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Jeffrey Izon
ENGN0090
Professor Hazeltine
Nike Global Womens Fitness
Abstract
Nike should invest heavily in womens fitness . They should be less concerned with
gender and view womens fitness from a strictly monetary standpoint . Nike should also
rethink its organizational structure . They should focus research on connecting with and
approaching women . At the same time , they should also invest in a way to distribute entire
collections to many stores simultaneously . Finally, they should change the companys
product-driven mentality to a more consumer-oriented approach , and while doing this ,
orchestrate change more quickly , and on a larger scale .
Overview
In this paper I will first give a brief history of the company from the beginning of the
company to the beginning of Nikes global womens fitness division . From there I will give a
much more in-depth description of the history of global womens fitness division and how it
came to be. I will then go into the critical issues surrounding the Nike Global Womens
Fitness. Finally, I will analyze these problems and make recommendations to resolve them .
Lastly, I will summarize what took place .

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Background
In 1962 Phil Knight and Bill Bowerman began with a simple idea of bringing lowpriced, high-tech athletic shoes from Japan to compete in the U .S. athletic shoe market ,
which at the time was dominated by German imports . With this collaboration Blue Ribbon
Sports was created in 1964 . Blue Ribbon Sports imported shoes from Onitsuka Tiger , and
Knight would make sales at high school track meets with Bowerman heading the designing
aspects of the shoes . In 1966, BRS opened its first retail store , located on Pico Boulevard in
Santa Monica, California . By 1971, the relationship between BRS and Onitsuka Tiger was
nearing an end as BRS prepared to launch its own line of footwear , which would bear the
newly designed Swoosh . By 1972, BRS introduced its first line of Nike shoes , with the name
Nike, from the Greek goddess of victory . In 1978, BRS, Inc. officially renamed itself to
Nike, Inc. Beginning with Ilie Nastase , the first professional athlete to sign with BRS/Nike ,
the sponsorship of athletes became a key marketing tool for the rapidly growing company .
By 2006, Nike had grown into one of the worlds most well-known and renowned
brands and a major competitor in athletic footwear , apparel , and equipment . Nikes corporate
mission statement was , to bring inspiration and innovation to every athlete in the world .
This motto coupled with notion that , if you have a body , you are an athlete , encompassed
the ideals of Nike.
Similar to its beginnings from one shoe , Nike had not strayed from its product-driven
mentality, with three main business focuses footwear , apparel , and equipment . In fiscal

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2006, footwear accounted for 66 percent of the companys business , with apparel at 28
percent, and equipment at 6 percent . It was also held that Nike held approximately 38
percent of the market share in global branded footwear . However , Nike owned smaller pieces
of the market in apparel and equipment .
Nike operated as a matrixed organization , which is to say that there was a matrix of
branches within branches of each sector of Nike . The first dimension of the matrix was the
different business units that represented the lead dimensions of the company . The second
dimension of the company was the four main geographic regions that Nike sold to , the
United States, Europe, Middle East , and Africa , Asia-Pacific , and the Americas . The third
dimension consisted of Nikes nine sports categories , which included running , basketball ,
tennis , soccer , and golf.
Over the years Nike had considered adding gender to its already complicated matrix .
In the early 90s the company created a womens team , and signed endorsement contracts
with many famous female athletes of the time . In 1997, footwear dedicated three
professional athletes to truly bring a womens perspective to its running category . In 2001
Nike created its first global womens footwear division .
The first major change that the division made was engineering shoes to cater to a
womans biomechanics , rather than , put a pink bow on it, and then call it a day, as joked
by Mary Slayton , director of marketing intelligence . The next main stride in building the

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global womens footwear business was a marketing project called Nike Goddess , which was
a way for the company to rethink how it sold to its female customers .
In 2004 the senior management started a project called Change the Game in order to
discern which division , outdoor, bags, mens training , value footwear , and women , would be
able to drive the companys next leap forward . The first phase of the womens task force
started with internal research . They first had to determine their competitive position . In this
they found that no one had a dominant mindshare in the womens fitness market . For this
reason, Adidas hired celebrity designer Stella McCartney , Puma created its Olive brand , not
to mention other competitors such as Lulu Lemon and Under Armour . Nike also had to
analyze the targeted consumer . They calculated that women spent $7 trillion a year . Their
target consumer was , a 22-year-old, confident , slightly irreverent woman who wanted to
work out hard and look good , referred to as Sweat Beauty .
Phase two consisted of developing an overreaching plan for approaching the market; a
$13 billion market that was potentially anyones for the taking . One of the biggest steps
towards this would be aligning the calendar so all facets of Nike would be on the same page .
They decided to engage in an experimental 21-month calendar that had seemed to work in
Europe.
The third and final phase included operating outside the matrices in order to prove
that womens fitness had the potential , and could in fact outpace growth in other areas of the
company. To do this, a core team was put together and specific positions were designated .

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This core team included Mindy Grossman , Emma Minto, Darcy Winslow , and Jodi Sittig .
Now they had the task of Making It Happen .
Critical Issues
The most prominent issue that Nike Global Womens Fitness faces is the fact that
Nike is an overly testosterone-driven company . Many people feel that success in the
womens sector might have adverse affects on the mens section of Nike . The next issue the
company faces is the complexity of its matrixed organization and the disorganization that
results from it . They also need to organize how they distribute their product . Next, Nike
needs to know how to connect to and approach women . Finally, they need to change the
companys product-driven mentality to a more consumer-oriented approach , and while doing
this, orchestrate change more quickly , and on a larger scale . If they could do this , then they
could also solve the issue of no one company having a dominant mindshare in womens
fitness .
Analysis
In Lieu Of
The testosterone-driven nature of Nike is an evident encumbrance for womens Nike .
According to Darcy Winslow , global general manager for womens footwear , apparel , and
equipment , there was a time when , many of the womens shoes had been built using molds
for men that were taken down to fit a womans foot , despite the fact that for any given foot

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length women weighed 15 percent to 40 percent less than men (and therefore required
different shoe designs and dynamics) . However, Winslow goes on to state that when they
started womens footwear , every single show was made based on a womans
biomechanics , a noticeable stride from hand-me-downs . If womens fitness is able to
communicate to their female consumers in an appropriate Nike voice they can enhance the
brand, not detract from it .
Strategic Planning
One of the most difficult problems in Nike was its matrixed organization . The first
dimension of the matrix was the different business units that represented the lead dimensions
of the company . The second dimension of the company was the four main geographic regions
that Nike sold to , the United States , Europe, Middle East, and Africa , Asia-Pacific , and the
Americas . The third dimension consisted of Nikes nine sports categories , which included
running, basketball , tennis , soccer , and golf. Due to these matrices , organizing anything
across the company was near impossible . Nike should try and facilitate one encompassing
calendar to unify the entire company . For instance , in Europe they experimented with a 21
month calendar in order to manually handle the production process . With strategic planning ,
Nike could stop impeding itself due to miscommunication .
Marketing Research
Marketing research is an essential aspect for Nikes Global Womens Fitness to
explore. Research had shown that with 20 percent of the styles on the production line , you

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get 95 percent of the revenue . But what was this 20 percent that women wanted? Finding out
exactly what women want is Nikes greatest goal . According to Winslow:
Women dont do fitness . They run, they walk, they do cardio machines , they
dance, they do yoga . So thats what led us to a micro-segmentation approach .
Previously, most of our womens products were nonspecific , so womens real
needs got marginalized . We discovered that we had to get much more specific
regarding whats different about dance versus running versus cardio . Because
any woman can tell you , for example , that it doesnt work to wear running
shorts during yoga .
Not only do they need to find out what women want , they also need to find out who she was ,
and how to communicate with her .
Target Audience
According to Pat Zeedick , general manager of equipment and womens for the EMEA
region:
When we look at our consumer in Europe , she wasnt driven by I want a
perfect body. I want to compete . Im an athlete . Her position was , Hey,
exercise should be social , it should be fun. And, for me that means dance . So
talk to me about something that I have a passion for and love to do , but at the
same time is a blast and I can do with my friends and then go out afterwards .

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Nikes target female was defined as , a 22-year-old, confident , slightly irreverent

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something to earn the body she had; a body covered in Nike .

Nike MY BUTT is big ad. 2005.

Recommendations

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The most prominent problem facing Nike Global Womens Fitness is the testosteronebased nature of Nike . According to Mindy Grossman , the companys former vice president of
global apparel , Some of the issue in the past was that there was a faction within the
company that felt if we were successful in the womens business , it would erode out mens
business and we would lose some of our testosterone . However , if womens fitness is able
to communicate to their female consumers in an appropriate Nike voice they can enhance the
brand, not detract from it . One great idea that Nike came up with that they should definitely
pursue is the creation of Nike Goddess stores . The average woman , wanted to shop at the
mall , in catalogs , and at boutiques on High Street , but most of our distribution was through
retail sporting goods stores .
Nike needs to focus on the difference in consumers . Nike has historically taken the
male elite athlete , hero-worship model . This model is obviously not fit for the female
customer . Nike needs to find a way to communicate and connect with its female consumers
and tap into their $7 trillion spending power . The best way to combat the underlying sense of
sexism against the female consumer market is to simply show that they deserve a chance . As
Mindy Grossman put it , Ultimately, we proposed what I would call a semi-virtual
organization . Until the womens team could prove its model (by outpacing growth in the rest
of the company) , it recognized that creating a dedicated , cross-functional unit that added
another dimension to the matrix was out of the question . After which, the womens team

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more than proved their model. Therefore , I recommend to Nike that they should invest in
womens fitness .
Another problem that plagued Nike was its matrixed organization . Such a complex
establishment makes it more than difficult to coordinate things across the company . One
suggestion I have for them is to place more focus on each facet of the matrix , which might
solve the problem of miscommunications . The problem Nike had with the matrix was that
because it was so complicated, it hindered communication between different sectors of the
matrix. If staffing is an issue , they should hire more people whose sole job would be to look
after certain aspects of the matrix . That way, if things need to be coordinated across the
company, there isnt confusion about who is in charge of what aspect , and how it should be
handled . Nike should either dematrix the company or focus on improving the communication
within the matrixes.
Distribution was adversely affected by the complication of the matrices and the many
calendars . Womens Fitness had trouble distributing entire collections to thousands of stores
at the same time . A simple answer to that problem would be an increase in staff . With more
of a staff to oversee the distribution , there is less chance of anything going astray . Also, they
had noticed that about 20% of the production line accounted for 95% of their revenues , so I
recommend that they focus on making sure that at least 20% hits every store at the same
time , and worrying about the other 80% later . As Maithili Shenoy , global director of supply
chain strategy and development , noted, We have to figure out which doors are more

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important to total sales and give them priority when it comes to delivering a collection .
Otherwise, if everything is a priority , then nothing is a priority . I suggest that Nike focus
not only on which doors are supplied first , but also which products should be at those doors .
Lastly, Nike needs to change the companys product-driven mentality to a more
consumer-oriented approach , and while doing this , orchestrate change more quickly , and on
a larger scale, by focusing more on the consumers that will be buying their product and how
to get the product into these consumers hands . Focusing on the consumer and connecting
with the customer is essential for Nike to continue growing . Nike needs to invest in correctly
marketing to both men and women , but separately and differently . Nike cannot market to
men and women in the same manner, and Nike would greatly gain from properly marketing
to each gender. Again, a new staff may be a possible solution . If new minds are brought into
the collaboration , then they may have new ideas and different ways of looking at things .
Also, since they would not have been part of the previously product-oriented Nike , they
would not be tainted by those notions , which would allow them to provide solely unsullied
ideas .
Summary
Nike has a great opportunity to expand . They also have the opportunity to gain the
dominant mindshare in a very lucrative market . If they can rethink their organizational
structure , they can reduce how much they hinder themselves , and potentially reap large
monetary benefits . They should also focus research on connecting with and approaching

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women . It has been found that women on average spend $7 trillion a year , and to be able to
tap into that field would be a major step for Nike . However, with this step, Nike will need to
change its mentality from product-based to consumer-based . If they are successful in
connecting with the customer , they will most assuredly profit from investing in Nike Global
Womens Fitness.