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Commodity Chains and Marketing Strategies: Nike and the Global Athletic Footwear Industry
Miguel Korzeniewicz
The world‐economic trends and cycles of the past two decades have made it increasingly apparent that the production and distribution of goods take place in complex global networks that tie together groups, organizations, and regions. The concept of commodity chains is helpful in mapping these emerging forms of capitalist organization. Most often, analysts depict global commodity chains (GCCs) by focusing primarily on production processes and their immediate backward and forward linkages. Less attention has been paid to the crucial role played by the design, distribution, and marketing nodes within a GCC. These nodes are important because they often constitute the epicenter of innovative strategies that allow enterprises to capture greater shares of wealth within a chain. Furthermore, a GCC perspective helps us understand how marketing and consumption patterns in core areas of the world shape production patterns in peripheral and semiperipheral countries. Thus an analysis of the design, distribution, and marketing segments within a commodity chain can provide unique insights into the processes through which core‐like activities are created, and competitive pressures are transferred elsewhere in the world‐economy.
To provide such an analysis, this chapter focuses on the distribution segment of a particular commodity chain: athletic footwear. In particular, this chapter examines the marketing strategy of one corporation within the global athletic shoe industry (Nike) to refine our understanding of the dynamic nature of global commodity chains. The example of athletic footwear is useful in exploring how commodity chains are embedded in cultural trends. The social organization of advertising, fashion, and consumption shapes the networks and nodes of global commodity chains. The athletic footwear case shows that the organization of culture itself is an innovative process that unevenly shapes patterns of production and consumption in core, semiperipheral, and peripheral areas of the world‐economy. […]
Trends in the US Athletic Shoe Market
The athletic footwear market in the United States has been characterized over the past two decades by phenomenal rates of growth. As indicated by Figure 21.1, wholesale revenues of athletic shoes in the United States tripled between 1980 and 1990. In the past six years, consumers in the United States more than doubled their expenditures on athletic shoes: In 1985 they spent $5 billion and bought 250 million pairs of shoes, whereas by the end of 1991 retail sales totaled $12 billion for nearly 400 million pairs of shoes. Three‐fourths of all Americans bought athletic shoes in 1991, compared with two‐thirds in 1988. In 1990, athletic shoes accounted for about a third of all shoes sold. The athletic footwear industry today generates $12 billion in retail sales, with at least twenty‐five companies earning $20 million or more in annual sales. From the point of view of Schumpeterian innovations, the trajectory of the athletic footwear commodity chain over recent times provides valuable insights into the creation of a modern consumer market.
Figure 21.1 Total wholesale revenues of athletic footwear and Nike’s and Reebok’s shares, 1981–90.
Source: National Sporting Goods Association.
Retail markets for athletic shoes are highly segmented according to consumer age groups. Teenagers are the most important consumers of athletic shoes. A study sponsored by the Athletic Footwear Association found that the average American over twelve years of age owns at least two pairs of athletic shoes, worn for both athletic and casual purposes. As experienced by many parents and youngsters during the 1980s and 1990s, athletic shoes have been constructed and often promoted among teenagers as an important and visible symbol of social status and identity.
The products in this commodity chain also are highly differentiated according to models and the particular sport for which they are purportedly designed. By 1989, Nike was producing shoes in 24 footwear categories, encompassing 300 models and 900 styles. Reebok sold 175 models of shoes in 450 colors, and planned to add 250 new designs. Adidas and LA Gear sell 500 different styles each. The two fastest‐growing segments of athletic shoes in the late 1980s were basketball shoes and walking shoes, while the volume of sales for tennis and running shoes declined. In 1991, basketball shoes accounted for 22 percent of sales, and cross trainers for 14 percent of sales. Product differentiation provides an important vehicle both for competition among enterprises and price stratification.
Finally, the sports footwear market is highly segmented according to price. Indicative of this segmentation, the price distribution of athletic shoes has a very wide range. In 1989 the average cost of basketball, walking, and running shoes was between $40 and $47, while top‐of‐the‐line shoes cost about $175. The bulk of production is oriented toward sales of the lower‐priced shoes, while the market for the higher‐priced commodities is substantially smaller. In 1990, more than 80 percent of athletic shoe purchases were priced under $35, with only 1.4 percent of shoes bought costing more than $65. Price rather than appearance or functionality often constitutes the primary matrix differentiating athletic shoes as status symbols.
Since displacing Adidas in the early 1980s, and after falling behind Reebok in the mid‐1980s, Nike Corporation has become the largest and most important athletic shoe company in the United States. Nike’s sales have grown from $2 million in 1972 to $270 million in 1980, and to over $3 billion in 1991. Reebok, the number two brand in the United States today, experienced similar rates of growth – in fact, Reebok has been the fastest‐growing company in the history of American business. Between 1981 and 1987, Reebok’s sales grew from $1.5 million to $1.4 billion, experiencing an average annual growth rate of 155 percent. Similarly, LA Gear grew at a dazzling rate, from $11 million in 1985 to $535 million in 1989. Between 1985 and 1990, Nike’s share of the athletic footwear market in the United States declined from 30 to 25 percent, Reebok’s rose from 14 to 24 percent; LA Gear’s increased from a minimal share to 11 percent, and Converse’s share declined from 9 to 5 percent. These data suggest that a limited number of large firms compete within the athletic footwear market in the United States, but also that the organization of the market provides considerable permeability for successful entry and competition by new enterprises.
What are the factors that explain the enormous growth of the athletic shoe industry? The evidence suggests, in part, that the most important enterprises within this commodity chain have grown by increasing their control over the nodes involved in the material production of athletic shoes. The most fundamental innovation of these enterprises, however, has been the creation of a market, and this has entailed the construction of a convincing world of symbols, ideas, and values harnessing the desires of individuals to the consumption of athletic shoes. By focusing on the marketing and circulation nodes of a commodity chain, greater analytical precision can be gained in identifying the crucial features of these innovations.
Rather than analyzing the athletic footwear chain as a whole, the next section focuses on a single enterprise, Nike Corporation. Although a comparative analysis of other enterprises would yield greater insights into possible differences in organizational trajectories, the focus on a single firm allows a more detailed exploration of the innovative strategies that have characterized the athletic footwear commodity chain. This approach also highlights the relevance of world‐systems theory, and the concept of commodity chains, to the study of economic and social processes at a microlevel of observation. Nike’s rise to prominence has been based on its ability to capture a succession of nodes along the commodity chain, increasing its expertise and control over the critical areas of design, distribution, marketing, and advertising. This strategy also involved a fundamental reshaping of production and consumption, hence contributing to the recent transformation of the athletic footwear commodity chain.
Nike Corporation: Competition, Upgrading, and Innovationin a Commodity Chain
The activities of Nike Corporation created a quintessential American product that has captured a large share of the giant US athletic footwear market. Nike Corporation increased its revenues tenfold in the past ten years, from $270 million in 1980 to an estimated $3 billion in 1991. Nike sells tens of millions of athletic shoes in the United States every year, yet all of the firm’s manufacturing operations are conducted overseas, making the company an archetype of a global sourcing strategy. Nike Corporation never relocated domestic production abroad, as many American companies have done, because the firm actually originated by importing shoes from Japan. It has subcontracted nearly all of its production overseas ever since: currently, “all but 1 percent of the millions of shoes Nike makes each year are manufactured in Asia.” In the United States, Nike has developed essentially as a design, distribution, and marketing enterprise.
Nike’s successful implementation of its overseas sourcing strategy can best be understood as part of the firm’s effort to retain control over highly profitable nodes in the athletic footwear commodity chain, while avoiding the rigidity and pressures that characterize the more competitive nodes of the chain. “We don’t know the first thing about manufacturing,” says Neal Lauridsen, Nike’s vice‐president for Asia‐Pacific. “We are marketers and designers.” Nike’s practice of overseas sourcing provides strategic and geographical mobility to the firm by developing a complex division of labor among the components of a global subcontracting network. The way these characteristics are linked to consumer demand and marketing strategies helps explain the tremendous growth and success of Nike. […]
Marketing as an upgrading strategy (1976–84)
During this second period, Nike Corporation introduced major innovations in marketing, distribution, and subcontracting for the production of athletic footwear. First, between 1976 and 1984, Nike was shaped by (and helped to shape) the “fitness boom” – the phenomenal growth of jogging, running, and exercise as a common activity by millions of Americans. Nike was part of this phenomenon by implementing a marketing strategy that involved the development of a vast and visible network of endorsement contracts with basketball, baseball, and football players and coaches. Second, Nike’s distribution network was enhanced by the establishment of a strategic alliance with Foot Locker, a rapidly growing chain of retail stores marketing athletic products. Finally, Nike Corporation sought to further enhance its control over subcontractors and lower production costs by shifting most manufacturing activities from Japan to South Korea and (to a lesser extent) Taiwan. Combined, these innovations provided a significant competitive edge to Nike Corporation.
Beginning in the mid‐1970s, running, jogging, and exercise in general became part of mainstream American culture. Nike Corporation was in the right place at the right time to capitalize on this phenomenon by outperforming competing brands and becoming the most important athletic shoe company in the United States. But the ability to gain from this phenomenon required a major reorientation in the marketing of the company’s products: Nike Corporation’s main customer base had to shift, as one observer puts it, from “running geeks to yuppies.” To achieve this shift, Nike’s promotional efforts in the 1970s moved slowly but consistently away from amateur sports to professional sports, and from lesser‐known track and field runners to highly visible sports figures. In 1977 and 1978 Nike developed a strategy to sign visible college basketball coaches; by 1979 it had signed over fifty college coaches. One measure of Nike’s promotional success was the cover of Sports Illustrated of March 26, 1979, which showed Larry Bird (at the time a player in the NCAA tournament) wearing Nike shoes. In the late 1970s, Nike also began to promote heavily in baseball, and by 1980 a Nike representative had signed over fifty players in different baseball teams – as well as eight players in the Tampa Bay team that made it to the 1980 Super Bowl. This new marketing strategy enhanced Nike’s image in its new market niche.
Nike’s rise as the largest athletic shoe company in the United States also involved creating a more effective distribution network. Foot Locker, an emerging chain of sport equipment retailers, became the most important distributor of Nike shoes. As a way to solve inventory and financial bottlenecks, Nike people devised an advance‐order purchase system they called “futures.” The system required major distributors to commit themselves to large orders six months in advance, in return for a 5–7 percent discount and a guaranteed delivery schedule. Foot Locker was one of the first dealers to try the futures contracts, and to benefit from them, eventually becoming Nike’s most important retailer. Another reason for Foot Locker’s close relationship with Nike was the latter’s flexibility, and its willingness to change design specifications on request from dealers. This responsiveness of Nike contrasted with Adidas’ generally inflexible approach to their supply of shoes, and further extended the company’s competitive edge.
Finally, the phenomenal growth in the demand for athletic shoes changed Nike’s subcontracting patterns. Nike now needed larger outputs, lower labor prices, and more control over the manufacturing process. In 1974 the great bulk of BRS’s [Blue Ribbon Sports’] $4.8 million in sales was still coming from Japan. Phil Knight, aware of rising labor costs in Japan, began to look for sourcing alternatives. One of these alternatives was the United States. In early 1974, BRS rented space in an empty old factory in Exeter, New Hampshire, and later opened a second factory in Saco, New Hampshire. Domestic facilities also fulfilled a critical R&D function that Nike would later use to gain greater control over production processes abroad. However, by 1984 imported shoes (mostly from Korea and Taiwan) rose to 72 percent of the US shoe market, and US‐based factories were forced to close. The collapse of the US production base was due primarily to its limited manufacturing capacity and its economic implausibility. Product timelines lagged and American‐based manufacturing found itself unable to compete with lower Asian labor costs.
While Nippon Rubber (Nike’s Japanese supplier) reportedly made the decision to relocate part of its production to South Korea and Taiwan, Nike also began to look for new sources of its own. In October 1975, Phil Knight flew to Asia to search for alternative supply sources to lessen his dependency on both Nissho Iwai and Nippon Rubber without losing either company. In Japan, Knight met a Chinese trader who agreed to set up a Nike‐controlled corporation called Athena Corporation that established production facilities in Taiwan. In South Korea the Sam Hwa factory of Pusan became the main partner, which began 1977 making 10,000 pairs of Nike shoes a month, and ending the year by making about 100,000 pairs a month. By 1980, nearly 90 percent of Nike’s shoe production was located in Korea and Taiwan.
The consolidation of South Korea and Taiwan as the main geographical centers of manufacturing also involved the emergence of a complex system of stratification among Nike’s suppliers. Donaghu and Barff identify three main classes of factories supplying Nike: developed partners, volume producers, and developing sources. “Developed partners” are the upper tier of Nike suppliers, responsible for the most innovative and sophisticated shoes. “Volume producers” are those that manufacture a specific type of product in large quantities. These factories are typically less flexible than developed partners in their manufacturing organization. Finally, “developing sources” are the newer factories that attracted Nike because of their low labor costs, entering into a series of tutelary arrangements both with Nike and the more experienced Nike suppliers.
The geographical dynamism of Nike’s shifts in subcontracting arrangements interacted with this complex stratification system in interesting ways. As labor costs in Japan rose in the 1970s, Nike Corporation shifted production to emerging semiperipheral countries such as South Korea and Taiwan. As labor costs in the established semiperipheral supply locations began to rise in the 1980s, Nike tried to shift some of the labor‐intensive, technologically less advanced segments of its production to new locations in peripheral areas (such as China). It is interesting to note, however, that linkages with developed partners remained critical for two reasons. First, several of Nike’s more sophisticated models required the expertise and flexibility of older, more reliable partners. Second, the technological expertise and capital of the older partners was often necessary to bring newer production facilities up to Nike standards, leading to joint ventures between the older, more established sources and the newer ones. From this point of view, centralization and decentralization of subcontracting arrangements were constrained by marketing requirements.
Design, advertising, and the return to the semiperiphery (post‐1985)
After 1985, Nike entered into another period of high growth, based on innovations in product design (the creation of the “Air Nike” models, which quickly became immensely popular) and advertising strategies (signing its most popular endorser, Michael Jordan). Also, Nike Corporation continued to target new market niches, entering the aerobics segment of the market, where Reebok had become increasingly dominant, and the growing and profitable athletic apparel markets. Finally, Nike Corporation altered its subcontracting arrangements, shifting important segments in the manufacture of Nike’s athletic shoes to the People’s Republic of China, Thailand, and Indonesia. However, the need for specialized and sophisticated production runs once again forced Nike to return to more experienced manufacturers in South Korea and Taiwan.
The ability to produce high‐performance, sophisticated footwear models became critical to Nike because the company was able to pull out of its early 1980s stagnation through its “Nike Air” technological innovation. By 1984 the phenomenal growth of a mass market for jogging shoes began to stabilize, particularly in the men’s segment of the market. Other companies, like Reebok and LA Gear, were becoming more effective in selling to the female and aerobics segments of the market. Nike Corporation, accustomed to years of high growth, was in crisis. Many endorsement contracts were canceled, the Athletics West program cut down its sponsored athletes from 88 to 50, and by the end of 1984, Nike had laid off 10 percent of its 4,000‐person work force. Another indication of Nike’s bad fortunes was its declining influence among sports coaches and agents. To reverse this decline, Nike Corporation once again turned toward introducing a drastic product innovation.
Nike’s declining fortunes in the mid‐1980s were reversed by the introduction of Air Nike (a new technology that allowed a type of gas to be compressed and stored within the sole) and by the phenomenal success of its “Air Jordan” line of basketball shoes, as well as the success of the endorser they were named after, Michael Jordan. In Nike’s Los Angeles store, the first two shipments of Air Jordans sold out in three days. By 1985 it was clear that Air Jordan shoes were a huge success. Nike sold in three months what had been projected for the entire year. The first contract between Nike Corporation and Michael Jordan was worth $2.5 million over five years, and it included (among other things) a royalty to the athlete on all Air Jordan models sold by the company.
The several advertising campaigns featuring Michael Jordan highlight Nike’s capacity to influence market demand for its shoes. Nike’s video and print advertisements have been among the most innovative and controversial in recent years, adding to Nike’s visibility and undoubtedly contributing to its phenomenal growth. Part of the appeal of Nike advertising is its success in tapping and communicating a consistent set of values that many people in the 1970s and 1980s identified with: hipness, irreverence, individualism, narcissism, self‐improvement, gender equality, racial equality, competitiveness, and health.
But there also have been several allegations made that by targeting inner‐city youths in its advertising and marketing campaigns, Nike has profited substantially from sales directly related to drug and gang money, showing little concern for the social and financial stability of the predominantly black, poor communities, where sales account for 20 percent of the total athletic footwear market. The relationship between the athletic footwear industry and drug money has become increasingly evident by the alarming rate of robberies and killings over expensive sports shoes. Some store owners claim that Nike is not only aware that drug money contributes heavily to its sales, but that Nike representatives adamantly encourage distributors in the inner cities to specifically target and cater to this market.
Nike commercials tend to be subtle. The trademark “swoosh” logo is often far more prominent than dialogue or a straightforward pitch. They are also controversial. Nike’s use of the Beatles’ song “Revolution” to advertise its new “Nike Air” was startling, and so has been its recent use of John Lennon’s song “Instant Karma.” Some of the most distinctive Nike advertisements contain themes that can best be described as postmodern: the rapid succession of images, image self‐consciousness, and “ads‐within‐ads” themes. The “Heritage” Nike commercial, showing a white adult runner training in an urban downtown area while images of sports heroes are projected on the sides of buildings, is particularly striking because it seeks to identify the viewer with an idealized figure (the runner) who is in turn identifying with idealized figures (the sports heroes). This ninety‐second advertisement cost over $800,000 to run once in its entirety during the 1991 Superbowl. Though there is no dialogue, the product is identifiable (it is seen almost subliminally several times), and the message of the commercial is clear. Postmodern theory, given its sensitivity to new cultural phenomena, can be helpful in understanding advertising as a crucial element in the athletic footwear global commodity chain. An understanding of consumption must be based on commodity aesthetics because consumption is increasingly the consumption of signs. Similarly, Featherstone has noted the increasing importance of the production of symbolic goods and images. In a sense, Nike represents an archetype of a firm selling to emerging postmodern consumer markets that rest on segmented, specialized, and dynamic features.
As in the previous periods, these drastic changes in marketing and distribution strategies were accompanied by shifts in the firm’s subcontracting strategy. In 1980 Nike began a process of relocation to the periphery (particularly China, Indonesia, and Thailand) that most other companies would gradually follow in the course of the decade. This relocation was driven by cost advantages: “a mid‐priced shoe made in South Korea which costs Nike US $20 when it leaves the docks of Pusan will only cost about US $15 to make in Indonesia or China.” Nike Corporation was one of the very first companies to enter the People’s Republic of China. In 1980, Phil Knight began to set up a manufacturing base in China. Soon an agreement between Nike Corporation and the Chinese government was finalized, and shoes began to be produced in the PRC. This rapid success can be explained by the fact that Nike used a Chinese‐born representative (David Chang) who was thoroughly familiar with the local environment, which meant that proposals were quickly translated into Chinese and attuned to the negotiating style and objectives of the Chinese government. Also, Nike’s objectives were long‐term and the volumes of production being negotiated were significant, which coincided with the development priorities of the Chinese government at the time.
Just as Nike led the trend of entry into China, later in the mid‐1980s it led a reevaluation of the benefits and disadvantages of associating directly with developing partners. By late 1984, production in Chinese factories totaled 150,000 pairs a month, one‐seventh of the originally projected 1 million pairs a month. The early 1980s also signaled a slowdown in the rapid growth of conventional athletic footwear markets at a time when competition from other athletic footwear firms (LA Gear, Reebok) was increasing. By 1983 Nike terminated its subcontracting arrangement with the Shanghai factory, and in 1984 negotiated an early termination of its contract with the Tianjin factory.
In the mid‐1980s Nike briefly considered shifting production back to established manufacturing sources in South Korea and Taiwan. The advantages of lower labor costs in the developing manufacturing areas had to be weighed against disadvantages in production flexibility, quality, raw material sourcing, and transportation. The development of a new shoe model from technical specifications to shoe production was four months in South Korea, compared to eight months in China. The ratio of perfect‐quality (A‐grade) shoes to aesthetically flawed, but structurally sound (B‐grade) shoes was 99 : 1 in Korea, 98 : 2 in Taiwan, and 80 : 20 in China. While Taiwan and South Korea sourced 100 percent of the raw materials needed for production, China was only able to source 30 percent. Finally, shipping from Taiwan and South Korea was 20–25 days; from Shanghai it was 35–40 days.
The mid‐1980s also marked the introduction of the “Nike Air” technology and especially the “Air Jordan” model. Being more sophisticated, secretive, and expensive, this model required more experienced and trustworthy suppliers of the “developed partners” type that had been developed in South Korea over the years. One Reebok executive argued that “as the complexity of our product increases, it continues to go to [South Korea]. The primary reason is that product development out of Korean factories is quick and accurate for athletic footwear, better than any place in the world.” An observer concluded in the mid‐1980s that after the trend of relocation to low‐wage locations like Thailand, Indonesia, and China, “buyers are starting to return [to Pusan] after finding that the extra cost of doing business in South Korea is offset by reliability and the large capacity of its factories.” This need for more established suppliers coincided with the adjustments that the Korean shoe producers themselves made in an effort to adapt to rising labor costs and the migration of many firms to other countries. Many Pusan firms shrunk in size but also increased the unit value of their production.
However, the relative importance of South Korean firms has continued to decline. Thus, “at least one‐third of the lines in Pusan have shut down in the past three years. Only a handful of South Korean companies are expected to remain significant shoe exporters in a couple of years.” Similar changes have affected shoe‐producing firms in Taiwan, where “since 1988, the number of footwear companies has fallen from 1,245 to 745. Athletic shoe exports slipped from US $1.5 billion in 1988 to US $1 billion (in 1991).” Taiwanese and South Korean‐based firms, on the other hand, are used for managing and mediating the relocation of production facilities to the periphery.
The shift of Nike’s production to the periphery has become significant. “In the fiscal year to 31 May 1988, Nike bought 68 percent of its shoes from South Korea but only 42 percent in 1991–92. China, Indonesia and Thailand produced 44 percent of Nike’s shoes last fiscal year; against less than 10 percent in 1987–88.” This same trend is expected to continue in the future: “now, Vietnam looks like the next country on the list. Two major Taiwanese suppliers, Feng Tay and Adi Corporation, are interested in starting production in Vietnam if and when the U.S. trade embargo of its old adversary is lifted.”
The advantages of Nike Corporation that have enabled it to become a powerful and profitable link in the athletic footwear commodity chain are the expertise of its designers in finding technological advances in shoe comfort and performance, the distribution networks built over the past twenty‐five years, and the effectiveness of its marketing, promotion and advertising campaigns.
Overall assessment
To summarize the arguments made in this section, Nike’s development of its twin strategies of overseas subcontracting and domestic marketing can best be understood as involving three distinct periods, each corresponding to different patterns of market demand, geographical locus of production, and marketing strategies. In the first period, between 1962 and 1975, Nike Corporation emphasized control over the import and distribution nodes of its commodity chain. Between 1976 and 1984, Nike Corporation enhanced its relative competitive position by extending control to marketing, and by redesigning its subcontracting strategy to take advantage of new opportunities in Southeast Asia (in South Korea and Taiwan initially, later in China, Thailand, and Indonesia). Finally, beginning in the mid‐1980s, Nike Corporation successfully extended control to product design and advertising, further upgrading the firm’s organizational structure. As a whole, these three periods suggest that Nike Corporation has sustained and enhanced its competitive edge through the implementation of frequent innovations in the nodes and networks of its commodity chain.
Conclusions
This chapter has examined the organizational strategies of Nike Corporation within the global athletic shoe industry. Nike’s uncommon success and growth is due in part to social and cultural trends that have made leisure and fitness more important in our contemporary society. It is also the outcome of Nike’s strategy of responding to these trends by accumulating expertise and control over the increasingly important service nodes of the athletic footwear commodity chain: import, distribution, marketing, and advertising.
Nike Corporation (and the athletic footwear industry in general) are excellent case studies of how goods emerge from complex, transnational linkages at different stages of production and distribution. Nike Corporation was born a globalized company. The study confirms a division of labor between core or postindustrial societies (that will presumably specialize in services over time) and noncore societies at different levels of industrialization (that will increasingly specialize in manufacturing). While Korean and Chinese firms are producing the actual shoe, US‐based Nike promotes the symbolic nature of the shoe and appropriates the greater share of the value resulting from its sales.
Nike and the athletic shoe industry show that there are emerging patterns of consumption that have enormous consequences for social and economic organization. Linkages between consumption and production must be explored in greater detail. While a consensus has been building for some time that there are new patterns in the organization of production (alternatively called flexible specialization, flexible production, or post‐Fordist production), we also need a better understanding of what may be called “post‐Fordist consumption” – that is, the emerging patterns of consumption and distribution that are the counterpart to transformations in the realm of production.