2. ABOUT NIKE
Largest seller of athletic footwear and athletic apparel
in the world.
Design, development and worldwide marketing of
footwear apparel, equipment and accessory
products.
18 000 retails in the US
Product for women, men and children
Top selling product: running, basketball, cross-
training and women’s shoes
Also design sportswear for tennis, soccer, baseball,
football, bicycling, volleyball, wrestling, cheerleading,
aquatic activities, hiking, …
The Swoosh
19713,
represents of the
wing of the
goddess.
Nike a winged goddess
capable of moving at
high speed, personifying
victory
The headquarters of Nike in
Beaverton, Oregon.
56 % of its sales abroad
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3. ABOUT NIKE
Manufacturing Footwear & Apparel
98% outside the US: China, Vietnam, Indonesia and Thailand:
98% of total Nike brand footwear
Raw materials: rubber, plastic compounds, foam cushioning
materials,
Marketing and Advertising
• Significant weight on
marketing
• Successful and influential
athletes
• Adjusting the mix of existing
product offerings, developing
new products, styles and
Main competitors
Products
Sports-inspired lifestyle apparel (bags,
socks, sport balls, eyewear, protective
equipment, …) + products under other brand
names in particular markets
Owns: Converse, Hurley International, LLC,
Nike Golf (13% of total revenues, $2.5 billion
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4. FAMOUS SNEAKERS
Nike Air Jordan
Nike Air Force One
Nike Air Max
Nike + iPod
Chuck Taylor All Star
Nike SB
Nike 6.0
Nike Flyknit Nike Roshe Run
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5. CURRENT SITUATION ANALYSIS
NIKE, Inc. has been the worldwide leader of athletic shoe sales.
The company’s successful brand image united competition and
empowerment for the competitive.
However, NIKE is losing their grasp of the urban, casual runner.
NIKE’s current brand statements are aligned with.
Nike needs to reposition their brand towards a focus on fun and
functionality.
Currently stands in the athletic shoe industry and how they will be
able to adapt their brand position to be more successful in the
future.
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6. EXTERNAL ENVIRONMENT:
General Environment
Political Environment
Economic Environment
Social Environment
Technological Environment
Legal Environment
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11. INDUSTRY LIFE CYCLE
Nike is in the stage at which the efficiency of dominant business
model provides the company competitive advantage over the
competition
Factors
Strong Product Awareness
Barrier of New entry
Share market 11
12. NIKE CORPORATE STRATEGY
Focus on innovation and emphasis on
their research and development in order to
be:
• Profitable in the long run.
• Reduce or eliminate athletes injury.
• Help in athletic performance and maximize
comfort.
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13. NIKE COMPETITIVE STRATEGIES
Nike has a combination of two strategies:
• Best cost provider strategy.
(by outsourcing and most of their products are manufactured
outside the United States ,and by economic of scale)
• Broad differentiation strategy.
Nike emphasize on key elements such as design of products ,
High quality products, brand advertising and product development
Nike differentiates its products for athletics in three ways:
Firstly, it manufactures for three different segments of people: men, women
and children.
Secondly, differentiates it products by offering a variety of accessories and
apparels like gym bags, gloves and skates.
Thirdly, Nike has the licensees to manufacture and sell Nike brand products
aside from athletic products like school supplies, electronic media devices and
timepieces.
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14. 5 FORCES ANALYSIS: US & DEVELOPED
MARKETS
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Internal Rivalry (High)
Fierce Competition
Mostly Non-Price competition
Differentiation strategy
Loyal customers (other cies)
E-commerce
Threat of New entrants(Low)
High Barriers to Entry
Capital Intensive
Strong & well established brand
name
Economies of scale
High Marketing & R&D Costs
Industry in consolidation phase
Bargaining Power of
Buyer (High)
End user brand loyalty
Price sensitivity issues
Retail and vendor
consolidations
Growing power of retail
chains
Good Infrastructure
Threat of Substitutes
(Low)
Other types of shoes
Other sport apparel
Bargaining Power of
Supplier (Low)
Abundantly available raw
materials
Cheap resources-commodity
item
• Large amount of buyers relative to the
number of firms on this industry
• Nike needs to seek continously for
high quality to keep its clients
• Competitive products all compete in
diffentiations
• Many online buyers are proce
sensitive & switching costs is low for
the buyer
• Buyers of sports footwear have
changed in the past decade
• An increase in women buying the
shoes
• Generation Y has a different taste &
purchasing methods
• Sub contracts to more than 500
small scal factories
• Suppliers are dependent on
sport firms
• Selling footwear online is highly
competitive: barriers to enter into this
e-commerce industry are quite low
• Cheap copies from the Far East
• Fashion brand
• Innovation and confort
• Buyer’s prepensity to substitute is low
• Consumer substitues for athletic
footwear products are low
• Boots, flip-flops, sandals
• Reebok, offering more choice of
shoe, introducing endorsment by
sports personalities, sponsoring
sporting leagues etc
• Adidas have recovered from the
problems that plagued them, and
have a good product mix, covering a
wide range of sports
• Each company has a stron brand
15. VALUE CHAIN ANALYSIS
Firm Infrastructure
HR Management
Technology
Development
Procurement
Operations
Outbound
logistics
Marketing&
Sales
Service
SupportActivities
• High brand recognition and
reputation
• Scale advantage
• Price leadership and value
based pricing strategy
• First mover advantage in e-
commerce in the industry
• Agressive marketing
• Celebrety endorsement
• High allocation on
marketing budget
• Strong customer base
• Diversity of products offered
online
• Low production costs
• Locally purchase most raw
materials in bulk
• Specialised materials
importantion
• Local logistics providers
• Inventory control and reduced
inventory risk
• Focus on product design
marketing and product
technology
• Nike IHM specialized in rubber,
foam and raw material
•Strong management team
•Global learning & staff training
•Excellent employee relationship
•Minimum hierarchy concept
Long-term and trusting relationship with suppliers
Localised and bulk procurement
Just in time strategy as finished goods are shipped as soon as they are ready for sale
Buffer and safety stock in hand
Inbound
logisitcs
• Outsourcing manufacturing
and assembly
• Design (R&D)
• Technological innovation
• Effective supply chain
management
• Heavy investment in R&D
• Quality control
• Low and no packing
options
• Nike personals to assist
factory management
• No heavy metal, glue or
solvent used
• Strong control over
global distribution
channel
• Just in time delivery
• Good supplier relation
• Ability of forward
integration
• Use of strong servers to
support and manage
supply chain projects
• Customer care
• Pre-sales & after
sales services
• Use of IT to
improve customer
service (touch
screen)
• Increased
customer
satisfaction
• Customization
•IT system across supply chain
•E-commerce infrastructure
•Strong financial position & CSR
•Emprowement of top management
• Great financial discipline with low debt
• Strong brand, product, marketplace solution, delivery and
support
• Effective compliance process through strategic
knowledge and verification
• Great management and efficient corporate strategy
globally
• Blend of new hires and promotion
• High ethical values among employees
• Well monitored labor audit add brand audits
•Research and product dvp:
leading edge in technology dvpt
•Product improvment
•Ability to change
• Great product technology like Motion Analysis, metabolic
rate, blood work
• Air-sole technology expert
Primary Activities
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16. NIKE’S SWOT
Strengths
• Brand recognition
• High product quality
• Effective marketing strategy
• Capacity of innovation
• Strong distribution chain
• Strong R&D
• Strong customer
relationship/satisfaction
Threats
• Fierce industry competition
• Revenue relies on consumer’s
discretionary income
• Economic rescission
• Fluctuation in the currency
Opportunities
• Expansion into emerging markets
• Increased demand in product
innovation
• Growing segment of women athlets
• Increase in the number of sports
event like Olympic, FIFA
• Develop the fashion brand image
Weaknesses
• Overseas manufacturing
dependency
• Decreasing US market share
• High product price compared to
Adidas
• Currency exposure
• Medium retail presence
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17. Key External Factors Weight Rating Weighted
Score
External Opportunities
1. Should strive to penetrate the new regions that have
higher rate of growth such as “Brazil, Eastern Europe,
India, and China”
0.1 4 0.4
2. New production line for protective or safety footwear. 0.1 2 0.2
3. Pursue the government to establish Anti-dumping
duties on Chinese products.
0.05 1 0.05
4. Internet website. 0.05 1 0.05
5. New production line for fashionable footwear to attract
new consumers.
0.1 2 0.2
6. New era to concentrate on children from 3 to 12 years
Old.
0.15 4 0.6
External Threats
1. Competition in athletic footwear and apparel is fierce. 0.05 2 0.1
2. Main competitor is Adidas, Reebok, TaylorMade, and Rockport. 0.05 3 0.15
3. Adidas contracts with Chinese basketball superstar to produce basketball shoes. 0.1 2 0.2
4. A new competitor who's sell the footwear for leisure
and fashion.
0.05 2 0.1
5. The competitors expand their categories and countries with deepen their relationships with customers. 0.1 1 0.1
6. Consumer shifting to fashionable footwear. 0.1 1 0.1
Total 1.00 2.25
External Factor Evaluation (EFE) Matrix
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18. Internal Factors Evaluation (IFE) Matrix
Key Internal Factors Weight Rating Weighted
Score
Internal Strengths
1. Nike is the world’s largest sports apparel producer. 0.08 4 0.32
2. Nike’s U.S retail stores about 338 outlets, and 336 outlets outside U.S 0.05 3 0.15
3. International branch offices in 52 countries. 0.05 4 0.2
4. Fiscal May 31, 2009 revenues increased 2.9% to $19.1 billion. 0.05 3 0.15
5. The company’s website allows consumers purchase directly from Nike. 0.05 4 0.2
6. Customization availability. 0.02 4 0.08
7.Strong in Marketing and R&D. 0.08 4 0.32
8.Diverse portfolio. 0.08 4 0.32
9. Customer loyalty. 0.02 4 0.08
10.Strong financial position 0.05 3 0.15
11. Strong international presence. 0.05 4 0.2
12.Nike doesn’t own any factories. 0.05 3 0.15
Internal Weakness
1. Nike’s fiscal May 31, 2009 net income decreased 21% to $1.48 billion. 0.1 1 0.1
2. Only concentrate in youth and young adult market, from 12to24 years old age. 0.15 1 0.15
3. Lack of stores serving females. 0.05 1 0.05
4. Heavy dependency on footwear sales. 0.07 1 0.07
Total 1.00 2.69
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19. TWOS Matrix:
Strengths
1. Nike is the world’s largest sports apparel producer.
2. Nike’s U.S retail stores about 338 outlets, and 336 outside U.S.
3. International branch offices in 52 countries.
4. Fiscal May 31, 2009 revenues increased 2.9% to $19.1 billion.
5. The company’s website allows consumers purchase directly from
Nike.
6. Customization availability.
7. Strong in Marketing and R&D.
8.Diverse portfolio.
9. Customer loyalty.
10. Strong financial position.
11. Strong international presence.
12. Nike doesn’t own any factories.
Weaknesses
1.Nike’s fiscal May 31, 2009 net income decreased 21% to $1.48
billion.
2. Only concentrate in youth and young adult market, from 12 to 24
years old age.
3. Lack of stores serving females.
4. Heavy dependency on footwear sales.
Opportunities
1.Should strive to penetrate the new regions that have higher rate of
growth such as “Brazil, Eastern Europe, India, and China”
2. New production line for protective or safety footwear.
3. Pursue the government to establish Anti-dumping duties on Chinese
products.
4. Internet website.
5. New production line for fashionable footwear to attract new
consumers.
6. New era to concentrate on children from 3 to 12 years old.
SO Strategies
1. S1, O1:With some of the most recognizableand followed athletes
globally,expanding into places like India andforming alliances with
different kinds ofsports leagues will be a valuablestrategy to expand.
2. S2, O2:With strong international precenseshould used to attract a new
segment
like kids and women.
WO Strategies
1.W1, O1:With the concept to increase theconsumer attractiveness
should paymore attention to the new era of considerable in fashionable
footwear.
Threats
1.Competition in athletic footwear and apparel is fierce.
2. Main competitor is Adidas, Reebok, Taylor Made, and Rockport.
3. Adidas contracts with Chinese basketball superstar to produce
basketball shoes.
4. A new competitor who's sell the footwear for leisure and fashion.
5. The competitors expand their categories and countries with deepen
their relationships with customers.
6. Consumer shifting to fashionable footwear.
ST Strategies
1. S1, T1:Should apply CRM system to sustainthe numbers of
consumers and gothrough product development andmarket development
against itscompetitors in new markets
WT Strategies
1. W1, T1:Should pay more attention to theChinese market to and make
a joinventure with some suppliers could offer
good quality raw material against the
severe competition
Internal
External
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21. Advantages of Alternative Strategy 1:
Addition of new products in various departments
High quality
Disadvantages of Alternative Strategy 1:
Very challenging
High cost
Advantages of Alternative Strategy 2:
increasing R&D
increasing market share
Disadvantages of Alternative Strategy 2:
challenging economic
Maintain rules and regulation
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22. Recommendation
Nike should take alternative strategy 1 and 2.From this study; we will
recommend that Nike should have more concentrated on customer
benefits. It can create a privilege for the members for bonding the
relationship between the customer and the company. It also can improve
the customer services by conducting survey to more understanding the
customer needs.
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23. Evaluation and control
Area of objective Short Term Responsibility
Customers
1. Image Well-recognized in their market division and process from there. Marketing
2. Customer relation Customer should feel they have more of an influence and say over the
Nike products and expectation.
Public Relations
3. Increase OTC sales Will help boost sales Sales
Learning & growth
1. System maintenance
upgrades
Important to maintain and continuously be running the latest and up to
date technology.
IT department
2.Training & development Train new employees and update experienced workers. Managers
3. Funding allocation Important to wisely select division which need more funding than
others.
Managers
Operation/Internal process
1. Controlling and managing
materials
Should be controlled and well organized for distribution Managers/Employees
2. Procurement of materials Manager should make sure they are getting materials and equipment for
best possible cost.
Management
3. Distribution of materials Delivery time-frame should be met within specified days. Management
Financial
1.Decrease R&D expense Decrease R&D expense as a whole but fund certain division more than
others for the time being.
Management
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24. CONCLUSION
Based on the survey, there are 12% of the customers prefer Nike because of its
reasonable price. 16% of the customers prefer Nike because of its durability. They
think that Nike can last longer than other brands. 18% of the customers choose Nike
because they feel that its product is comfortable and Nike has good reputation.
Besides that, 17% of the customers are attracted by its trendy design. 19% of the
customers choose Nike because Nike has good quality. In conclusion, there are
several reasons that the consumer go for Nike. The reasons are its price, durable,
comfortable, good reputation, trendy and good quality. Nike Company should do the
marketing research to get the consumer’s opinion to improve their product. In
addition, the company should add new features to attract more customers to buy
their product. New features can expand the scope of the product and may develop a
new market.
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