The Cleverness Of Nike -- Mastery Of Choice

The clever thing is to be proficient in choice.

Forbes (Forbes) recently released the world's most valuable brand list in 2016.

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In the field of industry, sports brand Nike has become the most valuable brand in the global fashion industry.

This is Forbes's sixth year release.

List of values.

Besides Forbes, agencies including BrandZ, Interbrand, and British consulting firm Brand Finance regularly issue brand value reports and lists.

But the calculation methods are different.

Forbes's rule of "brand value list" is based on the profit of each brand in the past three years and multiplied by a percentage coefficient according to the brand's status in various industries. The adjusted profit is multiplied by the average price earnings ratio of the past three years, and finally the brand value is calculated.

That is to say, brand value is not positively related to company performance, market value and sales volume.

It is related to whether consumers are willing to pay a higher price and whether they have a stronger desire to buy.

I believe that the ranking of the top one hundred has been over and over, and whose ranking has risen, whose ranking has dropped, who is in front of whom?

But in addition to ranking order and ranking, we really want to explore why the most valuable clothing brand in the world is Nike.

Online search, all kinds of articles about Nike emerge in endlessly.

I am afraid that this Brand Company is not recognized as it is today.

Looking back at the trend of this brand of predators in recent years, from products, stores, design to marketing, Nike is not necessarily better than other brands, but Nike's cleverness lies in its mastery of trade-offs, instead of blindly adding to it, instead of blindly pursuing all sizes, so as to create a strong brand positioning and style, becoming the most valuable brand of NO.1 in fashion industry.

1, brand

Starting from the 2012 year of the year, Nike continuously divestiture various assets, with a view to concentrating more on business with high potential growth opportunities.

In 2012, Nike2.25 sold its brand Umbro for $100 million, while it spent 565 million dollars when it bought the brand 4 years ago.

Almost at the same time, it also sold its footwear brand Cole Haan for $500 million to Apax Partners, a private equity fund company.

To abandon two brands, Nike put more energy into the development of Nike, Jordan, Converse, Hurley and other brands.

2, products

Nike's product line has been expanding, and the new product of the season is also most concerned by consumers.

But until now, footwear revenue still accounts for more than 60% of Nike's total revenue. Although Nike has expanded diversified products such as golf, clothing and sports equipment since 2000, Nike is quite focused on pursuing "lighter and softer shoes".

In 1987, the Air Max air cushion technology was born. This kind of slow vibration technology has become the main source of Nike growth, and its annual sales volume is more than one billion US dollars.

In the past 3 years, Nike's strong financial performance has been largely attributed to the high margin products, which are the star shoes of Flyknit series and Jordan and Kobe launched in 2012.

Today, the Jordan brand has been selling well for 30 years, and the Flyknit Lunar running shoes have also been developed into the third generation. Flyknit technology has been applied to every product line from soccer shoes to running training.

These thousands of shoes become the biggest revenue growth engine of Nike.

In March of this year, Nike launched 11 new types of shoes. Flyknit technology basically covered all footwear products, including Nike company's Nike HyperAdapt 1 which was able to automatically tighten the shoelaces on the shoe's surface and adjust the tightness by pressing buttons on the sides of the shoes for ten years.

3, store

Nike is adjusting its global store strategy and opening more direct stores. At present, Nike has 7 flagship stores, more than 300 retail outlets and more than 6 thousand shopping malls in China.

In the 2015 fiscal year, Nike's revenue in China reached $3 billion 67 million, an increase of 18% over the same period last year. The growth was mainly driven by the strong driving force of Direct to Consumer, which accounted for 27% of total revenue.

Nike requires every store to be as meticulous as possible. Under the premise of standardization, what kind of business circle is the main group?

While dealers still have no way to do the same as self run shops, Nike hopes to supplement the official website Nike.com with the function of electric business.

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4, design

Since the birth of the 1964 year old brand, Nike has been one of the best sports brands in the world, largely thanks to its brand design.

Nike's product development is not aimed at collocation and trend, but is athlete oriented.

This is consistent with the design rule, because athletes are much more athletic than ordinary consumers, and any product that meets their needs is generally applicable to ordinary consumers.

This rule applies to the research and development of all Nike products.

You will feel the trade-offs of Nike in many places.

But it is wonderful that, from the results, it seems that Nike only focuses on the movement itself, but does not know why it drives and affects the trend.

For example, the introduction of Flyknit technology is to solve the problem of self weight of shoes, but it appears frequently in streets and lanes on street pads, becoming a fashion.

In a sense, this trade-off has built the attitude of Nike brand.

For Nike, as long as you want to exercise, enter the store to buy a dress or a pair of shoes, its purpose is achieved.

5, marketing

Nike's marketing model has always been in the lead in the industry.

First, Nike built the world's largest online community of sports enthusiasts with Nike+; two, Nike has the ability to cut into all kinds of sports: in addition to mainstream basketball, soccer and running, Nike also involved in niche sports such as golf; three, Nike has a perfect e-commerce and digital service platform.

In the face of the impact of the digital wave, Nike is also a quick response, quickly pulling aside all kinds of marketing agents before cooperation, reducing the cost of traditional media advertising, and forming internal teams to take charge of social media affairs.

In the three years since 2010, Nike has cut 40% of its advertising costs in television and print media in the US.

According to its latest earnings report, Nike official website e-commerce sales rose 50%.

Whether it is official website, electricity supplier, App or intelligent hardware, Nike is basically the highest index in terms of user friendliness and convenience.

On all social platforms such as Facebook, Instagram and micro-blog, the number of fans in Nike is the first among sports brands.

Of course, in order to occupy the important market in China, Nike has launched a lot of Nike shoes, which are considered to be very popular, to please Chinese consumers. For example, in order to welcome the limited money introduced in the year of Monkey (Hua Shang Hui's article before, "fashion brand monkey, fantastic or absurd"), for example, the new models launched in May 5th this year:

Summary

Is Nike the best sport equipment? I'm afraid not.

At least many runners would not agree.

But so far, the company has maintained a surprisingly strong growth.

In the third quarter earnings report just released in fiscal 2016, Nike revenue rose 8% to 8 billion dollars.

Yes, Nike is a Oregon based company. Its headquarters are not in the metropolis of Paris, Milan, New York or London, but this does not mean that Nike has no ambition to aim at the fashion industry.

Starting from a sportswear manufacturer, production outsourcing, sales outsourcing and even some non core R & D technology are also outsourced, thus creating a model of Nike light asset operation.

No factory, less than 20% of Direct stores, but to control the supply chain and sales market all over the world, Nike's business operation has become a model of imitators.

The secret can be summed up a lot, but the most important thing is that I still know how to choose and seize the most valuable links in the industry chain, such as R & D, marketing and logistics, and abandon the low profit and high competition part, so as to further expand the market and achieve business success.

In 2010, Nike's annual revenue was $18 billion 300 million. In 2015, this figure climbed to $30 billion 600 million. In 2016, Nike became the most valuable brand in the world.

Do you think Nike has gone to the top? Oh, NO! Nike tells us that their next goal: to complete US $50 billion in 2020 will mainly depend on women's products and Jordan's brand.

Among them, e-commerce will become the strongest driver, from the current 1 billion US dollars to 7 billion US dollars.

Obviously, in order to achieve the goal, Nike can not only stop resting, but also have to run faster.

Although the company has not made any obvious mistakes so far, it does not mean that it has no worries or worries about the future.

Like the Apple Corp, which always keeps the number one, the first tier companies, apart from dealing with catchers, have a clear understanding of their direction and know what to do next, in addition to keeping the leading edge. This also means that these business tycoons will face more choices, challenges and anxieties.

But who is not anxious?