Nike Diversification Strategies

Nike implemented a diversification strategy which is a type of corporate-level strategy so as to spread its risk and capitalize on its strengths. In this strategy a company ventures into related or unrelated product lines so as to boost revenue or expand (Marca, 2001). The specific diversification strategy that Nike has ventured into related (concentric) where it decided to add beach-style sport clothing (Hurley) as a business line. Another instance is when Nike acquired Bauer so as to venture into the hockey market that was formerly dominated by Bauer. Other top selling product categories of Nike as a result of diversification are shoes for women and children, basketball, and cross training. The objective for diversification in terms of products and operations is to reduce the company’s dependence on the swoosh brand. Generally, characteristics of related diversification strategy call for the acquired investment to have some relationship to the existing business which is similar to what is happening at Nike.

Reference:

Marca, T., L. (2001). How to Think Like the World’s Greatest Marketing Minds. New York: McGraw-Hill. Pp. 26-34