Nike is in the process of trying to create a new target market and or product line designed for women which is a 7$ trillion a year market, while trying to prove that woman product lines will not negatively effect the sales of the already successful male lines. Nike is one of the most recognized brands and companies in the world and has historically been known for its men’s footwear. Nike has the largest footwear share of market at 38% and the footwear line is one of Nikes most profitable segments. Nike also has large segments in apparel and equipment as well.
Nike traditionally has focused on these three as there strategic approach. Nikes first efforts to try and enter the woman’s market caused a shift to category driven approaches of running, men’s training, basketball, soccer, women’s fitness, and sportswear to be more diverse groups. This lead to a lack of actual products designed for women versus just making a guy’s product pink and smaller. The marketing and selling of the woman’s line also did not fit the way women wanted to buy or shop for the products.
This lead to the women product line trying to become more diverse with its plans and set up while also trying to fit within the Nike matrix system. Nike also had to decide which markets it wanted to enter into within the woman fitness field and how those markets would fit with the already set ways of doing and running thing. Nike trying to set up a new way of doing things within the woman field while trying to balance the way Nikes matrix system has always operated leads to many decisions and changes which will be discussed in this case review along with the issues stated above.
Woman fitness issues and solutions The biggest issue facing the woman’s fitness sector is choosing whether to try to fit in the matrix system of Nike which is complex and already stressed with how many sectors it has. Nikes matrix is split first by global functions sales, brand, customer service, operations, logistics, and etc. it is then split by geographic regions united states, Europe, middle east, Africa, Asia-pacific, and Americas the third dimension are its different sports lines which include running, basketball, tennis, soccer, golf, and ect.
So the way this matrix worked was all ideas are all shared with the different branches, but the problem was that all the products were designed for males so the sharing of knowledge with the woman sector was basically here is a man’s shoe makes it smaller and pink. To try and solve this issue the woman sector has chosen to operate outside of the matrix by hiring a system of directors that will look after each sports line within each level of the geographic regions. The hiring process was difficult at first because there was no clear chain of command set, so no one knew who was working for whom at first.
Once this system was in place though the woman sector had basically created its own matrix in which it would share its ideas and designs between the different product lines. With this new set up big picture ideas would be traded between men and female lines but design type ideas were kept separate. Once the idea to keep the woman line out of the men’s matrix was finalized, it came to decide how to effectively use supply chains and what selling strategies to use. The two options for selling strategies were adopting the already set Nike strategy or a new one to better fit its woman target base.
At first the woman sector answer was to try and adopt the already set strategy but soon realized that Nike was traditionally sold as all the shoes in one place and all the apparel elsewhere. The problem with this is that woman will buy more if they can see the connections of making a full outfit and can see its usefulness. So for example if a woman sees the shoes she needs for running she will also want a running outfit to match the shoes. Therefore the woman sector stopped selling by item but by sport. This caused a large investment in changing stores and the way the stores operated across the world.
This change lead to the creation of the goddess store which was a female only store in which they focused on more one to one selling and customer service, rather than the traditional customer service and selling styles. From those ideas came the demand for a specialized Nike brand to associate with the store. Nike meets this demand with the goddess apparel line, which has been extremely successful. A big issue that the changes to the matrix and selling style have not solved for the woman sector was the issues it had with the supply chain and trying to get all the different product lines on the same page.
For example if a new running shoe was coming out Nike was having a hard time getting the shirt and shorts makers on the same page to get that to be there number one priority at the same time. Therefore it’s having issues getting all the products out at the same time which is a big issue when trying to create product lines together. Another issue that the woman line had to deal with was the issue of initial investment and the cost of entering a new market and what markets would be wise to enter into. The cost to enter a new market may be high but when the market is 7 trillion a year market it’s worth entering at almost any cost.
Form there Nike had to decide what their niche or target market would be and they decided on focusing on 22 year old confident irreverent woman. Nike also decided to try and get a strong market share in dancing, platies, and yoga because of the data about the massive growth in those markets. The data defending these markets was that gym membership for young woman doubled in the last 15 years and platies had a 169% increase and yoga and dancing had a 95% increase. Therefore there is a booming field in which no one has a real control of the market and it’s a great time for new entry.
Since Nikes entry into these fields it has seen about a 40% share of market which is tremendous. Recommendations The change in sales strategy for woman was one of the best changes they made because the buying behavior of woman versus men is very different, since men tend to go in and buy that one item versus woman that buy a whole outfit. With that knowledge it would be wise to suggest having elder men or younger family items sold like they sell woman’s stuff since many children and married men are heavily influenced by their mother or wife to buy a complete outfit rather than just that individual item.
Another recommendation would be to try and have all the branches of say running under one management to try and avoid agency problems which affect the supply chain negatively due to differences when they finish or start different products. A third recommendation for Nike would be to continue trying to enter into the growing fads of work outs for woman and try and grow market share for younger children because woman are often very brand loyal and woman will often stick with a sport or activity for life which is therefore a cash flow from them for the rest of their life.
Yet another recommendation would be to try and invest in staying with the fashion and keeping things fashionable for whatever market you’re going for because clothing has more and more grown to what looks good than if it’s comfortable or has the features I want. Final recommendation is to try and take woman’s fitness apparel and goods into the growing sports of field hockey and lacrosse because both are seeing a large growth with only a few competitors at the moment. With Nikes high brand recognition and quality associated with it could easily come in and take a large share of market rather quickly.