Nike, Inc by Karan shah

Case Analysis:

NiKe, Inc.

Karan Shah

Hayward | 08/20/2014

Developing an International Business Strategy |MKTG 7710

Instructor - Jeffrey Newcomb

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1. Overview 2. Challenges 3. Expansion of Nike 4. Industry and business situations 5. Competitors & Market Share 6. Competitive Advantage 7. 4P’s of Marketing Strategy 8. Porter’s 5 Forces 9. SWOT Analysis 10.Recommendation 11.Conclusion 12.References

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Nike, Inc. is the world’s leading innovator in athletic footwear, apparel, equipment and

accessories.

The company was founded on January 25, 1964, as Blue Ribbon Sports, by Bill Bowerman and Phil Knight, and officially became Nike, Inc. on May 30, 1971.

The company takes its name from Nike, the Greek goddess of victory.

The company is headquartered near Beaverton ,Oregon, USA.

Area served – Worldwide more then 160 countries.

With revenue in excess of US$27.1 billion. As of 2013, it employed more than 44,000

people worldwide.

Nike operated 690 retail stores worldwide and managed 23,000 retail account in US.

Nike markets its products under its own brand, as well as Nike Golf, Nike Pro, Nike+, Air Jordan, Air Force 1, Nike Dunk, Nike Skateboarding, and subsidiaries including Brand Jordan, Hurley International LLC and Converse inc.

Website launched in 1998 with Nike.com

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Nike’s Mission –

Nike aims to lead in corporate citizenship through proactive program that reflect caring for the world family of nike ,our teammates, our customers ,and those who provide service to Nike

Nike’s Vision - “TO BRING INSPIRATION AND INNOVATION TO EVERY ATHLETE* IN THE WORLD.IF YOU HAVE A BODY,YOU ARE AN ATHELETE. Nike’s Slogan –

JUST Do IT…

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Tightening competition – growth of Adidas, New Balance, Marketing

expenditures are growing steadily.

Losing market share in China.

Nike’s premium and high quality brand image doesn’t sync with the expectations of the customer.

Nike is heavily dependent on information technology systems across its

supply chain.

2. Nike challenges

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NIKE+ allows us to connect the physical world of sport with the social elements of digital to create a better sport experience for every athlete. It’s about much more than a shoe. It represent a shift for NIKE from product, to Product+ experience.

- Mark parker , Nike CEO Founded in 2010, with joint venture with Apple , INC after the initial digital and

social success in Soccer and running ,The Nike digital Sport division , based in Jerry Rice Building at Nike ‘s headquaters in beaverton, Oregon.

Nike+ was made up of censor placed inside running shoes that monitored the runner’s speed ,distance and calories burned and transmitted that information to the ipod, which receive and stored data.

The censor is 30$ and running shoes averaged 80$. In 2010, Nike increased fuctionalality by adding the Nike+ GPS app and Nike + GPS

SportsWatch . In January 2012, Nike + FuelBand costing 149$ , the FuelBand was a wristband that

track the wearer’s movement through the day. In February 2012 , Nike+ Basketball and Nike+ Training connected new footware,

which featured digital sensors with wireless communication capabilities with the nike + interactive mobile platform. The Sensors collect information about the user’s movement and transmitted the data to a smartphone.

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3.1 Exhibits of Nike+ Products

Nike+ FuelBand

Nike + GPS app

Nike + GPS SportsWatch

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4. Industry Revenue Growth & Market Price Of Nike

As we can see the continuity in growth Nike has made the Nike, Inc reached Fiscal 2014 revenues from continuing operations up 10 percent to $27.8 billion.

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4.1 Industry Life Cycle

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5.Competitors , Key Customer & Market Share

ADIDAS AG: 2013 revenues - $14.49 billion. It competes in the overall sporting goods market.

PUMA: 2013 revenue - $3.5 billion. Puma AG is a Germany-based competitor in the sells sports footwear, apparel, accessories, and equipment.

UNDER ARMOUR: 2013 revenue - $856.4 million. Its products, which are designed with microfibers intended to wick away perspiration, extend across the sporting goods, outdoor, and active lifestyle markets.

In addition to Nike's footwear competitors, the company also competes with other makers of outdoor apparel, such as V.F. Corporation, Columbia Sportswear and Quicksilver.

KEY Customers • Women • Men • Girls and Boys

3 – 36 month 3 – 8 Years 8 – 15 Years

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6. Competitive Advantage

Technology in Products Nike technology allows consumers to connect their iPod devices to sensors inside the shoes to record time, distance, pace, and calories burned. Manufacturing Skills Due to cheap labor in foreign countries, Nike outsources virtually all production to other areas of the world. Strength of Patents One of Nike’s most revolutionary technologies comes through its footwear cushioning. Competitors have tried to match rival Nike’s cushioning systems, but none have matched their success Economies of Scale Nike is the single largest producer of athletic footwear and apparel, allowing them large cost advantages over competition.

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7. 4 P‘s of Coach Marketing Strategy

P P

P P

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- Offers a diverse range of high quality sporting goods and apparel. - Product mix width consist of athletic shoes , apparel and sports

equipment.

4 P’s Marketing Strategy

Product

- A premium product commands a premium price, at e same time as the company also compete heavily with their main rival Adidas.

- Uses market skimming pricing strategy. - Product line pricing.

Price

Promotion

Place

- The business has a rich history and bright future using sponsorship to generate brand authenticity in their markets.

- Direct Marketing (through e-Shop). - Public personal relations and also with Social Media . - Mass Advertising.

- Nike is truly global corporation seeking to further segments its current markets and increase its impact in China, Russia , brazil and INDIA in particular through independent distributors , licenses , subsidiaries.

- Sells product in approximately 160 countries around the world.

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8. PORTAR’s 5 Forces

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Threats of Potential Entrants (LOW) Barriers to entry in the athletic footwear industry are high due to several factors:

It is as very capital intensive industry. Economies of scale The industry itself is in a consolidation phase and only the big ones will

survive. Bargainng power of Buyers (VERY HIGH)

Customers more affected by price. There has been and increase in women purchasing the shoes. The buyers for this industry are retailers and end users. .

Threats of Substitutes Products (LOW) They are an attractive alternative product or service, which customers can easily shift to if there are low switching costs The availability of substitutes invites customers to make price, quality and performance comparisons. Buyer’s propensity to substitute is low.

PORTAR 5’s Forces

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Suppliers (LOW) The suppliers do not have the power to bargain the price of their product, since there are numerous suppliers. Using production facilities in the Far East has give Nike economies of scale.

Competitive Rivalry(HIGH) Reebok, offering more choice of shoe Acquisition between Adidas and Rebook .

PORTAR’s 5 Forces

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STRENGHT

WEEKNESS

• Nike is strong at research and development. • Offers their product worldwide. • Nike is globally recognized • Nike has no factories • It has a strong sense of marketing strategy • Strong financial position

• Reported to have applied child labor in pakistan. • Accusations of poor conditions in the work place. • History of violations of over time laws • Searching for cheap labour • Income of the business is still heavly dependent

upon its share of the footware.

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OPPORTUNITY

Product development that changes as the trends change. Diversification in product range Expansion in the global markets Make Efforts to reduce the pollution generated from Nike

manufacturing factors. Reduce prices in Asia and third world countries. Expansion in Sport sunglasses and jewelry lines

THREATS

• Currency value fluctuations that can lead to losses. • Competition is strong among athletic footwear. • Managing the financial conditions in the economy. • Maintaining the reputation of being eco –friendly.

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9.1 Some Facts

Evolution Of LoGo..

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Baseball Equipments

Running Shoes

Air Max

Outfits

Golf Equipment

Footballs

T- Shirts & Hoodies

9.2 NiKe Product’s

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Improve its marketing plan including advertising. SIMPLFY ITS WEB SITE. Focus on setting up a reliable Information system. Nike should focus more on its labor working conditions and

wages. Increase its market share in the middle-east. Increase its acquisition due to increasing the threat from

adidas and rebook merger. More emphasis on women Athletic. Design shoes for elderly women and pregnant women.

10. Recommendation

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11. Conclusion

To summarize the presentation, I would conclude that nike has done pretty good in this financial crisis.

Providing excellent services in the foot wear industry.

Still to Date they are the market leader within the industry.

Entry barrier for other competitors in the industry is still very high to compete with Nike.

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References

www.nike.com www.nikeplus.com www.footware-industry.com www.wikipedia.com Case Analysis of Nike

Any Questions ?