Nike Enters Strategic Partnerships to Drive Innovation

Phalguni Soni - Author

Oct. 29 2015, Updated 1:05 a.m. ET

Nike unveils new innovation center

At its 2015 Investor Day held on October 14, Nike’s (NKE) CEO, Mark Parker, announced a new innovation hub, called the Nike Advanced Product Creation Center to be based at the Nike World Headquarters in Beaverton, Oregon. Nike has the third-largest design patent portfolio in the United States.

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The center will enable faster adoption of digital and 3D printing technologies, product customization, and enable quicker responses to the customer’s requirements. It will also enable innovation in manufacturing automation and modernization, and higher collaboration between teams including the design, innovation, product, and manufacturing teams. Global rival Adidas (ADDYY) had also announced it was looking at robots manufacturing products at an investor update in March.

New partnerships

Nike announced a couple of other major partnerships. According to Jeanne Jackson, Nike’s President of Distribution & Merchandising, it’s partnering with NOVA, a company owned by DreamWorks Animation (DWA) in creating a 3D digital design system. This will enable Nike to enhance its digital design capabilities and create digital prints and photo type more quickly.

Nike is also partnering with Flextronics International (FLEX) or Flex, to adapt its innovative footwear technologies within its manufacturing and supply chain, and have a quicker response time to consumer requests for customization, and reducing manufacturing waste, among other collaborative features.

Innovation culture

Nike’s company’s Flyknit technology has seen sales for the franchise mushroom to over $1 billion in just four years. It’s also reduced manufacturing waste according to comments by Jeanne Jackson, Nike’s President of Distribution & Merchandising.

Innovation also enables Nike to set breakthroughs for new products, and charge premium prices for them, while increasing unit sales and enhancing profitability.

Nike makes up 0.84% of the portfolio holdings in the iShares Russell 1000 Growth ETF (IWF) and 0.38% of the holdings in the iShares Russell 1000 ETF (IWB).


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