Nike “Jordan Brand” a Blue Ocean Strategy
Froilan Mencias EEMBA: Strategic Management 2
Prof. Jesus Gallegos Jr February 12, 2013
Written Analysis of Case: Nike “Jordan Brand” a Blue Ocean Strategy
In 1983 Nike had revenues of $920m, this increased by $15m after the Air Jordan 1 was released in 1984. Air Jordan 1 actually sold $130m in 1984 or 13% incremental sales. In 1989, powered by further increase in Jordan’s popularity and the efficacy of his “Just Do It” campaign, Nike sales reached $1.7 Billion, with the Jordan brand contributing $200m annually since then. By 2011, Jordan brand already sell in excess of $1 Billion annually for Nike. The success of the Jordan brand allowed Nike to innovate their other portfolio of product offerings using the template that the Jordan brand created. http://www.forbes.com/sites/kurtbadenhausen/2011/09/22/the-business-of-michael-jordan-is-booming/ http://www.forbes.com/sites/kurtbadenhausen/2013/02/14/how-michael-jordan-still-earns-80-million-a-year/?partner=yahootix 1. Strategy Canvass of Jordan Brand vs Nike vs Adidas (1985) High | | | | | | | | | H/M | | | | | | | | | Mid | | | | | | | | | M/L | | | | | | | | | Low | | | | | Jordan brand created the premium sports shoe segment
| | | | | Price | Design Innovation | Innovative Marketing | Cost | Brand Passion | Perceived Functionality | Extensive use of Superstar/s | Annual Release | KSF Weight | 5% | 20% | 15% | 5% | 15% | 5% | 25% | 10% |
2. The ERRC for Nike Eliminate - Factors to eliminate that industry has competed on * Price (used to be important, but because what Jordan was selling was the brand, price became immaterial) | Raise - Factors that should be raised well above industry standard * Prestige * Marketing * Functionality | Reduce - Factors to reduce well below industry standard * Cost (cost of Jordan brand was spread within the Nike operations, so shared and lower) | CreateFactors to be created that
Prof. Jesus Gallegos Jr February 12, 2013
Written Analysis of Case: Nike “Jordan Brand” a Blue Ocean Strategy
In 1983 Nike had revenues of $920m, this increased by $15m after the Air Jordan 1 was released in 1984. Air Jordan 1 actually sold $130m in 1984 or 13% incremental sales. In 1989, powered by further increase in Jordan’s popularity and the efficacy of his “Just Do It” campaign, Nike sales reached $1.7 Billion, with the Jordan brand contributing $200m annually since then. By 2011, Jordan brand already sell in excess of $1 Billion annually for Nike. The success of the Jordan brand allowed Nike to innovate their other portfolio of product offerings using the template that the Jordan brand created. http://www.forbes.com/sites/kurtbadenhausen/2011/09/22/the-business-of-michael-jordan-is-booming/ http://www.forbes.com/sites/kurtbadenhausen/2013/02/14/how-michael-jordan-still-earns-80-million-a-year/?partner=yahootix 1. Strategy Canvass of Jordan Brand vs Nike vs Adidas (1985) High | | | | | | | | | H/M | | | | | | | | | Mid | | | | | | | | | M/L | | | | | | | | | Low | | | | | Jordan brand created the premium sports shoe segment
| | | | | Price | Design Innovation | Innovative Marketing | Cost | Brand Passion | Perceived Functionality | Extensive use of Superstar/s | Annual Release | KSF Weight | 5% | 20% | 15% | 5% | 15% | 5% | 25% | 10% |
2. The ERRC for Nike Eliminate - Factors to eliminate that industry has competed on * Price (used to be important, but because what Jordan was selling was the brand, price became immaterial) | Raise - Factors that should be raised well above industry standard * Prestige * Marketing * Functionality | Reduce - Factors to reduce well below industry standard * Cost (cost of Jordan brand was spread within the Nike operations, so shared and lower) | CreateFactors to be created that