Nike Incorporation is the worlds leading sporting goods manufacturer. The company produces the sports goods all-encompassing: clothing, footwear, sports equipment and so on.
The company headquartered in Beaverton, Oregon. Nike with its impressive performance impresses its founder; Bill Bowerman once said the sentence: “As long as you have a body, you are world athletes, and Nike will continue to develop grow.”
Before the company became Nike, the original name of the company is Blue Ribbon Sports on January 25, 1964. The company then officially became Nike Inc. on May 30, 1978.
Nike has been around the world will inspire every athlete and offer the best products as glorious task. Nike’s language is the language of movement. Three years later, the company has always been committed to create every opportunity to show themselves. Nike knows: Only the use of advanced technology to produce the greatest products. So, by the way, Nike put a lot of manpower and material resources for the research and development of new products.
Years ago, Nike has been sponsors a lot of high-profile athletes and sports teams around the world, with the highly recognized trademarks of “Just Do It” and the Swoosh logo.
Nike – Nature of the Business
NIKE, Inc. is engaged in the design, development and worldwide marketing of footwear, apparel, equipment and accessory products. It sells its products to approximately 18,000 retail accounts in the United States and through a mix of independent distributors, licensees and subsidiaries in nearly 200 countries. NIKE’s athletic footwear products are designed for specific athletic use, although some of its products are worn for casual or leisure purposes.
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The Company creates designs for men, women and children. Running, basketball, children’s, cross-training and women’s shoes are the Company’s top-selling product categories. NIKE also markets shoes designed for outdoor activities, tennis, golf, soccer, baseball, football, bicycling, volleyball, wrestling, cheerleading, aquatic activities, hiking and other athletic and recreational uses. NIKE sells active sports apparel that covers most of these categories, athletically inspired lifestyle apparel and others.
Objective of the Nike
Nikes main objective is to develop products that help athletes of every level of ability reach their potential, to create business opportunities that set Nike apart from the competition and to provide value for its shareholders.
Besides that, their aim also is to keep manufacturing costs down is driven by the intense competition of the industry in which they operate. Indeed, many other companies within the athletics industry also operate in these low-wage countries, moving between countries depending on factor cost. Their ability to move so easily is often the cause of difficulty for many less developed countries, who can become economically dependent on the corporations.
Strategies of Nike
There are four main categories of strategies of Nike to continue develop growth in this along the years. They are financial perspective, customer perspective, internal perspective, and learning & growth perspective.
Financial Perspective
Growth strategy
Focus on Emerging Markets (i.e. BRIC)
Products in new niche activities
New customer segments
Productivity strategy
Increase Asset Utilization : increase employee by 5%
Reduce Operational Cost
Customer Perspective
Maintain Product Leadership
Provide high quality & innovative products
Improve Customer Relationship and Service
Launch 250-300 Nike retail outlets in next three years
Improve image
“Nike Community” for welfare manufacturing workers
Align incentives of workers
Internal Perspective
Follow “Cost Out” strategy
Reduce marketing spent
11% of revenue only, focus on local sport heroes
Integrate New Segments & Markets and their attributes with current processes like customer
Improve Innovation Cycle
With smarter and more intelligent customer feedback mechanisms through e-channels
Implement CSR
Expand its alliance with other non-profit organizations to work together
Learning & Growth Perspective
Retain and Train key employees
Ensure attrition rate is between 2-3%
Improve IT Assets
Enhance CRM, e-channel, social media platform
Invests 2-2.5% Rev in IT Systems
Create a customer centric culture
Executive team to provide a strong and visionary leadership
Targeting Market
Nike’s targeting market is active people who enjoy high quality sporting goods, especially footwear. To do so, Nike focuses on creating premium consumer experiences on product innovation, brand leadership and elevated retail presence.
Nike is targeting further geographic expansion and farther marketing penetration in all regions. Though disciplined operating management, the company still continues to target long range mid teen earnings per share growth.
Size of Nike
The size or range of the Nike Company is increases throughout the years. The total number of employees of Nike Company is about 38000 people around the world. In 2009, the company had a net income of around $1.49 billion. They have offices in 45 different countries. Besides that, the number of Nike stores globally is 700 around the world.
Types of products sold
Nike Company has a wide range of sports equipment. The first products that Nike produce is track running shoes.
Besides that, Nike also offers a range of shoes for sports like, tennis, golf, soccer, baseball, football, bicycling, volleyball, cheerleading, hiking and others. They manufacture casual clothes, running clothes, yoga clothes, tennis clothes (dresses and skirts), thongs, socks, caps, aquatic gear, duffel bags, sunglasses, skates, bats, gloves, women’s sport bras, ice skates, roller blades, roller skates, protective gear, hockey sticks, hockey jerseys and many more small accessories.
http://upload.wikimedia.org/wikipedia/commons/thumb/1/17/Zoom_elite_2.png/220px-Zoom_elite_2.png Nike Pro Core Compression
Nike brand, athletic shoes Nike brand, Tennis(Girls’ shorts)
Services
Nike Company has a great service which known as NIKEiD. It is a service that allowing customers to customize the products purchased from Nike. It must be through the online purchased.
Besides that, The NIKEiD studios give customers have a great personal experience to work with. The NIKEiD App for iPhone and iPod Touch was released on the iTunes App Store on 14 October 2009 to allow users to search products.
Nike PhotoiD service is by taking picture or image with their mobile and sends to Nike where newly designed software will then analyze the picture for its two main colors and then go about designing a shoe based on it. The consumer will then receive reply with an image of their desired shoe. From this stage they can either save the image, send it to someone else or even purchase the new design.
Strengths and weaknesses of Nike
Strengths
Weaknesses
Brand recognition
High product quality
Effective marketing strategy
Capacity of innovation
Strong distribution chain
Strong R&D
Strong customer relationship
Overseas manufacturing dependency
Decreasing United States market share
High product price compared to Adidas
Currency exposure
Medium retail presence
Competitors
Adidas is the major competitor to Nike Company. Adidas is about to launch a new innovative campaign praising the Team Spirit in sports. Any company that produces athletic footwear or athletic apparel is a competitor to Nike such as Puma, Reebok(now is owned by Adidas), Asics, Under Armour, and so on. However, according to graph below, Nike Company is the best sells compete with others.
http://cstl.syr.edu/fipse/TabBar/BldCirc/circlgif/fig17.gif
Financial Model of Nike
Since year 1997, Nike Company’s revenues had plateaued at around $9 billion.
Net income had fallen from almost $800 million to &580 million. However, market share in US athletic shoes had fallen from 48%, in 1997, to 42% in year 2000. It adverse effect of a strong dollar had negatively affected revenue.
The management is concerned about the top-line growth and operating performance. To boost revenue, the company would develop more athletic-shoe products in the mod-priced segment- a segment that Nike had overlooked on the recent years.
The company has also planned to push its apparel line. The company has planned to exert more effort on the expense control. Long term revenue growth target is 8%-10%. Earning growth target is 15%.
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