The Competitive Advantage of NIKE

Lauren Robinson
Strategic Selling
Published in
14 min readApr 5, 2021


photo by Kristian Egelund on Unsplash

NIKE is a world-renowned sports, footwear, and apparel company that was founded in 1964 by Phil Knight. The American company is based out of Beaverton, Oregon, but supplies the streetwear, activewear, footwear, and sports equipment industries globally today through 338 US and 758 non-US retail stores, along with their large eCommerce platforms and wholesale ventures. Included under the NIKE entity are Converse, Umbro, and the Jordan brand, contributing to their sales volume and large market presence and holdings.

In 2020, NIKE recorded $37.4 billion USD in revenues; 66% being from footwear, 31% from apparel, and 3% from equipment. Of these sales, 41% were from the North American market. NIKE is ran by a team of seven Executive Officers, and supports 75,400 employees worldwide. The company has a reputable track record for employee satisfaction and are committed to creating an environment for all employees to succeed and thrive in.

Major competitors to NIKE include adidas, Anta, ASICS, Li Ning, lululemon athletica, Puma, Under Armour, and V.F. Corporation; adidas and Puma being the greatest competition.

Profiles of Competitors

Adidas was founded in 1949 in Herzogenaurach, Germany as an athletic footwear company, and boasts over 2500 retail stores worldwide with 62,285 employees today selling apparel, footwear, and sports equipment. Other companies under the adidas name are Reebok and TaylorMade. Shown in their 2020 report, adidas earned $25.3 billion USD in net sales, considerably less than NIKE but the second highest earnings by a company competing within these industries. While NIKE dominates the North America and China market, adidas performs slightly higher in the Western Europe market. Their corporate management team is made up of 6 Executive Board and 16 Supervisory Board members.

Puma was founded in December, 1948 — also in Herzogenaurach, Germany—by the brother of adidas’ founder. The company comes in last of the three companies with a recorded $6.13 million USD in 2020 net sales, with 13,016 average employees over the course of the year globally, including that of their subsidiary company Cobra Golf.

Products and Services Comparison

NIKE, adidas, and Puma are all huge international entities in the apparel, footwear, and sports equipment industries, using many of the same strategies for growth. These strategies are popular with many companies today and include social media presences, campaigns, and promotions; endorsement and partnerships with athletes, sports leagues and tournaments, influencers, and celebrities; social and political commentary focused on sustainability, equality, and peace; and constant development and innovation of technology and products. All three offer athletic apparel, footwear, and equipment through their main companies as well as through their respective subsidiaries.

While many of the products and services that all three of these companies are offering are similar in terms of trends, prices, materials, distributors, and manufacturers — NIKE stands out in quality, brand recognition, and consumer demand.

In the early 1970s, NIKE found a competitive advantage by redesigning the classic track shoe, making it more comfortable, durable, and light. They differentiated themselves from the established companies of adidas and Puma by creating a shoe that lasted longer and cost less than the German competitors. From there, a loyal customer base was secured, strong marketing actions were taken, and positive reviews were spread.

Market Niche and Share

Today, NIKE is the largest sports apparel and footwear company in the world, holding approximately 27.4% of the global market share in athletic footwear. The global apparel and footwear market is valued around $1.9 trillion USD as of 2019, and is expected to reach $3.3 trillion USD by 2030. The market value of NIKE in 2020 sat at $223.03 billion USD, followed by $68.36 billion USD for adidas, and $16.23 billion USD for Puma. Participating in the international market does come with risks as trade, consumption, manufacturing, and distribution can be affected by global and regional economic and political conditions as well as aspects of trade protectionism, taxes, and tariffs. The COVID-19 pandemic has caused widespread disruptions to business everywhere, which has led to slowdowns and shutdowns regarding physical stores, manufacturing and distribution, and sports leagues; worsening economic conditions; additional costs of precautionary measures; and more.

While their footwear is still of high quality, NIKE also has an edge in the market due to the brand loyalty shown by consumers, high demand for products, a diverse range of product types, strong marketing campaigns and social media content, collaborations with other brands, investment in innovation, and an emergence into the streetwear scene.

Strengths and Weaknesses

Social Media & Marketing Campaigns

Social media is a crucial strategy for marketing in today’s globalized world, as it reaches infinitely for a lesser cost than traditional marketing tools. Some benefits of successful social media marketing include increased brand awareness and loyalty, better SEO (Search Engine Optimization), higher website traffic and conversion rates, repetitive/limitless exposure, sense of community, and influence within the market. The most popular social media platforms today are Instagram, Twitter, Facebook, and YouTube. All three brands have available smartphone apps as well.

graphic by Lauren Robinson, photo by Tyler Lastovich on Unsplash

As seen in the graphic above, NIKE dominates in social media followers, accounting for much larger digital reach and engagement than competitors. All three of these companies have many social media accounts for each of their respective product and service range — such as women, youth, basketball, and running — however, these numbers depict the following count on each main account.

As for campaigns, each company uses slightly different methods and affiliations when marketing to their target audience. The involvement of professional athletes and sports leagues, as well as celebrities and influencers in campaigns has proved to be beneficial for NIKE, adidas, and Puma. NIKE arguably secured the most popular and talented athletes through endorsement contracts — the top five being Michael Jordan, Lebron James, Cristiano Ronaldo, Kevin Durant, and Tiger Woods. These are huge household names in sports making these sponsorships extremely expensive, yet beneficial to further the popularity success of NIKE’s brand. On a list of the top 100 most paid athletes (compiled by Forbes), NIKE has sponsored 51 of them.

NIKE’s investment in athletes and celebrities is a driving force in their marketing strategy. However, a weakness can be determined in their lack of investment towards female athletes and celebrities, as seen in other major companies as well. Serena Williams is arguably one of the top tennis players internationally, yet did not make the top 15 list of highest paid NIKE sponsorships as the list only included men.

Serena Williams does appear in the recent NIKE ad, “Toughest Athletes”, — along with other female athletes — to launch the new ‘NIKE (M)’ maternity line and features pregnant and breastfeeding mothers. Exposure and normalization of both pregnant and new mothers as athletes drives a unique campaign not seen by many companies.

Throughout the history of the NIKE brand, their marketing has always focused on emotions and authenticity, making them known for inspiring and motivating through advertisements and campaigns. Real people are used — usually highly regarded athletes and celebrities — to share real stories of struggle and adversity that can be relatable to the average consumer. The use of many cultures and races in their content can attest to their international reach and popularity. The curated content is shared through social media platforms, digital campaigns, and physical advertising — creating uniformity and cohesion across all digital means, benefiting brand recognition and awareness.

Adidas embodies ‘Own the Game’ as their brand strategy, focusing on sport. They aim to strengthen their credibility by leveraging and strengthening their relationships with consumers, lifestyles, women, the digital realm, and partnerships as well as committing to sustainability and the experiences of consumers. Their partnerships focus on athletes as well, but also on industry creatives such as Beyoncé, Kanye West, Kylie Jenner, and Pharrell Williams. This is a unique direction as it targets new demographics by using popular celebrities and artists that are not involved in sports. What makes adidas stand out is they allow the sponsor to be a creative partner on the campaign, making an immersive, collaborative experience for the brand, the sponser, and the consumer.

One of adidas’ most popular advertisements, “Change is a Team Sport”, was directed by and starred Jonah Hill and featured many big celebrities and athletes. They have a tendency to focus on tradition, generations, progression, and unity within their advertisements, and feature modernity and creativity in their releases and posts. Although adidas has less followers and digital reach than NIKE overall, their content is personalized and features images and stories of real people.

Puma has followed adidas’ lead of signing on giant artists, such as Nipsey Hussle, Jay-Z, Selena Gomez, and Rihanna, as well as legendary athletes like Usain Bolt and Neymar. Puma specifically targets young people through the use of pop culture icons and trendy product lines. One notable campaign by Puma, “Play On”, featured an AR (Augmented Reality) Instagram filter and a retro arcade-style game that entered users into a contest to win a pair of sneakers. Their innovative campaign was very popular with younger consumers.

While their social media feeds are fresh and colourful, one downside of Puma’s social media/marketing strategy is the lack of consumer content being shared on their platforms which can cause a barrier for community building and engagement. Another downfall is the scope of their targeted audience, which can exclude other potential consumers due to a smaller niche of product and service offerings catering towards the younger generations.

Investment in Innovation, Sustainability & Technology

Investment and research into innovation, sustainability, and technology are necessary in remaining relevant and staying competitive as a company today. New methods of manufacturing, distribution, and consumption; efforts towards sustainability; and latest technology in products and services will contribute to a brand’s competitive edge greatly.

Photo by Imani Bahati on Unsplash

NIKE presented strong goals regarding their efforts in innovation and sustainability and are supporting their goals by staffing in areas of biomechanics, chemistry, exercise physiology, engineering, digital technologies, industrial design, sustainability, and more. NIKE is constantly researching new design and development opportunities to enhance performance, reduce injury, improve comfort, and reduce waste. Product innovations and advancements include the creation of NIKE Air, Zoom, Free, Flywire, Flyknit, Flyweave, FlyEase, Dri-Fit, ZoomX, React, and Adaptive tech — all tested and approved by real athletes and industry professionals.

Regarding sustainability, NIKE is fully accepting the challenge to work creatively beyond the “constraints of finite natural resources” and focus on the colour, construction, and material innovation of products as well as a ‘Move to Zero’ initiative to create a zero carbon, zero waste future. They released collections like ‘NIKE Plant Color’ which utilized plant-based dyes, sneaker lines like ‘VaporMax2 Random’ which uses leftover ‘Flyknit’ yarn in its manufacturing, and materials like ‘Flyleather’ which is made with 50% recycled natural leather fiber. All of NIKE’s football (soccer) shirts are made from recycled plastic bottles which has led to more than 6 billion bottles diverted from landfills since 2010. NIKE is now the leader in utilizing recycled polyester across the entire textile and apparel industry.

By 2025, NIKE wants to reduce their GHG (greenhouse gas) emissions in their facilities by 70% through renewable electricity for both facilities as well as their fleet, usage of environmentally friendly materials, and with alternative fuels. They currently use 100% renewable energy in the United States and Canada within their owned facilities, 48% of all energy used globally is renewable energy, and they’ve reached a 10% decrease in energy consumption per pair of footwear produced since 2015.

Regarding the supply chain, they aim to decrease the design to delivery time through better sourcing, automation, and new methods of manufacturing (including manufacturing that is closer to the targeted market); decrease costs to improve margins; increase efficiency; and digitalize the supply chain.

Adidas’ focus on innovation is seen in their usage of robotics and new technology in production and the infusion of oxygen and light into sneakers for enhanced personalization and speed. The miCoach technology allows users to track/record their performance while wearing shoes with this feature integrated into it. They aim to never run out of stock by adding new designs throughout every season and in some cases, producing specific to orders. The younger audience is a huge market for footwear brands, and adidas has contributed to unique shopping experiences that mixes technology with retail shopping with social mirrors and touch screen purchasing.

Adidas also has eco-conscious goals that include reducing their carbon footprint in both the materials used to create their products, as well as the resources used to drive their operations. By 2025, adidas aims to produce 9 sustainable articles for every 10 made by using recycled materials, reworking existing articles, and utilizing natural and renewable materials. The company also wants to become climate neutral by 2050 through zero-carbon initiatives throughout the value and supply chain and within all operational facilities. Their Parley for the Ocean lines have created 3 new ‘UltraBoost’ sneakers from plastic waste from the ocean.

Innovation in Puma has been a large part of their brand for as long as they’ve existed, as they were the first company to feature velcro on performance footwear. Today, they focus on creating products that adapt to the human body and the surrounding environment and creating unique consumer experiences. Their ‘Fit Intelligence Training Shoe’ adapts to the foot and the tightness of the laces. Like adidas, PUMA also created a shoe that tracks performance digitally as well.

Puma has committed to an initiative they call ‘10FOR25’ which are 10 sustainability and social targets that align with the United Nations Sustainable Development Goals to be completed by 2025. Fair working conditions, control of pollution, and integrating more sustainable materials throughout the entire supply chain is a priority to Puma.

A huge downfall of all these companies — that may not seem so in terms of financial gain, production volume, and profit margins — is the exploitation of labour, land, and resources in both countries historically used in offshore manufacturing and countries recovering from the effects of colonialism and imperialism such as China, Vietnam, Indonesia, and Cambodia. While this is a common occurrence by actors in the apparel and footwear markets, it should not be retained as the norm moving forward. In this industry, it is common for companies to share suppliers, therefore it is a widespread issue that cannot be addressed by one brand. NIKE has expressed intentions to move manufacturing closer to targeted markets which is a first step in alleviating oppression and hierarchy caused by transnational corporations — but can also be attainable through fair wages and compensation, safe working environments, responsible material and chemistry sourcing and disposal, reparations and engagement within communities, and more.

Collaboration with High-End Brands

Scarcity and hype around brands can increase the market value of products, especially in terms of sneakers. There is a huge sneaker culture worldwide, with rare collector items and expensive resales. A popular trend is seen by high-end luxury brands collaborating with mid-range brands such as NIKE, adidas, and PUMA, creating hype around limited edition releases that sell out quickly and are highly sought after by collectors. NIKE, adidas, and Puma have all partnered with luxury brands for small batch lines — listed below are the most notable and popular collaborations for each respective brand and their relevant subsidiaries.

Photo by Will Breen on Unsplash

NIKE (Converse, the Jordan Brand): Off-White, Dior, Supreme, Comme des Garçons, Sacai, OVO, Rick Owens, Fear of God

adidas (Reebok): Yeezy, Prada, VETEMENTS, Pharrell Williams, Palace, BAPE, Chanel

Puma: Balmain, KITH, Alexander McQueen, J. Cole

NIKE has definitely collaborated with the most influential streetwear and luxury brands, and the Jordan Brand has the highest resale value overall for a shoe brand. The average resale value of the Air Jordan is 1816% of the original price, while the Yeezy Boost has an average resale value of 589%.

It appears that consumers of the sports apparel, footwear, and equipment industry are focused not only on the performance, price, and quality of products, but also the innovation and creativity surrounding the brand — whether that is through collaborations; celebrity and athlete endorsements; unique shopping experiences; sustainability, diversity, and inclusion efforts; scarcity/rarity of products, and/or other aspects. It is hard to stand out with the infinite digital content being consumed by users, therefore brands like NIKE, adidas, and Puma must fight for their brand’s reputation and awareness in non-traditional ways. NIKE has a competitive advantage overall due to international popularity, brand recognition and endorsements, strong social media followings, successful marketing campaigns, and hype around products.


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