Nike’s Footwear Director for Emerging Markets was challenged with “expanding the playing field” in emerging markets with a range of affordable, durable, and easy-to-produce sports shoes. The goal was to effectively reach the huge untapped segment of “Tier 3” countries, characterized by a population of 1 billion and an average of $2,000 purchasing power parity. By January 2001, the initiative had sold only 404,520 pairs in China. Compared to the booming 1.2 billion population of China, this was disappointing. Now students must determine what the team should do to persuade senior management to support and continue the project.
Expanding the Playing Field: Nike’s World Shoe Project (A)
by: Stuart L. Hart, Ted London
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After reading and discussing the material, students should:
- Identify the differences in business strategies for developed versus developing world markets and explore the disruptive challenges that can face a company attempting to tap emerging markets;
- Offer students a better understanding of the potential internal constraints and need for new business models when exploring emerging markets in developing countries;
- Investigate the sustainability issues surrounding market entry into the Bottom of the Pyramid.