I read a recent FT piece about the challenges at Nike.
They’ve done a brilliant job of taking margin by creating a brand business that adds margin on top of a range of fairly cheap goods. But, in the world of value, people are recognising that they can get alternatives for much cheaper.
Where does Nike go to cut cost? They really have a lean organisation – and their sourcing is from the cheapest factories around (not so cheap if the currencies play rollercoaster?)
Click through on the FT Lex piece here – sorry, I think it requires a subscription. I think you get the point, though… surprising things happen if you are leveraging a brand veneer on top of a vanilla product, when the punters start wanting cheaper vanilla.