One of the many, many advantages of being a huge company such as Nike is the economies of scale. The article though, talks about one specific type of economies of scale; innovation. This basically means that being such footwear giant, Nike can afford to experiment with their products and services in order to gain greater profit. This time they have increased the customization options available to costumers. Costumers are now given free decision over the color of their shoes. As a result of it, Nike’s online sales were 70% higher and its shares increased their value by 8%.

In my opinion there are many reasons why the increase in customizations options got such a positive outcome in the market. First of all it helps Nike supply what the costumer wants, as the costumer itself customizes its product and Nike simply provides it saving the time and effort of guessing the new trends in the market. Using this, the giant can boost sells while charging more for the value added to the ‘kicks’. It is also important to remember that there are hardly any additional costs by this.  Furthermore Nike’s inventory levels are also reduced as these customized products are on demand, they don’t need to be in storage as they are immediately sold.

Last but not least the customization of products has helped Nike expand its other existing markets such as the app download (which got 17 million downloads recently) and the woman’s market, owing much of the increase sales to them.