1. 1
Introduction
Company History
NIKE, Inc., incorporated on September 8, 1969, is engaged in the design, development,
marketing and selling of athletic footwear, apparel, equipment, accessories and services. The
Company's operating segments include North America, Western Europe, Central & Eastern
Europe, Greater China, Japan and Emerging Markets. The Company's portfolio brands
include the NIKE Brand, Jordan Brand, Hurley and Converse. The Company sells its
products to retail accounts, through its retail stores and Internet Websites, and through a mix
of independent distributors and licensees across the world. The Company's products are
manufactured by independent contractors.
As of May 31, 2016, the Company focused its NIKE brand product offerings in nine
categories: Running, NIKE Basketball, the Jordan Brand, Football (Soccer), Men's Training,
Women's Training, Action Sports, Sportswear (its sports-inspired lifestyle products) and
Golf. Men's Training includes its baseball and American football product offerings. The
Company also markets products designed for kids, as well as for other athletic and
recreational uses, such as cricket, lacrosse, tennis, volleyball, wrestling, walking and outdoor
activities. The Company's athletic footwear products are designed primarily for specific
athletic use. Its products are also worn for casual or leisure purposes. The Company also sells
sports apparel. The Company also markets apparel with licensed college and professional
team and league logos.
The Company sells a range of performance equipment and accessories under the NIKE Brand
name, including bags, socks, sport balls, eyewear, timepieces, digital devices, bats, gloves,
protective equipment, golf clubs and other equipment designed for sports activities. The
Company also sells a range of plastic products to other manufacturers through its subsidiary,
NIKE IHM, Inc. NIKE IHM, Inc. manufactures Air-Sole cushioning components at the
Company-owned facilities located near Beaverton, Oregon and in St. Charles, Missouri. The
Company's Jordan Brand designs, distributes and licenses athletic and casual footwear,
apparel and accessories focused on basketball using the Jumpman trademark. The Company's
Hurley brand designs and distributes a range of action sports and youth lifestyle apparel and
accessories under the Hurley trademark. The Company's brand, Converse, designs, distributes
and licenses casual sneakers, apparel and accessories under the Converse, Chuck Taylor, All
Star, One Star, Star Chevron and Jack Purcell trademarks. Converse Direct to Consumer
operations include e-commerce business.
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The Company competes with adidas, ASICS, Li Ning, lululemon athletica, Puma, V.F.
Corporation and Under Armour. Reuters (2019)
Headquarters
Nike's world headquarters are surrounded by the city of Beaverton but are within
unincorporated Washington County. The city attempted to forcibly annex Nike's
headquarters, which led to a lawsuit by Nike, and lobbying by the company that ultimately
ended in Oregon Senate Bill 887 of 2005. Under that bill's terms, Beaverton is specifically
barred from forcibly annexing the land that Nike and Columbia Sportswear occupy in
Washington County for 35 years, while Electro Scientific Industries and Tektronix receive
the same protection for 30 years. Nike is planning to build a 3.2 million square foot
expansion to its World Headquarters in Beaverton. The design will target LEED Platinum
certification and will be highlighted by natural daylight, and a gray water treatment center.
Siemers, Erik (2016). .
Board of directors
Board of directors of Nike ,by (Kapasondo 2019)
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Contents
Form Of Business
Nike, Inc. is an American multinational corporation that is engaged in the design,
development, manufacturing, and worldwide marketing and sales of footwear, apparel,
equipment, accessories, and services.
Nike’s Corporate Vision Statement
Nike Inc.’s corporate vision is “to remain the most authentic, connected, and distinctive
brand.” The business continues to apply this vision statement, which was emphasized in the
corporation’s global growth strategy for 2015. The company focuses on developing its brand.
The following are the notable components of Nike’s corporate vision statement:
Authentic
Connected
Distinctive
Nike’s vision statement uses the word “remain,” which indicates that the company already
considers its brand as the most authentic, connected, and distinctive in the global market for
sporting goods and related products. The “authentic” component of the corporate vision
statement shows that the company aims to make its products deliver high performance to
consumers. On the other hand, the “connected” component is about ensuring consumers’
personal connection with the brand. Nike’s marketing mix or 4P supports the creation and
maintenance of such connection with customers. The company also maintains distinctiveness
by delivering the best possible products to the market. This corporate vision regards Nike Inc.
as a leader in the industry, while pushing the business to further separate itself from
competitors. A notable point about the company is it also develops connections with
consumers through its vision for corporate social responsibility: “to help NIKE, Inc. and our
consumers thrive in a sustainable economy where people, profit and planet are in balance.”
This vision serves as basis for Nike Inc.’s corporate social responsibility strategy and
stakeholder management approaches.
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Nike’s Corporate MissionStatement
Nike Inc.’s corporate mission is “to bring inspiration and innovation to every athlete in the
world.” The company further states that everybody is an athlete, based on Nike founder Bill
Bowerman’s statement, “If you have a body, you are an athlete.” This mission statement
represents the company’s strategic goal of reaching out to the global leisure and sports
footwear, apparel and equipment market. The following main components are in Nike’s
corporate mission statement:
Inspiration
Innovation
Every athlete in the world
As a leading manufacturer of sports shoes, apparel and equipment, Nike Inc. inspires people
to adopt a “winner mindset”, which is covered in the “inspiration” component of the mission
statement. The company’s slogan “Just Do It” represents this inspirational goal. Also, Nike’s
corporate mission statement emphasizes innovation. This component is applied through the
company’s strategy of continuous improvement of products through new technologies, as
included in Nike Inc.’s generic competitive strategy and intensive growth strategies. The
“every athlete in the world” component indicates that the company’s corporate mission
pushes the business to target every consumer in the world. As noted, the company considers
every person an athlete. Thus, based on this corporate mission, Nike’s products are designed
to attract and satisfy a wide variety of market segments globally. Nathaniel(2018)
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Situational Analysis
SWOT analysis
Nike’s Strengths (Internal Strategic Factors)
Nike’s strengths are the primary drivers of the company’s growth and global leadership in the
sports shoes, apparel and equipment market. This component of the SWOT Analysis deals
with the internal strategic factors that support business development and competitiveness.
The following strengths are the most notable in the case of Nike Inc.:
Strong brand image
Rapid innovation processes
Extensive global production and distribution network
Nike’s strong brand image evolves based on product quality. The company’s effective
marketing campaigns also contribute to this strength. Also, rapid innovation processes are a
core factor in Nike’s ability to create cutting edge designs for its athletic footwear, equipment
and apparel. The company’s extensive global production and distribution network is a
strength that enables the business to support global market dominance. This part of the
SWOT Analysis shows that Nike Inc. has capabilities to retain its global market leadership.
Nike’s Weaknesses (Internal Strategic Factors)
Weaknesses could disrupt Nike’s growth trajectory in the sports shoes, apparel and
equipment market. This component of the SWOT Analysis addresses the internal strategic
factors that prevent or reduce business performance. In the case of Nike Inc., the following
weaknesses are the most significant:
Labor controversies
Limitations in the product mix
Limited presence in developing markets
Labor controversies continue to plague Nike’s business, especially in considering production
facilities in developing countries. This weakness negatively impacts the company’s brand
image. Also, even though Nike Inc. has expanded its product mix through the years, the
resulting product lines are still limited in capturing a larger share of the sports shoes,
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equipment and apparel market. Moreover, the company suffers from limited presence in
developing markets, partly because of issues with pricing, imitation and patent protection.
This weakness limits Nike’s global growth. Based on this part of the SWOT Analysis, Nike
Inc. must improve its policies and strategies in the areas of labor and employment, product
mix development, and penetration in developing markets.
Opportunities for Nike Inc. (External Strategic Factors)
Nike Inc. has opportunities to enhance its performance in the athletic footwear market. The
external strategic factors that facilitate business growth are covered in this component of the
SWOT Analysis. The following are the major opportunities in the case of Nike Inc.:
Improve labor/employment practices
Improve the product mix
Increase market presence in developing countries
Nike has the opportunity to improve its labor practices to address controversies in this area of
the business. Proactive strategies for this concern can lead to an improved brand image.
Another opportunity is for Nike to improve its product mix to attract more customers,
especially non-athletes. The company also has the opportunity to improve its presence in
developing markets to benefit from these markets’ high growth potential. This part of the
SWOT Analysis indicates that Nike Inc. must reform some of its policies and strategies to
ensure its continued leadership in the global athletic footwear, apparel and equipment market.
Threats Facing Nike Inc. (External Strategic Factors)
Even though Nike is one of the major players in the sports shoes, equipment and apparel
market, some threats could limit or reduce the company’s performance. This component of
the SWOT Analysis deals with the external strategic factors that negatively impact business
performance. The following threats are most notable in Nike’s case:
Tough competition
Rapid technological innovation
Imitation
Nike faces tough competition, considering other major players like Adidas. Also, rapid
technological innovation could further increase competitive pressure if Nike does not
innovate as rapidly. In addition, imitation remains a threat, especially in developing countries
with poor legal protection for patents. This part of the SWOT Analysis shows that, for Nike
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to maintain its leadership in the global sports shoes market, product innovation and legal
protection must be included in its major strategies.
Marketing Mix of Nike
Nike is one of the pioneers in marketing and the marketing mix of Nike is one of the
strongest. Depending mainly on pull strategy, it has established its hold in face of major
competitors like adidas and reebok. Read on for its product marketing mix.
Product in the Marketing mix of Nike
Nike offers a wide range of shoe, apparel and equipment products, all of which are currently
its top-selling product categories. Nike started selling sports apparel, athletic bags and
accessory items in 1979. Their brand Cole Haan carries a line of dress and casual footwear
and accessories for men, women and children. They also market head gear under the brand
name Sports Specialties, through NikeTeam manufactures and distributes ice skates, skate
blades, in-roller skates, protective gear, hockey sticks and hockey jerseys and accessories.
Price in the Marketing mix of Nike
Nike’s pricing is designed to be competitive to the other fashion Shoe retailer. The pricing is
based on the basis of premium segment as target customers. Nike as a brand commands high
premiums. Nike’s pricing strategy makes use of vertical integration in pricing wherein they
own participants at differing channel levels or take part in more than one channel level
operations. This can control costs and influence product pricing.
Place in the Marketing mix of Nike
Nike shoes are carried by multi-brand stores and the exclusive Nike stores across the globe.
Nike sells its product to about 20,000 retail accounts in the U.S. and in almost 200 countries
around the world. In the international markets, Nike sells its products through independent
distributors, licensees and subsidiaries. The company has production facilities in Asia and
customer service and other operational units worldwide
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Promotions in the Marketing mix of Nike
Promotion is largely dependent on finding accessible store locations. It also avails of targeted
advertising in the newspaper and creating strategic alliances. Nike has a number of famous
athletes that serve as brand ambassadors such as the Brazilian Soccer Team (especially
Ronaldo, Renaldo, and Roberto Carlos), Lebron James and Jermane O’Neal for basketball,
Lance Armstrong for cycling, and Tiger Woods for Golf.
Nike also sponsors events such as Hoop It Up and The Golden West Invitational. Nike’s
brand image, the Nike name and the trademark swoosh; make it one of the most recognizable
brands in the world. Nike’s brand power is one reason for its high revenues. Nike’s quality
products, loyal customer base and its great marketing techniques all contribute to make the
shoe empire a huge success. Hitesh (2018)
9. 9
Findings
The statistic depicts the revenue of Nike, Adidas and Puma from their respective footwear
segment from 2010 to 2017. In 2017, Adidas' revenue from the footwear segment was 10.36
billion U.S. dollars.
Nike is the market leader in the global sports footwear industry, with sales amounting to
revenue of over 19.8 billion U.S. dollars in 2016. This figure is larger than the combined
footwear revenues of its two closest rivals, Adidas and Puma, who made global sales of 10.68
billion U.S. dollars and 1.71 billion U.S. dollars respectively.
Of Nike’s footwear revenue in 2016, four billion dollars was generated in Western Europe
and a further 2.54 billion U.S. dollars came from emerging markets in countries such as
Brazil and Mexico. However, North America remained the biggest regional market for Nike
as footwear sales here reached 9.3 billion U.S. dollars in 2016. In comparison, sales of Nike
apparel in the U.S. generated revenue of just under 4.8 billion U.S. dollars and sales of
equipment reached 719 million U.S. dollars.
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Although it is still behind Nike in the global market, Adidas’ footwear segment is growing
steadily, with 360 million pairs of shoes produced in 2016, the highest figure to-date. The
largest regional market for Adidas in 2014 was the emerging European markets, which
accounted for 33 percent of net sales. This market included areas such as Russia and the
Commonwealth of Independent States. A considerable portion of sales were also made in
North America, where the company generated 19 percent of its revenue.
Owing to the market dominance of Nike and Adidas, Puma’s footwear sales have remained
relatively constant since 2006. The footwear segment nevertheless remains the company’s
biggest earner as sales in its apparel segment stood at around 1.3 billion euros in 2016 and
sales of its accessories generated close to 667 million euros in revenue. Statista (2019)
Conclusion
As a conclusion Nike company has contribute in producing quality sport products. My
recommendation is Nike can involve into digital sports. In my opinion the new
accelerometer based Nike and technology is the birth of a whole new generation of Nike
products and an amazing innovation to motivate people to include sports into their everyday
life.
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References:
Reuters (2019) Nike Inc (NKE) profile [Online] Available from:
https://www.reuters.com/finance/stocks/company-profile/NKE [Accessed on 14
February 2019]
Siemers, Erik (January 20, 2016). "A first look at Nike's $380M-plus HQ expansion
(Renderings)". American City Business Journals. [Online] Available from:
https://en.wikipedia.org/wiki/Nike,_Inc.#cite_ref-:0_84-1[Accessed on 14 February
2019]
Nathaniel (2018)Nike Inc.’s Mission Statement & Vision Statement (An
Analysis)[Online] available from: http://panmore.com/nike-inc-vision-statement-
mission-statement
Daniel (2017) Nike Inc. SWOT Analysis & Recommendations [Online]Available from:
http://panmore.com/nike-inc-swot-analysis-recommendations [Accessed on 14
February 2019]
Hitesh (2018)[Marketing Mix of Nike [Online]Available from:
https://www.marketing91.com/marketing-mix-nike/
Statista(2019) Revenuefromfootwearsegmentof Nike,Adidasand Puma from2010 to
2017 (in billion U.S.dollars) [Online]Available
from:https://www.statista.com/statistics/278834/revenue-nike-adidas-puma-footwear-
segment/
Organizational chart Nike Hurley International Organizational structure - nike
[Online] available from: https://www.kisspng.com/png-organizational-chart-nike-
hurley-international-org-2340121/
