The Fall of a Giant: Nike’s $70 Billion Digital Transformation Crisis
In 2020, Nike's ambitious digital transformation under new CEO John Donahoe led to a staggering $70 billion value erosion over nine months, including a dramatic $25 billion single-day loss. The transformation aimed to boost digital sales and operational efficiency but instead resulted in multiple crises across category management, distribution strategy, marketing, and organizational structure. The company's aggressive push toward digital-first operations, including the elimination of specialized teams, termination of key wholesale partnerships, and shift from brand building to performance marketing, significantly disrupted its core strengths. Nike's experience serves as a cautionary tale for global brands, highlighting the importance of balancing digital innovation with core competencies, maintaining customer relationships, and implementing change management effectively. The case demonstrates that successful digital transformation requires preserving brand heritage and customer experience while carefully integrating new technologies and processes.
October 26, 2024