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Nike market analysis and business overview

Nike produces a broad scope of athleticss equipment. Their first merchandises were track running places, tennis, association football, and wrestling & A ; hoops places. They presently besides make New Jerseies for a broad scope of athleticss including path & A ; field, football, baseball, tennis, association football, lacrosse, hoops and cricket. The most recent add-ons to their line are the Nike 6.0 and Nike SB places, designed for skateboarding. Nike has late introduced cricket places, called Air Zoom Yorker, designed to be 30 % lighter than their rivals ‘ . Nike places its merchandises in such a manner as to seek to appeal to a “ vernal… .materialistic crowd ” . It is positioned as a premium public presentation trade name. However, it besides engineers places for price reduction shops like Wal-Mart under the Starter trade name.

Manufacturing

Nike has more than 500 locations around the universe and offices located in 45 states outside the United States. Most of the mills are located in Asia, including China, Taiwan, India, Turkey, Thailand, Vietnam, Pakistan, Philippines, Malaysia, and Korea. Nike is hesitating to unwrap information about the contract companies it works with. However, due to harsh unfavorable judgment from some organisations like Barbie.com, Nike has disclosed information about its contract mills in its Corporate Governance Report. Nike plans to be carbon impersonal by 2011.

Rivalry and competition

Because Nike creates goods for a broad scope of athleticss, they have competition from every athleticss and athleticss manner trade name. After exceling adidas in the 1970s, Nike had no direct rivals because there was no individual trade name which could vie straight with Nike ‘s scope of athleticss and non-sports oriented gear until Reebok came along in the 1980s. Reebok now has selling contracts with the National Football League and the National Hockey League in the United States, and was purchased in 2006 by adidas. Nike ‘s other rival is Puma, the 3rd largest shoe and athleticss dressing provider.

Key Business Issues

Addition market portion in all the markets to counter the menace from the recent Adidas/Reebok amalgamation

Expand further into international markets such as Emerging markets and spur growing in the European and Nipponese markets

Improve gross borders & A ; operating borders through supply concatenation enterprises – thin fabrication, better sourcing, merchandise costs, etc..

Better its stock list direction, yearss gross revenues outstanding, yearss payables outstanding and working capital direction farther

Provide advanced and proficient merchandises that cater to the consumer outlooks at all monetary value points – Connect to the consumer

Counter the increased selling strength of Adidas/Reebok by passing more on selling spend and making demand while keeping borders

Improve dealingss with all retail merchants & A ; innovatively use multi channels to market and sell its multiple trade names to different client sections

Focus on design, development and selling of merchandises and cut downing clip to market

Expand its ain retail concatenation as a feasible and profitable option to postulate with retail consolidation, as retail merchants may replace Nike ‘s merchandises with private labels merchandises or lessening Nike ‘s shelf infinite

Stabilize the leading squad and have a common scheme and program for the hereafter

NIKE Introduction

Nike, Inc. is a major publically traded athletic wear and equipment provider based in the United States. The company is headquartered in the Portland metropolitan country of Oregon, near Beaverton. It is the universe ‘s taking provider of athletic places and dress and a major maker of athleticss equipment with gross in surplus of $ 16 billion USD in 2007. As of 2008, it employed over 30,000 people global. Nike and Precision Castparts are the lone Fortune 500 companies headquartered in the province of Oregon.

NIKE is engaged in design, development and selling of footwear, dress, equipment and accoutrement merchandises. It is a marketer of athletic footwear and athletic dress in the universe. It sells its merchandises to retail histories, through NIKE-owned retail, including shops and Internet gross revenues, and through a mix of independent distributers and licensees, in over 170 states around the universe. NIKE ‘s athletic footwear merchandises are designed chiefly for specific athletic usage. It besides markets footwear designed for aquatic activities, baseball, cheerleading, football, golf, lacrosse, out-of-door activities, skateboarding, tennis, volleyball, walking, wrestle, and other athletic and recreational utilizations. It besides markets apparel with accredited college and professional squad, and conference Son. It sells a line of public presentation equipment under the NIKE trade name name, including bags, socks, athletics balls, eyewear, timekeepers, electronic devices, chiropterans, baseball mitts and protective equipment.

The company was founded in 1962 as Blue Ribbon Sports by Bill Bowerman and Philip Knight, and officially became Nike, Inc. in 1978. The company takes its name from Nike, the Greek goddess of triumph. Nike markets its merchandises under its ain trade name every bit good as Nike Golf, Nike Pro, Nike+ , Air Jordan, Nike Skateboarding, Team Starter, and subordinates including Cole Haan, Hurley International, Umbro and Converse. Nike besides owned Bauer Hockey ( subsequently renamed Nike Bauer ) between 1995 and 2008. In add-on to fabricating athletic wear and equipment, the company operates retail shops under the name Niketown.

History

1962: Phillip Knight, a Stanford University concern alumnus and former member of the path squad, arranges to import athletic places from Japan and sell them in the U.S.. Knight created Blue Ribbon Sports as a screen name for his small-scale shoe-selling operations

1964: William Bowerman becomes a spouse by fiting Knight ‘s investing of $ 500.

1966: Blue Ribbon Sports, besides known as BRS, rents its first retail infinite ; employees can now halt merchandising places from their autos.

1971: Nike, capitalising on the Grecian goddess of triumph. The first Nike merchandise sold with the new symbol is a association football shoe.

1970 – 1975: Steve Prefontaine was turned to the University of Oregon by Bill Bowerman and wore Nike merchandises.

1976: The popularity of ramble oning additions gross to $ 14 million.

1978: The Company changes its name to Nike.

1980: Nike goes public, offering 2 million portions of stock.

1990: Nike files suit against rivals for copying the patented designs of its places, and besides engaged in a difference with the U.S. Customs Service over import responsibilities on its Air Jordan hoops places.

2000: The National Football League declines to regenerate its sole dress licensing agreement with Nike.

2001: Nike opens its first Nike Goddess shop, a unit aiming adult females, in Newport Beach, CA.

2003: Nike purchases Converse Inc. for $ 305 million

Vision:

“ To convey inspiration and invention to every jock in the universe ”

( * “ If you have a organic structure, you are an athlete ” Bill Bowerman, co-founder )

Nike patrons many high profile jocks and athleticss squads around the universe, with the extremely recognized hallmarks of “ Just make it ” and the Swoosh logo.

Nike is the “ largest marketer of athletic footwear and athletic dress in the universe. Performance and dependability of places, dress, and equipment, new merchandise development, monetary value, merchandise individuality through selling and publicity, and client support and service are of import facets of competition in the athletic footwear, dress, and equipment industry.A We believe we are competitory in all of these countries. ” The company aims to “ take in corporate citizenship through proactive plans that reflect caring for the universe household of Nike, our teammates, our consumers, and those who provide services to Nike. ”

Mission: “ Innovate for better universe ”

Unleashing possible through athletics. In the last two old ages, Nike has invested $ 100 million worldwide in community-based athleticss enterprises. By 2011, NIKE is expected to put another $ 315 million. These investings will be used to give excluded young person around the universe the opportunity to play because as entree to feature can heighten their lives. Nike will supply merchandises, resurface playing Fieldss, back up community-based plans, and assist immature people create their ain communities. This is all will be the NIKE “ Let Me Play committedness. ”

Three nucleus values of the company are honestness, fight, and teamwork. Despite its size, Nike operates with a lower limit of hierarchy. As a consequence, there is a batch of coaction and consensus decision-making. Normally held values are imperative in such a matrix organisation.

Industry Analysis

Barriers to entry hold become really competitory in the athletic industry and the companies that will do best are those with strong trade names, immense graduated table, multi-products, multi-channels & A ; selling strength.

Global Brand power is the equation

Trade names have emerged as the most powerful ( and least imitable ) assets in the industry.

While retail consolidation and the terminal of quotas have created some uncertainness, powerful planetary trade names will more than held their ain in the changing environment, as they have done in the yesteryear.

Selling is Critical

Apparel and footwear companies rely on selling to drive demand for their merchandises. Industry has transitioned from capital-intensive fabrication and distribution activities ( which are outsourced ) to a more capital-efficient design and selling concern theoretical account.

Each company spends on an mean approximately 10 % of their gross revenues on advertisement and publicities, while Nike spends about 13 % of gross revenues.

Consumers are turning more sophisticated – Performance merchandises driven by engineering

Industry is extremely focused on developing engineering for its footwear & A ; dress merchandises. Consumers are good informed and are demanding more value for their merchandises at all monetary value points. Requires stronger trade name profiling and more investing in merchandise features by companies.

Margins drive stocks

Footwear and dress industries are comparatively mature and investors perceive few pure growing dramas, and outlooks for borders tend to drive stock ratings more than gross revenues growing

Acquisitions to diversify

Large dress companies, because of their size find it hard to turn at high figure rates. Besides they seem to hold neither the propensity nor creativeness to develop new trade names. Hence, most companies look at acquisitions to diversify every bit good as turn their addressable market and better gross revenues.

Offshore Sourcing

To cut disbursals & A ; better borders there is a tendency towards traveling production installations to lower-cost parts outside the U.S. The riddance of quotas/safeguards over the following twosome of old ages is expected to drive input costs lower, and the powerful dress trade names sourcing from the Far East will capture a important portion of these nest eggs.

Manage Own Retail

Branded sellers have traditionally operated factory mercantile establishments as a agency to pull off extra stock list. However, given retail consolidation and retail merchants ‘ stated desire to increase private label incursion, companies are looking at spread outing their own-retail webs.

Global Market Share for Athletic Footwear, 2008

“ 2008: footwear informations from Sporting Goods Intelligence ” .

U.S. is the largest market for athletic footwear, but is besides the most mature market along with Western Europe, and future growing is traveling to be led by the under-penetrated emerging markets, Central & A ; Eastern Europe. Gross saless by Geography for Athletic footwear, 2008

Opportunities

Growth in Emerging markets

Industry barriers to entry exist in footwear

With the lifting of dress quotas in the United States, companies should see improved borders in the United States as they move fabricating offshore

Outsourced production creates thin corporate constructions

Industry turning more rapidly than GDP rates in most parts

Challenges

Retail Consolidation – will impact the dress industry ( more fragmented ) more than the footwear industry ( really concentrated and powerful trade names ( less imitable )

Competition has intensified – Adidas acquisition of Reebok forms a strong rival, many smaller companies turning quickly

The activewear market is acquiring crowded – Nike, Adidas, Reebok, and Puma are all seeking to ramify out from the primary athletic wear consumer to an sportswear or lifestyle consumer making intense competition

Possible lag of consumer disbursement in the U.S. and Europe

Higher energy monetary values, weakening consumer sentiment, and lifting involvement rates

Currency impacts

Closing Year

Acquirer

Target

Deal Value

2006

Adidas-Salomon AG

Reebok

$ 3.8 billion

2005

Quiksilver

Rossignol

Undisclosed

2004

Russell Corp

Brooks Sports

$ 115 million

2004

Nike

Official Starter

$ 47.2 million

2004

Russell Corp

Huffy Sports

$ 30 million

2004

Reebok

The Hockey Company

$ 204 million + premise of $ 149 million of debt

2004

Quiksilver

DC Shoes

$ 144.2 Million

2004

Nike

Converse Inc

$ 310 million

One such amalgamation – the Adidas- Reebok amalgamation between two transatlantic companies has non merely doubled Adidas ‘s market portion in the U.S. but has besides made it a close rival to Nike. Theory behind the merger-to utilize Reebok ‘s selling power and apprehension of the U.S. consumer to construct Adidas ‘s presence in the United States and, conversely, to pull on Adidas ‘s heritage in Europe to develop the Reebok trade name overseas. The company gained top topographic point in the planetary athletic dress market & A ; European footwear market with the amalgamation, which was once held by Nike. Adidas and Reebok will now hold a larger armory of athlete subscribers, more influence on the supply concatenation, and a opportunity to procure more shelf infinite.

NIKE Marketing Strategy

Nike ‘s strength of its merchandise grapevine, trade name portfolio and planetary range has made it the clear leader in athleticss public presentation, doing it # 1 or # 2 in 89 % of the top markets.

Nike ‘s chief concern activity is the design, development and world-wide selling of high quality footwear, dress, equipment, and accessary merchandises. It is distributed in over 160 states around the universe. Sells under the NIKE trade name, entirely owned subordinates Converse, Cole Haan, Hurley International, BAUER NIKE Hockey, and Exeter trade names

Nike ‘s Marketing Mix

Nike ‘s selling scheme is an of import constituent of the company ‘s success. Nike is positioned as a premium-brand, selling well-designed and expensive merchandises. Nike lures clients with a selling scheme focus oning on a trade name image which is attained by typical logo and the advertisement motto: “ Merely make it ” . Nike promotes its merchandises by sponsorship understandings with famous person jocks, professional squads and college athletic squads. Nike has been developing its selling mix consisting of the four P ‘s i.e. merchandise, monetary value, topographic point and publicity. Thus Nike has soughed out the mix that will outdo aid it achieve its ends of maximal profitableness.

Merchandise:

Nike takes into consideration assorted facets of its merchandises as it is in a merchandise or consumer market. Thus it needs to hold extended scope of merchandises to defy its competition. Nike provides characteristics, designs, assorted trade names, boxing along with some excess characteristics like guarantees and after gross revenues service. This all facets can be included in the merchandise analysis. Nike has assorted merchandises every bit good as trade names that cater to different market sections which varies harmonizing to demand of peculiar sections every bit good as persons. Besides they offer customized designs of their merchandises wherein client designs their merchandise as per their demands. Nike provides customization of their shoe scope on their site Nike.com.Nike besides offers a one twelvemonth guarantee for their merchandises. Besides they provide an option for replacing in all their merchandises if any defects or jobs occur after purchase which is a portion of after gross revenues service. Nike has been planing universe category places for over 5 decennaries. Yet it has a inclination of altering the designs and forms after a peculiar period or measure. It besides has a scope of authoritative Nike places which are available all the clip. Nike besides provides packaging with coaction with other trade names.

Eg. Selling i-pods with their jogging places range

Monetary value:

Nike has a high-end consumer market with high disposable income inquiring for better service and satisfaction as their mark market. Thus their pricing scheme is to supply value at high cost with maximal profitableness. Therefore they have high borders but this can be justifiable due to its advertisement and research costs. Nike besides provides with price reductions during assorted gay seasons on its merchandises like Diwali in India. This is besides a portion of its pricing determinations.

Topographic point:

Nike is a multi-national organisation. Thus it needs to develop a broad scope of distribution channel which can back up its retail concern. Thus Nike has some of the undermentioned distribution mercantile establishments.Retail: Nike sells through its retail shops, trade name mercantile establishments, sole salesrooms every bit good as hyper markets in metropolitan countries. Online shopping: Nike besides provides with online shopping installation for its assorted merchandises and services. Distributors: Nike has a broad coverage of its distributers across the Earth to back up its retail mercantile establishments. Factory mercantile establishments: Nike besides sells its ware through mill mercantile establishments that sell some of its merchandises at a discounted rate.

Promotion:

Nike is extensively involved in Promotion and advertisement. Nike uses advertisement, gross revenues publicity, advertizement runs, public dealingss and promotion and gross revenues offers to construct consciousness and trade name image and trueness. Nike endorses assorted famous persons such as jocks, football participants, cricketers, tennis etc.It topographic points its merchandises in assorted films and shows utilizing merchandise arrangement. Nike besides sponsors assorted events such as circuit de France, FIFA World Cup, Delhi Marathon and assorted others. Nike promotes its merchandises besides using other merchandises trade name equity such as advancing its scope of places along with I-pod. The “ Just-do-it ” run of Nike has been since about 3 decennaries and has got them worldwide celebrity. Nike besides advertises by utilizing assorted celebs in their advertizements to increase trade name trueness while using the trade name image of such celebs.Nike has besides gone to the extent of patronizing a bowl called “ the Alliance Arena ” , which is by far the biggest football land in the whole universe. Eg. Roger Federer, Tiger Woods, Ronaldinho, Ronaldo. Nike besides endorses assorted squads every bit good as nines such as Barcelona Football Club. Designed to do a connexion to the consumer

Ad Schemes

Seldom pitch the merchandise straight or speak about merchandise properties

Sometimes do n’t even advert the company ‘s name, having alternatively merely the whoosh logo

Seek to portray the nucleus values of athletics

Collaboration ads with another strong branded merchandise, such as Apple iPod

Stigmatization: powerful selling mechanism used by Nike

aˆ? Leads to higher and more consistent merchandise quality.

aˆ? Increases invention by giving manufacturers an inducement to look for more new characteristics that can be safeguarded by the patent.

aˆ? Branding consequences in more merchandise assortment and pick for consumers.

aˆ? Branding provides consumer information about merchandises and where to happen them.

Michael Jordan

Put Nike on the map

1984-1985 Nike saw a lessening in their net incomes for the first clip of all time

Influenced them to do their first forte hoops shoe

Since so, Michael and Nike together have generated one million millions of dollars in gross

“ World Sports Hero No. 1 ”

Jump adult male logo is one of the most easy recognized symbols throughout the universe

Tiger Forests

The newest Nike esthesis

Estimated that Nike paid him $ 40 million

More attending than Michael Jordan and Bo Jackson

3 pg. ad in Wall Street Journal

30- and 60- 2nd Television musca volitanss

Gross saless & A ; Distribution

In the U.S. , Nike operates 3 distribution centres for footwear. Internationally, Nike operates 21 distribution centres in Europe, Asia, Australia, Latin America, Africa and Canada. Nike ‘s gross revenues force is divided into footwear and dress and the squads are assigned specifically to histories. Nike ‘s gross revenues force is the most professional and has the greatest cognition of the merchandises compared to its rivals. Globally, if Nike is in an emerging market, or a new market, it distributes its merchandise through a 3rd party. However, as the company additions critical mass in that peculiar country of the universe, Nike works to travel in straight and extinguish the distributer degree.

Manufacturing

Majority of Nike ‘s footwear and dress merchandises are manufactured by independent contractors outside the U.S. , while equipment merchandises are produced both in the U.S. and abroad. Fully 98 % of Nike ‘s footwear is manufactured outside the U.S. Nike has 42 mills in Asia ( China 36 % , Vietnam 26 % , Indonesia 22 % , and Thailand 15 % ) that manufacture its footwear merchandises ; nevertheless, they are non all sole Nike merchandise mills. In the non-exclusive mills, the company ‘s more basic gym shoes are manufactured, while the more technologically advanced merchandise is by and large manufactured in the sole mills. Nike besides has about 400 mills around the universe that industry dress, with the largest per centum of dress fabrication coming out of Asia, the Middle East, Turkey, Israel, and Mexico.

Financially, Nike ‘s overall consequences have improved over the old ages through both organic ( core trade names ) and inorganic growing ( acquisitions ) , supply concatenation enterprises and increased incursion in Europe and Asia. Nike has shown a 3 twelvemonth CAGR of 11.8 % since 2003. In 2006, grosss grew by 9 % led by strong growing in Americas and U.S. , while Europe and Japan have shown flattish growing. Currency had a negative consequence of 1 % on the entire growing. Nike ‘s public presentation in 2006 was fueled by solid gross growing across the different dimensions of the concern – each of the geographic parts and each of the merchandise concern units posted higher gross revenues for the twelvemonth. Nike struggled in Europe but improved gross revenues in the 4th one-fourth as a consequence of the universe cup. Exchange rates excessively affected the International gross revenues growing negatively. Net Income border has besides been bettering over the old ages

While the nucleus trade names have shown good growing, the subordinates, through assorted acquisitions, have been responsible for a one-fourth of the entire growing in the past three old ages and are expected to be the future drivers of growing. Nike branded footwear is the largest constituent of overall Nike gross revenues. However, this concern is going a smaller part of the company ‘s portfolio. In financial 2001, Nike footwear comprised around 59 % of gross revenues compared to 53 % at the terminal of financial 2006. Nike could farther heighten its “ other business/subsidiaries ” through assorted little acquisitions

Gross saless by concern Unit, 2001

Gross saless by Business Unit, ( $ Billions ) 2003-2006

*The section labeled “ Subsidiaries ” or “ Others ” represents grosss from NIKE Golf, Cole Haan Holdings, Inc. and Bauer NIKE Hockey, Inc. for financial twelvemonth 2001, and besides includes Hurley International LLC, Converse Inc. and Exeter Brands Group LLC for financial twelvemonth 2005. The subordinates gross revenues are non reported geographically and therefore are included under a separate section ( 1 ) All growing rates include currency impacts

Business Scheme

Nike ‘s chief precedences are to better trade name strength globally, better flight in Europe & A ; Japan, and experience growing from multiple positions: by class, monetary value point, geographics & A ; channel

Nike ‘s scheme for constructing a profitable portfolio is focused in the undermentioned cardinal countries:

Continuing to put in the nucleus concern through invention and demand creative activity.

Broadening its trade name portfolio – Leverage multiple trade names to prosecute chances in all markets, distribution channels and at broader monetary value points

Concentrating on fiscal subject – Making supply concatenation a competitory advantage, through operational subject and excellence

Improve public presentation in Europe & A ; Japan

Europe – United kingdom and France need farther work in the hard athletic footwear and dress industry. Football ( association football ) is at the nucleus of athleticss in Europe and is the key to success in that market. Even broader chances exist globally. Nike has made steady additions in football, in Europe through steady merchandise invention and effectual demand creative activity enterprises and is now the leader

Japan – Reorganized direction, increased demand creative activity, redesigned merchandises to add value at choice monetary value points

Accelerate growing in developing markets

Nike will concentrate on turning its trade names in developing states such as China, India, Thailand, Indonesia, Mexico, and Brazil. While the company may be underdeveloped in states, the chance has non been preempted.

Nike is focused on maintaining its endowment growing in line with its gross growing

Women ‘s Fitness

Estimated market – $ 14.5 billion, turning at 5 % -8 % per twelvemonth

% of Women ‘s merchandises in Nike gross revenues – 18 % of the sum branded concern

Nike is developing merchandise specifically for adult females, around four nucleus athletics classs: running/walking, yoga, cardio and fittingness dance – major competitory advantage. Consequences have been strong – 19 % gross growing in FY05

China – Biggest growing market – population of 1.3 billion people, over 400 million young persons ( 5x the figure of young persons in the U.S. )

Gross doubled in 2006, 2nd largest market in Asia, behind Japan

Nike faces intense competition from Adidas, and Li-Ning

Nike ‘s retail presence – over 2,000 point of sale locations presently and will go on to turn

Other under penetrated emerging markets like India, Thailand, Indonesia, Mexico and Brazil

Other Brands To Become Increasing Mix Of Revenues

Nike has built a diverse portfolio of other trade names including Converse, Starter and Cole Hann among others to turn to market chances non allow for the Nike trade name

Potential to go 25 % of entire grosss, up from 13 % presently

By put to deathing these schemes, Nike aims to present the undermentioned long-run fiscal ends

High individual figure gross growing ;

Mid-teens net incomes per portion growing ;

Increased return on invested capital and accelerated hard currency flows ; and

Consistent consequences through effectual direction of diversified portfolio of concerns

Profitableness additions, through gross borders enlargement irrespective of FX motions, augmented by a new focal point on SG & A ; A purchase.

Business Competition

Nike ‘s chief rival is Adidas which, after the acquisition of Reebok, has become the closest rival in footings of grosss and market portion

Adidas AG – The Group ‘s chief activities are bring forthing and selling of athleticss goods. The Group markets its merchandises under the trade name names: Adidas, Salomon TaylorMade-Adidas, Mavic and Bonfire. Merchandises sold under the trade name name Adidas include footwear, dress, and athletics accoutrements such as bags and balls. The Group has operations in Europe, North America, Asia and Latin America. At 31-Jan-2006 the Group acquired Reebok International Ltd & A ; staying involvement of Taylor Made Golf Company. During the twelvemonth the Group disposed Salomon concern section. Grosss for the company in 2005 were $ 7.8 billion and net income of $ 503 million

Puma, another German based company, whose grosss though little, has shown enormous growing in the past few old ages and is a large participant in the Europe market is expected to supply competition

Puma – The Group ‘s chief activity is to plan, industry and market featuring goods. The Group ‘s activities are carried out through three divisions: Footwear, Apparel and Accessories. Footwear division design, industry and market athleticss places. Apparel division includes path suits, football strips and similar athletic wear. Accessories include athleticss baggage, footballs and baseball mitts. The Group has operations in Europe, Asia, America and Africa. The Group sold Tretorn Sports Gross saless Ltd on 1 July, 2005. Puma had gross revenues of $ 2.1 billion in 2005 and net income of $ 337 million

In athletic dress and footwear, there are two genuinely planetary participants – Nike, Adidas/Reebok – with a host of ‘second grade ‘ rivals including Puma.Competitive Landscape – Nike is the best positioned athletic company in the market place ( Ratings – 3 being the highest and 0 being the lowest )

SWOT Analysis -Nike

Strengths

Contracts with Universities: Nike has contracts with universities countrywide to provide dress for jocks. These university sponsorships are good to Nike because they give the company the right to sell ware with these schools ‘ Sons, tap into the market of collegial athleticss dress, and organize relationships with immature consumers.

Analyst Assurance in Stock: Harmonizing to imperativeness releases issued by Bloomberg, analysts from Bank of America, CSFB, and Wells Fargo late called Nike a “ bargain. ” After a lacklustre fiscal twelvemonth, this intelligence could potentially impact stock monetary value in a positive manner.

Michael Jordan Returns to Basketball: Nike received imperativeness coverage throughout Jordan ‘s decision-making procedure and continues to do imperativeness sing the impact of Jordan ‘s return. Nike was able to capitalise on this strength by debuting a new shoe – the Air Jordan XVI – and by doing new commercials with Jordan that will hit the airwaves shortly. Michael Jordan is possibly the most accepted jock in the universe and markets Air Jordan dress for Nike.

Corporate Responsibility Report: Harmonizing to the Nike Web site, in October Nike released its first Corporate Responsibility Report. The papers states that Nike ‘s focal point points, in footings of corporate duty, are the environment and labour. Since these are two countries that cause protests against Nike, it is of import for Nike to label them as countries to concentrate on and for Nike to give the populace this information.

Strict Environmental Standards: Harmonizing to Bloomberg, Nike has accepted rigorous environmental criterions to follow with by 2005. These criterions were portion of the Kyoto pact that President Bush refused to subscribe and are supposed to assist in the battle against planetary heating. Nike has made other attempts to be energy efficient ; its office in the Netherlands is the most energy efficient office in that state by 35 % . Nike besides uses organically adult cotton, promotes the Eco-class plan with Delta Airlines, and founded N.E.A.T. in 1993 to, as the Nike Web site maintains, “ Reduce Nike ‘s impact on the planet. ”

Philanthropy: Nike is committed to philanthropic enterprises such as “ Reuse a Shoe, ” “ Project Dreams ” and “ Habitat for Humanity. ” These attempts, along with other plans such as the “ Shadow ” plan and the Bower adult male Foundation, show Nike ‘s committedness to the community. Nike employees besides benefit from these philanthropic chances. Recently, Nike continued to give back to the community by giving $ 1 million to the World Trade Center Disaster.

The Nike “ Swoosh ” : One of the biggest strengths of Nike is its trade name designation and corporate individuality. The Swoosh resonates in the heads of consumers who recognize that logo as stand foring quality, ace athletic dress. The Nike Swoosh is recognizable and identifies all Nike merchandises and sponsored universities.

Nike Icons: Nike uses athletic icons and heroes to market its company goods. Examples of Nike icons are: Michael Jordan, Tiger Woods, Mia Hamm, Marion Jones, and Lance Armstrong. Not merely do these jocks adorn print and telecasting advertizements, but they besides appear on the Nike Web site and are called “ Our Heros. ” This is strength because consumers begin to place the jock with Nike. Nike ‘s popularity is connected to the popularity of these jocks.

Event Selling: Nike successfully uses event selling in the kingdom of fittingness to convey more trade name acknowledgment to its name. These sponsorships guarantee that consumers see the Nike Swoosh in topographic points other than telecasting advertizements, on merchandises, and in shops. Nike patrons fittingness challenges at universities and besides patrons countrywide athletic tourneies, including some for charity.

Niketown: Nike town shops, located in 15 major metropoliss across the universe, demonstrate that Nike has become a portion of American and universe civilization. These celebrated shops represent the true strength of the Nike trade name and the popularity of the jocks who advertise Nike dress.

Failings

Labor Practices: Militant groups and pupil organisations have made Nike a symbol of labour development. These groups blame Nike for hapless conditions in its 3rd universe mills, under-paying workers, using kids, and disregarding the basic rights of its workers. Nike is frequently in struggle with labour brotherhoods ; most late, Nike bucked caputs with a mill workers ‘ brotherhood in Mexico. Consequently, the public associates Nike with sweatshop labour and accuses it of hedging human rights in order to procure the greatest net income.

Ad: Nike spent over $ 1 billion on advertisement, athleticss selling, and promotional disbursement in 1999, and, although popular, some of its advertisement schemes were considered controversial, harmonizing to an article titled “ Channel Conflict. ” Feminist groups impeaching Nike of degrading adult females have attacked Nike commercials that stress winning above everything else and demo adult females deferentially. Although the bulk of Nike ‘s commercials are cutting border and originative, those very commercials can be failings in Nike ‘s repute.

Consumer Cost: Nike has been accused of outrageously marking-up monetary values on many of its merchandises to cover the costs of advertisement and sponsoring. The public feels that Nike overcharges its consumers and should take down monetary values. Harmonizing to an article from the Graduate School of Business at Stanford University, a shoe whose net mill monetary value is $ 24.71 is sold retail by Nike for $ 100.

Endorsements: The public inquiries the sum of money that Nike spends on patronizing jocks. Peoples do non hold with the multi-million dollar, multi-year contracts that Nike extends to jocks such as Tiger Woods, Ken Griffey Jr. , and Michael Jordan and are disillusioned with Nike ‘s preoccupation with these jocks.

Global Community and Outsourcing: Nike ‘s attempts toward planetary enlargement have become a failing in its repute. Nike has operated in the Asiatic part for 25 old ages and uses subcontractors throughout the Earth to fabricate its merchandises. Factories in China, Indonesia, Vietnam, Italy, the Philippines, Taiwan, and South Korea produce the bulk of Nike goods. Nike has small control over its drawn-out merchandise line because it is such a big company with the bulk of its operations overseas. Additionally, many people in the United States see Nike ‘s outsourcing as taking away occupations from Americans.

Opportunities

Wide Range of Products: Nike non merely has the ability to win in the hoops shoe market, but in virtually every other athletic market from golf dress to adult females ‘s exercise cogwheel. This diverseness of merchandises nowadayss Nike with a great chance – to construct up strength in all of its merchandise lines and besides to be flexible when the market displacements, doing demand in some countries higher than others.

Foreign Market: While Nike has become a major portion of American civilization, there is international strength in the Nike trade name. Harmonizing to one Nike imperativeness release, world-wide orders for Nike merchandises are up 6 % . This is an chance because it means Nike can spread out globally and depend less on the American market for its successes or failures.

NIKE goddess Opened in Newport Beach, California: This marks Nike ‘s enlargement into the adult females ‘s dress market. Because adult females wear athletic dress for more than merely working out, this is an chance for Nike to leap into the mainstream vesture market.

Ballyhoo of Ad: Nike ‘s advertizements make moving ridges. Peoples enjoy them and wait for new 1s. Nike ‘s newest advertisement run is “ Enjoy the Weather, ” which features jocks suppressing conditions conditions to execute their athletics. The ballyhoo of Nike advertisement brings with it the chance to make the populace through the publicity of Nike ‘s newest advertisement enterprise.

Expansion into Outdoorss Dressing: The enlargement into out-of-door vesture is an chance for Nike because this will let Nike to go more of a portion of the dress market. The fittingness, invention, and engineering vesture line supports in Nike ‘s tradition of supplying superior merchandises.

Web site: Nike ‘s monolithic Web site will turn out to be an chance for Nike consumers to acquire up-to-date intelligence coverage and to purchase into the on-line buying market. It is one of the most comprehensive and synergistic sites on the Internet. Nike should be able to capitalise on its Web site and stress those issues that Nike populaces would non otherwise be exposed to by other media.

Menaces

University Campus Groups: Student groups are deriving strength and going a larger presence on university campuses across America. For illustration, an article stated that the University of Connecticut decided to let pupils with protest marks to go to athletic events merely after the school was approached by a pupil organisation bespeaking this step. If Nike can non accommodate its differences with pupil groups, it will confront more and more menaces to its repute as these groups gain more and more of a following on campuses.

Competition: Harmonizing to assorted Web sites, Nike competes with Converse, Fila, Adidas, New Balance, and Reebok. Nike presently dominates the market, but these companies pose a possible menace to its repute. If Nike can non remain one measure in front of these companies in footings of merchandise design and client satisfaction the corporation could stagger. Reebok, for case, has already taken over Nike ‘s contracts with the WNBA and the NFL.

Industry Tendencies: In the yesteryear, Nike has been unable to maintain up with alterations in the industry. Harmonizing to a study refering Nike ‘s failings, the corporation was one of the last athletic footwear companies to travel into e-commerce and was late recognizing other tendencies in the market. Nike can ill afford to be viewed as a self-satisfied company and can non allow this endanger its repute.

Manufacturing Network and Global Economy: Nike Inc. is the parent company of legion subordinates and is imbedded in an intricate planetary fabrication web. Additionally, Nike relies to a great extent on the planetary economic system to win.

Management: Since its construct in 1964, Phil Knight has held near control of the company and “ ruled with a mix of closely allied senior directors, ” harmonizing to a concern study entitled “ Channel Conflict. ” Nike direction has besides gone to enormous lengths to place with competition and triumph. Management wants to be in complete control ; nevertheless, this is non ever a positive in the eyes of stakeholders and could endanger its repute.

Internet Boom: An Internet hunt with the phrase “ anti-Nike ” showed 1000s of links to anti-Nike Web sites appear. With the chink of a mouse, anyone without any accreditation or legitimacy can post anti-Nike sentiment or hold entree to anti-Nike stuff. This has made it easier for militants to show their negative sentiments of Nike and is doing it harder for Nike to get the better of some of its less flattering reputes.

Lawsuits: Nike has been involved in many cases that besides threaten its repute. Most late, the United States Court of Appeals for the Second Circuit affirmed the dismissal of a instance against Nike and St. Johns University by a Mr. Keady. Harmonizing to a study by Vada Manager, Director, Global Issues Management, “ Mr. Keady had made legion efforts to discredit Nike ‘s considerable attempts at bettering conditions in the mills and communities around the universe where our merchandises are made. ” Although Nike won the case, Keady ‘s attempts, and others like them, to discredit Nike present a menace to the paces it has made in the manner it does concern.

NIKE ‘S PRESENCE IN INDIA:

NIKE has been present in India from 1996 and headquartered in Bengaluru. India is a cricket brainsick state, NIKE understood the importance of cricket and in December 2005, it tied up with coaching schools like the BCCI ‘s National Cricket Academy. Now NIKE became official kit patron for BCCI Indian Cricket Team. TheA first “ Merely Make It ” cricket ad besides made its visual aspect during the Champions Trophy. ”

We want to look at what drives the passion for cricket in India. We aim to link emotionally with our clients, ” – Sanjay Gangopadhyay, selling manager, Nike India.

Target Market:

Nike is aiming immature people in India.

Paying attending to other popular games in India.

Signed on India ‘s taking football star Bhaichung Bhutia

Entered into a trade with Bhupathi Tennis Academy

The mark market of NIKE is the urban young person with the trade name proposition ‘competition to lifestyle ‘ .

The rule ingestion Centre ‘s viz. the tubes are besides a possible mark market.

TYPES OF OWNERSHIP:

Licensing, Franchising, Own Subsidiary

Market SEGMENTS

Geographic cleavage

Density: Urban and semi-urban metropoliss

Demographic cleavage

a?”Age: 15 to 35 a?”Income degree: & gt ; Rs. 15,000 a?”Social category: Upper center, lower upper and upper category a?”Gender: Male and female

Customer Profile:

a?”Athletes a?”Gym habitues a?”Sports partisans a?”Brand freaks a?”Image searchers

Cleavage, Targeting and Positioning of Nike

Nike has been in the market for a long period now. Thus it has already sought out the STP analysis that it would utilize to advance and sell its merchandises.

Market Sections:

The market segments that Nike can chiefly distinguish are high, medium and low terminal clients with variable income degrees. Therefore, Nike needs to section on assorted foreparts such as economic, demographic, geographical distinctions.

Economic cleavage:

High, medium and low income degrees that can be clubbed with their life styles of high, medium and low terminal clients.

Demographic cleavage:

The company can section the market into age, gender and category sections.

Geographic cleavage:

The company can section the market into sections of north, west, east and South.

Target Market:

The company needs to aim the market as per the trade name image and equity in different markets. Therefore, the company has targeted the market of high-end, high income degree between the age of 16- 55 with a pan India location. Thus the market section it is aiming is rather indispensable to distinguish itself from its rivals i.e. Reebok, Puma, Fila and local trade names like Bata.

Placement:

The trade name Nike has positioned itself in the heads of the consumer as a high-end merchandise which is rather dearly-won but gives the value for money with its service, quality and designs. All this analysis provides Nike with the client satisfaction and therefore trueness that it needs to accomplish high volumes and profitableness. Sportswear major Nike is manner in front in the race for leading in athletic wear. It shot to a 40 per cent portion of the US sportswear market — the biggest in the universe — which gives it a lead in the planetary market, even though Adidas leads in Europe. But the head start has n’t helped the planetary athleticss trade name in the Indian market so far. Harmonizing to retail consultancy KSA Technopak, while Reebok has a 45 per cent portion, Adidas has 30 per cent and Nike histories for merely 25 per cent of the Rs 375-400 crore branded.