When Nike releases new shoes on launch day (introduction), they invest in heavy advertisement such as commercial posters in magazines and at various stores. Due to the power of their brand, they typically prices their products at expensive figures to rake in massive profit as they are aware of the demand for the company’s work. With a team of more than 40 academic professional with doctorates in every single sector of product development including mechanical engineering, kinesiology, and mathematics, Nike is able to innovate in ways that cannot be replicated anywhere else. Given Nike’s incredibly smooth stock performance on a per share value year over year, one could easily put forth the argument that the company has remained in the growth stage for over 50 years although individual products eventually decline. Despite the fact that many get thrown in the trash, Nike has introduced a new incentive to return and recycle used shoes, called simply reuse-a-shoe (Xiong, Harn, Trieu, 2013). Such a program was created with the hope to reduce landfill waste and promote recycling of various materials.
Product Life Cycle Analysis:
NIKE
Nike, Inc. serves as a multinational corporation based in the United States whose purpose is to engage in the development, design, worldwide marketing, sales and manufacturing of various apparel, accessories, footwear, and equipment. Since its founding in 1964, the company has evolved into the planet’s single largest supplier of athletic apparel and shoes in addition to being a major provider of general sports equipment. As of 2017, the company has become the most valuable brand in the history of sports, with a reported market value of nearly $30 billion. According to an excerpt from a 10-K issued by the company, founders Bill Bowerman and Phil Knight have stated that they believe a tireless dedication to research and development are the key factors in both Nike’s past and future success (Kalb, 2011).
With a team of more than 40 academic professional with doctorates in every single sector of product development including mechanical engineering, kinesiology, and mathematics, Nike is able to innovate in ways that cannot be replicated anywhere else. Furthermore, the founders stated that most of their best product ideas came from using the tried and true technique of basic trial and error. Any new product introduced to the economy naturally progresses through a limited sequence of stages, ranging from introduction, to growth, to maturity, to finally decline (Kalb, 2011). This is known as the product life cycle. Utilizing their iconic logo, a big check mark known only as the Swoosh, the corporate symbol has become a commonly recognized figure in the general public.
For decades, the location of the Swoosh on the product line for maximum exposure allows the brand to be consistently etched into the minds of anyone watching sports events, news coverage, or instant replays of professional athletes with them on (Kalb, 2011). Given Nike’s incredibly smooth stock performance on a per share value year over year, one could easily put forth the argument that the company has remained in the growth stage for over 50 years although individual products eventually decline.
From the beginning, Nike has utilized a number of common natural resources to establish and maintain the quality of their products; including but not limited to 20.4 percent Bamboo Rayon, 35 percent Down, 22.6 percent Cotton, 22.3 percent of Hemp, and 34.8 percent of Cardboard as a fusion type (Xiong, Harn, Trieu, 2013). Out of the over 30 materials utilized to make up the entirety of a single product line, the six primary materials of cotton, rubber, synthetic leather, polyester, leather, and EVA foam encompass the majority of the material volume (Xiong, Harn, Trieu, 2013). These specific materials were chosen under the pretext that they pose the smallest threat on waste management. In the packaging process, Nike has always attempted to utilize as many recyclable and environmentally friendly materials as possible in order to live up to company commitments of innovation and sustainability.
Moreover, they reduced their reliance on cardboard for the boxes by a factor of 16 percent thereby reducing cardboard waste by nearly 5000 tons per year (Xiong, Harn, Trieu, 2013). Production of their flagship line of shoes is documented as an intensive process that requires collaboration between skilled workers, visionaries, and information factory machines. Initially, a design is implemented and data is gather to establish a template of the type of shoe that is desired. Feedback and various prototypes are gathered which eventually adjusts any faults in the shoe schemata. Upon agreeing on a setup, the product is approved for sale in the over 750 retail markets that represent the company (Xiong, Harn, Trieu, 2013).
Technical aspects related to the creation of the shoe are classified into three separate processes which include cutting and stitching the components comprising the upper materials, shaping and molding soles with tooling and finally bonding all the components in one. The shoes are then shipped to distribution centers where they are subsequently relocated to retail stores. After entering the hands of the consumer, the product may be utilized for either professional or recreational use. Depending on the endurance of wear and tear, the product can be utilized for months or even years. By the end of the design cycle, all Nike shoes can be easily recycled and disassembled. Despite the fact that many get thrown in the trash, Nike has introduced a new incentive to return and recycle used shoes, called simply reuse-a-shoe (Xiong, Harn, Trieu, 2013). Such a program was created with the hope to reduce landfill waste and promote recycling of various materials.
When Nike releases new shoes on launch day (introduction), they invest in heavy advertisement such as commercial posters in magazines and at various stores. Due to the power of their brand, they typically prices their products at expensive figures to rake in massive profit as they are aware of the demand for the company’s work. While most prices hover between $120 to $200, several of their more premium offerings are placed at higher rates given their uniqueness and popularity (Kalb, 2011). As waves of customers purchase the product, the shoes are often left in limited supply given the unpredictability of demand (growth); pushing the prices higher.
Like any product, a brand of Nike shoes remain on store shelves for several weeks to months after the initial wave of sales passes as several customers opt to save their money before investing in a new pair (maturity). After the shoes have remained for the aforementioned life span, prices initially decline such that the old designs can co exist with the more expensive new designs. Eventually, the old models become disassembled and recycled (Kalb, 2011).
- Kalb, I. (2011, December 27). How Nike Continues To Just Do It Again And Again. Retrieved October 7, 2017, from http://www.businessinsider.com/nike-the-brand-that-keeps-on- giving-2011-12
- Xiong, Y., Harn, Y., & Trieu, A. (2013, November). Dissecting the Raw Materials, Energy Productions, and Waste of NIKE Shoes. Retrieved October 7, 2017, from http://www.designlife-cycle.com/nike-shoes/
