turn runners away. Meanwhile, MapMyRun further engage their community of runners, connected by their common pursuit of running (or cycling, walking and skiing, which they also cater for).

Nike have been credited with a similar level of engagement and community around Nike+. And have also held virtual races around the world. Where MapMyRun could push the boundaries, is by extending this concept to those pursuing other sports too. Or perhaps by including video recording of your experience. And by tying it into existing real-life races, they can even cater for the virtually home sick. The loneliness of the long distance runner is no more.

This also has me thinking. What other events/brands restrict access to those being physically present? Orchestra’s already play “live” to theatres full of people around the world, who get dressed up to enjoy the experience of almost being there. Sports broadcast games to giant screens, where fans can gather, sing, drink, cheer and get almost the same experience as being there.

So where else could brands take this..?








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