CASE STUDY

PRINCIPLE OF MARKETING

Group Members Name:

 Partha Nath Sarker.

 Tahsin Muntasir.
 Safabe Hossain.
 Robi Rakibul Islam.
 Modabbir Hossain.

Course: Principle of Marketing.

Department: FBA

Faculty: Yesmin Sultana.

Context:
1. What is Nike's mission and how does the company accomplish it?
2. using either the Boston Consulting Group or GE Matrix approach, analyze Nike’s business
portfolio. How would you characterize its basketball, running, and soccer businesses? What is
Nike’s growth strategy?
3. What are Nike's markets and how is Nike positioned in these markets? How does it reach these
markets?
4. What is Nike’s proposed positioning in the global soccer market? Describe the company’s global
soccer marketing mix?
5. What marketing recommendations would you make to help Nike achieve its quest for global
soccer dominance? How serious is the threat of a firm like Vans? Is Nike likely to be successful in
global soccer?

Ans: to the question no: 1

 What is Nike's mission and how does the company accomplish it?
Ans: Nike is a major US footwear, clothing and sportswear supplier based in Beaverton, Oregon. The
company operates in more than160 countries and employs over 44000 people across six continents.
Today Nike is considered the world’s leading supplier of athletic shoes and apparel and one of the
world’s most famous and strongest brands.
The mission of Nike is to bring inspiration and innovation to every athlete in the world.
Company’s main goal (vision) is to carry on its founder’s legacy of Innovative thinking, whether to
develop products that help athletes of every level of ability reach their potential, or to create business
opportunities that set Nike apart from the competition and provide value for its shareholders.
They accomplish their mission by giving employee freedom to thinking for the product design,
innovation and also how they can give more and more comfortable to the athletes those who are the
member of Nike. So they think about their consumer perception.

Ans: to the question no: 2

 Using either the Boston Consulting Group or GE Matrix approach, analyze Nike’s business
portfolio. How would you characterize its basketball, running, and soccer businesses? What is
Nike’s growth strategy?
 Analyzing Nikes business portfolio using BCG MATR:
Nike has six major business that includes ,Footwear apparel that sells athletic clothing, equipment that
sells athletic equipment, global brand division and corporate. BCG MATRIX includes four things that is:

 Stars
 Cash cows
 Question marks
 Dogs

Nikes stars: with its rapid growth and $2.8% market share in clothing and apparel market, Nikes apparel
business is categories as a stars. In 2018, its annual revenues Increased by 9% to $10.73bn from $9.65bn
in 2017 fueled by growth in several key categories most notably sportswear, Nike basketball and football
according to its annual report (Annual report2018). The unit contributed 29.5% to Nike’s annual revenue
in 2018. However, the apparel markets expected to grow at a CAGR of 7.1% from 2017 to 2023 which
gives Nike several market opportunities to improve its market share and revenues (Allied Market
Research 2018). Since growth needs heavy investments, Nike can invest in the apparel business to
facilitate its growth into a cash cow with large market share and revenues to support other businesses.
Nikes question mark: Nike’s equipment business that sells sports equipment is classified as a question
mark in the group Because of its ambivalent growth. In 2018, the business unit recorded a revenue
amounting to $1.40bn that was a 4% decrease from its $1.43bn revenue in 2017 contributing 3.8% to
Nike’s Annual revenue according to its annual report. According to research, the Global apparel and
sports equipment market is expected to grow to $619.28bn in 2023 from$384.56bn in 2017 which gives
the equipment business an opportunity to grow. Given the market opportunities, Nike can invest in its
equipment to enable it to attain a bigger market share and revenues to support Nike’s struggling
businesses.

Nikes cash cows: Nike’s footwear business that sells athletic footwear to consumers has been operating
as a cash cow for Nike for many years because of its consistently high revenues and high market share in
the global athletic footwear industry. According to Nike’s 2018 annual report, its footwear business had a
$22.27bn revenue that was a 4% increase from its $21.08bn revenue from 2017. The increase in footwear
revenue was mainly driven by strong growth in sportswear and running according to Nike’s annual report
(Annual Report 2018). In 2018, the footwear business contributed 61.2% to Nike’s total revenue.
Nike Dogs: Nike’s corporate business that includes differences between assigned and actual market
shares, foreign currency hedge gains and losses, among others, is considered a dog in the group because
despite heavy capital investments, the business unit has failed to become popular like its footwear and has
failed to show any significant growth. In 2018, the unit had a revenue amounting to$26million that was a
decrease from its $75million revenue in 2017 according to Nike’s annual report (Annual report 2018).
However, given growth of actual market shares, the business unit can grow attracting large revenues.
Therefore, Nike can continue with its investment in the business Unit.
Characterizing Nikes basket. All, running, and soccer business:

Cash cow:

Soccer
business

Characterizing
chh Stars:
Question

Mark: Basketball
running

Nike’s growth strategy:

Product Development: Nike’s primary intensive growth strategy is product development. This intensive
strategy involves the introduction of new products to grow sales revenues. For example, Nike’s mission
statement highlights innovation applied through new designs for shoes and related products. New
technologies enhance the products and set them apart from the competition
Market Penetration: Nike’s secondary intensive growth strategy is market penetration. In this strategy,
the company grows by increasing sales revenues in existing markets. For example, Nike increases its
stores and retailers in the United States to sell more athletic shoes to American consumers. However,
market penetration is just a secondary intensive growth strategy because the company already has
significant presence in the global market.
Market Development: One of Nike’s supporting intensive growth strategies is market development. This
strategy facilitates the company’s growth by targeting new markets or market segments. For example,
Nike enters new markets in Africa and the Middle East to increase its shoe sales revenues. He Company
applies the market development intensive growth strategy by investing in new technologies to penetrate
new market segments, such as segments composed of bodybuilders.
Diversification: Diversification is the least significant in Nike’s intensive strategies for growth. This
strategy involves developing new businesses to achieve growth. Nike implemented this intensive strategy
in its early years, such as when it introduced apparel and sports equipment to its product mix. Initially, the
Nike brand was on athletic shoes only. Diversification can support Nike’s generic competitive strategy of
differentiation through new businesses that supply materials for product innovation in the athletic shoes,
apparel and equipment business.

Ans: to the question no: 3

 What are Nike's markets and how is Nike positioned in these markets? How does it reach these
markets?
Ans: Nike’s global market share was an impressive 30.4% in 1998. In 1998, the closest competitor,
Adidas, held 15.5% of the market share while Reebok held 11.2%. The remaining competitors, including
Fila, Timberland, Asics, Converse, and New Balance, among others, each hold approximately 3-5% of
the remaining market share.
Nike has taken the lead in e-commerce by being the first to market with its e-commerce web-site. Nike
launched its e-commerce site in April 1999 by offering 65 styles of shoes to the U.S. market for purchase.
Nike increased its e-commerce presence by launching NIKEiD in November 1999. NIKEiD enables
online consumers to design key elements of the shoes they purchase. The program represents the first
time a company has offered mass customization of footwear.
There are a lot of strategies Nike has follow to reach these markets. Some of these strategies are now
going to discuss in below:
The very first things Nike has follow that is Advertising and Promotion - Nike’s brand images, including
the Nike name, are considered to represent one of the most recognizable brands in the world.
The Nike name and associated trademarks have appeared everywhere from players' shirts, pants, and hats
to stadium banners and walls.
Aggressive advertising campaigns, celebrity endorsements, and quality products also enhance the brand.
The second things Nike follows is product- Though Nike leads the apparel division among industry
competitors, Nike has not claimed to be leading the race among the apparel industry as a whole.
Their apparel line is not only being challenged by their typi
cal industry competitors such as Adidas and Reebok, but also by clothing and accessories retailers such as
Old Navy and Abercrombie & Fitch.
Nike is planning on initiating five structures within the apparel division to focus on the following areas:

 Women
 Men
 Kids
 sports graphics and caps
 strategic response independently
They are also spending more time on continuing to support and develop programs to gain a better
understanding what their customers would like to see in the market.
The last thing Nike do that is Marketing Research - Nike primarily conducts marketing research on a
continual basis to maintaining their company’s position as the leader in the athletic footwear and apparel
industry. Because of such research, they have decided to revamp our apparel division, an area in which
they can still greatly improve. Nike will be organizing the internal business by gender as opposed to sport
category and conducting increasing amounts of research addressing the buying habits of men, who tend to
be item-driven, and women, who tend to be collection-driven, with specifically targeted product lines.

Ans: to the question no: 4

 What is Nike’s proposed positioning in the global soccer market? Describe the company’s global
soccer marketing mix?
The Nikes proposed positioning in the global soccer market is -Nike is “For serious athletes, Nike gives
confidence that provides the perfect shoe for every sport”
Describing the company’s global soccer marketing mix below:
Nike implemented a number of marketing strategies to sell its products. One of the most important
consideration is its marketing mix, better known as the 4Ps.
The marketing mix or the 4 Ps of Marketing are Product, Price, Place (distribution) and Promotion.so
Nikes marketing mix are:
1. Product
Nike offers a wide range of shoe, apparel and equipment products, all of which are currently its top-
selling product categories. Nike started selling sports apparel, athletic bags and accessory items in 1979.
Their brand Cole Haan carries a line of dress and casual footwear and accessories for men, women and
children. They sell small amounts of plastic products to other manufacturers through Nike IHM, Inc.
2. Price
Nike’s pricing is designed to be competitive to the other fashion shoe retailers. The pricing is based on the
basis of premium segment as target customers. Nike as a brand commands high premiums. Nike’s pricing
strategy makes use of vertical integration in pricing. This can control costs and influence product pricing.
3. Place
Nike shoes are carried by multi-brand stores and the exclusive Nike stores across the globe. Nike sells its
product to about 20,000 retail accounts in the U.S. and in almost 200 countries around the world. In the
international markets, Nike sells its products through independent distributors, licensees and subsidiaries.
4. Promotion
Promotion is largely dependent on finding accessible store locations. Nike has a number of famous
athletes that serve as brand ambassadors such as the Brazilian Soccer Team (especially Ronaldinho,
Renaldo, and Roberto Carlos), LeBron James and Jermaine O Neal for basketball, Lance Armstrong for
cycling, and Tiger Woods for Golf.

Ans: to the question no: 5

 What marketing recommendations would you make to help Nike achieve its quest for global
soccer dominance? How serious is the threat of a firm like Vans? Is Nike likely to be successful
in global soccer?
Ans:

 Hire independent industrial engineers and analysts to work with manufacturing facilities in order
to maximize efficiency of operations: shop layout, processes, etc.
 Reduce inventory at all levels of production: raw materials, work-in-process, and finished goods.
 Work with 3rd party shipping agents to manage the flow of orders from factories to distribution
centers.
 Work with suppliers to implement the next generation of electronic data interchange (EDI)
technology in an attempt to achieve just-in-time inventory.
Vans is an American manufacturer of skateboarding shoes and related apparel, started in Anaheim,
California, and owned by VF Corporation. If you look at their market share in us that is 55 % on the
other hand Nike market share in us is 41%. But this percentage is in us demand but id u look at
worldwide market share Nike is one of the largest brand that has 505 share in worldwide and other
competitors has the remaining share so it’s not a major or big issue or serious threat for Nike if there is a
firm like van.
And yes you can surely said that Nike is going to be successful in global soccer already brand like Nike is
successful in global soccer if you look at their history and their largest market shares.
Allied Market Research (2018) “Global Sports Equipment and Apparel Market Expected to Reach
$614.28 million by 2023, Says Allied Market Research” PR Newswire [online] at
https://www.prnewswire.com/news-releases/global-sports-equipment-and-apparel-market-expectedto-
reach-619279-million-by-2023-says-allied-market-research-683561041.html [Accessed on 5th.11.2020

Annual Report (2017) “2017 FORM-10K” [online] at

https://fintel.io/doc/sec/320187/000032018718000142/nke-5312018x10k.html [Accessed on
10th.8.2018].
Bain Marc (2017) “Nike is facing a new wave of anti-sweatshop protests” Qz.com [online] at
https://qz.com/1042298/nike-is-facing-a-new-wave-of-anti-sweatshop-protests/ [Accessed on 5th.11.2020
Bayley Lucy (2018) “U.S unemployment rate falls to 3.9 percent- lowest since 2000” NBC News
[Online] at https://www.nbcnews.com/business/economy/unemployment-rate-fell-3-9-percentlowest-
2000-n871326 [Accessed on 5th.11.2020].
Bissell-Links Jennifer (2017) “Nike’s focus on robotics threatens Asia’s low-cost workforce”
Financial Times [online] at https://www.ft.com/content/585866fc-a841-11e7-ab55-27219df83c97
[Accessed on 5th.11.2020].
Bloomberg (2017) “Nike and Zara Clothing Suppliers Are Building Their Own Brands” Business
Of Fashion [online] at https://www.businessoffashion.com/articles/news-analysis/nike-and-zaraclothing-
suppliers-are-building-their-own-brands [Accessed on 5th.11.2020].
Business Insider (2017) “Trump’s policies have Nike facing one of its biggest threats in history”
[Online] at https://www.pulselive.co.ke/bi/finance/finance-trumps-policies-have-nike-facing-one-ofits-
biggest-threats-in-history-id6122591.html [Accessed on 5th.11.2020].
Garmano Sara (2018) “Celebrity Route pays off for Puma--WSJ” Fox Business [online] at
https://www.foxbusiness.com/features/celebrity-route-pays-off-for-puma-wsj
Accessed on 5th.11.2020].
Green Dennis (2017) “A surging Adidas is ‘causing pain internally‘at Nike” Business Insider
[Online] at https://www.businessinsider.com/nike-losing-share-to-adidas-2017-9?IR=T [Accessed on
5th.11.2020
Lin Xiaolu (2017) “The brand equity of Nike, what makes it the best sports brand ever?” The
Medium [online] at https://medium.com/@xlin6/the-brand-equity-of-nike-what-makes-it-the-bestsports-
brand-ever-561a24fd296e [Accessed on 5th.11.2020].
McDonald Samantha (2018) “How the latest Fed Hike Will Affect the Footwear Industry”
Footwear News [online] at https://footwearnews.com/2018/business/retail/federal-reserve-interestrate-
hike-impact-footwear-retail-1202541384/ [Accessed on 5th.11.2020].
Mintel (2018) “More than half of Americans report living healthier in 2017” [online] at
http://www.mintel.com/press-centre/social-and-lifestyle/resolution-resolve-more-than-half-ofamericans-
report-living-healthier-in-2017 [Accessed on 5th.11.2020].
Mintel (2017) “Footwear Retailing” [online] at
http://academic.mintel.com.ezproxy.sussex.ac.uk/display/829993/?highlight#hit1 [Accessed on
5th.11.2020].
Molt Stephanie (2018) “We’ve Not Seen the End of Smart Shoes Yet” Geek.com [online] at
https://www.geek.com/tech/weve-not-seen-the-end-of-smart-shoes-yet-1741397/ [Accessed on
5th.11.2020

Moore Nicholas (2017) “Under threat: Could robots replace human workers in Nike and Adidas?”
CGTN.com [online] at https://news.cgtn.com/news/794d444f31597a6333566d54/share_p.html
[Accessed on 5th.11.2020].
Nelson Jr Keith (2017) “Nike store in Paris lets customers test their sneaker colors using
Augmented reality” Digital Trends [online] at https://www.digitaltrends.com/cool-tech/nikeaugmented-
reality-nikeid-paris-news/ [Accessed on 5th.11.2020].
Nike (2018a) “Did you know 75% of all Nike product contains recycled material” [online] at
https://news.nike.com/news/sustainable-innovation-air-bag-manufacture [Accessed on 5th.11.2020].
Nike (2018b) “Nike takes steps toward 100% renewable energy in North America” [online] at
https://news.nike.com/news/nike-renewable-energy-wind-farm [Accessed on 5th.11.2020]
Pickard Jim et al (2017) “Tax experts call for ‘rethink’ of UK corporation tax in Budget” Financial
Times [online] at https://www.ft.com/content/a159deba-cb98-11e7-aa33-c63fdc9b8c6c [Accessed on
5th.11.2020].

The end