Nike: Companies Fighting

Climate Change in 2023

ID: 2012-1573

MBA - SMEs

ID: 20121573
MBA - SME
Table of Contents
Title Page
Introduction………………………………………… 3
Vision, mission & core values……………………… 5
External Environment Assessment…………………. 7
➢ PESTEL Analysis
➢ PESTEL IPM
➢ Porter’s Five Forces
➢ Porter’s 5 Forces IPM
➢ Competitive Profile Matrix “CPM”
➢ EFAS
SWOT Analysis……………………………………. 27
Internal Environmental Assessment………………... 29
➢ IFAS
➢ Value Discipline Triad
➢ VRIO Model
Matching Phase……………………………………. 34
➢ TOWS
➢ IE Matrix
➢ SPACE Matrix
QSPM………………………………………………. 41
Strategic Objectives………………………………… 43
Strategy Implementation…………………………… 44
Evaluation & Control………………………………. 47
Business Plan………………………………………. 50
Summary..…………………………………………... 61
References…………………………………………... 63

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Introduction

the Greek goddess of victory

➢ Nike, Inc. is an American multinational corporation that's engaged in the design,

development, manufacturing and worldwide marketing and sales of footwear, apparel,
equipment, accessories and services. HQ is found near Beaverton, Oregon, within
the Portland metropolitan area. With sales exceeding US$37.4 billion in its financial
year 2020, it's the largest maker of sports equipment as well as a global supplier of
athletic shoes and apparel. It had 76,700 employees worldwide as of 2020. The brand
alone features a worth of more than $32 billion in 2020, making it the
foremost valuable brand in the sports industry. Nike was placed 89th on the Fortune
500 list of the most important companies in 2018.
➢ Bill Bowerman and Phil Knight established the business on January 25, 1964, under
the name "Blue Ribbon Sports." On May 30, 1971, then changed its name to Nike, Inc.
➢ As a well-known global brand that specializes in the sale of sporting goods, Nike is
committed to conducting ongoing innovation and improvement based on an
assessment of the environmental footprint of the whole value chain.

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 ➢ It goes without saying that climate change plays an important role in our lives, Climate
change refers to long-term shifts in temperatures and weather patterns. These shifts
may be natural, but since the 1800s, human activities have been the main driver of
climate change. As it is very important issue, Egypt now hosting the 27th Conference
of the Parties to the United Nations Framework Convention on Climate Change –
COP27.
➢ Move to Zero is Nike's initiative to eliminate waste and carbon emissions in order to
safeguard the future of sport.
➢ It is a continuation of Nike's steadfast commitment to sustainability and is motivated
by the conviction that preserving the environment also involves defending sport's
future from climate change.

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Vision
We see a world where everybody is an athlete. Driven by our passion for sport and
our instinct for innovation, we aim to bring inspiration to every athlete in the world
and to make sport a daily habit.

o It is clear that the vision of Nike in future seeing everyone as an athlete as saying
that “If you have a body, you are an athlete”. So, vision is based on every single
person in world to be dressed by Nike which is driven by being & remaining most
authentic well-known brand.
Mission
Bring inspiration and innovation to every athlete in the world. We champion
continual progress for athletes and sport by taking action to help athletes reach
their potential. Every job at NIKE, Inc. is grounded in a team-first mindset,
cultivating a culture of innovation and a shared purpose to leave an enduring
impact.

o This mission can be modified in order to cover more aspects in mission statement.
Proposed Mission:
Bring inspiration and innovation to every single product “footwear, apparel,
equipment & accessories” to every athlete across the whole world with our latest
technology in manufacturing & making our products more sustainably, by building
a creative and diverse global team and by making a positive impact in communities
where we live and work by our innovated skilled team.

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Core Values
1. Inspiration.

2. Creativity & Innovation.

3. Authentic.

4. Distinctive.

5. Sustainability.

Nike Purpose:
o Our Purpose is to move the world forward. We take action by building community,
protecting our planet and increasing access to sport

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External Environment
Assessment

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 A. PESTEL Analysis for Egypt
1- POLITICAL FACTORS:

I. Political Stability

• Egypt is ranked the 37th in Africa in political stability with index of

-1.02 on year 2021.

Source: World Bank

• As shown in graph Egypt is becoming more & more stable country by time
with better rating index & considered to be a stable country with no
intimidation for any political instability in future.

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 II. Taxation

• Individual income tax is imposed on the total net income of the resident
individuals for income earned in Egypt. So, direct taxation varies from (0%
to 25%)
• Indirect tax like 14% for VAT.

III. Pressure groups

• There are no pressure groups concerning this industry in Egypt.

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 2- Economic Factors

• Most recent GDP value in 2021 is 404.142 billion compared to year 2020
which was 365.25 billion.
• This graph shows the Growth Domestic Products “GDP” is raising starting
from 2017 to 2021.

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Egypt GNP 2016-2022
• Egypt GNP for 2021 was $365.80B, a 18.98% increase from 2020.
• Egypt GNP for 2020 was $307.45B, a 13.93% increase from 2019.
• Egypt GNP for 2019 was $269.86B, a 1.85% decline from 2018.

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 • After decreasing in inflation rate, it started to increase again by 2021 due to
many factors especially:
➢ global inflation.
➢ Federal bank is increasing interest rate.
➢ War between Russia & Ukraine.

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 • Egypt’s GDP ranks quite high, but its GDP per capita is below the world
average, and using the World Bank’s categories, Egypt is a “lower middle
income” country

➢ From all above graphs it is obvious that Economy in Egypt was on

the right track even when it was struck by COVID 19, Economic
factors were still growing but due to global inflation & instability &
wars, economic factors started to decrease by 2021.

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 3- Sociocultural Factors
➢ Egypt is divided to 6 Social Classes (A, B, C1, C2, D & E).

➢ Minimum Wages in Egypt increased to 2400 EGP/Month in 2022 from 2000

EGP/Month in 2021. source: Central Agency for Public Mobilization and Statistics
(CAPMAS)
➢ Egypt trending life style is going to fitness, gymnastics & sports practicing which
leads to favor in industry. The overall apparel market in Egypt is forecast to grow
at a CAGR of 7.9% between 2020 and 2025 to reach EGP 184.2 bn. Women’s
footwear will grow at 8.8% by 2025.

4- Technological

➢ The Egyptian IT sector is expanding rapidly as IT infrastructure are being well

established.
➢ Egypt is improving its Cyber security
➢ Increasing Internet speed & quality of service.

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 5- Ecological “Environmental”
➢ Environmental factors have become very important issue with high priority due to
climate change issue.
➢ A lot of regulation to reduce carbon emission & to take in consideration
environmental surroundings maximizing the usage of Renewable resources.
➢ Due to the expected increase in heat waves, dust storms, storms along the
Mediterranean coast, and extreme weather events, Egypt is extremely vulnerable to
climate change. Over the past 30 years, there has been a proven stronger warming,
with average yearly temperatures rising by 0.53 degree Celsius every ten years. The
country's climate dangers affect today's younger generations and will continue to do
so.
➢ Importantly, Egypt is quickly becoming more aware of the necessity of domestic
and international climate change action. The nation's dedication to and efforts to
address the effects of climate change are at a tipping point. Egypt also pledged to
incorporate climate change into national development strategies and to gradually
green its budget across sectors in the 2030 Vision and sustainable development
strategy.
➢ The first environmental project in Egypt's history, Go Green aims to protect the
country's natural resources and secure their sustainability in order to protect future
generations' rights. The program also intends to raise awareness of the importance
of protecting natural reserves and managing them in accordance with international
standards in a way that maximizes prospects for economic and social growth while
conserving the ecosystem's balance.

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 6- Legal FACTORS

➢ Competition Law: The Egyptian Competition Authority (ECA) was established

under Law No. 3 of 2005 on Protection of Competition and Prohibition of Monopoly
Practices to ensure free competition and free market entry and exit.
➢ Consumer protection law: The Egyptian Consumer Protection Authority (CPA) is
given both civil and judicial powers through Law No. 67 of 2006. Civil law
obligations are manifested in the ability to use various tools to promote a culture of
consumer protection, monitor trading activity and take legal action for violations.
➢ Labor Law: such as working hours shall not exceed 8 hours a day or 48 hours a
week.
➢ Environment Sustainability Laws.

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PESTEL Issue Priority Matrix
1- Inflation rate.
2- “Sociocultural”
Egypt new life style
High
1- Egyptian IT sector trend.
is expanding 3- Environmental
regulation & Go
Green initiative.
Medium

1- GDP.
Probability

1- Income. 1- Taxation.
2- Interest Rate.

1- Competition Law.
Low

2- Consumer 1- Political
protection Law. Instability.

Low Medium High

Impact
• From the above PESTEL IPM, the most important factors to be taken into
consideration are: “High inflation rate, new trending life style like “going to
the gym” & environmental regulation concerning carbon emission”.

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 B. Porter’s Five Forces
1- Rivalry Power of Competitors

➢ Direct Competitors
o Adidas
o Puma
o New balance
o Activ
o Decathlone
➢ It is a healthy competition market depending on innovation & cost.
• Adidas, Puma & New Balance are the main competitors to Nike as they
have strong R&D pipelines, very professional staff & a lot of SKUs.
• Activ & Decathlone are indirect competitors as they are lower quality but
they have cost advantage.

2- New Entrants

➢ Entry barriers are Moderate as:

1. When considering new entrant with high quality, huge infrastructures
facilities are needed, Customer loyalty for the existing brands is high &
competing with mass production for existing companies.
2. When considering new entrants like local brands & even low-quality brands
it is easy for them to enter.

3- Substitutes

➢ It a point of strength as there are no substitutes for sports products.

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 4- Bargaining Power of Buyers

➢ The bargaining power of intermediaries is low.

➢ The bargaining power of end user is medium.
➢ Bargaining power can be assumed to be moderate as the limited number of buying
actors puts the customer at a disadvantage. While some customers are price sensitive
and looking for something cheaper, Nike's quality, safety and goodwill justify the
premium price is turning the tide in favor of Nike.

5- Bargaining Power of Suppliers

➢ Very Low bargaining power of suppliers as there are large number of suppliers
around the world who supply rubber, cotton, Eva, synthetic leather etc. to the
athletic brands.

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Porter’s 5 Forces Issue Priority Matrix

1- Rivalry Power of
High
Competitors
Medium

1- New Entrants.
Probability

2- Bargaining Power of
end users.

1- Substitutes.
2- Bargaining Power of
Low

Suppliers.
3- Bargaining power of
Intermediaries.

Low Medium High

Impact

• From the above Porter’s 5 Forces IPM, the most important factor
which should be taken into consideration is the rivalry power of
competitors.

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Competitive Profile Matrix “CPM”

Nike Adidas Decathlone

Weighted Weighted Weighted
Items Weight Score Score Score
Score Score Score

Brand Name 0.13 4 0.52 3 0.39 2 0.26

Product
0.12 4 0.48 3 0.36 2 0.24
Quality

Market
0.09 4 0.36 3 0.27 2 0.18
Share
New
Product 0.12 4 0.48 3 0.36 1 0.12
“R&D”

Advertising 0.10 3 0.3 3 0.3 2 0.2

Online
shopping 0.10 1 0.1 4 0.4 3 0.3
Web-site
Customer
0.08 4 0.32 3 0.24 2 0.16
Loyalty
Price
Competitive 0.12 2 0.24 3 0.36 4 0.48
-ness
Customer
0.07 3 0.21 3 0.21 3 0.21
Service

Locations 0.07 3 0.21 3 0.21 1 0.07

Total 1 3.22 3.1 2.22

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➢ From the competitive profile matrix, we can see that Nike has the upper hand
in Egyptian market but it is clear that there is a strong competitor for Nike
which is Adidas that must be taken into consideration.
➢ Nike has the upper hand in product quality, market share & new innovative
products which must be focused on.
➢ Adidas has an online website for shopping which gives an advantage over
Nike which should be considered.

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 External Factor Analysis Summary
“EFAS”
Weighted
External Factors Weight Rating Comments
Score
Opportunities
1- Increasing no. of population in Egypt by
2% over las year which leads to increase 0.09 3 0.27
in market size.
2- Number of Female athletes are growing Raising market
in Egypt, so it’s a good market for 0.1 4 0.4 especially upon
sportswear. veiled women.
3- Assign celebrated athletes for
0.08 3 0.24
campaigns.
4- Low salary for labors in Egypt. 0.05 2 0.1
5- Customer Loyalty. 0.08 4 0.32
6- Egypt Sustainability. 0.1 4 0.4
Threats
1- Very strong competition especially
0.1 2 0.2
from adidas & Puma.

2- New competitor in Egypt “Decathlone”. 0.05 3 0.15

3- High inflation rate. 0.09 2 0.18

4- Lack of foreign currency in Egypt leads
0.09 1 0.09
to decreasing imported products.
Concerning
5- Governmental regulation. 0.09 1 0.09
imported goods
6- Markets with copied Nike products 0.08 3 0.24
Total 1
Total Weighted Score 2.68
➢ From the EFAS Model, it is obvious that the external environment is
favorable to Nike company as its score is above the average which is 2.5.

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 SWOT Analysis

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SWOT Analysis
Internal Factors
Strengths Weaknesses
1. Strong brand name. 1. Expensive products.
2. Nike is the world's largest supplier and 2. Major focus on footwear only.
manufacturer of athletic shoes and 3. Though the company provides a world-
apparel, as well as a major supplier of wide service, the company largely
sports equipment. depends on the North American market.
3. Innovative products as they have strong 4. Nike has no online shopping in Egypt.
R&D.
4. Mass production associated with low
manufacturing costs.
5. Nike has different products from footwear,
apparel & accessories.
6. High distinctive quality products.
7. In-house Professionals.
8. High Market Share approximately 39% of
the global athletic footwear market
and 13% of global athletic
apparel market.
9. Move to zero & forward initiatives.
10. Well stablished company.
11. Strong reputation.

External Factors
Opportunities Threats
1. Increasing no. of population in Egypt by 1. Very strong competition especially from
2% over las year which leads to increase adidas & Puma.
in market size. 2. New competitor in Egypt “Decathlone”.
2. Number of Female athletes are 3. High inflation rate.
growing in Egypt, so it’s a good market 4. Lack of foreign currency in Egypt leads
for sportswear. to decreasing imported products.
3. Assign celebrated athletes for 5. Governmental regulation.
campaigns. 6. Markets with copied Nike products
4. Low salary for labors in Egypt.
5. Customer Loyalty.
6. Egypt Sustainability.

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 Internal Environment
Assessment

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 Internal Factor Analysis Summary
“IFAS”
Weighted
Internal Factors Weight Rating Comments
Score
Strengths
1- Strong brand name. 0.07 4 0.28
2- Nike is the world's largest supplier and
manufacturer of athletic shoes and apparel,
0.03 4 0.12
as well as a major supplier of sports
equipment.
3- Innovative products as they have strong
0.07 4 0.28
R&D.
4- Mass production associated with low
0.02 3 0.06
manufacturing costs.
5- Nike has different products from
0.04 4 0.16
footwear, apparel & accessories.
6- High distinctive quality products. 0.06 4 0.24
7- In-house Professionals. 0.05 4 0.20
8- High Market Share approximately 39% of
the global athletic footwear market 0.03 3 0.09
and 13% of global athletic apparel market.
9- Move to zero & forward initiatives 0.06 4 0.24
10- Well stablished company. 0.02 3 0.06
11- Strong reputation. 0.05 4 0.2
Weaknesses
1- Expensive products. 0.15 2 0.3
2- Major focus on footwear only. 0.12 2 0.24
3- Though the company provides a world-
wide service, the company largely depends 0.1 2 0.2
on the North American market.
4- Nike has no online shopping in Egypt. 0.13 2 0.26
Total 1
Total Weighted Score 2.93

➢ From the IFAS Model, it is obvious that the internal environment is

favorable to Nike company as its score is almost 3 which is fantastic.

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Value Discipline Triad

1- Product Leadership
➢ Nike is a prospector in R&D as it spends a lot of money on R&D & has many
products in pipeline & new innovative products are launched regularly.
➢ Nike has Wide range of products from footwear to apparel to accessories.
➢ Nike’s well-known quality is done by Additive manufacturing (also known as 3D
printing) is a method of translating a digital design to produce physical objects by
adding successive think layers of materials.

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 2- Operational Excellence
➢ Nike gets benefit from their good planning & good allocation for their resources.
➢ Nike targets to eliminate any waste, Nike helps eliminate waste before products hit
the shelf by using more recycled materials, efficient methods of make and smarter
packaging solutions.
➢ Reducing the impact of packaging by switching from single-use to reusable cartons
and reducing the weight of the shipping cartons used to ship products around the
world.

3- Customer Intimacy
➢ As Nike is a well-established company & has its well-known reputation, Nike is
always seeking for customer satisfaction.
➢ In order to satisfy customers, Nike operates 4 am - 11 pm PT 7 days a week for any
help concerning new orders or returns.

➢ So, from above analysis Nike goes for “Differentiation Strategy” as it

depends on Product leadership from its strong R&D.

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VRIO Model
Impact on
Resource Valuable Rare Inimitable Organization Competitive
Advantage
Strong POP
Global Yes Yes No Yes Competitive
Presence Advantage
Temporary
Strong R&D Yes Yes No Yes Competitive
Advantage
POP
High Quality
Yes No No Yes Competitive
Products
Advantage
Distinctive
Distinctive
innovative
Yes Yes Yes Yes Competitive
Products like
Advantage
“Air Jordan”
POP
Customer
Yes No No Yes Competitive
loyalty
Advantage
Temporary
Sustainability Yes Yes No Yes Competitive
advantage
POP
Brand Image Yes Yes No Yes Competitive
Advantage

➢ So, it is noticed from the VRIO Model that Nike has a distinctive
advantage which is Distinctive innovative Products & two temporary
competitive advantages which are strong R&D, new sustainable recycled
products & move to zero & renewable energy initiatives.

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Matching Phase

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TOWS
Strengths Weaknesses
1. Strong brand name. 1. Expensive products.
2. Nike is the world's largest 2. Major focus on
Internal supplier and manufacturer of footwear only.
athletic shoes and apparel, as 3. Nike has no online
well as a major supplier of
Factors sports equipment.
shopping in Egypt.
3. Innovative products as they
have strong R&D.
4. Mass production associated
with low manufacturing costs.
External 5. High distinctive quality
products.
Factors 6. Move to zero & forward
initiatives.
Opportunities S2 O1: As Nike is the world’s largest W1 O3: The celebrated
1. Increasing no. of supplier for sportswear, we can increase marketing campaigns can
our market share in Egyptian growing be assigned to overcome
population in Egypt by market.
2% over las year which the expensive products
S3 O2: Nike’s strong R&D can gain price.
leads to increase in new customers especially women new
market size. sector entering market like swimming
2. Number of Female W2 O1: Increasing number
wear.
of population & market size
athletes are growing in S1 O3: Nike’s strong brand name can can be utilized to overcome
Egypt, so it’s a good attract celebrities to make successful Nike’s big focus on
market for sportswear. marketing campaigns.
footwear only.
3. Assign celebrated S5 O4: Through Nike’s well known
athletes for campaigns. quality brand we can keep our customer W3 O4: Nike’s customer
4. Customer Loyalty. loyalty & to be satisfied with premium
loyalty can minimize the
5. Egypt Sustainability. quality.
impact of absence of Nike’s
S6 O5: As sustainability is growing shopping website in Egypt.
Nike has its initiatives to be leader in
this field.
Threats S3 S5 T1: With Nike’s strong R&D & W1 T3: Nike’s expensive
1. Very strong distinctive high-quality products we products face the copied &
can face the threats of competitors. mirror products market.
competition especially
from adidas & Puma. S4 T2: With high mass production to
2. High inflation rate. W3 T1: Nike should take
reduce cost we can face the high
3. Markets with copied inflation rate.
into consideration to
Nike products develop online website in
S1 S5 T3: With Nike’s strong brand
Egypt in order to compete
name & its distinctive quality can face
the threat of copied ones.
with others.

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➢ From TOWS, intensive strategies are in favor especially “Product
development & Market penetration”.

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IE Matrix

High
3
1 2
External Factor Evaluation
Medium

4 5 6
Low

7 8 9

Weak Average Strong

Internal Factor Evaluation

➢ In IE Matrix matching phase, it shows that we are in the middle between
hold & maintain & Grow/Expansion strategies.

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Strategic Position & Action Evaluation
“SPACE” Matrix
➢ This data is for EMEA, Africa & Middle East as there is no specific data
concerning Egypt.

A. Internal Factors:
1. Financial Strength

➢ Nike's revenue in Europe, the Middle East and Africa (EMEA) from the fiscal years
of 2016 to 2022, by segment (in million U.S. dollars)

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 Factor Score
ROI 4
Liquidity 4
Cash Flow 4
Working Capital 3
Earnings per share 4
Score 3.8

2. Competitive Advantage
Factor Score
Market Share -1
Product Quality -1
Customer Loyalty -2
-1.3

B. External Factors:
1. Industry Strength
Factor Score
Growth Potential 5
Profit Potential 4
Financial Stability 4
Resources 5
4.5

2. Environmental Stability
Factor Score
Technology -2
Rate of Inflation -5
Competitive Pressure -4
Risk -2
Price Elasticity -4
-3.4

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 FS
8

0
CA -8 -6 -4 -2 0 2 4 6 8 IS
-2

-4

-6

-8

ES

➢ From SPACE Matrix, it is clear that Nike is in the aggressive strategies quadrant.

Summary:

➢ From the previous analysis, and according to Nike’s R&D capabilities

as well as other strengths, it is suggested to go for growth strategy.
➢ On the other hand, due to the current Egyptian market conditions of
very high inflation rate and low national income as well as challenges
facing the EGP exchange rate, stability strategy by maintaining
profitability through cost reduction must be taking into consideration.
➢ To decide which strategy is more suitable, we have to apply the QSPM
model to measure the attractiveness of each of them.

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Decision Phase

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QSPM
Product Market
Stability
development Penetration

TOWS Factors Weight AS TAS AS TAS AS TAS

Strong brand name. 0.08 4 0.32 4 0.32 1 0.08
Nike is the world's largest
supplier and manufacturer of
athletic shoes and apparel, as well 0.04 4 0.16 4 0.16 1 0.04
as a major supplier of sports
equipment.
Innovative products as they have
0.08 4 0.32 4 0.32 1 0.08
strong R&D.
Mass production associated with
0.02 2 0.04 2 0.04 4 0.08
low manufacturing costs.
High distinctive quality products. 0.08 4 0.32 3 0.24 1 0.08
Move to zero & forward
0.08 4 0.32 3 0.24 1 0.08
initiatives.
Expensive products. 0.06 1 0.06 1 0.06 4 0.24
Major focus on footwear only. 0.02 3 0.06 2 0.04 4 0.08
In Egypt there is no online
0.08 1 0.08 1 0.08 4 0.32
shopping.
Increasing no. of population in
Egypt by 2% over las year which 0.07 3 0.21 4 0.28 1 0.07
leads to increase in market size.
Female athletes are growing in
Egypt, so it’s a good market for 0.07 4 0.28 4 0.28 1 0.07
sports & swimming wears.
celebrated athletes for 0.05
0.05 3 0.15 4 0.2 1
campaigns
Customer Loyalty. 0.05 4 0.2 3 0.15 1 0.05
Egypt Sustainability. 0.08 4 0.32 2 0.16 1 0.08
Very strong competition
0.06 4 0.24 2 0.12 4 0.24
especially from adidas & Puma.
High inflation rate. 0.06 1 0.06 2 0.12 4 0.24
Markets with copied Nike
0.02 4 0.08 4 0.08 2 0.04
products
Total 1 3.22 2.89 1.92

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➢ Accordingly, Nike shall go for intensive strategy “Product development” according
to the Quantitative Strategic Planning Matrix “QSPM” Total attractiveness score.

Strategic Objectives:
1. Creating 25% increase in company’s revenues by getting new & improved products
by R&D department to market ahead of rivals till 2025.
2. Matching with Sustainability, new products are aligned with “MOVE TO ZERO”,
to reduce carbon emissions by 15% across its entire supply chain by 2025 powered
by 100% on renewable energy.

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Strategy Implementation

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Implementation
Strategy: Product Development
Strategic Objective: Creating 25% increase in company’s revenues by getting new &
improved products by R&D department to market ahead of rivals till 2025.
Annual Objective: 2023-2024
Functional Functional Objective Procedures Required KPI’s
Area action Polices Resources
R&D • Develop & create new • Modify • Money. • Number of
products to contribute current • Time. researches
by 10% of the total products. • People. for product
company’s portfolio. • Conducts • Info. innovation.
meeting to
develop new
products.
Marketing • Increase Marketing • Marketing • Money. • Customer
budget by 10% during Campaigns. • Time. Satisfaction
2023-2024 • New products • Info. index.
• Create revenues for new to be • People. • NPS.
sustainable products by associated • No. of
20%. with sales.
• Increase Customer Celebrities.
satisfaction by 10%
during 2023-2024
Human • Hiring talented • Recruitment. • Money. • Performanc
Resources innovative employees. • Training • Time. e appraisal.
• Increase efficiency of programs. • Info. • Job
quality staff by 20% • People. satisfaction
index.
Production • Increase production rate • More shifts. • Money. • Rate of
by 10%. • Overtime • Time. production
• People. /day/machi
ne
Finance • Increase budget of • Reduce • Money. • ROI.
R&D by 15%. dividends to • Time. • Liquidity.
reassign for • People.
R&D.

ID: 20121573
MBA - SME
 Strategic Objective: Matching with Sustainability, new products are aligned with
“MOVE TO ZERO”, to reduce carbon emissions by 15% across its entire supply chain
by 2025 powered by 100% on renewable energy.
Annual Objective: 2023-2024
Functional Functional Objective Procedures Required KPI’s
Area action Polices Resources
Operation • New ways to reduce • Products • Money. • Reduction
carbon emissions by Recycling. • Time. in
5%. • Refurbished • People. Percentage
• Increasing the usage of products. • Info. of carbon
renewable energy in all • More emissions.
aspects by 40%. facilities to • Increasing
run on % of usage
renewable of
energy like renewable
wind or solar energy.
energy.
Marketing • Increase customer • Marketing • Money. • Customer
awareness for Campaigns. • Time. number of
sustainability by 40%. • Info. impression.
• Customers to be aware • People. • Survey.
of new sustainable
products.
Human • Increase employee’s • Training • Money. • Percentage
Resources awareness to programs. • Time. reduction of
sustainability. • Info. wasted
• People. materials.
Finance • Increase budget for • Update • Money. • Percentage
converting to renewable budget plan. • Time. for current
energy by 10%. • Track current • People. budget
budget modification
effectiveness .
to spot any
gaps to be
modified.

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Evaluation & Control

ID: 20121573
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Balanced Score Card
Time (years) Time
Strategic Target KP 1 2 3 Business Objectives Target KPI 1 2 3
Objective I Aspect
Creating 25% increase in company’ s revenues by getting new & improved products

Revenues
Actual

Finance
Growth for
revenue /
new 25% 8% 8% 9%
Target
innovative
revenue
products.
by R&D department to market ahead of rivals till 2025

Current
Increase
Creating 25% increase in company’ s revenues.

Internal Process
Year
To be able the
new
to develop number
products 10
new of new 10%
%
10%
Vs
innovative product
Previous
products. s by
Actual revenue / Target revenue

Year
30%
products
8%

8%

9%

Increase Increase
Customer

marketing the Current

expenses demand year Vs
10 10 10
for for new Previous
customer product year
satisfaction by 30%
Learning & Growth

Training Number
programs 9 of
for R&D progra training 3 3 3
Staff ms program
s

ID: 20121573
MBA - SME
 Time (years) Time
Strategic Target KP 1 2 3 Business Objectives Target KPI 1 2 3
Objective
to reduce carbon emissions by 15% across its entire supply chain by 2025 powered by I Aspect
Matching with Sustainability, new products are aligned with “ MOVE TO ZERO” ,

reduce carbon emissions by 15% across its entire supply chain by 2025 powered by
Increase

Finance
profitabilit
Actual / 10
y of new 30% 10%
%
10%
Target
sustainable
products.

Design for
the

Internal Process
environme Current
nt Year
15% Vs 5% 5% 5%
Eco Previous
100% on renewable energy

100% on renewable energy

efficiency Year
of
production
Actual / Target

5%

5%

5%

Customer

Improving Current
the value year Vs
30% 10 10 10
of green Previous
customer year

Training
Learning & Growth

programs
to reduce Number
waste & 6 of
emissions progra training 2 2 2
& improve ms program
sustainabili s
ty culture

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Business Plan

ID: 20121573
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Marketing Plan
New sustainable products line
➢ Industry Description:
• the design, development, marketing, and sale of athletic footwear, apparel,
accessories, equipment, and services.

➢ Situational analysis:
• As stated, before by PESTEL, Porter’s 5 Forces & SWOT analysis.

➢ Marketing Objectives:
• Create revenues for new sustainable products by 20% by 2024.
• Increase Customer satisfaction by 10% during 2023-2024.

➢ Marketing Strategies:
1. Growth Strategy by product development: innovative products depending on
sustainability.
2. Competitive Strategy: Differentiation by using competitive advantage.
➢ Segmentation:
A. Demographic B. Geographic
• Age: 15-50 • Areas: Cairo, Giza &
• Gender: Both Male & Alexandria.
Female.
• Social Class: A, B & C1
C. Psychographic D. Behavioral
• Life Style: Athletes • Daily fitness habits & healthy
life style
• Exercising at Gym.

ID: 20121573
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➢ Targeting:
• Differentiated: Different products to different segments

Target Market Needs Benefits Offered

Age: 18-40 • Casual & Athletics • Comfy products.
Sportswear & Shoes. • Style.
• Sports accessories. • High quality products.
Age 40-50 • Comfort shoes. • High quality products.
• Comfort daily outfits. • Comfy products.
• Accessories like hats
& bags.
Social class: A & B • Premium Quality. • High quality products.
• New design products. • Brand name.
• New innovative
products.
Athletes • All sports aspects: • High quality products.
shoes, sportswear & • Style & comfy
accessories. products.
• Durable outdoor
activities.

➢ Positioning:
• Nike focuses on the following to occupy a clear, distinctive & desirable place in the
minds of target customers:

i. As a leader in sports goods

ii. Style

iii. Quality level& valuable product

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➢ Competitive advantage:
• Associated with celebrities
• Innovative products
• High quality with low environmental impact
➢ Product:
• Shopping product “Shoes, Apparel & Accessories”

• New Product introduction

➢ Branding strategy:
• Line extension
➢ Pricing strategy:
• Skimming “High price for new products”

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➢ Place:
• Distribution channels “Retailers & Retailers outlets”
• Distribution strategy: Selective “Few number of retails”
➢ Promotional tools:
• Advertising: online & outdoors
• Direct marketing: E-mail
• Public relations: Events, exhibition & Sponsorship
• Advertising (360 Campaign):

Online Offline
E-mails Street billboards
YOUTUBE ads
Social Network ads
Search engine

➢ Promotional strategy:
• Pull “targeting end users”

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Operational Plan
➢ Nike gets benefit from their good planning & good allocation for their resources.
➢ eliminate any waste, Nike helps eliminate waste before products hit the shelf by
using more recycled materials, efficient methods of make and smarter packaging
solutions.
➢ Reducing the impact of packaging by switching from single-use to reusable cartons
and reducing the weight of the shipping cartons used to ship products around the
world.
➢ Nike seeks for importing the exact forecasted demand.
➢ Our priorities include promoting diversity, equity and inclusion for all; advancing a
transparent and responsible supply chain; innovating sustainable materials and
methods of make that focus on our environmental impact; building community by
investing in organizations focused on economic empowerment, and education and
equality; and bringing today’s generation together through sport and an active
lifestyle so they can reach their full potential tomorrow
➢ To increase the 100% footwear manufacturing waste diverted from landfill or
incineration without energy recovery.
➢ Increasing the P.P. reduction in freshwater used in textile dyeing & finishing.
➢ 0.5M tons of GHG emissions reduced by using environmentally preferred materials
— the equivalent of taking 110,000 cars off the road for a year.
➢ New ways to reduce carbon emissions by 5%.
➢ Increasing the usage of renewable energy in all aspects by 40%.
➢ Products Recycling.
➢ More facilities to run on renewable energy like wind or solar energy.
➢ Reduce Transportation
➢ Increasing customer satisfaction by Nike’s well trained customer service.
➢ To ease reverse logistics.

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Financial Plan
➢ For confidentiality purpose there is no access to Nike Egypt standalone financial
statements, accordingly stated below Nike consolidated statements & analysis.

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 ➢ Financial Ratios:

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 ➢ Brief on historical financial statements:
• Nike, Inc. reported revenues of $46.7 billion for the fiscal year 2022, an increase
of 5% from the fiscal year 2021. driven by increased revenue in EMEA, North
America. Additionally, Converse's revenues climbed by 6%. As seen below,
footwear products account for 66% of the company's overall revenues while
apparel accounts for 30%.

• A rise in full price sales on a wholesale equivalent basis, a larger percentage of

full price sales overall, and favorable changes in net foreign currency exchange
rates, including hedges, were the main drivers of the improvement in gross
margin for the fiscal year 2022. This activity was partially offset by higher
product costs on a wholesale equivalent basis, which were primarily brought on
by rising freight and logistics costs. Other costs also increased, primarily as a
result of higher inventory obsolescence reserves recognized in Greater China in
the fourth quarter of fiscal 2022.

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 • For the fiscal year 2022, income before income taxes remained unchanged due
to greater selling and administrative costs offsetting higher gross margin
expansion and revenue growth. With the help of margin expansion in the NIKE
Direct business, a higher percentage of full-price sales, and favorable changes in
net foreign exchange rates, including hedges, NIKE, Inc.'s gross margin
increased by 120 basis points. However, these gains were partially offset by
higher freight and logistics costs as well as higher inventory obsolescence
reserves, which were primarily recognized in Greater China in the fourth quarter
of fiscal 2022. Due to rising operating overhead and demand generation costs,
selling and administrative expenses increased. The main drivers of this increase
in operating overhead costs were higher strategic technology investments, higher
wage-related costs, and higher NIKE Direct variable costs. This activity was
somewhat countered by higher restructuring-related charges in the prior year
related to restructuring.

• As stated above Nike has a stable financial performance, accordingly Nike can
postpone distribution of dividends for the up coming year to support R&D department.

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Summary
▪ Every athlete in the globe can get inspiration and innovation from Nike, which views
everyone as an athlete thanks to its well-known brand image.
▪ Nike continuously aspires to maintain its position at the forefront of product
innovation and design as a well-known, leading sports brand. through rigorous study
and creation.
▪ As climate change plays an important role in our lives globally, Egypt now hosting
the 27th Conference of the Parties to the United Nations Framework Convention on
Climate Change – COP27.
▪ The UN Climate Change Conference (COP27) presents an opportunity for all
stakeholders to come together to find concrete solutions to the global climate
emergency, including on mitigation, adaptation and resilience, loss and damage and
climate finance.
▪ Move to Zero is Nike's initiative to eliminate waste and carbon emissions in order
to safeguard the future of sport.
▪ It is a continuation of Nike's steadfast commitment to sustainability and is motivated
by the conviction that preserving the environment also involves defending sport's
future from climate change.
▪ It is noted from the external factors analysis in Egypt that the external environment
is favorable to the industry of sports ware & accessories. Taking into consideration
the high inflation rate, high market competition & Go Green initiative.
▪ Additionally, the internal factor analysis reveals that Nike has an advantage in R&D
and its distinctive quality items.
▪ It is obvious from EFAS matrix that Nike is able to benefit from the market
opportunities to a great extent with a strong R&D.

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 ▪ Nike, a well-known, established firm with great R&D, must utilize its advantages
for an intensive strategy, particularly product development.
▪ Nike also going for sustainability by reducing carbon emission & to power its whole
supply chain by 100% renewable energy.
▪ Nike has an advantage from its strong R&D Nike Forward of 75% less carbon
compared to traditional knit fleece aligned with sustainability.
▪ With stable financial performance & Strong R&D with distinctive high quality
products, Nike continues to lead the market & increase its market share.

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References:

https://www.worldbank.org/en/home

https://www.theglobaleconomy.com/

https://www.capmas.gov.eg/

https://www.nike.com/eg/

https://www.statista.com/topics/2510/egypt/

https://www.macrotrends.net/stocks/charts/NKE/nike/financial-ratios

https://s1.q4cdn.com/806093406/files/doc_downloads/2022/399556(1)_27_Nike-
Inc._NPS_Combo_Form-10-K_WR.pdf

https://www.nike.com/sustainability

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