09 Aug For the past few modules, you have researched and thoroughly explained the major strengths, weaknesses, opportunities, and threats of the organization; and you have discussed why they are p

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Air Jordan Brand SWOT Analysis (Weaknesses)

Dacquarius R. Payne

Excelsior College Student

BUS299: Business and Management Capstone

Dr. Emilsen Holguin

July 17, 2022

The Air Jordans have become too expensive, and this has made purchasing the shoes hard to do. Over the years we have seen many changes when it comes to clothes and shoes. Since the 1980s the price of Michael Jordans shoes has raised significantly. When the first Air Jordan I was released, it was priced at $65 in 1985. With the release of the Air Jordan II & III in 1986 and 1988 the price jumped from $65 to $100. This was only the beginning of how the Air Jordan brand began to raise its prices over the years. The 1980s closed out with the price jumping even more, the shoes went from $100 to $125 with the release of the next two shoes. Moving into the year 2022 the shoes are now being sold for $200, some are even being sold at $225. With the prices going from $65 in 1985 to now $225 it makes buying the shoes harder and has caused Air Jordans to not sell out like they used to. Once upon a time, Nike's Jordan brand was crushing it. It seemed that everyone wanted the brand's new releases, which sold out instantly amid overwhelming demand. (Green, D 2017) Production is a big cause of why the price of the shoes are steadily increasing over the years. There are limited quantities of each of the released Air Jordans now compared to the 1980s and even throughout the 1990s. Back then you did not have to stand in line for hours upon hours for the shoe. You also did not have to worry about doing a raffle because the shoes are not being produced as much. Sneaker bots have also had a bad impact on Air Jordan brand, bots have made it extremely hard to purchase Air Jordans online. The instant the shoes become available online sneaker bots instantly buy all the shoes and the reseller sales them for double or even triple the price.

Michael Jordans name is becoming more dated as the years go by this has had a significant impact on the Jordan brand name. What he was doing on the basketball court helped to drive sales for Jordan brand because everyone wanted to be like him. The under-30 generation and the younger basketball fans in the millennial generation only know MJ as the namesake of a brand for Nike. For instance, I was born in 1992 the prime of his career and he had just released the Air Jordan VII. He also just won back-to-back championships as well as the gold medal in the Olympics that year. My parents and I watched his greatness and dominance from the time I was born until the time he retired in 2003. I had 11 years to experience Michael Jordans impact on and off the court with the release of a new shoe every couple of years. He was a household name in the 1980s until the early 2000s, now he’s a figure of the past. It’s almost as if he played 60 years ago. My generation and the generation before myself were able to witness the Michael Jordan experience. So how can my children really understand his impact if they weren’t alive when he retired in 2003? You have sources you can go to like YouTube for old highlights of iconic moments during his career but him being somewhat irrelevant to today generation has and will continue to impact his shoe sales into the future. He had an amazing image and brand management idea to remind the younger generation about who he was. This 10-part series was aired on ESPN and was titled “The Last Dance.” It is the highest-rated ESPN documentary ever, at 6.1 million viewers, compared to a previous high of 3.6 million for a 2012 program. It held strong in subsequent episodes as well. (Lichtenberg, N 2020)

References

(2021) Ernest, M https://www.inputmag.com/style/nike-jordan-brand-sneakers-price-higher-getting-more-expensive-2022

(2017) Green, D https://www.businessinsider.com/nike-jordan-brand-has-problems-2017-8

(2020) Lichtenberg, N https://www.businessinsider.com/last-dance-proves-michael-jordan-is-the-greatest-brand-manager-2020-5#the-last-dance-as-a-phenomenal-exercise-in-brand-management-1

https://www.footlocker.com/history-of-air-jordan.html

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Nike’s Air Jordan Brand SWOT Analysis (Opportunities)

Dacquarius R. Payne

Excelsior College Student

BUS299: Business and Management Capstone

Dr. Emilsen Holguin

July 31, 2022

Opportunities for Nike's Air Jordan Brand Company

Wearable technologies

Nike has created a lot of products, but there is still plenty that can be innovated. With Nike recently expanding its technological capabilities concerning fitness and wellness, it can explore integrating digital features with Air Jordan. For instance, Nike can integrate creative wearable digital technology into the shoe to monitor the wearer's physical activity. Wearable technology can track data, collect it, and interpret it in meaningful ways to enhance athletic performance and enhance the athletes' overall health and quality of life (Nazeer et al., 2020). Since athletic clothing is still a relatively unexplored area of the fashion industry, combining technology with it can be advantageous. Nike can hold first mover advantage in the use of smart wearable technology in sport's shoes, with the market predicted to grow by at least 15% annually (Modo Bio, 2022)

Revenue driver

Because of the incredible strength of the Jordan brand image, as well as the good financial returns it has generated for Nike in the past, one can expect the Jordan Brand to remain one of Nike's core growth drivers in the near future (Du et al., 2022). Nike has the ability to sell its items directly to customers and less through merchants, thanks to the power of its brand image. By eliminating middlemen through direct sales, the company can grow its profits significantly. In addition, Nike's affiliations with the world's top athletes would also help Nike to access a huge media audience which ultimately boosts sales.

References

Du, M., Guo, Y., Wei, X., & Zhao, J. (2022). Analysis of Business Model of Leading Sportswear Company. https://www.clausiuspress.com/conferences/LNEMSS/WTED%202022/Y0886.pdf

Modo Bio. (2022, February 16). These statistics on wearables help us better understand what the future holds. Modo Bio -. https://www.modobio.com/these-statistics-on-wearables-help-us-better-understand-what-the-future-holds/

Nazeer, A. M., Sasikala, S., Kumar, M. S., Yogeshwaran, M., Veeramani, K., & Vigneshwaran, R. (2020). Arduino Controlled Cooling Smart Footwear. https://www.academia.edu/download/65356821/6831.pdf

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Strengths of Air Jordan Brand

One of Jordan brands biggest strengths is being a part of Nike, this gave Jordan the power to grow, thrive and take risk throughout the years. As of April 2019, Nike’s Jordan Brand was worth more than $3 billion in wholesale revenue. The annual take by the company’s namesake, Michael Jordan, is about $130 million (Watson P. 2021) Nike throughout the years has had Michael Jordan’s back when it comes to marketing and financing. Michael was the main reason Nike went from a scrappy underdog in the 1980s to one of the largest and most valuable consumer brands in the entire world. In return Nike gave Michael Jordan the freedom to expand beyond just shoes. That turned out to be a very wise and lucrative decision, which helped Michael become a cultural icon and billionaire. Nike has generated over $40 billion in revenue over the last twelve months. (Badenhausen 2020) That is 60 percent more than its next closest competitor Adidas and which is still significantly larger than it was before they even signed Jordan to an endorsement contract. Nike and Jordan brand show no signs of slowing down as they continue to be in a great partnership, this relationship has been the main reason why Nike continues to leave its competition behind them.

Another strength of Jordan brand is Michael Jordan himself, easily the most recognized and iconic basketball player of all time. This helps to drive the sales of his shoes and merchandise, which helps brings in big time revenue. Due to him being such an icon people wanted to “be like mike” he capitalized on this opportunity by making clothes and movies. This included jackets, shirts, and underwear this was only a success, because everyone wanted to do what Michael Jordan did. In the prime of his career, he decided to do a movie called Space Jam. The idea for Space Jam began with a Nike commercial, broadcast during 1992's Super Bowl XXVI, which pitted "Air Jordan" and "Hare Jordan" (Bugs) against a group of basketball-playing bullies. (Ott T. 2020) Space Jam earned a total of $320 million worldwide, also the soundtrack along with the move helped to generate $1.2 billion in merchandise sales. The world wanted to do whatever it took to reach the level of success that he had. He is a marketing genius due to capitalizing on his name image and likeness. Since 1984 his total salary as an NBA player was $90 million, but since then he has earned $1.8 billion from his partners Nike, Hanes, and Gatorade. (Forbes 2022) This was only possible, because of the marketing genius Michael Jordan is.

References

(2020) Badenhausen, k https://www.forbes.com/sites/kurtbadenhausen/2020/05/03/michael-jordans-1-billion-nike-endorsement-is-the-biggest-bargain-in-sports/?sh=34366eab6136

(2021) Watson, P https://www.sportscasting.com/michael-jordans-3-billion-relationship-with-nike-almost-ended-prematurely-because-of-a-broken-foot/

(2022) https://www.forbes.com/profile/michael-jordan/?sh=1d751d872d83

(2020) Ott. T, https://www.biography.com/news/michael-jordan-space-jam

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Nike’s Air Jordan Brand SWOT Analysis (Threats)

Dacquarius R. Payne

Excelsior College Student

BUS299: Business and Management Capstone

Dr. Emilsen Holguin

July 3, 2022

The Emergence of Counterfeit Products

The sales and popularity of Nike's Air Jordans might take a major hit from counterfeit items. The possibility of dealing with fake goods has increased as the company has expanded internationally (Zhu, 2022). Many vendors and shops provide knockoffs for a lesser price. The low-priced items bear the Air Jordan brand even if they are produced with cheap materials. This is a risk that consumers will perceive a decline in product quality and view Jordans as a less reliable brand. The company should focus on addressing counterfeit products, because in 2018 five people were sentenced for 20 years for trafficking counterfeit Nike Air Jordan sneakers. Allegedly the individuals made over $70 million in fake sneakers, making massive profits from fake shoes. “These five individuals are alleged to have been a part of a large-scale counterfeiting scheme, importing nearly a half-million pairs of knock-off Nike sneakers” from Homeland Security Investigations special agent-in-charge Angel M. Melendez. (Daniels, 2018)

Increased Competitive Pressure

Although Nike's Air Jordan brand dominates the athletic sector, the corporation faces threats from competitors and newly developing companies. Due to increased competition, Air Jordan must increase its marketing and advertising budget. In the fiscal year 2020, Nike spent $3.5 billion primarily on-demand development and marketing (Liu, 2021). Nike's Air Jordan's best chance of dominating the competition is to provide novel items specifically catered to athletes' requirements

References

Daniels, T (2018, August) https://bleacherreport.com/articles/2790072-5-people-charged-with-trafficking-73-million-in-fake-air-jordan-sneakers

Liu, X. (2021, March). NIKE's General Company analysis based on its 2020 annual report.

In 6th International Conference on Financial Innovation and Economic Development (ICFIED 2021) (pp. 799-803). Atlantis Press.

https://www.atlantis-press.com/proceedings/icfied-21/125954238

Zhu, X. (2022, May). A Comparative Study of Nike's Marketing Strategies in China and the US.

In 2022 International Conference on Urban Planning and Regional Economy (UPRE

2022) (pp. 467-470). Atlantis Press.

https://www.atlantis-press.com/proceedings/upre-22/12597449