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Muhammad Ali Naeem Misba Kiran 17 Khayam Shafiq 16 Irfan Razzaq 06 Tariq Abbasi 35 Farah Naz 39
Muhammad Ali Naeem
– History, Nike overview, Key Facts, Our Brands etc. – Nike Actual Vision and Mission – Economic Performance – Strengths and weaknesses • Analysis: IFE
– Why our decision? – Strategic implementation – Actions
– Industry overview and comparison of financial ratios – Manufacturing – Opportunities and threats • Analysis: EFE – Competitors • Market Share • Analysis: CPM
January 25, 1962 as Blue Ribbon Sports 1978 as Nike, Inc.
William J. "Bill" Bowerman Philip H. Knight
Washington County, Oregon, United States (Near Beaverton, Oregon)
Area served Key people
Philip H. Knight (Chairman) Mark Parker (CEO & President)
Designing&Manufacturing: Sportswear Sports equipment
Athletic shoes Apparel Sports equipment Accessories
Revenue Operating income Net income Total assets Total equity
▲ US$19.2 Billion (FY 2009) ▲ US$1.87 Billion (FY 2009) ▲ US$1.49 Billion (FY 2009) ▲ US$13.2 Billion (FY 2009) ▲ US$8.69 Billion (FY 2009)
Cole Haan, Hurley International, Converse Inc. and Umbro.
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.
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.
2008 :Nike acquired sports apparel supplier Umbro,
Evolution of the Swoosh Logo
Nike Sportswear Jacket
Nike T90 Club Team Soccer Ball
Key facts (2010)
• Headquarters: Beaverton, OR • Sector: Consumer Goods • Industry: Textile - Apparel Footwear & Accessories
• Other Brands: Cole Haan, Converse, Hurley, Bauer Hockey, Starter Apparel • Market Cap: 21.738 billion • Ticker Symbol: NKE • Ranked 173 in the Annual ranking of America's largest corporations (Fortune 500 magazine)
• Cole Haan, based in Maine, sells dress and casual footwear and accessories for men and women under the brand names of Cole Haan, g Series, and Bragano.
• Nike Bauer Hockey, based in New Hampshire, manufactures and distributes hockey ice skates, apparel and equipment, as well as equipment for inline skating, and street and roller hockey.
• Hurley International, based in California, designs and distributes a line of action sports apparel for surfing, skateboarding and snowboarding, and youth lifestyle apparel and footwear.
• Converse, based in Massachusetts, designs and distributes athletic and casual footwear, apparel, and accessories.
“To bring inspiration and innovation to every athlete* in the world”
(* “If you have a body, you are an athlete” Bill Bowerman, co-founder)
Nike is the "largest seller of athletic footwear and athletic apparel in the world. Performance and reliability of shoes, apparel, and equipment, new product development, price, product identity through marketing and promotion, and customer support and service are important aspects of competition in the athletic footwear, apparel, and equipment industry. We believe we are competitive in all of these areas." The company aims to " lead in corporate citizenship through proactive programs that reflect caring for the world family of Nike, our teammates, our consumers, and those who provide services to Nike."
Internal strengths and weaknesses
• • • • • • • • • • • Strong brand recognition Internet sales Growing international presence Superior research and development department Strong financial returns Strong sense of culture in the working environment Great celebrity spokespersons Automatic replenishment system Successful experience being competitive Nike doesn’t own any factories Successful marketing campaigns
• • Lack of stores catering to the active females Poor employment practices at their international manufacturing sites giving a bad reputation Heavy dependency on footwear sales Issues with Footlocker
External Opportunities and Threats
• Customer use of company’s products change from athletic purpose to a fashion item • Development of international trade (GAAT and NAFTA) • Generation Y children (born between 1979 and 1994) will reach 60 million •General demand for clothing/footwear for leisure activities continues to increase • Growing e-commerce’s positive effect since one of company’s competitive advantages is Internet sales •Women demand for athletic footwear and clothing is increasing significantly
• Competitors which copy company's business model (high value branded
product manufactured at a low cost) •Reebok's strong presence with 204
factory direct stores •Adidas-Salomon AG, top European competitor • The impact of foreign currency fluctuation and interest rates, and political instability • Labor and political unrest in the suppliers countries • Cost orientated customers vs company’s higher-end market.
Athletic Shoe Market Share (2010)
Adidas Decade Hi Grün
3.4 oz EDT Spray for Men
Adidas Adilibria Zip Track Jacket
• One of Adidas biggest Marketing schemes was to merge with Reebok to compete with the powerhouse Nike. • The Germany-based global power announced a $3.8 billion deal to buy Canton, Mass.-based Reebok, uniting two of the world's top sports companies and creating a much stronger challenge to Nike, particularly on the global giant's home turf: the prime North American market that accounts for about half of the category's sales worldwide.
Reebok 1kg Medicine Ball
Jacket and Watch from HomeShop18
Competitive Profile Matrix (CPM)
Technology in Products
• Nike has historically had some of the most cutting-edge products on the market. • For example, Nike teamed up with Apple and launched the “Nike + iPod” line of products. • This technology allows consumers to connect their iPod devices to sensors inside the shoes to record time, distance, pace, and calories burned.
• Due to cheap labor in foreign countries, Nike outsources virtually all production to other areas of the world. • This behavior has become an industry standard, with all major competitors also outsourcing production. • Consequently, no competitor has a major advantage in manufacturing.
Nike’s Target Strategy
• Nike’s target market for their shoes, clothes and other accessories are males and females between 18 and 35 years old. • Nike’s Competitive market has expanded and dominated in the international market. • Nike disburse TV ads during professional and college sports events, prime-time programs, and late-night TV programs
– Footwear – Apparel – Equipment
– US – Europe, Middle East and Africa (EMEA) – Asia Pacific – Americas
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
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
– 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)
Formulating a strategic plan for the corporations’ future is key in determining the all around goals of the company. Nike, with there marketing, innovation, technological advancements, and equitable manufacturing departments, has created an al around dominant strategic plan. Nike has built there competitive advantage to the highest form possible.
Nike has shown that they are a true force to be reckoned with.
• Questions? • Comments?
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