Chapter Case 4 Nike

1. The MiniCase indicates that Nike’s core competency is to create heroes. What does this mean? How
did Nike build its core competency? Does it, for example, identify and leverage the potential
identified in a VRIO analysis (are its competencies valuable, rare, inimitable, and organized to
capture value) in a resource-based view of the firm?

Nike’s core competency of creating heroes began in 1984 with Michael Jordan and has only
grown from there. This idea of creating heroes was relatively revolutionary, especially since
Nike’s main approach to marketing was (and is) sponsoring athletes – especially those who were
not “heroes” to begin with. Nike can create heroes through repetitively branding athletes in a
way that amplifies the athletes’ auras. This is often done by taking a positive bias towards an
athlete’s actions and image. Controversially, Nike recently had an ad campaign featuring Colin
Kaepernick that read, “Believe in something. Even if it means sacrificing everything”. This is
just one small example of how Nike positioned someone in a positive light. This case was
specifically impressive because many people had a negative view of Kaepernick, and this not

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only enriched him, but has positioned himself as a virtuous social justice warrior and elite
athlete.

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Nike built this core competency by heavily investing time and energy into formulating how

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to position someone as a hero based on their actions. It is a model that has been copied by other
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firms, but no where near as effectively. From a VRIO perspective this is valuable, rare, and
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organized to capture value (position the athlete and the firm in a positive light). However, it is
not imitable completely. What Nike has done is taken many athletes off the market by having a
contract that does not allow other major sportwear brands to sponsor them, but this only works
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on an individual level. If Adidas or Under Armour sponsors a player, they have control of that
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piece of marketing. For these reasons, Nike does not completely pass the VRIO perspective, but
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they do a pretty good job.

Nike’s approach could become a weakness rather than a strength if the view of athletes
becomes negative. As it is today, most athletes are considered to be likable and high-quality
people. Realistically, this could shift as athletes are usually considered overpaid – which can
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come across as elitist and unrelatable. Also, if Nike pursues more controversial athletes and does
not distance themselves from sponsorships when athletes commit crimes then Nike’s aura can
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quickly shift into a “dinosaur” who only cares about making money. I do not believe that this
tipping point has occurred because Nike is stilled largely viewed in a positive light in spite of
occasional hiccups – such as Oscar Pistorius and others.
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3. What recommendations would you have for Nike? Can you identify a way to reframe the
competency of creating heroes? Or a new way to think of heroes, teams, or sports that would
continue to build the brand?

I would recommend that Nike continues to shift their focus towards sponsoring women, as
that is certainly a position that will be widely met with approval. In addition, Nike should seek to

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 get a lifetime sponsorship with Zion Williamson, Duke superstar. The reason for this is he is seen
as humble, hardworking, and one of the most talented and physically gifted athletes – not to
mention he is extremely well-liked. This will not only improve Nike’s aura, but if they position
themselves correctly could lead to unprecedented sales growth from one superstar, potentially
outpacing Jordan eventually. I think that Nike could gear themselves towards the physically and
mentally handicapped community and painting them as heroes which is not only great for that
community but will make Nike seem more inclusive.
4. If you are a competitor of Nike (such as adidas, Under Armour, New Balance, or Li-Ning), how could
you exploit Nike’s apparent vulnerability? Provide a set of concrete recommendations.

If Adidas, Under Armour, New Balance, or Li-Ning desire to exploit Nike’s weaknesses they
would have to almost directly attack Nike’s marketing. Specifically, I would highlight all of the
unfortunate alignments that Nike has had with certain athletes – followed by the noble
community action of the athletes that are sponsored by their company, with the message,
“Character is Bigger than Sports”. This would almost immediately position Nike as a greedy

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“dinosaur”, exactly what they are trying to avoid. This simple strategy should effectively attack
Nike’s vulnerability of their arguably checkered past.

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