Week 4 Application Assignment - Megan Samuels

Does the Nike – Apple Relationship Stand Up to the “Eight I’s That Create Successful We’s”?

In her excellent paper, Collaborative Advantage: The Art of Alliances (HBS, Jul-Aug., 1994), Professor Rosabeth Ross Kanter has put a more human face on the impersonal world of corporate alliances.  She adeptly approaches with a humanistic point of view and paints these relationships as, well, relationships; the journey from courtship to marriage (and sometimes divorce).
Kanter states that “business alliances are living systems, evolving progressively in their possibilities” (HBS, 1994, p. 97).

Last week there was an article on CNNMoney.com about Nike’s new marketing exploits which I can save for another week.  What struck me as really interesting was the partnership that Nike formed with Apple.

This all began with Nike’s partnership with Google when in 2006 they started experimenting with social networking and online communities through Joga.com, that allowed soccer fans to upload videos showcasing their talent (Ramaswamy, 2008) and then wait for feedback from the others online.  More than a million fans joined in the fun and Nike was learning a lot about their customers (cite) and used this as a platform to build customer relationships “on a scale and scope as never before” (Ramaswamy, 2008, p. 10). 
Just after Nike began to build their relationships with online customers, Nike engineers began noticing that people running around the Beaverton campus were listening to their Apple iPods (Cendrowski, 2012 Feb. 13).  Thus Nike+ was born and so was the partnership between Nike and Apple.

Now more than 5 million runners with Nike+ technology can synchronize their running data with their iPods while getting digital coaching (Cendrowski, 2012 Feb. 13). This is a boost for runners using the technology, but an even bigger boost for Nike to track “their customers’ behaviors and patterns” (Cendrowski, 2012 Feb. 13).  Though not confirmed, running division sales as said to be up by 30% to $2.8 billion.

So do Apple and Nike partnership pass the “I” test? (Kanter, 1994)  Let’s find out:

1. Individual Excellence – It’s an indisputable fact that both Nike and Apple are leaders in their industries and that the two technologies, shoes and computers, have built the relationship into a positive one.

2.  Importance – For six years now the relationship appears to “fit major strategic objectives of the partners” (Kanter, 1994, p. 100) in that Nike and Apple are not only making lots of money, but that Nike’s desire to forgo “top-down advertising campaigns” with people like Tiger Woods to using social media and other digital channels to advertise their brand (Cendrowski, 2012 Feb. 13).  
3. Interdependence – For the Nike+ feature that has become so popular, one company could not have done with without the other.  The shoes needed a wireless gizmo to capture the data, and the wireless gizmo needed a runner to create the data.

4. Investment – Though details of the Nike-Apple deal are not available,  but one can venture to guess that with two of the most profitable companies in the world, the investment was not only large, but was equitable (given that Apple’s CEO Tim Cook serves on Nike’s board (Cendrowski, 2012 Feb. 13). 
5.  Information – The writer of this article, Scott Cendrowski, visited the new super-secret facility on the Nike campus where “engineers and scientists with pedigrees from MIT and Apple” work together not on “making shoes or clothes. They're quietly engineering a revolution in marketing.” (Cendrowski, 2012 Feb. 13).  I would say that there’s a pretty good exchange of information going on there.

6. Integration – See #5

7. Institutionalization – Nike+ has become a household name when it comes to athletes tracking their progress.  Nike+ has a life of its own and only an act of insanity or capriciousness would tear Apple and Nike from this winner.

8.  Integrity – Both Nike and Apple are trusted brands, and addition to the quality products, millions of athletes are allowing both companies to mine their data and use it to find more ways to market.  They may not realize that that’s what they’re doing, but because of the integrity that both these brands carry, they’re probably a lot less afraid to do so because they’re getting a lot back in return.

Cendrowski, S. (2012, February 13). Nike’s new marketing mojo. CNNMoney.com. http://management.fortune.cnn.com/2012/02/13/nike-digital-marketing/?section=magazines_fortune.  Retrieved February 19, 2012.

Kanter, R. (1994). "Collaborative Advantage: The Art of Alliances. Harvard Business Review.

Ramaswamy, V.,  (2008). Co-creating value through customers’ experiences: the Nike case.  Strategy & Leadership, 36(5), pp. 9-14.