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Case Study

Has Nike lost its stride?

20 pages

June 2025

Reference: IMD-7-2598

Set in 2024, the case describes the trajectory of Nike’s success and how it had recently lost its way. The company was experiencing its worst slump in more than 10 years. Since 2020, CEO Donahoe oversaw a significant shift away from wholesale, with a focus on direct channels and a suite of apps. However, direct-to-consumer (DTC) sales failed to make up for the losses from previous wholesale partners. At the same time, competition from a new breed of smaller players increased. Critics claimed that the sportswear giant’s product innovations had lagged, allowing nimble competitors to chisel away at its market share. Sales were flat or down in all geographies. In response, Donahoe announced a three-year, $2 billion cost cutting plan that involved laying off 2% of workers, which in turn created a sense of crisis at Nike. Investors also suffered as the stock performed worse than the broader market in the last three years. To make matters worse, a class action suit was filed against Donahoe and CFO Matthew Friend for misleading the market about the company’s underperformance. How could Nike’s top management team execute a strategic turnaround by building upon the company’s core strengths of brand equity, product innovation and sports marketing? They had to reevaluate past strategies, rethink their assumptions and chart a comeback to restore the company to its former growth trajectory and market dominance.

Learning Objective

Understand how an iconic brand can stumble when it strays from its core strengths.
Explore what might be the dangers of pursuing digital dominance over all else.
Understand what is strategic segmentation and the importance of physical and mental availability in a high-visibility product category.
Learn how data traps can blindside and bias strategic decision making.

Keywords

Digital, Decision Making, Channel Design, Direct to Consumer, Customer Segmentation, Turnaround, Data Analysis

Settings

Nike, Consumer Goods, Footwear
2015-2024

Type

Published Sources

Available Languages

English

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