Professional Documents
Culture Documents
NIKE, Inc.
NIKE, Inc.
TABLE OF CONTENTS
TABLE OF CONTENTS
Company Overview..............................................................................................3
Key Facts...............................................................................................................3
SWOT Analysis.....................................................................................................4
NIKE, Inc.
MarketLine
Page 2
NIKE, Inc.
Company Overview
COMPANY OVERVIEW
NIKE, Inc. (Nike or the company) is a leading designer, marketer and distributor of athletic footwear,
apparel, equipment and accessories for a range of sports and fitness activities.The company primarily
operates in the Americas, Europe, the Middle East, Africa and Asia Pacific. It is headquartered in
Beaverton, Oregon, and employed about 44,000 people as of May 31, 2012.
The company recorded revenues of $24,128 million during the financial year ended May 2012
(FY2012), an increase of 15.7% over FY2011. The operating profit of the company was $3,040
million in FY2012, an increase of 8% over FY2011. The net profit was $2,223 million in FY2012, an
increase of 4.2% over FY2011.
KEY FACTS
Head Office
NIKE, Inc.
One Bowerman Drive
Beaverton
Oregon 97005 6453
USA
Phone
Fax
Web Address
http://www.nike.com
May
Employees
44,000
NKE
NIKE, Inc.
MarketLine
Page 3
NIKE, Inc.
SWOT Analysis
SWOT ANALYSIS
NIKE, Inc. (Nike or the company) is a leading designer, marketer and distributor of athletic footwear,
apparel, equipment and accessories for a range of sports and fitness activities. The company enjoys
a strong market position in most of its product segments. Widening product lines coupled with strong
marketing and innovation has contributed to Nike's rising market share in the global footwear market.
However, intense competition could affect Nikes market share.
Strengths
Weaknesses
Opportunities
Threats
Intense competition
Growing counterfeit goods market
Strengths
NIKE, Inc.
MarketLine
Page 4
NIKE, Inc.
SWOT Analysis
Continued emphasis on technical innovations in the design of footwear, apparel, and athletic
equipment has been the key for Nike's leadership position in the athletics footwear and apparel
market. The company employs own staff specialists in the areas of biomechanics, chemistry, exercise
physiology, engineering, industrial design, and related fields, for the development of products best
suited to athletic needs. Nike also utilizes research committees and advisory boards made up of
athletes, coaches, trainers, equipment managers, orthopedists, podiatrists, and other experts for
consultations on designs, materials, and concepts for product improvement. Furthermore, the
company employs the services of athletes, either employed with the company or engaged under
sports marketing contracts, to evaluate products during the design and development process.
Additionally, the company collaborates with other companies in order to design new products. For
instance, the company launched Nike+ GPS App on the App Store in 2010. The new Nike+ GPS
App includes several features which allow runners to use their iPhone to map every run while tracking
pace, distance, time and calories-burned. It also provides instant feedback during and after each
run from athletes including Paula Radcliffe. Earlier, Nike partnered with Apple to develop a shoe
with embedded chip that communicates data on speed and distance covered to the runner's iPod.
The popularity and customer penetration of iPods and other mobile devices that runners often use
during exercise showcases Nike's competency in innovative product design. Increased emphasis
on R&D and innovation enables Nike to cater to changing preferences and requirements with ease,
which in turn enhances the companys competitive advantage and brand equity.
Broad distribution network
Nike offers its products through a wide distribution channel across the globe. In the US, the company
distributes footwear through its distribution centers located in Tennessee and Memphis. Nike
distributes apparel and equipment from centers located in Memphis, Tennessee and Foothill ranch,
and California. Cole Haan products are distributed primarily from Greenland, New Hampshire, and
Converse and Hurley products are shipped primarily from Ontario, California.
The distribution channel of the company comprises 384 retail outlets across the US. Of these 156
are Nike factory stores which carry primarily overstock and closeout merchandise, 28 Nike in-line
stores including Nike Towns which are designed to shelf Nike branded products and employee-only
stores. Also, the company operates 109 Cole Haan stores, 62 Converse factory stores, and 29
Hurely stores in the US. Internationally, Nike offers its products through Nike-owned retail stores
and through a mix of independent distributors and licensees. International branch offices and
subsidiaries of Nike are located in Argentina, Australia, Austria, Belgium, Bermuda, Brazil, Canada,
Chile, China, Croatia, Cyprus, the Czech Republic, Denmark, Finland, France.The company operates
16 distribution centers outside of the US. In international markets, the company offers its products
through 308 Nike factory stores, 65 Nike in-line stores including Nike Towns and Nike employee-only
stores. Additionally, the company operates 69 Cole Haan stores.
Thus, the wide distribution channel helps in on-time delivery of the products across the countries,
which in turn, helps Nike in managing its inventories in a better way.
Weaknesses
NIKE, Inc.
MarketLine
Page 5
NIKE, Inc.
SWOT Analysis
Opportunities
NIKE, Inc.
MarketLine
Page 6
NIKE, Inc.
SWOT Analysis
NIKE, Inc.
MarketLine
Page 7
NIKE, Inc.
SWOT Analysis
Nike can cash in on India's growing urban middle class and strong demand for international brands
and lifestyle products. As the company already has operations in India, it has a competitive advantage
to take quicker business decisions and make more investments to expand its market presence in
the rapidly growing Indian footwear market.
Brand reorganization initiative
Nike undertook a new reorganization strategy in 2009. As per the strategy, the company reorganized
its Nike brand into a new model consisting of six geographies with reduced management layer. The
new model had six geographies: North America, Western Europe, Eastern/Central Europe, Greater
China, Japan and emerging Markets. The Nike Brand had been organized by four regions: the US,
Asia Pacific, Americas and EMEA (Europe, Middle East and Africa). This organizational change was
part of a wider company restructuring that would result in an overall reduction of up to 4% of the
company's workforce. Initiatives like this would help Nike increase its focus on core category business
areas and drive greater efficiencies and stronger consumer connections.
Growth in global footwear market
The global footwear market has shown positive growth in recent years. According to the MarketLine
estimates, the global footwear market grew by 5% in 2011 to reach a value of $241,294.3 million.
In 2016, the global footwear market is forecast to have a value of $311,132.2 million, an increase
of 28.9% since 2011. Clothing, footwear, sportswear and accessories constitute the largest segment
of the global footwear market, accounting for 67.2% of the market's total value. Nike is a specialty
retailer offering athletic footwear to various customer segments. The company offers its products
through Nike-owned stores, franchises and licenses. It supplies footwear to retailers, who in turn
sell to consumers. The company also offers its products through its websites, nikestore.com and
Nike.com. As Nike derived 55.6% of its revenues from the footwear segment in FY2012 and has a
significance presence in the global footwear market, it could capitalize on the growing market to
further consolidate its leadership position.
Threats
Intense competition
The market for sporting goods is intensely competitive in the US and across geographies. Nike
competes internationally with a large number of athletic and leisure shoe companies, athletic and
leisure apparel companies, sports equipment companies and companies with diversified lines of
athletic and leisure footwear and apparel and equipment. The company faces competition from
Adidas and Puma in international markets. In the US market, the company also faces competition
from regional players such as Dick's Sporting Goods and Finish Line. The company also faces
competition from cheaper imported footwear from Asian countries such as China. Thus, intense
competition and availability of cheaper products could put pressure on the price of products and
therefore affect the company's margins.
NIKE, Inc.
MarketLine
Page 8
NIKE, Inc.
SWOT Analysis
NIKE, Inc.
MarketLine
Page 9
Copyright of NIKE, Inc. SWOT Analysis is the property of MarketLine, a Datamonitor business and its content
may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express
written permission. However, users may print, download, or email articles for individual use.