1. Nike Case Study Analysis
By
Ahmed Samir
Haitham Salah
Magdy Essmat
Magdy Mohamed
Sherif
2.
3. Nike Over View
•Nike is the Ancient Greek goddess of victory “It is one of the most recognized symbols in the world – The Swoosh. Simple. Fluid. Fast.”
4. •Nike is the world’s largest designer, marketer, and distributor of sports-related apparel, equipment , accessories, athletic footwear and athletic apparel.
•Nike was founded in 1964 by Bill Bowerman and Phil Knight and opened its first store in Santa Monica, California, in 1966.
•The company introduced its Nike brand of shoes in 1972.
•The company officially renamed itself Nike in 1978.
•BY 1980, the company had reached a 50% market share in the U.S athletic shoe market and had become a publicly traded company.
•By 1985 new era by introduction of a Michael Jordan-endorsed basketball shoe. By end of 1988 Nike to the top of industry.
•By 1988 started to began diversify with purchase Cole Haan shoes and aquire other brands “
Nike Over View cont.
Bauer in 1995, Hurley in 2002, Converse in 2003, Starter in 2004, Umbro in 2008
6. •HQ: Beaverton, Oregon, in Washington County.
•On 71 hectare, 17 buildings, and houses 600 employees
•Inside U.S , Nike has 3 significant distribution and service facilities:
-Memphis
-Tennessee
-Wilsonville
Nike Over View cont.
7. The current vision of Nike
To bring inspiration and innovation to every athlete in the world
Seizing the future athletic with brands represent performance, quality, and fashionable sports product.
The Proposed vision of Nike
8. The current Nike’s Mission
Nike’s mission is to carry on Bowerman’s legacy of innovative thinking, develop products that help athletes of every level of ability reach their full potential, and to create business opportunities that set Nike apart from the competition and provide value for their shareholders
9. 1. Customers 2. Products or services 3. Markets 4. Technology. 5. Concern for survival, growth, and profitability 6. Philosophy 7. Self-concept 8. Concern for public image 9. Concern for employees
The Proposed Nike’s Mission
At Nike, we desire to deliver superior products to customers and athletes that are both safe and dependable (1, 2 and 6). Our well trained employees and experienced executives will ensure a competitive advantage for our markets, growth for the company, and profits for our shareholders (5). Our commitment to social responsibility and the communities in which we operate will ensure business relationships and alliances for the future and a perception of concern with our stakeholders (6, 8). We will continue to utilize innovation and technology to provide our employees with the best possible work environment while adapting to the many changes in the global market (3, 4, 7, and 9).
10. External Assessment
Opportunities
•Should strive to penetrate the new regions that have higher rate of growth such as “Brazil, Eastern Europe, India, and China”
•New production line for protective or safety footwear.
•Pursue the government to establish Anti-dumping duties on Chinese products.
•Internet website.
•New production line for fashionable footwear to attract new consumers.
•New era to concentrate on children from 3 to 12 years old.
Threats
•Competition in athletic footwear and apparel is fierce.
•Main competitor is Adidas, Reebok, Taylor Made, and Rockport.
•Adidas contracts with Chinese basketball superstar to produce basketball shoes.
•A new competitor who's sell the footwear for leisure and fashion.
•The competitors expand their categories and countries with deepen their relationships with customers.
•Consumer shifting to fashionable footwear.
11. Competitive Profile Matrix (CPM)
RatingWeighted ScoreRatingWeighted ScoreRatingWeighted Score0.0 to 1.01 to 41 to 41 to 4Advertising0.120.230.330.3Product Quality0.0840.3230.2420.16Price Competitiveness0.0820.1630.2410.08Management0.0630.1830.1820.12Financial Position0.0840.3230.2410.08Customer Loyalty0.0530.1520.110.05Global Expansion0.0530.1530.1520.1Market Share0.0840.3220.1610.08Technology0.0940.3630.2710.09Brand Recognition0.140.440.430.3Portfolio Diversification0.0830.2440.3220.16Product Positioning0.0930.2730.2710.09Research & Development0.0640.2430.1810.06Totals13.313.051.67NIKEADIDASPUMAWeightsCritical Success factors
12. External Factor Evaluation (EFE) Matrix
WeightRateScore1Should strive to penetrate the new regions that have higher rate of growth such as “Brazil, Eastern Europe, India, and China”0.140.42New production line for protective or safety footwear.0.120.23Pursue the government to establish Anti-dumping duties on Chinese products.0.0510.054Internet website.0.0510.055New production line for fashionable footwear to attract new consumers.0.120.26New era to concentrate on children from 3 to 12 years old.0.1540.61Competition in athletic footwear and apparel is fierce.0.0520.12Main competitor is Adidas, Reebok, TaylorMade, and Rockport.0.0530.153Adidas contracts with Chinese basketball superstar to produce basketball shoes.0.120.24A new competitor who's sell the footwear for leisure and fashion.0.0520.15The competitors expand their categories and countries with deepen their relationships with customers. 0.110.16Consumer shifting to fashionable footwear. 0.110.112.25OpportunitiesThreatsTotal Score
14. Positioning Map
High Quality
Low Price High Price
Low Quality
Nike is take a leading in producing high quality products with higher price than Adidas and
Puma
15. Internal Assessment
Growth trend in total Revenues
2007
2008
2009
U.S
6131
6414
6542
EMEA
4764
5629
5512
Asia
2295
2887
3322
Americas
966
1164
1284
0
1000
2000
3000
4000
5000
6000
7000
In Million
Total growth4%
16. Internal Assessment Cont.
Growth trend in Pre-Tax Income
2007
2008
2009
Americas
199
242
274
Asia
515
694
853
EMEA
1050
1281
1316
U.S
1386
1402
1337
0
500
1000
1500
2000
2500
3000
3500
4000
In million
Total growth4%
17. Internal Assessment
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
Weakness
•Nike’s fiscal May 31, 2009 net income decreased 21% to $1.48 billion.
•Only concentrate in youth and young adult market, from 12to24 years old age.
•Lack of stores serving females.
•Heavy dependency on footwear sales.
18. Internal Factor Evaluation (IFE) Matrix
WeightRateScore1Nike is the world’s largest sports apparel producer. 0.0840.322Nike’s U.S retail stores about 338 outlets, and 336 outlets outside U.S. 0.0530.153International branch offices in 52 countries.0.0540.24Fiscal May 31, 2009 revenues increased 2.9% to $19.1 billion0.0530.155The company’s website allows consumers purchase directly from Nike. 0.0540.26Customization availability0.0240.087Strong in Marketing and R&D0.0840.328Diverse portfolio 0.0840.329Customer loyalty0.0240.0810Strong financial position0.0530.1511Strong international presence0.0540.212Nike doesn’t own any factories 0.0530.151Nike’s fiscal May 31, 2009 net income decreased 21% to $1.48 billion. 0.110.12Only concentrate in youth and young adult market, from 12to24 years old age. 0.1510.153Lack of stores serving females.0.0510.054Heavy dependency on footwear sales.0.0710.0712.69Strenghts WeaknessesTotal Score
19. SWOT Matrix SO Strategies - With some of the most recognizable and followed athletes globally, expanding into places like India and forming alliances with different kinds of sports leagues will be a valuable strategy to expand. - With strong international precense should used to attract a new segment like kids and women.
WO Strategies
- With the concept to increase the consumer attractiveness should pay more attention to the new era of considerable in fashionable footwear. ST Strategies - Should apply CRM system to sustain the numbers of consumers and go through product development and market development against its competitors in new markets
WT Strategies
- Should pay more attention to the Chinese market to and make a join venture with some suppliers could offer good quality raw material against the severe competition.
20. FS Financial Strengths 15 Space Matrix
ROI 2
Leverage 2
Liquidity 4
Working Capital 4
Cash Flow 3
ES Environmental Stability -10
Business Risk -3
Technological Changes -2
Price range of competitors -1
Competitive pressure -2
Barriers to entry -2
CA Competitive advantage -10
Market Share -3
Product Quality -2
Customer loyality -2
control over suppliers and distributors -3
IS Industry Strength 11
Growth Potential 4
Profit Potential 3
Financial Stability 2
Easy to entery market 2
FS Average + ES Average 1
IS average + CA average 0.25
Total 1.25
Financial Strengths
Competitive
advantage
Environmental Stability
Industry
Strength +1 +2 +3 +4 +5 +6
Conservative Aggressive
Defensive Competitive
+1
+2
+3
+4
+5
+6
-6 -5 -4 -3 -2 -1
-6
-5
-4
-3
-2
-1
Nike
Market Penetration
Market Development
Product Development
Diversification
Backward, Forward,
Horizontal Integration
22. Recommendation
•The Strategic Position and Action Evaluation (SPACE) Matrix below indicates whether aggressive, conservative, defensive, or competitive strategies are most appropriate.
•Based on SWOT matrix, CPM, and Space matrix, we conclude that Nike should pursue some different strategies to sustain its competitive advantage and maintain or grow its market share.
• Spend more on R&D to discover new areas for kids and women.
•To create sportswear that would incorporate recycled material.
•To develop new alliances with companies which are well respected regarding social responsibility.
•To invest in additional marketing of existing products that will appeal to new demographic groups.
•To promote products as fashion wear, not just sportswear.
