Nike, Inc by Karan shah

Case Analysis:
NiKe, Inc.
Karan Shah
Hayward | 08/20/2014
Developing an International Business Strategy |MKTG 7710
Instructor - Jeffrey Newcomb
2

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1. Overview
2. Challenges
3. Expansion of Nike
4. Industry and business situations
5. Competitors & Market Share
6. Competitive Advantage
7. 4P’s of Marketing Strategy
8. Porter’s 5 Forces
9. SWOT Analysis
10.Recommendation
11.Conclusion
12.References

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 Nike, Inc. is the world’s leading innovator in athletic footwear, apparel, equipment and
accessories.
 The company was founded on January 25, 1964, as Blue Ribbon Sports, by Bill
Bowerman and Phil Knight, and officially became Nike, Inc. on May 30, 1971.
 The company takes its name from Nike, the Greek goddess of victory.
 The company is headquartered near Beaverton ,Oregon, USA.
 Area served – Worldwide more then 160 countries.
 With revenue in excess of US$27.1 billion. As of 2013, it employed more than 44,000
people worldwide.
 Nike operated 690 retail stores worldwide and managed 23,000 retail account in US.
 Nike markets its products under its own brand, as well as Nike Golf, Nike Pro, Nike+, Air
Jordan, Air Force 1, Nike Dunk, Nike Skateboarding, and subsidiaries including Brand
Jordan, Hurley International LLC and Converse inc.
 Website launched in 1998 with Nike.com

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 Nike’s Mission –
Nike aims to lead in corporate citizenship through proactive program
that reflect caring for the world family of nike ,our teammates, our
customers ,and those who provide service to Nike
 Nike’s Vision -
“TO BRING INSPIRATION AND INNOVATION TO EVERY ATHLETE* IN
THE WORLD.IF YOU HAVE A BODY,YOU ARE AN ATHELETE.
 Nike’s Slogan –
JUST Do IT…

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 Tightening competition – growth of Adidas, New Balance, Marketing
expenditures are growing steadily.
 Losing market share in China.
 Nike’s premium and high quality brand image doesn’t sync with the
expectations of the customer.
 Nike is heavily dependent on information technology systems across its
supply chain.
2. Nike challenges

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 NIKE+ allows us to connect the physical world of sport with the social elements of
digital to create a better sport experience for every athlete. It’s about much more
than a shoe. It represent a shift for NIKE from product, to Product+ experience.
- Mark parker , Nike CEO
 Founded in 2010, with joint venture with Apple , INC after the initial digital and
social success in Soccer and running ,The Nike digital Sport division , based in Jerry
Rice Building at Nike ‘s headquaters in beaverton, Oregon.
 Nike+ was made up of censor placed inside running shoes that monitored the
runner’s speed ,distance and calories burned and transmitted that information to
the ipod, which receive and stored data.
 The censor is 30$ and running shoes averaged 80$.
 In 2010, Nike increased fuctionalality by adding the Nike+ GPS app and Nike + GPS
SportsWatch .
 In January 2012, Nike + FuelBand costing 149$ , the FuelBand was a wristband that
track the wearer’s movement through the day.
 In February 2012 , Nike+ Basketball and Nike+ Training connected new footware,
which featured digital sensors with wireless communication capabilities with the
nike + interactive mobile platform. The Sensors collect information about the user’s
movement and transmitted the data to a smartphone.

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3.1 Exhibits of Nike+ Products
Nike+ FuelBand
Nike + GPS app
Nike + GPS SportsWatch

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4. Industry Revenue Growth & Market Price Of Nike
 As we can see the
continuity in growth
Nike has made the
Nike, Inc reached Fiscal
2014 revenues from
continuing operations
up 10 percent to $27.8
billion.

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4.1 Industry Life Cycle

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5.Competitors , Key Customer & Market Share
 ADIDAS AG: 2013 revenues - $14.49 billion. It competes in the overall
sporting goods market.
 PUMA: 2013 revenue - $3.5 billion. Puma AG is a Germany-based competitor
in the sells sports footwear, apparel, accessories, and equipment.
 UNDER ARMOUR: 2013 revenue - $856.4 million. Its products, which are
designed with microfibers intended to wick away perspiration, extend across
the sporting goods, outdoor, and active lifestyle markets.
 In addition to Nike's footwear competitors, the company also competes with
other makers of outdoor apparel, such as V.F. Corporation, Columbia
Sportswear and Quicksilver.
 KEY Customers
• Women
• Men
• Girls and Boys
 3 – 36 month
 3 – 8 Years
 8 – 15 Years

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6. Competitive Advantage
 Technology in Products
Nike technology allows consumers to connect their iPod devices to sensors
inside the shoes to record time, distance, pace, and calories burned.
 Manufacturing Skills
Due to cheap labor in foreign countries, Nike outsources virtually all production
to other areas of the world.
 Strength of Patents
One of Nike’s most revolutionary technologies comes through its footwear
cushioning. Competitors have tried to match rival Nike’s cushioning systems, but
none have matched their success
 Economies of Scale
Nike is the single largest producer of athletic footwear and apparel, allowing
them large cost advantages over competition.

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7.
4 P‘s of Coach Marketing Strategy
P P
PP

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- Offers a diverse range of high quality sporting goods and apparel.
- Product mix width consist of athletic shoes , apparel and sports
equipment.
4 P’s
Marketing Strategy
Product
- A premium product commands a premium price, at e same
time as the company also compete heavily with their main
rival Adidas.
- Uses market skimming pricing strategy.
- Product line pricing.
Price
Promotion
Place
- The business has a rich history and bright future using
sponsorship to generate brand authenticity in their markets.
- Direct Marketing (through e-Shop).
- Public personal relations and also with Social Media .
- Mass Advertising.
- Nike is truly global corporation seeking to further segments its
current markets and increase its impact in China, Russia , brazil and
INDIA in particular through independent distributors , licenses ,
subsidiaries.
- Sells product in approximately 160 countries around the world.

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8. PORTAR’s 5 Forces

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 Threats of Potential Entrants (LOW)
Barriers to entry in the athletic footwear industry are high due to
several factors:
It is as very capital intensive industry.
Economies of scale
The industry itself is in a consolidation phase and only the big ones will
survive.
 Bargainng power of Buyers (VERY HIGH)
 Customers more affected by price.
 There has been and increase in women purchasing the shoes.
 The buyers for this industry are retailers and end users. .
 Threats of Substitutes Products (LOW)
They are an attractive alternative product or service, which customers
can easily shift to if there are low switching costs
The availability of substitutes invites customers to make price, quality
and performance comparisons.
Buyer’s propensity to substitute is low.
PORTAR 5’s Forces

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 Suppliers (LOW)
The suppliers do not have the power to bargain the price of their
product, since there are numerous suppliers.
Using production facilities in the Far East has give Nike
economies of scale.
 Competitive Rivalry(HIGH)
Reebok, offering more choice of shoe
Acquisition between Adidas and Rebook .
PORTAR’s 5 Forces

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STRENGHT
WEEKNESS
• Nike is strong at research and development.
• Offers their product worldwide.
• Nike is globally recognized
• Nike has no factories
• It has a strong sense of marketing strategy
• Strong financial position
• Reported to have applied child labor in pakistan.
• Accusations of poor conditions in the work place.
• History of violations of over time laws
• Searching for cheap labour
• Income of the business is still heavly dependent
upon its share of the footware.

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OPPORTUNITY
 Product development that changes as the trends change.
 Diversification in product range
 Expansion in the global markets
 Make Efforts to reduce the pollution generated from Nike
manufacturing factors.
 Reduce prices in Asia and third world countries.
 Expansion in Sport sunglasses and jewelry lines
THREATS
• Currency value fluctuations that can lead to losses.
• Competition is strong among athletic footwear.
• Managing the financial conditions in the economy.
• Maintaining the reputation of being eco –friendly.

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Baseball
Equipments
Running Shoes
Air Max
Outfits
Golf Equipment
Footballs
T- Shirts
& Hoodies
9.2 NiKe Product’s

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 Improve its marketing plan including advertising.
 SIMPLFY ITS WEB SITE.
 Focus on setting up a reliable Information system.
 Nike should focus more on its labor working conditions and
wages.
 Increase its market share in the middle-east.
 Increase its acquisition due to increasing the threat from
adidas and rebook merger.
 More emphasis on women Athletic.
 Design shoes for elderly women and pregnant women.
10. Recommendation

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11. Conclusion
 To summarize the presentation, I would conclude that
nike has done pretty good in this financial crisis.
 Providing excellent services in the foot wear industry.
 Still to Date they are the market leader within the
industry.
 Entry barrier for other competitors in the industry is still
very high to compete with Nike.

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References
 www.nike.com
 www.nikeplus.com
 www.footware-industry.com
 www.wikipedia.com
 Case Analysis of Nike

Nike, Inc by Karan shah

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