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Nike's Shoe Project

In: Business and Management

Submitted By posak
Words 353
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NIKE’S SHOES PROJECT (B)

Now you know the Case A about Nike. This Case is one year later.

The Past

Today, the World Shoe Project is only „alive in spirit”: - efforts to sell high-end product in emerging markets at low price, - concept never spread beyond initial large cities of China, - business model never came together

Nike’s management feels that the World Shoe is “ahead of its time.”

The revenues generated by Li Ning and Kangwei (local manufacturer of sports shoes) and imitations shoe manufacturers indicate that there is a market for high-volume, low-margin shoes and that companies apparently can make money in this space.

The Presence

Most of Nike’s problems would likely remain after the elimination of the World Shoe Project. Growth will still be flat, Nike’s imitation will remain, and an inability or unwillingness to experiment with new business models will continue to prevail.

This suggests that there may be an opportunity to reframe the World Shoe concept. In addition, a new business model will need to be developed and effectively implemented if Nike is truly going to capitalize on this.

Alternatives and recommendations for the future

1. Quit the World Shoe Project and come back to previous business model based on high-quality shoes for demanding customers. It safes operations with no risk but no taking opportunities in China as well.
2. Modification of the World Shoe Project business model with changing its assumptions by changing price and profitability measurement formula. The measurement should be based on the number of sales (not sales margins), thanks to that sales volumes contribute to the profits.
The more the company sells, the better the results should be.
3. Create a distinct and vast promotional campaign: to change the local Chinese customs related to using footwear in practicing sports and to…...

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