By, Natalie Filice, Katie Kirk, & McKenna McVicker
Nike has created one of the most distinctive global brands in the world. Almost anywhere in the world, people will see the Swoosh, and immediately think “Nike.” They are a leader in the leisurewear industry, combining function with style. Their market segment is huge, drawing male and female customers alike, and from many different age groups. So what’s the next big step for an already massive global brand? To go local. This may seem like exactly the opposite of what a global brand should do. It almost makes it sounds like they’re cutting down their reach. In reality, it’s the exact opposite. This decision to reorganize the company was made back in 2015. They decided to cut two percent of their global work force and focus on 12 major international cities so that they could release their products faster in those places, thus allowing them to evolve trends more quickly. Because Nike focuses on function and fashion, they are subject to the ever changing trends in the fashion world. This new plan to do “local business, on a global scale” will allow them tailor the products to the preferences of the city. The risk of this is that it will be costly. If they are producing different products for different cities, it will require the purchasing of more materials, as well as more research power. However, by cutting their work force by two percent, it may help offset the cost.
Even though their strategy is to “go local,” this could give Nike even more strength as a global brand. By tailoring to the tastes of the cities they are in, they may increase sales. Consumers will want to purchase items if the items reflect their culture or current trends isolated to their city. People will see them even more on the cutting edge if they can get new products out faster and faster. It will make consumers want to keep up with what they are putting out. The consumers who purchase Nike are not looking for just a functional workout gear; they could buy that from anywhere if that was the case. Nike is delivering a product people want. People want fashion and function. And these people who want fashion, understand it is constantly changing. Updating their products so frequently will differentiate Nike from other competitors. The company will grow even deeper roots in the global market and strengthen their global brand with this potentially fiscally risky change.
Reference: https://www.nytimes.com/2017/06/15/business/nike-layoffs.html