Nike Swot Case Study

Nike Case Study Nike was founded in January 1964 by Bill Bowerman, a track and field coach at the University of Oregon and Phil Knight, a University of Oregon student and middle-distance runner under Bowerman. To satisfy coursework requirements, Knight decided that he would make low cost running shoes in Japan and sell them in the US. He engaged the help of Bowerman who was interested in developing a lightweight running shoe. The business started as Blue Ribbon Sports (BRS). First year sales totalled $8,000. In 1972, BRS introduced a new brand of athletic footwear called Nike, named for the Greek winged goddess of victory and the company was renamed to Nike in 1978. Nike is now the worlds most competitive sports and fitness company. Its headquarters are in Beaverton, Oregon, but the company has expanded its horizons to every corner in the world. The Nike Mission Statement is: To bring inspiration and innovation to every athlete in the world. If you have a body then you are an athlete Company Information (http://www.nike.com/nikebiz/nikebiz.jhtml?page=3&item=facts) Employees: Nike employs approximately 29,000 people worldwide. In addition, approximately 650,000 workers are employed in Nike contracted factories around the globe. Revenue FY06: Nike reported net revenues of $15.0 billion, a 9 percent increase from FY05. Stock Symbol: NKE. Went public in December 1980 and is traded on the New York Stock Exchange. Facilities: Nike owns facilities in Oregon, Tennessee, North Carolina and The Netherlands, and operates leased facilities for Niketown and NikeWomen retail stores, over 200 Nike Factory Stores and over 100 sales and administrative offices. Subsidiaries: Cole Haan Holdings, Inc. - With its headquarters in Yarmouth, Maine, Cole Haan sells a line of dress and casual footwear, apparel and accessories for men and women under the brand names Cole Haan, g Series and Bragano. NIKE Bauer Hockey - Based in Greenland, New Hampshire, NIKE Bauer Hockey manufactures and distributes ice skates, skate blades, in-line roller skates, protective gear, hockey sticks, hockey jerseys, licensed apparel and accessories under the Bauer and Nike brand names. Bauer also offers a full line of products for street and roller hockey. Hurley International LLC - Headquartered in Costa Mesa, California, Hurley International designs and distributes a line of action sports apparel for surfing, skateboarding and snowboarding, and youth lifestyle apparel and footwear under the Hurley brand name. Nike IHM, Inc. - Based in Oregon, Nike IHM makes AIR-SOLE cushioning components used in Nike footwear products and sells small amounts of various plastic products to other manufacturers. Converse, Inc. - Based in North Andover, Massachusetts, Converse designs and distributes athletic and casual footwear, apparel and accessories under the Converse, Chuck Taylor, All Star, One Star and Jack Purcell brand names. Exeter Brands Group LLC - Based in New York, Exeter Brands includes the Starter, Team Starter and Asphalt brand names and is the master licensee of Shaq and Dunkman brands. The Exeter Brands Group is devoted to designing and marketing athletic footwear and apparel for the retail value channel. Headquarters: The 16 buildings at world headquarters in Oregon are a soft-spoken testimony to the beauty of sports. Nike employees are typically active people who take full advantage of the fields, trails and gyms that dot the 178-acre spread. Each building is named after an athlete who is key to Nike's growth over the years. Retail: The first Niketown opened in Portland, Oregon, in 1990, setting the standard for interactive, immersive brand environments. Averaging over 30,000 square feet of selling space, Niketowns attract millions of consumers every year and employ over 4,000 Nike retail associates in the US alone. Nike has Niketown and NikeWomen stores in the US and around the world. In addition, the company has been operating Nike Factory Stores around the world since 1984. Manufacturing: As of May 31, 2004, Nike brand had 137 factories in the Americas (including the US), 104 in EMEA, 252 in North Asia and 238 in South Asia, providing more than 650,000 jobs to local communities. This total excludes the amount of jobs provided by manufacturers of Nike subsidiaries. Nike is the first company in our industry to publish the names and addresses of all factories making Nike branded product.

Back to top Overview: The US, namely the Pacific Northwest, is the home of Nike: The company's inception was at the University of Oregon in Eugene, where co-founder Phil Knight went to college and co-founder Bill Bowerman coached track. The first track star to wear Nike shoes was running legend Steve Prefontaine, a native of Coos Bay, Oregon, who ran for the U of O. Now the company's world headquarters are in unincorporated Washington County, Oregon near Beaverton, a suburb of Portland. The company also operates distribution centers in Wilsonville, Oregon and Memphis, Tennessee. Employees: There are 14,000 Nike employees in the United States. Approximately 7,000 work in Oregon at world headquarters, off-campus buildings, the Wilsonville distribution center and various retail venues combined; around 6,000 work in the Memphis distribution center and other retail stores around the country; and approximately 1,000 work in a variety of regional locations. Revenue FY06: For the full fiscal year, US revenues were up 12 percent to $5.7 billion. Footwear revenues increased 14 percent to $3.8 billion; apparel revenues grew 9 percent to $1.6 billion; and equipment revenues declined 5 percent to $298.7 million. U.S. pre-tax income improved 10 percent to $1.2 billion. Distribution: Nikes US distribution centers for footwear are located in Wilsonville, Oregon, Memphis, Tennessee and Greenland, New Hampshire. Apparel and equipment products are shipped from distribution centers located in Memphis, Tennessee, Tigard, Oregon and Foothill Ranch, California. Cole Haan and NIKE Bauer Hockey products are distributed primarily from Greenland, New Hampshire, Converse products are shipped from Ontario and Fontana, California, and Hurley products are shipped from Costa Mesa, California. Back to top Overview: Nike first sold footwear in Europe in 1978. Two years later, the first Nike European Headquarters opened. Then, in 1994, Nike centralized European distribution at the Laakdal [Belgium] Customer Service Center. The current EMEA headquarters, a state-of-the-art complex designed by William McDonough + Partners, opened in 1999 in Hilversum, The Netherlands. The Middle East has been included in the region since the beginning as a geographical area followed by the Nike Partners organization. (Nike Partners was the subsidiary in charge of dealing with local distributors located in Eastern Europe and Middle East, including Israel.) The region's latest addition, Africa, came under the control of the European region in the middle of 2000. In terms of revenue, the EMEA region is Nike's second largest region; it is the third largest in terms of manufacturing. Employees: Approximately 6,000 Nike employees are based in the EMEA region. Factory Base: There are 104 contract factories located in the EMEA region. These factories employ 29,242 workers. Countries where Nike offices are located: Nike branch offices and subsidiaries are located in 27 countries in the EMEA region: Austria, Belgium, Bulgaria, Croatia, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Israel, Italy, Lebanon, the Netherlands, Norway, Poland, Portugal, Russia, Slovakia, Slovenia, South Africa, Spain, Sweden, Switzerland, Turkey and the United Kingdom. Revenue FY06: For the full year, EMEA revenues grew 1 percent to $4.3 billion. Seven percentage points of this growth were the result of changes in currency exchange rates. Footwear revenues were down 2 percent to $2.5 billion. Apparel revenues increased 4 percent to $1.6 billion and equipment revenues rose 10 percent to $313.3 million. Pre-tax income increased 5 percent for the full-year to $960.7 million. Back to top Overview: Nike's roots run deep in the Asia Pacific region: Phil Knight first began doing business in Japan in 1963, importing shoes. Nike Asia Pacific has been in operation since 1977, when it began selling footwear in the region and subcontracted factories in Taiwan and Korea. Nike Japan was established in 1981. In 1997, two major customer service centers opened outside Seoul and Tokyo, and China became both a source country and a vital market for Nike. The Asia Pacific region is Nike's third largest in terms of revenue, and number one in terms of manufacturing. Employees: Approximately 3,282 Nike employees are based in the Asia Pacific region. Factory Base: There are 252 contract factories located in North Asia, and 238 contract factories located in South Asia. Combined, these factories employ 550,821 workers. Countries where Nike offices are located: Nike has 13 branch offices and subsidiaries in the Asia Pacific region: Australia, China, Hong Kong, India, Indonesia, Japan, Korea, New Zealand, Southeast Asia (Singapore, Malaysia, Philippines, Thailand), Sri Lanka, Taiwan and Vietnam.

Revenue FY06: $2.1 billion, up 8 percent from FY05. Of these revenues, approximately $1.0 billion were from footwear sales, $815.6 million from apparel sales and $194.1 million from equipment sales. Back to top Overview: Canada was Nike's first foreign market: The company started selling shoes there in 1972. Nike expanded its business to South America in 1978. While the Americas region is Nike's smallest region by revenue, it is the second largest in terms of manufacturing. The first Nike shoe ever contracted out was done in Mexico in 1971. It was a soccer shoe manufactured by Calzados Canada in Guadalajara, Mexico. Employees: Approximately 1,076 Nike employees are based in the Americas region. Factory Base: There are 137 total contract factories located in the Americas region. These factories employ 44,568 workers. Countries where Nike offices are located: Nike branch offices and subsidiaries are located in five countries in the Americas region: Canada, Mexico, Brazil, Argentina, and Chile. Nike operations in all other countries in the Americas region are managed through partner organizations based in Panama, Ecuador and Paraguay. Revenue FY06: $236.0 million, up 17 percent from FY05. Of these revenues, approximately $635.3 million were from footwear sales, $201.8 million from apparel sales and $67.8 million from equipment sales. Company Board Today, Phil Knight continues to head the Board of Directors of the company as its Chair. The Board consists of both management directors and independent directors. This benefits Nike because there is a presence of those who are involved indirectly and can assist in thinking outside the box issues. However the average age on the Board is 62 with the oldest member at 79 and the youngest aged 49. Product Range Nike has a vast amount of products which include shoes, accessories, sports equipment and clothing for men, women and children. This is a large target market for them to maintain their high status in. Since its inception, Nike has been joined by a large number of other companies such as Reebok, Addidas, Qasics, etc. There is every sign that the market is saturated. Nike has recognised this and diversified away from just shoe production into different product lines. On the marketing front, Nike sponsors athletic events and creates its own running events in cities across the world which it runs on an annual basis. Each event has its own theme and marketing campaign.