Nike's Strategic Alliances
As mentioned in earlier posts, Nike has had some very profitable and some not so profitable strategic alliances. Noted in our text this week, there are major upsides to alliances, mergers and acquisitions as well as major downfalls. In my opinion, my larger companies at one time or another have most likely or will more than likely experience both sides of the coin.
For Nike, as I've already discussed some of the acquisitions and divestment (Cole Haan and Umbro), I'd like to chat more about the more successful alliances Nike has built. I consider all of the athlete endorsements quite major portion of their business, and I would call those strategic alliances that are very successful. It would seem incredible beneficial to both parties.
Let's take Michael Jordan for example, because why wouldn't we take the biggest and best as an example??! Back in the day, Jordan was an exceptional basketball player. Nike had a vision to develop, manufacture and sell a line of basketball kicks. Enter, a very successful alliance. For Jordan, it was a chance (I imagine) to keep his legacy alive, earn a dollar or two after his body gave up on the court. For Nike, it was an awesome image to affix to shoes, apparel and equipment. Who wouldn't want to be like Mike??
Some of the potential pitfalls of course are still there, and it's always risky to form a partnership, especially over the years. In my example, this has been a very profitable long term successful alliance. Something could have or could go wrong with either Nike's manufacturing/distribution/promotion side, and of course something could go wrong for Michael Jordan causing a negative backlash (think Michael Vick...horrible).
There are always risks, everything in business is somewhat of a gamble whether it's all on your own or creating alliances, mergers or acquiring new business. That's somewhat the thrill of it and part of the game.
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