I. Strategy

Business Overview

Introduction

As the world’s leading athletic footwear, apparel and equipment company, NIKE, Inc. is dedicated to inspiring every athlete to reach peak performance. Nike co-founder Bill Bowerman sawendless possibilities for human potential embodied through sport. His philosophy still guidesour mission today: “To bring inspiration and innovation to every athlete in the world.” (And if you have a body, you are an athlete.)

Through our commitment to innovation and design, we are continually challenging ourselves, and our customers, to reach that next level of achievement. We strive for:

  • Innovation to serve the athlete
  • Innovation to grow the company
  • Innovation to inspire the world

Company Portfolio

NIKE, Inc. includes seven distinct brands, each with a powerful connection to its customers:

  • NIKE Brand designs, develops and sells high-quality athletic performance gear and sport-inspired casual products, including footwear, apparel, equipment and accessories
  • Cole Haan designs, markets and distributes luxury shoes, handbags, accessories and outerwear
  • Converse designs, markets and distributes athletic footwear, apparel and accessories
  • Hurley International LLC designs, markets and distributes action sports and youth lifestyle footwear, apparel and accessories
  • Umbro designs, distributes and licenses athletic and casual footwear, apparel and equipment, primarily for the sport of football (soccer)
  • Nike Golf designs and markets golf equipment, apparel, balls, footwear, bags and accessories
  • Jordan Brand designs and markets premium footwear, apparel and accessories inspired by the dynamic legacy, vision and direct involvement of Michael Jordan 

Cole Haan, Converse, Inc., Hurley International, LLC and Umbro International Limited are wholly owned subsidiaries of NIKE, Inc. These Affiliate businesses, as we call them, play a significant role in our future growth plans. At the end of FY11, NIKE, Inc.’s Affiliates, together with our Nike Golf division, contributed approximately $2.7 billion of the company’s $20.9 billion in revenue.

Plan for Growth

Nike is a growth company. But we want to deliver growth in the right way. We seek growth that is:

  • Sustainable
  • Profitable
  • Capital efficient
  • Brand enhancing 

Like many other businesses, Nike faced some significant headwinds in FY10 and FY11. Around the world, unemployment was high, especially among youth; and governments wrestled with high debt levels. Rising costs for energy and labor sparked inflationary pressures. In turn, higher costs for materials, labor and freight were evident in our margins. 

While the headwinds we faced were shared across our industry, the competitive advantages we have are unique to the Nike portfolio. In spite of ongoing macroeconomic challenges, we are well positioned to leverage our strengths – including scale, operational capabilities and pricing power – to help mitigate the risks beyond our control and capitalize on opportunities to grow the company.

Integrating Sustainability Into Our Game Plan

At Nike, one way we seek to deliver shareholder value is through sustainable growth. To us, sustainable growth means our long-term vision to deliver profitable growth decoupled from constrained natural resources, even as we work to deliver value to our shareholders in the near term. Meeting these two objectives requires a careful balance – one our stakeholders expect of us – and it remains our commitment. We attempt to strike this balance by leveraging our significant competitive advantages, including 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 profitability.

As we set aggressive goals in all areas of our business – financial, social and environmental – we are committed to sharing these goals and to reporting on our performance to consumers, the investment community and others interested in our commitments and progress, including the wider sports and apparel industry, community groups and academia. Over the past 15 years, we have moved from approaching sustainability as a risk management issue to viewing it as an innovation opportunity and a competitive advantage to be integrated into every aspect of our business. 

A more holistic sustainability strategy that is fully integrated into the business enables Nike to create value, not just through risk mitigation, but also through top-line growth, cost avoidance and better access to capital. As an example, our next portfolio of sustainability targets is designed to improve Nike’s environmental and social impacts for us and across our value chain, while also avoiding costs across the value chain by reducing waste, energy and water expenditures.

In FY10, to help us further accomplish this transition, we launched a new business unit called Sustainable Business & Innovation, as well as a new business sub-unit called Sustainable Manufacturing & Sourcing. And in FY11, we launched Nike Better World, an online platform to engage consumers in our sustainability vision and our efforts to balance people, profit and planet.

See Our Sustainability Strategy for more on Nike’s sustainability strategy.

Nike Value Chain

Companies often use the term “value chain” to refer to the actors and stages needed to bring their product or service to market and ultimately to its end of life. At Nike we use this term too, though we also find the “chain” metaphor a bit linear and limiting for something that is actually interconnected in multiple ways, like an ecosystem or a web. 

The connections in this chain drive our decision making. For example, the quality of our planning shapes the choices we make for manufacturing. Efficient manufacturers create little to no scrap and turn what remains back into material inputs for new products. Nearly 85 percent of our footwear manufacturing waste is now diverted from landfill or incineration through recycling and other efforts. Also, insights we gain in the use phase impact how we design our products. Our design decisions, in turn, determine whether a product can be recycled at the end of its life. Design choices can also eliminate the need for toxics in the manufacturing process, and our ability to get toxics out of products determines whether materials can be recycled in a closed loop. Working with the right manufacturers means better insight and control of quality and in performance for the environment and their workers. Choosing the right partners for moving our products around improves our ability to gather and track data on transportation emissions and to get products where they need to be at the right time. Each choice has financial, environmental and social impacts that are intertwined and mutually dependent. 

These are just a few examples of the interconnections. We invite you to explore Nike’s value chain through the graphic below and online where you will find additional detail about impacts and relevant stories. This value chain outlines each phase, where the greatest impacts occur, and some of the key tools we are using to increase efficiencies, reduce impacts and improve working conditions throughout the system.

Overview of the Nike, Inc. Value Chain

Our business has many dimensions. Every product and partner, every decision, every gateway, every stage from concept to reclamation adds to a near-infinite ecosystem of cause and effect


To offer as much clarity into this ecosystem as possible, we’ve distilled it down to seven fundamental stages: Plan, Design, Make, Move, Sell, Use, Reuse.

  • Plan - At the core of our business is a plan – our opportunities, our resources and our values. It’s who we are. What we believe. And how we get things done.
  • Design - Form. Function. Superior performance. Minimal impact. While our designers always strive to create products that are faster, lighter and stronger, they also pay close attention to smarter.
  • Make - Ideas don’t become reality by magic. For a global business, it requires people, materials, tools, knowledge, skill and a whole lot of coordination. We contract with more than 900 factories globally to make products from our designs.
  • Move - We ship products wherever and whenever they are needed, to get to thousands of partners and millions of consumers around the world. Airplanes, boats, trucks and trains are the tools our transport providers use to overcome the obstacle of distance every day.
  • Sell - Nike operates more than 750 retail stores around the world across all our brands. Beyond selling products, each location strives to be a rewarding experience for its consumers and an asset to its community. The stores are in leased space. While NIKE and our Affiliate brands sell primarily through retail partners not owned by our company, our focus is on the impact of the selling we do in our own stores.
  • Use - Once you bring home your new shoes, shirt or shorts, a different footprint starts to take shape. This one belongs to you.
  • Reuse - Finding innovative ways to reuse our products – creating running tracks, sport courts and even new shoes and clothing helps minimize our impact on the environment. Good becomes better over time. And so do we.

We believe these stages provide the best way to track, measure and report where we have influence, compared to where we have control, and how the decisions we make have impacts in terms of energy and climate, labor, chemistry, water, waste and community.

See Impacts in the Impact Overview Chapter


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