Professional Documents
Culture Documents
NIKE, Inc.
Nike World Headquarters
One Bowerman Drive
Beaverton, OR 97005
Team Members:
Artur Krasniqi
Betim Mehmeti
Butrint Ymeri
Fitor Murati
Table of Contents
Profile .................................................................................................................................................... 5
1. Executive Summary ..................................................................................................................... 5
1.1. Identification of unique features of the business ................................................................. 5
1.2. Single most important issue facing the corporation today .................................................. 6
2. Mission and Vision....................................................................................................................... 6
3. Description of the Business ......................................................................................................... 7
3.1. Location.................................................................................................................................. 7
4. Brief history of business .............................................................................................................. 8
4.1. Origin ..................................................................................................................................... 8
4.2. Ownership .............................................................................................................................. 9
4.3. Mergers .................................................................................................................................. 9
4.4. Branding ............................................................................................................................... 10
5. Legal - business form ................................................................................................................. 10
5.1. Business type ....................................................................................................................... 11
5.2. What are they selling? ......................................................................................................... 11
5.3. Quality provided and consumers relationship ................................................................... 11
6. Growth opportunities ................................................................................................................. 12
7. Corporate Goals and Objectives ................................................................................................ 12
8. What essential resources is the success of the corporation reliant upon? ............................... 13
9. How do the suppliers and stakeholders define success? .......................................................... 14
10. Market Analysis ...................................................................................................................... 14
10.1. Target Market Identification: .......................................................................................... 14
10.2. How does the customer define success? ........................................................................ 15
11. Markets are growing............................................................................................................ 15
12. SWOT Analyses ...................................................................................................................... 16
12.1. Strengths ........................................................................................................................... 16
12.1.1. Competitive spirit..................................................................................................... 16
12.1.2. Brand recognition..................................................................................................... 17
12.1.3. Teamwork ................................................................................................................. 17
12.2. Weaknesses ...................................................................................................................... 17
12.2.1. Dependence on footwear ......................................................................................... 17
12.2.2. Retailers .................................................................................................................... 18
12.3. Opportunities.................................................................................................................... 18
12.3.1. Popularity of soccer in USA is growing ................................................................. 18
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12.3.2. Converting some sport brands into more luxury ones ........................................... 18
12.3.3. Tracking down the growing population trends ...................................................... 18
12.4. Threats .............................................................................................................................. 18
12.4.1. Globalization makes it easier to steel ideas ............................................................ 18
12.4.2. International nature of trade .................................................................................... 19
12.4.3. Internet has changed the concept of advertising .................................................... 19
13. PEST Analysis ......................................................................................................................... 19
13.1. Political Analysis ............................................................................................................. 19
13.2. Economic Analysis .......................................................................................................... 19
13.3. Society Analysis .............................................................................................................. 19
13.4. Technology Analysis ....................................................................................................... 20
14. Marketplace segmentation ...................................................................................................... 21
15. Five most influential competitors ........................................................................................... 21
15.1. How does their product or service differ? ...................................................................... 24
15.2. Competitor‟s strengths and weaknesses ......................................................................... 25
15.3. How do they advertise? ................................................................................................... 26
16. How can the corporation hold/increase your market share?................................................. 28
17. How does the corporation promote their business? .............................................................. 28
18. What pricing strategy have they devised? ............................................................................. 29
19. Scenario Planning Processes .................................................................................................. 29
19.1. Trend 1 - Targeting Developing Countries .................................................................... 29
19.1.1. Worst case scenario.................................................................................................. 30
19.1.2. In-Between Scenario ................................................................................................ 30
19.1.3. Best case scenario .................................................................................................... 30
19.2. Trend 2 – Avoiding Environmental Issues .................................................................... 31
19.2.1. Worst case scenario ..................................................................................................... 31
19.2.2. In-between scenario ................................................................................................. 31
19.2.3. Best case scenario .................................................................................................... 31
19.3. Trend 3 – Popularity of soccer is rising in USA ............................................................ 32
19.3.1. Worst case scenario.................................................................................................. 33
19.3.2. In-between scenario ................................................................................................. 33
19.3.3. Best case scenario .................................................................................................... 33
19.4. Trend 4 – Technology ..................................................................................................... 34
19.4.1. The best case scenario ............................................................................................. 35
19.4.2. In-between scenario ................................................................................................. 35
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NIKE, Inc.
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NIKE, Inc.
Profile
- Type: Public
- Industry: Sportswear and Sports Equipments
- Service Area: Worldwide
- Subsidiaries: Cole Haan, Hurley, Converse, Umbro
- Chairman and Chief Executive Officer: Phil Knight
- Nr. of employees: 32,000
- Headquarter Address: Nike World Headquarters, One Bowerman Drive, Beaverton,
OR 97005
- Website: http://www.nike.com; http://www.nikebiz.com
1. Executive Summary
Back in 1962, in a partnership of Bill Bowerman and Phil Knight was founded Blue
Ribbon Sports, nowadays known as Nike Inc. Their primary goal was to offer low cost and
quality athlete shoes to American consumers. Since being founded in 1962, Nike has grown from
a small retail shoe company to a worldwide leading sport company operating by distributing
sports wears in over 170 countries. Today the goal of Nike is to maintain the innovative thinking
and developing products that might help athletes to perform better and reach their potentials.
The reason why we have chosen Nike Inc. is that Nike is the leading company in
sportswear and sports equipment industry. Since all four of us prefer sports, this is an addition
motive to make a research for the Nike Inc. Moreover, two of our group members have worked
for Nike Factory Store in Las Vegas, Nevada. Knowing more about the company mentioned
Nike uses a lot of unique features that appeal to customers, especially their resources
used to make the products and their taglines used in Nike ads. The most unique feature that Nike
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NIKE, Inc.
uses is the tagline “Just Do It”, and this tagline appeals to customers in that way that customers
use this tagline even when they talk about something else and it stays in customers mind for a
long time ("Is your Marketing Campaign Appealing," 2009). Also, Nike uses special resources,
such as, lunarlite foam, flywire, nylon, leather, natural and synthetic rubber, and many others for
The most important issue that Nike is facing today is the issue that Nike supply chain is a
complex network that connects with all of their consumers, communities, and their workers
("Corporate Responsibility Report FY07-09," 2009). Moreover, Nike is facing problems with the
wages and the freedom of association of their workers, but Nike is trying to solve their problem
Nike Company has a very clear mission, “to bring inspiration and innovation to every
athlete* in the world” (“Company Overview,” 2010). By this they mean that everyone who has a
body, products of Nike would inspire them and would encourage them to be sports player or
Nike‟s philosophy and vision is to remain the leading sports company around the world.
They will continue to produce affective athlete products that can help sports‟ people to perform
better. Thus, they will meet the needs of consumers and try to come up with innovative products.
*
If you have a body, you are an athlete.
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Nike World Headquarters are located in Beaverton, Oregon, United States; the city where
Nike was founded on 24 th January, 1964. It is an area with 17 buildings (around 190,000 m2)
which are named after greatest Nike athletes or coaches such as: Michael Jordan, Tiger Woods,
Pete Sampras, Lance Armstrong, Mia Hamm, etc. Whereas Nike Regional Headquarters are
located in Hilversum, a small town in the North Holland. These Regional Headquarters operate
for all Europe, Middle East, and Africa. Listed below you can see address of both, World and
Regional Headquarters:
Regional Headquarters
World Headquarters
Nike EMEA (Europe, Middle
Nike World Headquarters
East & Africa) Headquarters
One Bowerman Drive
Colosseum 1
Beaverton, OR 97005
1213 NL Hilversum
Nowadays, Nike operates in over 170 countries, 6 continents, all over the World. United
States, United Kingdom, Australia, India, Canada, Germany, Netherlands, Sweden, Spain, Italy,
France, Switzerland, Belgium, Norway, China, Ireland, Japan, Brazil, South Africa, are just
some out of hundred countries that Nike operates Worldwide (“Frequently Asked Questions,”
2009).
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NIKE, Inc.
Nike was founded on 24 th January 1964, by a University of Oregon student and athlete
Philip Knight and his coach Bill Bowerman. “Bill Bowerman was a nationally respected track
and field coach at the University of Oregon, who was constantly seeking ways to give his
athletes a competitive advantage” while “Phil Knight was a talented middle-distance runner from
Portland, who enrolled at Oregon in the fall of 1955 and competed for Bowerman‟s track
program” (“History & Heritage 1950s,” 2010). They first decided to invest each $500 dollars and
to form Blue Ribbon Sports, a company that would start distributing shoes of Onitsuka Tiger, a
Japanese shoe maker. Phil Knight was selling the shoes, while Bill Bowerman was working on
improving them; making them lighter and better (“History & Heritage 1950s,” 2010). Basically,
this is how Nike, now the leading company in sportswear and equipments, was established.
trademark of Nike Inc., BRS produced their first shoes in 1972. In 1978, BRS decided to change
During the 1980‟s, Nike reached 50% of the market share in the US shoe market. In a
short time, they came up with an advertising campaign known as „the Revolution‟ and with the
1
Fig.1. shows how the Swoosh looked in 1972 and nowadays.
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famous tagline “Just Do It”. Nowadays, “Just Do It” has become a slogan of Nike all around the
Globe. Since the late 80‟s, when Nike took the leadership on footwear and apparel, they have
“never relinquished that position again” (“History & Heritage 1980s,” 2010).
Nowadays, Nike is the leading company in sportswear and sports equipments‟ industry. It
4.2. Ownership
“Behind a great company are strong leaders” (“Executives,” 2010). Nike Inc. functions as
a whole team. Nevertheless, behind this team, there are some great leaders such as: Phil Knight,
the founder and the chairman; Mark Parker, President and Chief Executive Officer; Charlie
Denson, President of Nike Brand, and many other board members, directors, managers,
designers, sales associates etc, that in total make up a team of more than 33,000 people (i.e.
employees).
4.3. Mergers
Nike Inc. owns four other key subsidiaries: Cole Haan, Hurley International, Converse
In 1988, Cole Haan, a footwear company, became the first subsidiary of Nike. Then, in
February 2002, Nike expanded its company by buying a surf apparel company known as Hurley
International, from its founder Bob Hurley. Just a year after they put Hurley under their
umbrella, Nike paid US$305 million to purchase Converse Inc. Converse is a footwear and
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NIKE, Inc.
apparel company, known the most for their famous Chuck Taylor All Stars. The last, but not the
least company acquired by Nike was sports apparel supplier Umbro, on March 3, 2008. The deal
4.4. Branding2
Nike Vision, Nike Total 90, Air Jordan, Air Force One,
Nike Air Max, Nike+, and lot more. In addition, Nike has
(LJ23), Kobe Bryant (KB24), Roger Federer (RF), etc. Air Jordan is another famous brand of the
greatest basketball player of all times, Michael Jordan. Nike has been producing under the name
of Air Jordan for more than 25 years now. Another brand of Nike is NIKEiD. NIKEiD is a
program which allows customers to customize different designs for some of the Nike shoes and
apparels. Customer can choose the colors, write their name and then Nike delivers that designed
Nike Inc. is a public company which stocks can be purchased by general public through
stock exchange. On New York Stock Exchange (NYSE) Nike is known as NKE (NYSE, 2010,
February 5).
2
More about Nike Brands you can find in Appendix A.
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NIKE, Inc.
5.1.Business type
Nike “is engaged in the design, development, and worldwide marketing of footwear,
apparel, equipment, and accessory products” (NYSE, 2010, February 5). Its products are sold
through Nike Stores (including NikeTown 3), retailers (e.g. Footlocker, The Finish Line), or
Nike is mostly focused in sports. Therefore, Nike‟s main benefiters are athletes, coaches,
Nike Inc. “markets footwear designed for aquatic activities, baseball, cheerleading,
wrestling and other athletic and recreational uses. It sells a line of performance
equipment under the NIKE brand name, including bags, socks, sport balls, eyewear,
timepieces, electronic devices, bats, gloves, protective equipment, golf clubs and other
equipment designed for sports activities” (“Nike Inc. - Comparative Business Analysis
Snapshot,” 2008).
Nike pays a lot of attention to their products‟ quality and to their customers. Nike‟s
customer service mission is “to represent the highest service standard within and beyond our
industry, building loyal consumer relationships around the world” (“Shop & Customer Service,”
2010). Footwear is Nike‟s largest product category and the most demanded one with around 54%
of whole Nike products, then it comes apparel with 27%, followed by equipments with 6 %,
while other products make other 13% of Nike‟s Total Revenue 4 (“Annual Report 2009,” 2009,
3
NikeTown is Nike, Inc. Store where you can find the newest products of Nike after they are released in the market.
4
In Appendix B you can find Nike‟s most wanted products (separated on categories) for the 4 last years (2006- 09).
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NIKE, Inc.
July 27, p. 87). In brand terms, AirJordans, Nike Dunks, Nike Air Force Ones are the most
6. Growth opportunities
Nike “pursues promising growth opportunities by leveraging its resources, and attracts
consumers with its range of premium products and services” (Marcial, 2009, July 14). So far,
they have been following the right steps in order to have higher growth opportunities such as:
customer needs are measured trough different surveys, market segmentation, new geographic
markets, different competitive measurements etc. “We‟re aligning with our biggest growth
opportunities, both geographically in markets such as China, and in core product categories and
consumer segments such as basketball and football (soccer),” said Nike Brand President, Charlie
Denson, in one of the Nike presentations in August, 2006 (qtd. in “Nike Brand Aligns
Leadership To Drive Geographic And Consumer Segmentation Growth,” 2006, August 7).
new stores in countries where there are only few ones or not
Nike‟s goal is “to carry on [its co-founder Bill Bowerman] legacy of innovative thinking,
whether to develop products that help athletes of every level of ability reach their potential, or to
5
See Appendix C for detailed information on Nike five-year Goals.
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create business opportunities that set Nike apart from the competition and provide value for our
Nike‟s long term objectives are to keep delivering compelling products, maintaining the
integrity of its brands, building stronger relationships with its consumers, creating compelling
retail experiences, etc. (Parker, 2009, June 26). ”While at the same time, Nike remains focused
on its seven key markets: U.S. U.K. Brazil, China, India, Japan, and Russia, and on its seven key
performance and lifestyle categories: football (soccer), basketball, action sports, running, men‟s
Currently, some of the essential resources that Nike is dependent upon are textile, plastic,
rubber, animal‟s fur, etc. Nonetheless, Nike is working and giving more and more effort on
decreasing the quantity of some of these recourses used to produce its products as it is the case
themselves to decrease the air pollution released by its manufactures; to use as less fresh water as
Besides the resources that are used in the process of production, Nike‟s success is also
6
More about the campaign called GREENXCHANGE you can find in Appendix D.
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NIKE, Inc.
From suppliers‟ perspective, success essentially is when Nike makes all required
payments to them. Additionally, suppliers see as a success the success of Nike itself, since both
successes are directly related. Hence, the suppliers are succeeding since Nike‟s products are
highly demanded which automatically means that resources from suppliers will be needed more
Whereas shareholders define success mainly related with the financial position of the
company. Different shareholders define success differently. For some, it is only important to
have a good financial position, while some other think that financial position it‟s not the only
Bill Bowerman, co-founder of Nike said “If you have a body, you are an athlete”
(“Company overview,” 2010). This sentence explains in plain words whose Nike‟s target market.
Nike has a huge number of trends, producing for everyone; all ages and genders; and almost
every sport (See Appendix A). However, their primary targets are ages from 16-46 years old. As
long as income is concerned Nike has its own politics, it gives chance to everyone through sales
and also through Nike Factory Stores where one can find cheaper Nike products. However, when
they first introduce new products they usually are overprices, but they drop the prices after some
time.
Nike world headquarters is located near Beaverton, Oregon. However, Nike operates in
more than 170 countries around the globe. Just in USA they sell their products to more than
25,000 retailers, not to mention the Europe and Asia which are two other huge markets. Another
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NIKE, Inc.
way that they use for reaching every market is Internet. You just visit (Nike.com) and you can
Nike‟s customers have a lot of measuring tools through which they can define Nike‟s
success.
An important measure is the quality of the product. Nike is continuing to do the best with
their innovative strategies to produce great performance athletic sportswear and equipments.
Moreover, the advertisement that Nike does play a big role in customer‟s definitions of
success. When one sees Lebron James or Frenando Torres advertising Nike products it will
immediately know that Nike is still there with the best athletes of the world.
Also, customer service in Nike stores is crucial. Every Nike store has its own website
On the other side, the rising awareness for the environmental issues has turned into a
measuring tool for the success of most companies, especially huge ones. Mark Parker, NIKE,
Inc‟s, President and CEO stated: “Sustainability is key to Nike‟s growth and innovation” (qtd. in
“Nike Outlines Global Strategy for Creating a More Sustainable Business,” 2010).
According to Nike‟s annually reports on income we can conclude that Nike‟s markets are
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10,000.00
5,000.00
0.00
2009 2008 2007 2006
The reasons for the success are the growing markets particularly in Turkey, Russia, and
Brazil. Sales in Turkey and Russia increased 25% during 2008, and grew an additional 30% in
Q1 2009. Moreover, Nike sponsored the Beijing 2008 Olympics and endorsed 21 of the 26
national teams. This sponsorship helped them a lot in their markets in China. While giving the
report for 2009 Mark Parker labels the sponsorship to Olympic Games “Beijing 2008” as the
12.1. Strengths
Throughout their company Nike has implanted a sense of healthy competition against
their competitors. Phil Knight is quoted as saying “Business is war without bullets”. It is
awesome how they achieved to embrace the competitive spirit of the sports they represent.
7
Annual Report 2009
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Nike has achieved a stage where they don‟t need to always write the name next to their
“Swoosh”. When people see the logo (Swoosh) they immediately recognize the brand. The brand
Nike sponsors some of the great teams and athletes in the world. Michael Jordan, Tiger
Wood, and Cristiano Ronaldo wear Nike. This says a thousand words in terms of advertising.
12.1.3. Teamwork
Phil Knight highly regards the teamwork: “It's not a single product model, nor a single
manager, nor one ad, nor a single celebrity, not even a single innovation that is key to Nike. It is
the people of Nike, and their unique and creative way of working together.” (qtd. in “We're All
The company has installed a team spirit within their employees. It is another example of
carrying the spirit of sport in their company. In Nike stores managers are labeled as coaches
while other employees are players. In their outfit you can see the text “TEAM NIKE”. This
12.2. Weaknesses
The biggest share of Nike profits comes from footwear. It is dangerous because of the
competition increasing every day. A slight change in consumer preferences toward footwear can
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NIKE, Inc.
12.2.2. Retailers
A great number of incomes are derived from retailers. The risk comes from the fact that
retailers may fail to transmit the same spirit that Nike as a company has.
12.3. Opportunities
One of the opportunities to follow is the soccer trend in USA. This market has potential
Nike produces also sunglasses and/or watches. Products like this at the moment are more
sport oriented. It can be a great opportunity to work on developing these kinds of products in a
A good opportunity for dropping costs is tracking the growing population trends, and
taking advantage of less developed countries where the labor force is cheaper. Some places to be
taken under consideration are: Palestinian Territories, Niger, Yemen and Angola.
12.4. Threats
business it is easier for other companies to steel ideas in a short period of time. It is hard for Nike
to hold their market share because of smaller companies doing business with cheaper prices.
8
More about “The popularity of soccer in USA” see 19.3 or appendix G.
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The international nature of trade (buying and selling in different currencies) means that
The competition is becoming stiffer and tools like internet are making it easier even for
smaller businesses to advertise. Consequently, smaller companies with cheaper price can
advertise easier and threaten Nike‟s market share. Therefore, Nike has to be ready for these
Government policies help businesses to grow. One of the businesses who profits from
these policies is Nike. Nike benefited from US government through their low interest rates,
We have just witnessed an economic recession. During this recession most of the huge
companies suffered huge losses. Even though Nike also Nike felt this downturn of the economy,
we can say that they survived this economic recession. Nike‟s profits were slowed down;
however they still continue to go up. Nike was also affected by the rising cost of labor and
material prices.
where fast foods are destroying people‟s health. Now people are looking forward to joining sport
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activities and this immediately sends them to Nike where they will find their exercise tools like
Society as a whole also affects the customer preferences. Just as an example it may be
how the society deals with scandals like the one with Tiger Woods who represents Nike. People
can absorb a negative feeling related to these scandals, which can turn to a bad image for the
company.
Nike works hard to stay in touch with the newest technologies. Many of the new designs
created by Nike are delivered through the latest technology. They use the technology to analyze
what will fit best for their customers, and what will generate the best of their athletes.
Moreover, today you can buy a pair of Nike shoes online, by just clicking some web-
pages. Nike also works together with companies like Apple to take advantage of technological
9
You put the chip into your shoes. It measures your performances while you train, and you can explore them
afterwards in an Apple computer. (http://nikerunning.nike.com/nikeos/p/nikeplus/language_tunnel/)
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Others
Swimwear
Nike works based on the segmentation presented above. The greatest deal of profits to
Nike comes from the running section that includes running shoe, apparel, and equipments. The
Adidas
Reebok
Puma
K-Swiss
Sketchers
The main competitor is Adidas Group. Apart from being a different company Adidas
plays the same game with almost the same rules as Nike. They manufacture apparel, footwear
and equipments. Same as Nike their production goes beyond being only athletic oriented;
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furthermore, they work on developing their trend as a fashionable one for the time being. Adidas
Group has had some unwelcomed experiences with the recent global economical recession.
However they expect that 2010 will be the point where they raise on their feet again.
“In line with the projections of the OECD, the World Bank and independent researchers,
rates are estimated to remain well below 2008 levels. We forecast this development to
support the operational performance of our Group in 2010. Under this assumption, we
project Adidas Group sales and net income to improve in 2010 compared to
Sales
12,000 10,799
10,084 10,299
10,000
8,000
6,636
6,000
4,000
2,000
0
2005 2006 2007 2008
Reebok since 2005 is part of the Adidas group. Thus, the above analyses for Adidas
10
Information for constructing the graph were taken from several sources therefore, we don‟t have a specific one
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Puma is considered as the strongest competitor after Adidas Group. Same as Adidas
Group, Puma felt the cruelty of the recent economical recession. According to their annual report
Sales
2,160.00 2,148.60
2,140.00
2,120.00
2,094.80
2,100.00
2,080.00
2,060.00
2008 2009
Another competitor is K-Swiss. Even though it has a smaller share in market K-Swiss
competes only in the much coveted market of footwear. K-Swiss also felt the economic recession
and their sales and revenues declined: “Our total revenues decreased 27.5% and 23.7% in the
nine and three months ended September 30, 2009 from the nine and three ended September 30,
Another emerging strong competitor is “Sketchers”. Even though they experienced some
losses in 2009 they seem to be in an attacking position when talking about stretching their
markets:
As of September 30, 2009 we owned 218 domestic retail stores and 26 international retail
stores, and we have established our presence in most of what we believe to be the major
domestic retail markets. During the first nine months of 2009, we opened five domestic
concept stores, ten domestic outlet stores, one international concept store, and two
11
Financial Report 2009 (http://about.puma.com/downloads/137526520.pdf)
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In this industry the competition is fiercely strong. However, the main competitor for Nike
remains Adidas Group. As mentioned above their strategies seem to be very similar to Nike.
Even sometimes they were criticized for not creating their own identity. Nevertheless, Adidas
Group gained a good deal of market share especially after taking Reebok under their control in
2005. Up to know only small innovations in their products and services differentiates them from
each other.
On the other side Puma in contrast to Nike and Adidas whose aim is to bring inspiration
and improve athletes performance through innovation, tries to combine fashion, style and sport
in their company‟s strategies. In a word Puma is more “lifestyle driven style”. Furthermore in
order to differ from their rivals, Puma frequently organizes promotion events that are based
around “active lifestyle events” themes based on dinning, music, and fashion.
In comparison with the companies that we mentioned above K-Swiss differs from in the
fact that they are based only on producing only shoes. They have their own “Tennis based
identity” and also identify their selves with the white color shoes.
these are the “Women Work Shoe” and “Men‟s Dress Shoe”: Fig. 14. Skechers
Adidas Group (Adidas & Reebok) is the leading athletic sportswear company in Europe.
This is based especially on their soccer sponsorship around Europe. They sponsor teams like
Liverpool, Chelsea, Milan, Real Madrid and several other teams in Europe; while in 2004 they
announced a 10-year sponsorship deal with MLS (Major Soccer League) in USA. Up to now the
Analyzing the weaknesses of Adidas some find the fact that Adidas is so associated with
Germany as a weakness. On the other hand, another weakness is the overpricing of some
products. Nowadays, people have a tendency to buy products at lower price. Also their
international nature of their markets makes them vulnerable to economic fluctuations around the
world.
Reebok strength can be added to Adidas Group. They mainly consist of strong
advertising campaign, and the developing moisture technology. Though, their weakness is the
dependency on footwear.
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Puma’s main strength is their association with a different style. As mentioned above they
identify themselves as a “life-style driven” company. They are not direct followers of Nike and
Adidas, and that is what separates them. They have created their own way of connecting sport
with life style. The weaknesses remain the same with Adidas, their overpricing and the fragility
of economic fluctuations around the world. Moreover, they often lose within the war between
K-Swiss bases its own strength on their identity associated with tennis, and also
association with the white color. Their main weakness is the limitation of production only in
footwear.
Sketchers who have a smaller share have their completely different style. In this way
they differentiate themselves and can get away from the stiff competition and target some other
human preferences. However, it is hard for them to get more share of the market since the above
this by connecting with people emotions and feelings with catchy advertising. A great example
of how they try to influence people and also built a strong relationship with customers is the
Ad Campaign “Impossible is nothing”. In this campaign we see Steven Gerrard, Lionel Messi,
Kaka, Zidane and others talking about their experiences and struggles on their way for
achieving success.
Another example may be the advertisements on big events such as FIFA WORLD CUP
2006, where you could see the Adidas logo everywhere during the event. The same strategy
goes with other sports as they advertise with NBA stars like Dwight Howard. Other
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advertisement strategies are short advertisements presenting only the logo of the brand
reminding customers that Adidas is still strong. Adidas has a huge advertisement strategy that
would take a lot more to write about; however, these were some of their strongest approaches.
Reebok does their work on the other side. Their advertisement campaigns are
innovative and also try to grab people‟s attention through freshness and the “Re” coming to life
idea. As they state in their web-site: “Having Fun Staying in Shape comes to life through a fun,
bold, provocative manner expressed through fresh, eye catching imagery signed off with a
particularly. This campaign portrays young and fresh girls with the body of an athlete,
explaining the benefits of wearing “Reebok” shoes and clothes. Similarly to other companies
Puma advertisement goes equally with the strategies of Nike, Adidas and Reebok. They
also use celebrities and athletes to advertise their products. They also want to catch people‟s
attention through their distinct logo “PUMA” which is associated with speed.
Tennis, by promoting through Tennis stars as Anna Kournikova. They also try to catch
people‟s attention through creating a sense of “classical” style in their shoes. An example of
this is the glamorous black and white photo with K-Swiss shoes on.
usefulness and elegance of their products. As an example is one of their advertisements where
they state their goal of their products “Feel good. Look great.”
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NIKE, Inc.
Nike, Inc is the leading company in sportswear and sports equipment market, thus, Nike
has a larger market share than his competitors (i.e. Adidas, Puma, etc). Nike to increase the
market share would mean to have a larger competitive advantage, and this would be achievable
by having competitive information and being ahead with the most important trends that are
today.
Nike, Inc promotes the business by organizing and funding many sports activities and by
Nike Public Relations plan is developed thru sponsoring many sports teams and
organizing various sports activities, such as The Nike Foundation, Homeless World Cup,
ninemillion, and many others. The Nike Foundation was created in 2004 to invest in adolescent
girls and unleash a powerful ripple effect of positive change ("Corporate Responsibility Report
FY07-09," 2009). Homeless World Cup was created in 2003 to organize soccer programs for
homeless people in more than 60 countries globally ("Corporate Responsibility Report FY07-
09," 2009). Also, Nike, Inc in 2006 organized the ninemillion campaign to help more than 9
million children living in refugee camps to have a better access to education, sport, and
technology. This campaign was organized together with United Nations High Commissioner of
Nike Advertising plan is created thru both the Public Relations plan and advertising in
different Medias. The Public Relations plan makes a great image for Nike, Inc as a corporation
dedicated totally to the people around the word to enable them to taste the sport life. And, the
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advertisings among the best Medias around the world thru various attractive ads made Nike
Nike, Inc as many other successful companies, firstly, make high prices for the newest
products that they release and after a period of time they reduce their prices as new products
begin to evolve.
4. Technology
5. Fashion
6. Employment
For all of the trends mentioned above we have created a scenario for each one. For being
a successful company the signposts and indicators should be followed carefully. Therefore, we
have listed the signposts and signals that Nike should follow if they want to follow the trends in
their best case scenarios. The first four scenarios are also attached in Appendix E trough H.
Most of the Nike Inc factories are located in the developing countries which they already
have a stabilize economy. Nike should now focus more on the developing companies and follow
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this trend because of several reasons. These countries have unused resources that can be used by
the Nike Company; the labor force is cheaper; taxes are lower and the cost of opening and
maintaining factories and stores are lower. All these factors might help improving the Company
If we consider the worst case scenario, then Nike would have to close all the factories and
stores, and focus on countries that are already developed. Because they need money they can
increase the taxes, and therefore lower the profit or even in the worst case making no profit at all.
Because in these countries the potential market is high, Nike‟s competitors can also
follow this trend. In this case they would have to share the market along with other competitors,
In the best case scenario, the government would lower the taxes and make it easier for big
companies, like Nike, to enter the market in their respective countries. In this case Nike Inc will
lower the cost and therefore make more profit which is the objective of the company
It is very important for the companies to create these scenarios because in that way they
can have a clear image of what might happen to their company. Therefore, they should be very
careful and follow the signposts and indicators. If the indications are that the government is
increasing taxes than Nike should immediately take actions and try to follow a different scenario.
If they see that the revenues are going down and the customers are buying more products of our
competitors, and are taking Nike‟s market shares, are indicators that the worst case scenario
would happen. On the other hand, if the revenues start going up, and the government decides to
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lower the taxes, is a signal that Nike Company should follow this scenario because it might bring
a huge profit to the company. Watching these signposts can help the company react faster than
One of the global issues that Nike Inc. should avoid are the environmental issues. These
issues are forcing big companies to take actions and changes in order to avoid them. Even though
currently Nike uses recycled materials to produce the bags they use, recycles old shoes and
creates a material which makes possible to build sporting grounds, still it needs to give high
importance to environmental issues, making some changes such is Recycling, not using animal‟s
In the worst case scenario Nike would struggle to avoid environmental issues and would
have a tough future which may lead to loosing the market share to competitors and lose money.
There are a lot of organizations that deal with environmental issues. If Nike decides to close their
eyes when it comes to these issues, many organizations can take actions against Nike which
In this case Nike would keep going forward with the same pace considering that the
competitors would not do much about the environmental issues. Thus, Nike may still face some
Here, Nike would have to avoid all or at least minimize the environmental issues while
competitors would have to struggle. In this case the revenues of Nike would increase and by this
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they would have more profit to spend continuing in avoiding the issues that are left if there are
any.
Like every other company also Nike should create scenarios and try successfully to
follow the signpost and indicators which will lead the company in the right direction. Following
the right steps of avoiding environmental issues would be a high advantage over the competitors.
Contrary, if Nike continues to produce animal‟s fur would have to deal with a lot problems by
the environmental organizations and individuals who do not support this. If Nike sees they are
having pressure from these organizations and individuals they would have to stop producing
products from animal‟s fur and try to find another solution. Another signpost that Nike should
follow is air pollution. Air pollution is becoming more and more a global issue. If the signposts
are that the government would set new levels of polluting the air, then Nike would have to
reduce the pollution made by the factories. If the factories of Nike are polluting the air outside of
normal pollution levels set by the government, they would automatically consider this because
they may face problems with the government which may result to closing all the Nike factories.
Nike is the leading company in sportswear worldwide. Within Nike‟s products a great
deal of profits comes from soccer. Even though soccer is the most popular sport almost all over
the world, the same doesn‟t happen in United States. The main reasons why Nike should follow
this trend are: the quality of the National League of soccer is increasing because great soccer
players like David Beckham are playing, the success that the national team of USA is having,
and also the tourists coming from places that soccer is very popular. Currently, Nike is not
following properly this trend because there are not that much of soccer equipments in Nike
stores.
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NIKE, Inc.
The worst case scenario would be if Nike doesn‟t take the necessary steps to remain the
only official partner of National Team and also not being able to sign the contract with the MLS
when it expires in 2014 which currently Adidas have it. If Adidas starts the partnership with
MLS and also remains its partnership with MLS would benefit a huge profit from them and
If we consider this scenario, Nike will have to continue with the same pace as now and
not giving their best in that direction. It will continue to sponsor USA national team and meets in
better ways people requirements for soccer stuff as jerseys from big European or South
American soccer teams. Just to mention that the success of the company if this scenario happens
A success of US National soccer team in the “World Cup South Africa 2010” would lead
to an increase of the popularity of soccer in USA. By this Nike would benefit since they sponsor
the USA‟s national soccer team. In order for this trend to continue also the economy needs to
move upward, and then people will have more money and time to spend on sports, respectively
on soccer. Also, Nike should give it best to secure a partnership with MLS by 2014 when
Following the accurate signposts and indicators may lead the company to the right
direction for the future. The best case scenario would be indicated by these signposts: revenues
moving up; Nike maintains leadership in sportswear around the world; Nike starts conquering
the soccer world in USA; and the popularity of soccer continues to rise in USA. While the worst
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case scenario would be indicated by: revenues moving down; competitors taking Nikes share of
market in soccer; or players switching from Nike to competitors (mainly Adidas); or the
popularity of soccer moves on the wrong directions because of economy falling down or bad
results for the national soccer team. If MLS teams do not begin to be profitable in the near future
as expected, that can also be seen as an indicator for the worst case scenario.
The technology in Nike, Inc over the 21st decade has been developed enormously by
creating manufactories in a lot of countries, improving manufactories by using the most efficient
engines and machines, opening fancy shops all over the world, and improving the quality of the
resources that are used to create Nike products. Further, the developing of the technology has
helped Nike, Inc to become one of the biggest companies for sportswear and sports equipment.
In addition, Nike should focus on the technology as one of their most important trends that have
evolved over time and focus on improving and maintaining their most purchased products, such
as shoes, sports gear, sports jersey, and others. Moreover, some key factors and driving forces
that will determine the success of improving the technology in Nike are public opinion and
questionnaires about Nike position and technology, competitor advantage and various Market
analysis, extending factories and stores (Nike is mostly located in Asia, but in 170 countries
worldwide and has over 600 retail stores worldwide) and implementing technology - machines
and engines, getting the best quality resources (such as flywire and lunarlite foam for shoes) to
improve Nike products, and employing high educated managers and presenters to implement and
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NIKE, Inc.
The technology of Nike will keep growing faster if Nike keeps opening new factories,
shops, employing more people (nowadays there are more than 30000 people employed
worldwide), produces new technological products (such as Nike + iPod Sports Kit), and
improving and maintaining other products. Also, divide Nike in more sectors (for example, until
now they separated into Nike+, Nike Pro, Nike Air, Nike Golf, Nike Skateboarding, and others)
and possess more subsidiaries (today Nike subsidiaries are Coe Haan, Hurley International,
The in-between scenario will be if Nike keeps going with the same rhythm and makes no
changes in improving the technology. In this way, the demand for Nike products will decrease,
and Nike will lose competitor advantage, which means they will lose their position as a leading
The worst case scenario may happen, especially, if Nike leadership starts being laissez-
fair leaders that means only sitting on their position and doing nothing in improving the
technology. In this case, Nike popularity will decrease enormously and the demand will decrease
as well, thus, the productivity will fall and Nike may lose their track in the market. Also, many
The main indicator that demonstrates Nike successive technology is their profitability or
Nike revenue (which is $19.176 billion in 2009) – the largest one comparing to others sportswear
and sports equipment companies, such as Adidas and Puma. Also, the advertisements that Nike
makes in different Medias, and Nike new products, such as the Nike + iPod Sports Kit which is a
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NIKE, Inc.
chip in Nike shoes that connects with iPod or iPhone and it can measure the time and the speed
Being the leading company of sportswear and focusing more on sports products, Nike in
a way has not been able to create a lifestyle fashion for older people. Since it is a very successful
company in sportswear Nike should start and create a lifestyle fashion for older people too and
not just for athlete people. Considering that also older people want to feel young again, Nike
should cooperate with well known designers to start creating a lifestyle for this category of
people. As the slogan of the company is “if you have a body you are an athlete,” also the older
people would like to feel like an athlete in their twenties. Therefore, Nike should start to follow
this trend because can bring to the elder people the feeling of being young again, and what is
In the worst case scenario Nike will not be able to create a life style fashion for older
people and therefore not being able to gain more of the market share. Judging that older people
have more money to spend, not creating this trend means a lot of losses for the company.
In this case Nike will try to build clothes and other products for older people but not
being very successful as other competitors and gaining a small percentage of market shares in
In the best case scenario, Nike would hire some well known designers and establish a
new lifestyle fashion for seniors. Believing that older people have more money to spend, they
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would want to spend it on Nike products. By doing so, Nike immediately would increase the
market share in this segment which will result in making more revenues and at the same time
Creating different scenarios and trying to follow the signposts and indicators helps
companies for being successful. Thus, also Nike should create scenarios for this particular trend.
The main indicators for fashion in Nike are the new products that Nike releases. If they respond
to the products that Nike offers to its costumers is an indicator that people are liking Nike‟s
products and also purchasing them. Moreover, if the revenues are increasing it is a signpost and a
signal that people are buying more of the Nike products. Contrary to this, if they see that the
revenues are not increasing and the people are not responding to this trend Nike should consider
Employment is also an important trend for Nike, Inc because employing more highly
educated workers will enable Nike to extend their business. It is important to employ more active
managers in different sections to lead the company in to success, and to employ presenters to
advertise in the best possible way to attract consumers to buy Nike products. Moreover, opening
more factories to hire more workers would reduce the unemployment rate all over the world and
would expand Nike productivity for sportswear and sport equipments. Some key factors that will
determine the success of employment in Nike are offering scholarships for the best students that
will successfully graduate and then work for Nike, Inc, offering more job positions through the
internet, and offering a higher percentage of salary and better work conditions for employees.
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NIKE, Inc.
It would be if Nike advertises their key factors to people worldwide and show them that
Nike is the place where you should work. It will lead the company into a successful campaign in
If Nike doesn‟t show interest in attracting workers and employ the best individuals to
lead the company in further success. It will be negative for the company because they will be
If Nike doesn‟t employ any worker in their factories and stores, it will be the worst
possible way to lose the leading power that Nike has because they will not be able to extend their
business.
As in other trends, the total revenue of Nike (i.e. $19.176 billion) is the main indicator
because Nike financially is able to employ more workers and expand the business. Also,
advertisements in many Medias makes Nike to be ahead from their competitors, thus, it will be
able to attract people with Nike job positions. And, Nike attractive products with special
resources make people curios and eager to be part of the creation of those products.
20. Summary
Nike continues to be the leading sportswear company in the world. Based on their team
spirit; innovative products; marketing strategies; and their brand recognition around the world we
can conclude that Nike is in the right way of accomplishing their goal of maintaining the
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NIKE, Inc.
Based on research they face a stiff competition from Adidas Group and Puma, and they
should be prepared for struggles on keeping their success at the highest points. Up to the
moment, Nike is strong with their marketing strategies; however, competitors are very strong in
The scenarios presented in this project should be taken under consideration. We believe
that soccer will be playing a huge impact on the competition between Adidas Group and Nike;
while environmental issues are becoming important in people‟s conciseness. Technology will
continue to play a crucial part in every company growth. Moreover, based on the trend of
growing elderly-population Nike should consider putting efforts on controlling this trend.
Further analysis can be taken on labor condition at Nike; deeper analysis on how Nike is
products.
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