Business analysis for Uber and Nike
Introduction
Nike and Uber have undoubtedly been incredibly successful in recent years. Uber in particular has been wildly successful as a result of the technological developments that have occurred in the age of the smartphone; however, Nike’s rise can also be attributed, at least in part, to the technological boom that has occurred since the 1990s. Marketing, branding, and engagement in coherent advertising strategy has been incredibly important for Nike over the years as well (Goldman and Papson). Nike and Uber have vastly different products, and it stands to reason that their marketing strategy and business plans would engage the consumer very differently; however, in reality, there are key similarities in the ways that these two businesses have interacted with their customer base over time (“Nike and Uber Slides”).
One of the interesting aspects of the new type of economy that has been developed as a result of changes in technology and development is the fact that the new economy is increasingly individualistic ("Rise of the Creative Class and Design Revolution"). Whereas unions might have been one of the key features of the economy at the turn of the twentieth century, the twenty-first century is very much about the rise of the individual. Part of the reason for this change can be attributed to the fact that technology now allows people unprecedented freedom of information; creativity and self-development is much easier than it has ever been in the past, and being a self-employed person is possible thanks to the Internet as a whole. Freelancing, then, is something that is made possible for many more people because of these technological developments ("Rise of the Creative Class and Design Revolution;” Florida).
Another interesting aspect that contributes to the libertarian slant to the current economy is the fact that now freelancing is a potential employment opportunity for more people—meaning that there is greater competition in this sector as a whole. Freelancers must be self-centered in their focus, because it is their own ingenuity and drive that will allow them to be successful. This is not meant to be denigrating to those who choose freelancing as an option—however, without the protection of a business community, many freelancers must make decisions that more significantly benefit their personal needs ("Rise of the Creative Class and Design Revolution"). Freelancers are certainly more libertarian in nature than traditional workers, which Hill notes is part of the “raw deal” of the new economic structure.
Nike has more of a traditional company structure, but Uber has a very libertarian approach to business. Uber allows the individuals who work for the company to engage in planning their own schedules and provides them with the infrastructure to find fares and drive different routes; however, Uber drivers are largely independent and are unlikely to work closely with any other Uber drivers (“Nike and Uber Slides”). As the consumers demand, the company provides—but in reality, it is the freelancers doing the providing, not the company as a whole (“Nike and Uber Slides;” Hill). Hill takes the perspective that the current market is almost Randian in nature; as though companies like Nike and Uber can engage in any activity and be excused because of their purchasing power. While companies do indeed treat employees badly in some cases, Nike’s experiences in the 1990s are a perfect case of what can happen to a company when it extends too far into libertarian policies (The Economist Staff).
Egalitarian Implications and Consequences of Nike and Uber
There are some thinkers who suggest that the development of a more significant freelance economy has had an egalitarian impact on the market as a whole. When writing about the “long tail” of the current market, Anderson suggests that technology has essentially restructured the demand curve; the traditional demand curve was artificially created by the limitations of the marketplace. However, technology has allowed for a more egalitarian structure to the demand curve and thus, a more egalitarian marketplace as a whole. Rather than having to rely on outside market forces to determine the appropriate products to use, people are now able to determine the products they would like to use based on the benefits and strengths of those products. For instance, Uber allows for a “flattening” of the market because the consumer is no longer bound to the traditional understanding of transportation. It allows the user to bypass more expensive and difficult methods of transportation—like taxis—and utilize a completely different and more user-friendly method. Nike has long relied on the marketing strengths of the company to sell their product; Uber has interacted with a different business niche and business model with its freelance-heavy structure.
Income Inequality and Business Models
Nike is, perhaps, globally renowned for its income inequality (The Economist Staff). The individuals at the highest levels of the organization are paid significantly more than the workers who create the products; the CEO earns more than 1,000 times more than the average worker in Indonesia or other parts of Asia (The Economist Staff). The manufacturing sector at Nike is particularly horrible—many retailers still use sweatshop labor, and the income inequality within the organization is quite significant. Even within the manufacturing division, there are significant income disparities. The high end assembly factories are in Taiwan and Korea, while the low end assembly factories are in China, Indonesia, and Vietnam (The Economist Staff).
Hill suggests that the freelance economy has been detrimental to the state of income inequality in the United States as a whole, and that Uber is a part of this income inequality problem. No longer, Hill suggests, are the fates of the employer and the employee tied together; the employee is replaceable and the employer can move on to other employees with ease (Hill). However, it seems that in a flagging economy, the growth of a strong freelance market could be a potential positive in a way Hill does not foresee; while employers are no longer completely linked and dependent upon employees, employees are also no longer linked to employers that have the potential to be demanding and discriminatory. Income inequality does indeed still exist, but the freelance economy is not necessarily an immediately predicating factor.
Policy Recommendations
Nike and Uber are experiencing vastly different types of growth. While Nike’s exposure and marketing strategy should focus on building value—after all, Nike is focused on providing a lifestyle product rather than a consumable product—Uber needs to extend its reach into new and different markets. Because of the flexibility that Uber offers its workers, there are potential markets that are very significant for the company: for instance, Uber is still not available in certain American cities like Las Vegas, where it would undoubtedly be extremely effective and lucrative for both the freelancers and the company as a whole.
Anderson suggests that there are changes occurring in the economy because of the nature of what he calls the “long tail.” Demand is not limited to the traditional demand curve, he states; instead, demand is variable and niche economies can easily be created in which small business and organizations can fit cleanly. Uber and Nike both have the opportunity to expand into some of these “long tail” niches; Uber in particular could easily fit into some of the stranger niches in the American market using its extensive freelance work force.
Discussion and Conclusions
There is no doubt that technology has fundamentally changed the market, particularly in terms of the way that companies interact with the consumer. However, the fundamentals of the market economy have not changed—the big difference between today’s economy and the past is the speed at which information (and thus, trends) can travel. Companies like Uber and Nike have much more power and freedom to explore new avenues and new business strategies than they have ever had in the past; these changes have allowed the companies to expand into new and different business strategies and structures.
Nike has established itself as a brand that is able to adapt to new environments and succeed with new business strategies and new marketing plans regardless of changes in the environment. The Nike “swoosh” was designed in 1971 for a pittance, and that brand image has become one of the most recognizable images today (“Nike and Uber Slides”). While Uber is a company that is exploring new and different business strategies—with a different end goal—both Uber and Nike have demonstrated an almost preternatural ability to “read” the market, so to speak, and implement creative solutions for potential problems before they cause the company to struggle (Goldman and Papson; Hill).
Works Cited
Anderson, Chris. The long tail. Nieuw Amsterdam, 2013.
Florida, Richard. The Rise of the Creative Class--Revisited: Revised and Expanded. Basic books, 2014.
Goldman, Robert, and Stephen Papson. Nike culture: The sign of the swoosh. Sage, 1998.
Hill, Steven. Raw Deal: How the" Uber Economy" and Runaway Capitalism Are Screwing American Workers. Macmillan, 2015.
"Nike And Uber Slides". 2016. Presentation.
The Economist Staff. "Workers On Tap". The Economist. N. p., 2015. Web. 14 Mar. 2016.
"Rise of the Creative Class and Design Revolution". 2016. Presentation.
