Copy of Nike-1

8/4/2019 Copy of Nike-1

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NIKE


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Mission Statement

To lead in corporate citizenship

through proactive programs thatreflect caring for the worldfamily of Nike, our teammates,

our consumers, and those whoprovide services for Nike


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What Nike Does

Create authenticathletic footwear,apparel, equipment and

accessories for sportsand fitness enthusiasts

Through subsidiaries,design and sell a line of

mens and womensdress and casual shoesand accessories


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Principle Products

Began with longdistance running

shoes in 1963Past 17 years: AirJordan basketballshoes

Wide range ofshoes, apparel andequipment


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Brand and Logos

The Swoosh only

cost $35

Memorable, simplein form, workable inall sizes, invokes astrong signal


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Nike DominanceComparison of Annual Revenue

0

1

2

3

4

5

6

7

8

9

10

Nike Fila Reebok New Balance Adidas

Corporation

2001AnnualSales(In

Billions)


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Athletic Shoe Market Share

Athletic Shoe Market Share, 2000

Adidas

15.1%

Nike

39.2%

Asics

2.1%

Saucony

1.4%

K-Swiss

3.6%

Reebok

10.9%

New Balance

9.4%

Timberland

2.9%


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STRENGTHS

Strong and meaningfulresponse to laborcriticisms

High quality productsand good overallreputation

Phil Knightsmanagement andleadership

Brand recognition andeffective marketing


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WEAKNESSES

Poor communication of labor practices

Insufficient line of affordable shoes

Uninformed factory workers


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0.00%

5.00%10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

Well

Below

Average

Below

Average

Average Above

Average

Well

Above

Average

No

Opinion

Fairness of Nike's Labor Practices

Fairness of Nikes Labor

Practices


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0.00%

5.00%

10.00%15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

45.00%

Well

Below

Average

Below

Average

Average Above

Average

Well

Above

Average

No

Opinion

Quality of Nike's Products

Quality of Nikes Products


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Seven key marketsBrazil, China, India, Japan, U.K., U.S.and Russia.Seven key performance and lifestyle categoriesaction

sports, basketball, football, running, mens training,

womens training, and sportswear.


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OPPORTUNITIES

Increased sales due to thestrengthening economy

More positive public perception ofNikes social responsibility

Growth through increased presence in

low- to mid-priced shoe market


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THREATS

Increased awareness of human rights

Growing competition

Competitors attracting femaleconsumers

Mounting disapproval of allegedcorporatization of college athletics


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Comparison with Competitors


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Nike Brand Factories by Regionand Product

Contract Manufacturing Base

Overall manufacturing base is generally comprised of long-term partnerships,

with some fluctuation based on product sourcing requirements, changing

business and fashion trends or general factory performance.


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NIKE-Manufacturing

Contract Factory Disclosure

Nike was the first company in the industryto disclose its factory list. Nike iscommitted to supply chain transparency byupdating public disclosure of the contract

factories worldwide that are producingNike-branded product.

Focus Factories

prioritized monitoring by focusing on the20 percent of key contracted factories thataccount for approximately 80 percent ofNike's production by volume. 168 suchfactories


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NIKE-Business Strategy


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Strategy plans for ASIA-Long Term

Hire a market research firm familiar with Asia, specifically the

booming market of Japan, to study the buying habits of Asianconsumers. Determine what factors motivate their athleticfootwear and apparel purchases.

Sponsor regional sporting events for professional, amateur, and

collegiate teams.Conduct fashion shows at top retail venues to display our latestmerchandise offerings to consumers and the media.

Hire independent industrial engineers and analysts to work withmanufacturing facilities in order to maximize efficiency of

operations: shop layout, processes, etc.

Work with suppliers to implement the next generation ofelectronic data interchange (EDI) technology in an attempt toachieve just-in-time inventory.

St t i Pl f I di L T


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Strategic Plan for India-Long Term

Bulk buyers of sports products

School children constitute a largeportion of the sports market, and tend tostay loyal to a particular brand.

Traditional School

and CollegeFocus

India has traditionally seen lowerlevels of interest in activities thatconstitute Nikes main product portfolio

Focus on promoting Nikes coresegments like football, basketball

AthleticInterests


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Strategy-Product Differentiation


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Goals set in 2011

Investing insustainabilit

y as a keyinnovation/R+D priority on

consumerbrands'

agendas

Fast trackinnovation

throughinvestment

and

collaboration

Launch theGreenXchangeas a platform for

enabling thesharing of

intellectualproperty to fasttrack changes

efficiently

Build anadvocacyagenda topush for

large-scale

policies andinvestmentsin sustainable

innovation


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OBJECTIVE 1To increase positive public perception ofNikes labor practices by 20% by April

16, 2013

SHORT TERM STRATEGY

PLAN


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STRATEGY 1-1

Increase communication of positivesteps Nike is taking concerning labor

practices

Key Publics:

Media

Consumers (esp.university students)


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TACTICS

Create fact sheets outlining minimumwage discrepancies among countries

Circulate Letters to the Editorhighlighting positive aspects of Nikes

labor practices

Bring a visible Nike representative tocollege campuses


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TACTICS

Create focus groups to assess Nikes

labor practices

Distribute a video news releasepromoting Nikes efforts in the global

community


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STRATEGY 1-2

Make changes to improve Nikes current

labor conditions

Key Publics:

Foreign government agencies

Nike employees

Social activist organizations


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TACTICS

Create an anonymous system to protectwhistleblowers

Specify and inform employees of their rightsand responsibilities under the Nike code ofconduct

Provide employees with time and money toenroll in Nikes educational programs

Ensure surprise visits are a surprise


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EVALUATION

Repeat surveys atsix month intervals

to gauge publicperception

Revisit with focusgroups to record

their opinions ofimprovements


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OBJECTIVE 2

To increase American shoe sales by$500 million by April 16, 2013


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STRATEGY 2-1

Establish a better presence in theaffordable shoe market

Key Publics:

MediaConsumers only willing to spend lessthan $85


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TACTICS

Develop advertising tactics to promote NikesPresto line of shoes ($60-$85)

Aggressively target budget consumersthrough sales promotions and discounts onmid-priced shoes

Build a stronger relationship with moderately

priced retailers through sales associatesIncrease number of Nike outlet stores offeringdiscounted merchandise


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STRATEGY 2-2

Establish a competitive presenceamong female consumers

Key Publics:

Media

Female consumers(potential and real)


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TACTICS

Create advertisements that showcase Nikesfemale shoes by featuring professionalathletes and non-celebrity females who use

Nike productsDevelop a shoe named for a celebrity femaleathlete, such as Mia Hamm, comparable toAir Jordans

Actively pursue more female athletes forendorsements and advertisements byextending competitive contract offers


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Business Exit

>shoes, bagsand apparel forskateboarders-

Nike+Savier

>not able toachieve its

financial goals

>range of shoescalled Air Stabfrom its British

outlets after aspate of fatal knifeattacks across the

country

>Taken out ofdistribution

>football helmetchin straps

>reports of the

strap breaking andinjuries that inc. 2concussions, 2facial cuts that

required stitchesand a broken nose


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TIE-UPS

Nike has historically had some of the mostcutting-edge products on the market.

For example, Nike teamed up with Apple and

launched the Nike + iPod line of products.

This technology allows consumers to

connect their iPod devices to sensors insidethe shoes to record time, distance, pace, and

calories burned

Nike + iPodNike + iPod


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ADIDAS

High

Quality

Low

Quality

Low Price High Price

NIKE

REEBOK

ADIDAS

CONVERSE

Strategic Group Mapping


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5 Year Strategy Plan-

Sponsorships

NIKE, Inc. and the U.S. OlympicCommittee (USOC) announcedtoday that NIKE, Inc. will extendits sponsorship of the USOC asan official outfitter through 2016

London 2012 Olympic and

Paralympic Games, Sochi 2014Olympic and Paralympic WinterGames, as well as the Rio deJaneiro 2016 Olympic


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The Future: Closed-Loop BusinessModelFuture will demand closed-loop businessmodels that move closer to achieving zerowaste by completely reusing, recycling orcomposting all materials.

Includes up-front design of products that canbe manufactured using materials reclaimedthroughout the manufacturing process and atthe end of a product's life.

Innovators must create new ways to recycleand reuse waste and turn that into newproducts. Designers must look at newsustainable raw materials. Leaders mustexamine the impact on supply chains and

labor forces.


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Future Plans

A continued effort to eliminate PVC in its products;

The 'Reuse a Shoe' programme which has enabled some 13 millionpairs of athletic shoes to be recycled;

Working with organic cotton farmers to create a larger market for

their cotton: Nike's use of organic cotton has been climbing each

year since 1997, and it has a goal of 3% organic cotton use in everyunit of the company by 2012

Reducing emissions at factories worldwide and encouraging the

adoption of environmental management systems in each plant;


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RecommendationsFocus on Technology and Innovation

o With the market being mature in US and developed

countries, product differentiation is the best tool to gain

market share

o Focus on setting up a reliable Information system that iscapable of handling complex supply chains in a fool proof

manner

Revisit branding strategy by decoupling cheap and

low cost footwear from flagship itemso Cheap and low cost footwear should be decoupled from

the existing Nike brand. They might be sold under a

different name, but not Nike. For example, Nike starter

shoes should be sold as just starter and not Nike starter.


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Compete in full fledge in Emerging markets, particularly

in china make a website Store

Nike is currently the market leader in China. But competition is

catching up and Li Ning has been growing strongly. In this situation,Nike has to operate in full fledge to capture market share in emerging

markets. Basic things like an online store in a country like china will

seriously help drive a lot of business.

Follow both Differentiation and Pricing based strategy

o In a developing market, the market grows with a price competition

and later transforms into a high quality based market with non-price

competition. Since the industry in the developing economies is

growing, it is necessary to have an aggressive pricing based strategy as

well. As Nike has been building a high quality brand image so far, it

makes good sense to follow both differentiation and pricing based

strategy together.

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