contents

Introduction:.......................................................2

Mission.................................................................3

Vision...................................................................3

Core Values...........................................................4

Nike geographic segmentation:.............................9

PORTER’S FIVE FORCES MODEL...........................11

Recommendation...............................................20

Conclusion.........................................................21

References..........................................................21
Introduction:

NIKE, Inc. (Nike) started out as an importer of Japanese shoes but is now the

biggest sports footwear and clothing retailer in the world. Nearly 20,000 stores in

the United States sell Nike merchandise, and that number rises to roughly 110

nations globally for the firm. Nike has a number of different types of shops,

including Nike Towns and factory outlets, that are open to the public both at home

and abroad. Nike is engaged in the design, development, and marketing of the

products but almost all of the manufacturing is done by third-party contractors,

most of whom are based in developing countries.

The firm carries a variety of licenced team hats from the Sports Specialties line, as

well as formal and casual footwear from the Cole Haan brand, and a

comprehensive selection of sporting equipment from Nike and Bauer. The

company's expansion into new markets in the United States and throughout the

world has been driven by constant innovation in the design of its goods and

intensive marketing. Backlash against Nike emerged in the late 20th century, in

part due to reports of low salaries and harsh working conditions at the company's

Asian contract manufacturers, who were responsible for mass-producing goods

bearing the Nike name and its Swoosh logo.

Mission

Nike’s mission is “Do everything possible to expand human potential"

Vision

Nike’s vision is “To bring inspiration and innovation to every athlete in the world.”

Core Values

Nike’s core values include motivation, originality, worldwide participation in

sports, genuineness, interactivity, and identity. To be the best, Nike is guided by

these principles. Some of its features are as follows:

Inspiration

Innovation

Every athlete in the world

Authentic

Connected

Distinctive

Nike emphasises the need of sustaining high morale among its staff in order to

create and manufacture innovative items that are not only genuine but also tailored

to the demands of athletes everywhere. This allows the organisation to fulfil its
first through fourth core values. The company's emphasis on connection

development is one of its distinguishing features.

NIKE should use result of the SWOT matrix analysis to make strategic

planning.

SWOT Analysis

does not explain how to get an edge over the competition due to the fact that

capabilities, threats, and tactics are always evolving and hence may not be

reflected in a static matrix. When using SWOT analysis, a company runs the risk

of placing too much emphasis on one internal or external element. However,

SWOT overlooks the potential significance of interrelationships between the most

critical internal and external elements.

STRENGTHS

Everyone in the world recognizes the Nike brand just by looking at its logo.

Despite without knowing the company's name, everyone could recognize the

emblem immediately. While it's true that the names of certain businesses must be

included here, that's not the case here. This has resulted in a dedicated following

who associate the brand with superior sportswear and workout gear. Nike's well-

known athletes and other celebrities provide further support for the brand if it is

considered "cool" to wear, demonstrating the company's strength. Famous athletes

from various sports, such as basketball's LeBron James, tennis's Roger Federer,

and American football's Andrew Luck. They wear Nike gear from head to toe, and

now even on their wrists with the Nike FuelBand, to spread the word about the

brand. Since it is primarily a garment label, the firm has limited opportunities for

new product development. Nike, on the other hand, has consistently introduced

novel items and expanded their offerings to cover a wide price spectrum. The

company's ability to adapt its product line and yet maintain its position as market

leader is shown here. The FuelBand wristband, the new Flyknit running shoes, and

the Dri-Fit apparel technologies are all cutting edge and may be used in a variety of

contexts. The Flyknit trainers are revolutionary in that they mimic the sense of

running in bare feet, while the FuelBand pioneers a new market for wearable

electronics by encouraging regular exercise. Connecting the FuelBand to a

smartphone then challenging one's friends to competitions is a fun way to add

some healthy competition to one's daily routine.

WEAKNESSES

The company's prominent reputation makes it easy to assume that it is exploitative

and materialistic. Despite the company's troubled manufacturing history, they can

still put their brand on a basic white t-shirt and sell it for well over three times what

it cost to make. It's possible to criticise the firm for being immoral due to the huge
markup on the basic items, however it is a for-profit venture. For Nike's business

model to work, every link in the supply chain—from raw material procurement to

product finishing touches to shipping and handling—must be secure. Because of

the costs associated with each of these factors, the firm may attempt to put the

pressure on manufacturing employees by paying them less and/or providing them

with unsafe working conditions. The company's prominent reputation makes it

easy to assume that it is exploitative and materialistic. Despite the company's

history of manufacturing issues, they can still put their brand on a basic white t-

shirt and sell it for well over three times what it cost to make. It's possible to

criticize the corporation for being immoral due to the huge markup on basic things,

however it is a for-profit venture. Nike's business strategy relies on a reliable

supply chain, which must be in place from the procurement of raw materials

through production and distribution. Because of the costs associated with each of

these factors, a firm may attempt to put the pressure on manufacturing employees

by paying them less and/or providing them with unsafe working conditions.

OPPORTUNITIES
New forms of useable technology are always being developed as technology

advances. Smartphones replaced basic cell phones, CD players gave way to MP3

players, and VHS tapes were replaced by Blu-ray discs. In a collaborative effort

with Apple, Nike developed Nike+, a smartphone app that monitors your running
stats like pace, distance, and calories expended. Since then, Nike has developed its

own line of wearable fitness gear, including a heart rate monitor called the Fuel

Band and a game for the Xbox 360 that boasts the world's most sympathetic

camera. In order to get this kind of innovation onto smartphones sooner rather than

later, Nike may want to consider investing in additional wearable equipment like

this. Aside from expanding your customer base, this is a great strategy for

generating license income.

Nike's product offerings seem to be blending together, since there are many distinct

kinds of shoes available. The Nike Free lineup has a bewildering number of

options, including the Freerun 3.0, Freerun 5.0, Freerun+ 2ID, FlyKnit, and

FlyKnit Lunar1 +ID. The product's minor variations aren't always obvious without

a thorough explanation. The only ways a customer may learn the distinctions

between them are by reading each one and comparing it, or by travelling to a Nike

shop and asking a salesperson for help, who may or may not be fully informed.

Within specific categories, Nike might consider standardizing the names of certain

goods. Because of this, the firm can ensure that its clients have a thorough grasp of

the items it sells and the benefits they represent.

THREATS
When the native market is saturated, the profits made in other nations are a

fantastic method for major multinational firms to keep going. The primary danger
is the possibility that any offshore earnings would be erased by drastic changes in

the value of currencies. To mitigate the effects of currency fluctuations, businesses

have established separate finance departments that use a variety of instruments,

including forward contracts, futures contracts, and call/put options. The recent

collapse in the value of the Indian Rupee demonstrates how Nike may gain from

declines in other currencies by shipping items to other nations at an even lower

cost. As the US Dollar is Nike's home currency, any significant changes in that

currency's value would cause the company the most trouble. As a result of the

Federal Reserve's decision to maintain its asset purchase scheme, the value of the

US dollar has increased, encouraging investors to take more risks in the US stock

market. The Federal Reserve also appears committed to maintaining its asset

purchase scheme for the foreseeable future. Retailers of apparel were hit hard by

the media after the recent collapse of a factory making their products in

Bangladesh. The fall drew attention to unsafe working conditions and the

widespread issue of skipping through construction regulations in nations like

Bangladesh. Nike has encountered issues in its factories, and in response to public

scrutiny, the company has implemented internal rules of behavior. In response to

the issues brought on by the collapse, the developed world will likely look for

methods to boycott an organization that is widely seen as immoral. If Nike has

manufacturing issues, it might negatively impact domestic sales.

Nike geographic segmentation:

Market segmentation, in its most basic sense, is the act of breaking a company's

target market into distinct yet manageable subgroups. Nike divides their market

into smaller sub-segments based on customer data such as age, gender, income,

education level, and hobbies.

Each business will have its own unique method for determining how to divide the

market. Nike divides their target market into four subsets based on demographics,

interests, lifestyles, and geography.

Nike's consumer base is broken down according to age, gender, and socioeconomic

position. Nike markets to certain age ranges (15–55) and genders with distinct

product lines. Also, the firm separates its wares for men, women, and children. To

help offset some of their expenses, Nike sometimes runs sales, discounts, and price

reductions. In an effort to boost sales, the corporation sometimes time-releases

limited-time discounts on holidays. It's Nike's strategy to get people to purchase

something they can't normally afford.

Nike uses physical store locations as a component of their regional segmentation

strategy in various regions of the globe. This section recognises the fact that many

national cultures and ways of life exist across the world. In order to cater to its

international clientele, the firm has released a wide range of items in each region.
Due to the fact that sports are played differently throughout the United States,

Europe, Australia, Asia, and Africa, Nike runs many advertising campaigns in each

of these locations. It's possible you've noticed that American advertisements tend

to centre on baseball and football, whereas European commercials tend to centre

around soccer.

In New Delhi, India, Nike tailors their advertising to promote cricket gear for

England and rugby for Sydney. North America, China, and Western Europe are

three of Nike's most important markets, where the company regularly conducts

segmentations and has a special emphasis on metropolitan regions.

The goal of Nike's psychographic segmentation is to provide clients with a range of

options that meet their requirements and satisfy their interests. At this point in its

market segmentation process, Nike is able to collect information on the tastes of

each and every one of its customers.

When it comes down to it, Nike's behavioural segmentation is all about making

consumers' lives better with high-quality apparel, supportive shoes, and functional

sports gear. In order to appeal to as wide an audience as possible, Nike develops

many iterations of each product. If you buy Nike items, you'll feel like an athlete.

Having a selection of high-quality, novel options increases consumer involvement

in the business. Nike also encourages its target audience to write product
evaluations and share their experiences with others through online and social

media platforms. As a result, this will have a major impact on how people shop.

PORTER’S FIVE FORCES MODEL

POTENTIAL ENTRANTS:

 Other sportswear manufacturers expanding their portfolio

 Cheap copies from the Far East

 Threats of New Entrants: (Low)

Barriers to entry in the athletic footwear industry are high due to several factors.
It's a field that requires a lot of investment. A new business might easily get the

materials and labour required to manufacture shoes, but their chances of being

competitive in an industry dominated by some of the most well-known brands in

the world are little to none. As a result, it will be difficult for a new entry to "take"

clients from the established businesses due to the high level of brand loyalty

consumers have for their preferred brands. Larger companies may produce their

wares at reduced costs due to economies of scale, making them more competitive

with upstarts. The fixed expenses of manufacturing, equipment, marketing, and

R&D will fall per unit as production increases. Due to the high costs of advertising

and research and development, new entrants will be less competitive unless they

can quickly reach critical mass.

Consolidation within the industry means that only the largest companies will

thrive. Major corporations are continually and intentionally acquiring smaller ones.

Reebok by Adidas, Converse by Nike, Saucony by Stride Rite, etc., are just a few

examples of wildly successful mergers and acquisitions. Prior to becoming a

competitive threat or gaining market share, larger corporations often acquire

smaller ones. This means that every attempt at expansion will inevitably be

thwarted by the inevitable takeover of your business by a competitor.

BUYERS:

 The buyers of sports footwear have changed in the past decade.  There has

been an increase in women purchasing the shoes,

 Generation Y has a different taste and purchasing methods

 Customers more affected by price

 Buyer Power: (Very High)

 The buyers for this industry are retailers and end users.

Footlocker and Wal-Mart are just two examples of the many shoe stores available.

However, almost $15 billion in sales of sports footwear is accounted for by the top

25 shops. Big-box shops and independent sellers are among the many new entrants

to the retail sector. Due to dispersed purchasing, sellers gain control and profits are

squeezed. Shopkeepers also have little say in the final product's look and feel. As a

result, the major shoe companies often set the prices for their products.

Companies that sell shoes and athletic gear have been combining in order to

consolidate their market positions, with examples being Footlocker and Foot

Action and Sport Authority and Gart. In order to maintain their positions as market

leaders, the large businesses will need to share power with the well-known retailers

that this merger brings together. Profit margin expansion indicates strengthening
consumer bargaining position. The consumer is both a buyer and the ultimate

decision maker in every sector. All businesses nowadays engage in a fierce

competition for customer allegiance by launching new products and using rigorous

brand management strategies. A person who is unhappy with one brand may

simply try another.

SUBSTITUTES:

 Substitutes for athletic shoes are shoes in another category.

 When required for professional use there is no substitute goods, but as a fashion

item there are many other goods that could be purchased.

 Substitutes: (Low)

 Lifestyle athletic shoes sales, for instance are growing at the fastest annual

rate and Puma is undoubtedly the leader in this segment- with more than 50%

sales growth.

To begin, other garments may be considered interchangeable in the sports sector

for the sake of establishing a reputation and a sense of personal style. Second,

other footwear, such as slippers, heels, boots, flip-flops, etc., fall under the same

category and might be considered alternatives for the shoes being discussed.

Despite the fact that boots and sandals are gaining ground, sneakers are remain the
most worn shoes worldwide. Competition also comes from firms like Steve

Madden and Sketchers. Steve Madden's "thick high heeled shoes"19 are a best-

seller for good reason: they're a more comfortable alternative to traditional high

heels for most women. Sketchers launched non-athletic heel-less shoes also

nicknamed "sneaker mules" in 20. These shoes, which first acquired favor in

Europe, are now gaining acceptance in the United States.

SUPLIERS:

Nike is able to take advantage of economies of scale because to the location of its

factories in the Far East. Despite the current issues at these facilities, companies

are increasingly producing their own items. However, delays in production and

delivery are being caused by labor and political turmoil.

-Supplier Power: (Low)

-The suppliers do not have the power to bargain the price of their product, since

there are numerous suppliers.

Concerns about the labour standards of suppliers and manufacturers have led to a

gradual standardisation of manufacturing within the sector. Some businesses,

notably Nike, have had their reputations suffer as a result of these kinds of actions.

As a result, major corporations would rather not collaborate with any manufacturer

or supplier that isn't already on their authorised list and known to adhere to these
labor requirements. Both Adidas and Nike have implemented systems to guarantee

the highest possible standards in manufacturing, workplace safety, and distribution.

COMPETITIVE RIVARLY:

 Reebok, offering more choice of shoe, introducing endorsement by sports

personalities, sponsoring sporting leagues

 Adidas have recovered from the problems that plagued them, and have a good

product mix, covering a wide range of sports.

The market is consolidating as a result of several mergers and acquisitions, such as

the one between Adidas and Reebok, that are necessary to maintain

competitiveness and a widespread presence. It becomes very challenging for even

large corporations like Nike to maintain a consistent brand image. With three of

the five drivers being rather strong, the developing market is not a very promising

place to invest. However, with consistent advertising and education efforts, this

market might be transformed into a boom sector for all businesses.

 Technology in Products

For many years, Nike has produced some of the industry's most innovative goods.

Nike, for one, collaborated with Apple to create the "Nike + iPod" series of goods.

Customers may sync their iPods with the shoes' built-in sensors to keep track of

their steps, runs, and caloric expenditures.

 Manufacturing Skills

For the most part, Nike's manufacture is done in other nations where labor is far

cheaper. This practice has grown widespread in the business world, with even the

most formidable opponents resorting to it themselves. As a result, nobody other

can provide a meaningful manufacturing advantage.

 Strength of Patents

Nike's cushioning technology is one of the company's most ground-breaking

innovations. Cushioning systems in footwear alleviate wearer discomfort by

distributing the wearer's weight uniformly over the foot and soaking up impact

forces.

Nike has patents on four cushioning technologies:

 Nike Air: Nike Air Max is a line of shoes first released by Nike, Inc. in 1987.

The shoe was originally designed by Tinker Hatfield, who started out working for

Nike as an architect designing shops and offices; he also designed the Air Jordan

shoe

Nike Zoom: Like other members of the Nike Air family, Nike Zoom cushioning is

both lightweight and long-lasting. Nike's Zoom cushioning is so unbelievably thin

that it actually pulls the foot closer to the ground, improving stability, particularly

in lateral and angular actions like cutting and cutting in different directions. The
pressurised air unit's tightly stretched fibres rapidly return to shape after being

deformed by a hit, giving the ball a super-responsive feel and increasing the

player's knowledge of the court's surface.

 Nike Air Max: Max Air, a member of the Nike Air family, is designed to absorb

the most shock from repeated landings. Max Air shoes use less bulky midsole

materials and bigger airbag volumes for superior lightweight cushioning.

 Nike Shoe: When it comes to shock absorption and durability, Nike's latest shoe

technology is a game-changer. The technology used in Nike shoes creates the ideal

conditions for cushioning, slows the pace of impact loading (which helps lessen the

risk of impact-related injuries), and gives a responsive feel like no other. Nike's

high-density foam in the shoe's columns is constructed of energy-efficient material

that also increases durability and spring.

 Economies of Scale

Since Nike is the only company capable of mass producing sports footwear and

gear, they enjoy significant price benefits. Greater economies of scale, especially

in distribution and marketing, tend to favor larger enterprises over their smaller

counterparts. Due to Nike's massive size, many of the firm's suppliers rely on the

corporation to stay afloat.

 Application of Information Technology

In order to manage its supply chains, Nike depends extensively on information

technology due to the company's size. To put it bluntly, Nike knows that a failure

in these systems may have disastrous consequences for the company's operations

and finances. This makes them less competitive than their smaller rivals who do

not have to depend as much on IT. They are more prone to experience these issues

since they are a major corporation.

Recommendation

The company has to provide complete consulting services, beginning with

brainstorming and ending with product introduction. NIKE by the sport
collaborates with both new and existing businesses, using almost every service
sector necessary to deliver a product to consumers. The following are examples of
such fields of study:
• Market research and focus groups
• Marketing communication
• Public relations
• Sales and sales coaching
• Industrial design
• Mechanical design
• Mechanical fabrication
• Short-run manufacturing
• High-volume manufacturing
• Plastics tooling and production
Market development for an existing brand is when a corporation seeks to increase
sales by targeting consumers in new ways. There are several potential sources of
new customers: different regions, different age groups, different occupations, and
different personality types. Developing unanticipated markets for the goods is
another method.
A shift in the definition of the target market is the primary distinction between this
growth strategy and market penetration. As opposed to a market penetration
strategy, where the size of the market is "fixed," a growth strategy focuses on
expanding the potential of the market.
In order to expand sales, some businesses aim their marketing efforts towards the
group of potential consumers who are now not buyers. And it's aiming for brand-
new demographics of consumers. The goal of any market growth plan should be to
increase the size of the prospective market by attracting new customers. There are
several ways to classify new users, such by geography, population, kind of
institution, and even personality. Developing new applications for the product is
another method for increasing sales. How well a brand or category is "penetrated"
may be used as an indicator of its success. To calculate this ratio, take the total
population of the target market and divide it by the number of individuals who
purchased the product at least once during the specified time period.

Conclusion
In spite of competition, NIKE Company continues to have a strong market
position, and the company's growth ensures that NIKE will remain the world's
leading producer of athletic footwear and apparel. Our present strategies for
narrowing our focus and broadening our reach have been put into action. But
narrowing in a little on a few specific hypotheses.

Some NIKE tactics were suggested by the firm. Marketing, branding, sales,
production, organization, and human resource management are all part of the mix.
Marketing and Branding Strategy is the one we've settled on. We believe that if we
modify the form of our advertisements and aim to create advertisements that touch
the community's values, we would generate much more sales and income in this
market.
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