Nike finds value in acquisitions

Nike was thought of for a long time as strictly an athletic shoe and apparel company.  Today, that has changed a bit.  The change can be attributed to two acquisitions that Nike has made in the last fifteen years that have stuck.

In 2002 Nike's acquisition of Hurley, a surf-style apparel company, provided us with a small signal of the direction that Nike was heading.  There was a higher demand for urbanwear, and the younger generation had no interest in, or loyalty to Nike.  The Hurley brand gave them the opportunity to reach that demographic.  This acquisition wasn't enough, though.  Nike wanted to give itself the best chance to reach these consumers, so they acquired a brand that may have the most iconic shoe in history – Converse and the Chuck Taylor All-Star® basketball shoe, first sold in 1923.  Nearly one-hundred years later, the shoe is still being sold.  The outward appearance is still pretty much the same, but the structural technology has changed to make the shoe more comfortable.

Through these two acquisitions, Nike has been able to gain the loyalty of consumers that it may not have reached otherwise, and has provided itself the opportunity to integrate some of the "feel" from both of these companies into its own products.  This integration has created the NikeLab, which focuses on creating apparel and shoes that are targeted more at fashion/urbanwear than they are at athletics. Many of the shoes that come from NikeLab get their inspiration from some of Nike's earlier shoes.

I believe that NikeLab was inspired by the acquisitions of both Hurley and Converse, because those two companies brought to the table a customer base that Nike hadn't reached before.  This customer base had different tastes than Nike has been used to, and the willingness of Nike to listen to these consumers spurred the innovation that is NikeLab.

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