Here’s How Nike Became a Platform Business

11. April 2016

Date: 11-04-2016
Source: FORTUNE

It followed Apple’s lead.

Platform BusinessPlatform businesses are disrupting the traditional business landscape in a number of ways—not only by displacing some of the world’s biggest firms, but also by transforming familiar business processes like value creation and consumer behavior and altering the structure of major industries.

And if they hope to fight the forces of platform disruption, entrenched companies need to reevaluate their business models. They’ll need to scrutinize what they spend on marketing, sales, product delivery, and customer service and imagine how those costs might be reduced or eliminated in a more seamlessly connected world. They’ll need to examine the individuals and organizations they interact with, and envision new ways of networking them to create new forms of value.

Nike has proven to be one of the most intelligent incumbent companies seeking new ways to survive and thrive in the world of platforms. Some of the competitive steps they’ve taken may seem obvious. They aren’t.

Platform Revolution: How Networked Markets Are Transforming the Economy—And How to Make Them Work for You

Pipeline businesses like Nike have traditionally scaled in one of two ways. Some expand by vertical integration, owning and integrating a greater length of the value-creation-and-delivery pipeline—for example, buying upstream suppliers or downstream distributors. Others expand by widening the pipeline to push more value through it. When consumer goods companies grow by creating new products and brands, it’s an example of horizontal integration. Read the rest of this entry »