nikepresentation-124328039512-phpapp02

8/4/2019 nikepresentation-124328039512-phpapp02

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Largest seller of athletic apparel and footwear worldwide

International performance for 2008:

$18.6 billion total revenue

$9.7 billion from athletic shoe sales (52% of total revenue)

Accounts for 31% of the global market for footwear

Total U.S. revenue in 2008: $6.4 billion

Nike aims for 50% revenue increase over next 5 years, whilefootwear industry is expected to increase 20%

Key Competitors: Adidas-Reebok, Under Armour, Puma


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52% footwear, 28% apparel, 6% equipment, 14% other

Footwear includes: running, cross training, basketball,

soccer, and sport inspired casual footwear like the Air Force

Ones

Apparel includes: running shorts, t-shirts, and licensed

apparel (with logos of college and pro sports teams)

Equipment: balls, protective equipment, golf clubs


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Use of Iconic swoosh Helps

Gain Global Market Saturation


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Nike accounts for 36% of the U.S. market for athletic footwear

Key competitor: Adidas-Reebok

U.S. market share of 8.9% prior to Reebok merger

merged with Reebok in 2005 46% of their total sales comes from footwear in 2008

Nikes strength above competition lies in its ability to

differentiate and its popular brand image


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Nike is the industry leader in service and product differentiation

Service differentiation Nike id 2001

109 customizable shoes

ave price of Nike id Shox $120 vs regular Shox $120

apparel and equipment customization

Mi adidas 2009 17 customizable shoes

ave price of Mi adidas Microbounce $140 vs Microbounce $100

Adidas Mi Innovation Center Cube 2006

Product Differentiation

shoes designed specifically for a large variety of sports

shoe technology and innovation

Flywire technology and Lunar Foam Cushioning system

Nike Frees and Nike Shox

Nike Sports Research Lab


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Marketing strategy

targeting different audiences

Top 100 Global Brands of 2007

Nike 30th overall with an increase of 9% from 2006

Adidas 71st overall with and increase of 8% from 2006

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Creating customer recognition and brand loyalty

Creating long-term shareholder value

Keeping the Nike swoosh consistent

Performance minded

Adhere to their five brand principles namely:

inspire, innovate, focus, connect, and care


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Advertising

Nike spent $2.8 billion, Adidas spent $1.8 billion in 2008

print and commercials

sporting venues and events

Sponsorships

of athletes

of other celebrities

of NCAA teams

of professional teams


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Core competency: DIFFERENTIATION & BRANDINGValuable +/+

neutralizes threats and exploits new opportunities

Rare -/+ common in shoe industry/ unique

Costly-to-Imitate +/+ based on positive relationships and developed over

time

Nonsubstitutable +/+ no strategic equivalent/ not found in competitors


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Current Nike Portfolio

Converse

Cole Haan

Hurley International LLC

NIKE Golf

Umbro Ltd

Exeter Brands Group LLC Nike Bauer Hockey

Alliances

2003Nike Grind

2006 Nike + iPod 2006 Center of Excellence

2008 House of Hoops

2009 BICEP

Over 130 Wholly-Owned

Subsidiaries

Low level of related diversification with the dominant business


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First movers advantage in E-commerce Brand recognition and reputation

Strong control over its own distribution channel

Use of outsourcing to cut manufacturing costs

900 factories, 50 countries, 600,060 employees

Strong management team with good corporate

strategy in the U.S. and overseas


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Notable Board Members

Phil Knight Cofounder and Chairman of the BoardMark Parker CEO of Nike

Alan Graf also CFO of FedEx

Orin Smith former President and CEO of Starbucks

John Thompson former Georgetown basketball Coach

6 board committees oversee specific policies and procedures

audit, Compensation, Corporate Responsibility,

Executive, Finance, and Nominating & Corporate

Governance

Corporate Responsibility Committee

established in 2001 to review significant policies and activities

regarding labor and environmental practices


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Gain a more positive global image, especially

regarding labor laws

Pull back the extreme spending on endorsements

Better management of their fashion shoe sector

Gain a stronger presence in China

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