Thank you so much for the note Ryan! It is definitely an interesting question. Nike plans to grow its business to $50B in sales by 2020 (from $30B today) mainly through an emphasis on e-commerce, its women’s business and the expansion of the Jordan brand. Clearly Nike believes that they can continue to grow through new technology and emphasis on consumer groups that haven’t matured as much.
I think that Nike will definitely continue to innovate but I think they have learned from the Fuelband and will primarily focus on growth through their strengths, rather than overtly expanding their product lines. In addition, Nike will explore opportunities to grow their strengths even further, which is evident by them taking the NBA deal from adidas and creating NBA jerseys starting next year.
Thanks for commenting Haochen! That is a great question. Based on my research (and some past experience), Nike seems to take its segmentation by sub-group over geography most seriously. Of Nike’s competitors, Under Armour is still too small internationally to really do anything but sort by segment and adidas prioritizes geography over segment.
That being said, stores are still free to carry products across segments, but insights and decisions and driven by these groups rather than at a geographical level. Employees focused on retail and distribution work with the local partners to make sure the stores have what they need to maximize product sales.
This is great Michael! The diagrams are incredible and provide a lot of interesting information. I especially enjoyed the Timeline and seeing how much the company has achieved since 2007…WOW! I am always fascinated by Airbnb and especially people’s willingness to use it. Personally, I have always struggled with the idea of either “renting” out my home or staying at someone else’s but clearly it works and provides a great option for travelers everywhere. I do wonder as legal issues continue to arise if they will catch up to Airbnb resulting in bigger issues.
Thanks Michael! That is a great question. I think Nike is content to grow their business by dominating the mainstream sports and athlete markets (i.e., athletics/running, basketball, soccer/football), but at some point I could definitely see them move in to cricket especially. As they continue to establish themselves as the market leader, it is difficult to not see them one day owning the entire marketplace.
Great question Satoshi! I definitely think that is a major risk of the endorsement piece of Nike’s business. Fortunately, for most deals they do have the option of opting out due to morals clauses. In other cases, I think they are forced to think carefully about how they utilize those athletes moving forward – often being forced to distance themselves, especially in the short term.
Ultimately, Nike is too big though and too successful as a company to be TOO impacted.
Great job Kim! I had never thought of Costo in this manner before, but it is clear after taking TOM that this company is clearly a well-thought out machine. I thought your analysis of Costco’s labor policy (i.e., employees placed in strategic areas) and its minimalist approach to layout were particularly interesting. Despite being in a day and age where people prioritize customer service and high quality experiences, Costco has continued to succeed and thrive based on its unique model and low-cost, large quantity products. I wonder if that will continue to be the case or if the increased competition will one day catch up to Costco and force it to adapt.
Great post Jon! I actually had the chance to meet with and interact with Harry’s team a lot in my previous job and they were always a fascinating group to meet with. The company is founded, as you said, by people with experience and success in the start-up space. The culture they have created amongst their users is truly second to none. I also found the move they made to open Harry’s Corner Shop in New York City to be really interesting. The physical location provides them a great chance to reach their consumers, while hosting unique events in a high-traffic location near their target market.
That is an interesting question. I think that ultimately there could one day be synergies but Reebok has truly transitioned their entire brand to focus on true feats of athletic fitness, including UFC, fighting and cross training. It would be hard to see Reebok losing hold of this market since it would likely result in the end of their business altogether.
In addition, as you said, Nike may be hesitant to move into the UFC market where it would be associated with violence and move away from its goal to position itself for every athlete in the world (Nike defines athlete as anyone with a body…so everyone).
Great job Benny! The UFC is an interesting growth property that is clearly picking up interest in the U.S. I wonder what the future of the property will be. Boxing was ultimately forced to go into pay-per-view to raise necessary dollars for fights but to date UFC has succeeded with the opposite approach – TV rights deals on major networks. As sports remains the final live appointment viewing property, it will be interesting to see if UFC can continue to capitalize as a secondary form (after the Big Four American sports league) and potentially one day reach the popularity of some of the traditional sports both in the U.S. and abroad.
Great job Ryan! I have always been impressed by Fitbit and their ability to leverage their core strength (software) to capitalize on the ever-emerging fitness market in the U.S. I wonder what will be the next step for them as the technology continues to improve. In addition, as Under Armour and some of the traditional fitness brands begin to break into the industry, I wonder if Fitbit will continue to succeed on its own or be forced to merge with a competitor or partner with some to succeed.