Expanding the Playing Field: Nike’s World Shoe Project

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World Resources Institute Sustainable Enterprise Program A program of the World Resources Institute Expanding the Playing Field: Nike’s World Shoe Project Teaching Note For more than a decade, WRI's Sustainable Enterprise Program (SEP) has harnessed the power of business to create profitable solutions to environment and development challenges. BELL, a project of SEP, is focused on working with managers and academics to make companies more competitive by approaching social and environmental challenges as unmet market needs that provide business growth opportunities through entrepreneurship, innovation, and organizational change. Permission to reprint this case is available at the BELL case store. Additional information on the Case Series,…show more content…
Three key issues contributed to the disappointing sales. First, internal organizational challenges prohibited the growth of the line. Rigid profit margin expectations handed down by corporate headquarters created an environment that encouraged the sale of Nike’s high-margin products to high-end customers. Regardless of the low cost of the World Shoes, they were still slapped with a high profit margin, resulting in overpriced products compared to local Chinese products. Second, because of the current distribution network and infrastructure that Nike had in place for its high-end footwear, the World Shoes, distributed through the same channels, didn’t reach the proper target market. The Series 100 and Series 400 were simply placed on a shelf next to the expensive Air Max in an urban retail store. The consumers in the intended market segment, who lived primarily in rural areas, didn’t necessarily shop at these places. However, Nike had no system to distribute the shoes outside of its three major metropolitan areas. Finally, no marketing plan for the World Shoes existed in China. (Marketing was left up to the local country managers.) Neither the Chinese retailers nor the consumers had any understanding of the value of the World Shoe line. Case A ends without any indication of what will become of the World Shoe project. In two days, Tom Hartge will meet with CEO Phil Knight and the fate of the project will be
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