Professional Documents
Culture Documents
2003
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Case-Study Overview
• Internal: • Analysis
– History, Nike overview, Key – SWOT Matrix
Facts, Our Brands and Stock – SPACE
Information
– BCG
– Nike Actual & Proposed Vision
and Mission – IE matrix
– Economic Performance – Grand Strategy Matrix
– Evolution of Financial Ratios – QSPM
– Strengths and weaknesses • Possible strategies: Matrix
• Analysis: IFE Analysis
• External: • Decisions
– Industry overview and – Why our decision?
comparison of financial ratios – Strategic implementation
– Manufacturing – Actions
– Opportunities and threats • Evaluation Procedure
• Analysis: EFE • Current Update
– Competitors
• Market Share
• Analysis: CPM
History
1962: Phillip Knight, a Stanford University business graduate and
former member of the track team, arranges to import athletic
shoes from Japan and sell them in the U.S.. Knight created
Blue Ribbon Sports as a cover name for his small-scale shoe-
selling operations
1964: William Bowerman becomes a partner by matching
Knight's investment of $500.
1965: Hires a full time employee, and annual sales reach
$2,000.
1966: Blue Ribbon Sports, also known as BRS, rents its first
retail space; employees can now stop selling shoes from their
cars.
1969: It now has several stores and 20 employees; sales are
close to $300,000.
1971: Nike, capitalizing on the Greek goddess of victory. The
first Nike product sold with the new symbol is a soccer shoe.
1970 – 1975: Steve Prefontaine was turned to the University of
Oregon by Bill Bowerman and wore Nike products.
History
1976: The popularity of jogging increases revenue to $14 million.
1978: The company changes its name to Nike.
1980: Nike goes public, offering 2 million shares of stock.
1990: Nike files suit against competitors for copying the patented
designs of its shoes, and also engaged in a dispute with the
U.S. Customs Service over import duties on its Air Jordan
basketball shoes.
1997: Feb., Stocks reaches a high of $76 per share.
1998: Sept., Stocks tumbles to $31 per share.
2000: The National Football League declines to renew its
exclusive apparel licensing arrangement with Nike.
2001: Nike opens its first Nike Goddess store, a unit targeting
women, in Newport Beach, CA.
2003: Nike purchases Converse Inc. for $ 305 million.
Origin of the Name and the
Swoosh
• Nike is the Ancient Greek goddess of victory
Question marks
Stars
Cash-Cow Dogs
IE Matrix
The Grand Strategy Matrix
• Potential Strategies:
• - Market Development
• - Market Penetration
• - Product Development
• - Backward Integration
• - Forward Integration
• - Concentric
Diversification
Matrix Analysis
QSPM
Decisions
• Alternative:
– Keep expanding into current and future foreign markets by being
aggressive and the worldwide leader of the footwear industry
– Accelerate funding for numerous marketing campaigns in order to get to
specific markets or customer groups
– Focus on improving working conditions and human rights at
international manufacturer centers and at the same time increasing their
productivity
– Implement product diversification with company’s newest technologies
so resulting increased earnings could be reinvested into R&D plans
Why this strategy?
• U.S. Women: Prefer fashion, not footwear, they
prefer clothing, we must create a shopping style
based in athletic shopping.
• U.S. Kids: E-commerce, influenced by
innovation and design, not only comfort or sports
• We need to consolidate US sales compared to
international sales and international competitors
• Difficult to expand towards other sports or
population segments
Implementation
Actions:
• Women:
– Open 25 specific stores specialized only for women
– Increase R&D expenses by 7% in women products
– Increase Marketing expenses by 10%, designing a specific
campaign for women using female endorsements
– Create a new logo for women market which would be associated
with fashion trends and introduce new products
• Kids:
– Increase R&D expenses by 7% in kids products
– Increase Marketing expenses by 10%, designing a specific
campaign for kids
– Introduce more soccer and basketball products targeting potential
youth market
• Research in international market to find out what are the new
trends related with women and kids products (Long-term)
Showing Cost: EPS-EBIT Analysis
Evaluations
• Nike annual financial reports
• Sales and profits reports (on-line and off-line) based
on Women stores and Kids products
• Frequent management meetings between VP
Global Brand Management (US), VP Global
Footwear, VP Global Apparel, and VP Subsidiaries
and New Business Development
• Evaluation reports
Update: 2004-2006
• 2004: Nike introduces “Swift” technology.
– Nike Swift increases track times by up to 1.13%.
– Football (soccer) wear becomes #1 in Europe.
– Nike SHOX footwear introduced in other footwear types and continues to boom.