Nike Considered: Getting Traction on Sustainability: Strategic Management Assignment, Malaysia

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Nike Considered: Getting Traction on Sustainability

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Date

11/16/2023

Nike Considered: Getting Traction on Sustainability

Rebecca Henderson, Richard M. Locke, Christopher Lyddy, Cate Reavis

Corporate responsibility is no longer a staff function at Nike. It’s a design function, a sourcing function, a consumer experience function, part of how we operate.
—Nike CEO Mark Parker1

When you first say to someone, ‘I need you to design a sustainable shoe,’ they freeze, because they think ‘what does that mean?’ Morality will get you to that conversation, but it won’t get you past that conversation. What we need to do is give people the tools that they can use in real time to create products that are different.
—Nike Corporate Responsibility VP Hannah Jones

In early January 2008, Nike launched the 23rd iteration of its Air Jordan basketball shoe. Like its predecessors, the Air Jordan XX3 was marketed as a lightweight, high-performance basketball shoe. But there was something different about this version of the Air Jordan. With a price tag of $185, the XX3 was designed and developed with the environment in mind, incorporating content from recycled sneakers and minimizing solvent usage. Thrilled at the press his new signature shoe received for its eco-friendliness, Michael Jordan told Nike’s Brand Jordan team, “I want all my shoes made this
way.”

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The XX3 was one of the first high-performance examples of Nike’s Considered strategy, the name given to its sustainable design ethos. As Sarah Severn, a director of Corporate Responsibility at Nike, noted,

We needed to adopt the Considered principles into mainstream product, which is now happening with the Jordan XX3. After many years that’s the Holy Grail that we’re finally starting to get traction on. We recognized in the 1990s that design was the key, but we didn’t have the skill-set in the environmental team to translate what we knew about environmental issues in a way that designers understood. Part of the problem was we didn’t have tools in place. But now what you see with the Considered Index is that for the first time, we have a tool that helps designers make environmental choices about how they design their product.

Scenario planning on Corporate Responsibility-related global trends such as water, health, and energy, alongside increasing worldwide concern about climate change, had fueled Nike’s worries about the company’s supply chain. As with most industries, Nike realized that it was heavily dependent on oil for materials and fossil fuel energy, and was potentially exposed to high oil prices and looming carbon restrictions from anti-climate change regulation. Meanwhile its waste production and use of toxic materials and water also posed major risks.

In December 2004, incoming Corporate Responsibility (CR) VP Hannah Jones recognized that Nike needed to be strategic in its response to its environmental impacts, keeping in mind how ineffective Nike’s initial reaction to accusations of abuse at its contracted supplier factories had been in the 1990s. But how could Nike best do this? Was Considered a good first step? What else might be required?

Nike2
In 2008, with nearly 50,000 product styles across its three product lines, Nike Inc., which included the Nike, Converse, Cole Haan, Umbro, and Hurley brands, was the world’s leading branded athletic footwear, apparel, and equipment company. The Nike brand, a subsidiary of Nike Inc., was organized around more than 30 product categories responsible for designing, developing, and marketing products for consumer niches, such as Running and Basketball. Categories housed key support functions like product engineers and innovators, and maintained connections to Nike’s factory liaison offices and sales and marketing functions. Categories depended on factories’ expertise in managing production processes, which allowed them to focus on product creation and marketing.

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