Category: Nike

Background And Management Of Nike Company

Nike may be the Greek goddess of victory, but to most people nowadays it is the most recognizable activewear brand in America, and one of the biggest apparel brands in the world. Since I was a kid I’ve seen my favorite athletes, Lebron James, Michael Jordan, Tiger Woods, wearing Nike shoes and other apparel. I knew the company was cool, and I knew it was stylish, but until I did more research I had no idea just how iconic Nike and its “swoosh” are. But what made the company so great? The company was a catalyst in the fitness revolution that changed athletics from just activities that symbolized the upper social classes to something that was both fun and cool for the general public. But what inspired its founders to break the boundaries that the rest of the apparel community were comfortable remaining within? What I hope to accomplish with this paper is to both further my own understanding of one of the company’s that has been most influential on my life, and to convey to all those who read this paper my awe for this company, its founders, and pass some of my own enthusiasm on to them.

Blue Ribbon Sports was founded in 1962 by Phil Knight, Stanford Business School student and former University of Portland undergraduate athlete, to sell Japanese athletic shoes made by Onitsuka, an athletic-wear manufacturer, based on his gut feeling that the shoes would be major competitors to the German shoes that then dominated the American market. At the end of 1963, Knight’s vision came to fruition as he sold 200 pairs of “Tiger” athletic shoes, which he peddled at track and field events in the Portland area. The following year Knight was joined in business by his former coach Bill Bowerman who chipped in $36,500 to equal Knight’s investment. BRS had over $20,000 in sales in 1965 and it was forced to bring on another full time employee. In 1966 BRS opened its first retail outlet in Santa Monica, and thanks to its first store’s success it was able to open a second location in Massachusetts in 1967. Throughout these years Bowerman was influential in the design of Blue Ribbon’s innovative running shoes. His first design that became a big hit was the “Cortez” in 1968, and he quickly followed that by incorporating nylon into the upper part of the shoes, and by adding the first cushioned midsole throughout an athletic shoe.

The 70’s were a decade of big expansion, as the company started its own line of shoes for the first time. At this time the company began using swoosh logo and introduced its new name, “Nike,” after the Greek goddess of victory. A year later Nike broke with its original Japanese supplier and began promoting the 1972 Olympics, the first of its endorsement deals attempting to attach its name to the careers of the world’s biggest athletes.

In their first year of distribution, Nike’s shoes grossed almost two million dollars, and the company’s staff swelled to 45, while the company also expanded its operations to Canada and Australia. Bowerman’s next innovation was his moon shoe which he created using a waffle iron. The design helped increased the shoe’s traction without adding to its weight. Nike’s brand name continued to grow throughout the 70’s as more and more athletes began adopting its products. By the end of the decade, the company had expanded distributions into Asia, and Europe, and its shoes were so popular that Nike sold almost half the running shoes in the entire United States.

By the 1980’s Nike had grown to surpass Adidas, formerly the largest shoe company, in U.S. sales. In December 1980, Nike went public with an offering of two million shares of its stock. The 80’s also marked Nike’s shift to overseas manufacturing instead of producing its shoes in the U.S. As the jogging craze in the U.S. began to wane, Nike expanded its international operations with more intense marketing strategies to break into the European soccer shoe market which was dominated by Adidas and Puma. Another bi-product of the waning jogging craze was Nike’s expansion into industries besides running apparel, like women’s casual clothing, as well as gear and apparel for other sports. Nike branched out from athletics with its purchase of Cole Haan, a maker of casual and dress shoes, in 1987. In 1988 Nike launched its first “Just Do It,” campaign featuring athletes Michael Jordan, Bo Jackson, and director Spike Lee and a year late it launched its ‘Air Jordan’ brand.

Nike was the dominant force in athletic footwear in the early to mid-1990s. The company held about 30 percent of the U.S. market by 1995, far outdistancing the 20 percent of its nearest rival, Reebok. Overseas revenues continued their steady rise, reaching nearly $2 billion by 1995, about 40 percent of the overall total. Nike also acquired a hockey equipment company in 1994, making it the leading maker of hockey equipment in the world, and the company became part of Nike’s growing equipment division. Nike’s superstar of the 90’s was golf phenom Tiger Woods, who it signed to a 20 year $40 million endorsement contract which he payed off by winning more than 18 majors, breaking the all time record. The late 1990s were difficult times for Nike as it became the subject of scrutiny for its treatment of overseas workers, and the general backlash against multinational companies, and its struggles continued until it was finally able to turn the corner in 2002. Nike’s turnaround was thanks in large part to its acquisitions of diverse apparel brands like extreme sports brand Hurley, the stalwart brand Converse, and Starter which brought with it several of its portfolio companies and athletes it had been endorsing, most notably Shaquille O’Neal. Nike’s biggest endorsement contract of the 2000s was its signing of high school star Lebron James to a $90 million contract. Nike’s biggest challenge of the 20th century was by far Adidas’s purchase of Reebok, combining Nike’s two biggest competitors and giving them 30% of the worldwide athletic shoe market compared to Nike’s 37%. However, Nike has shown its ability to overcome obstacles before and there is no doubt it will continue to dominate the market and overcome this new challenge as well.

Nike has been the subject of a few controversies, with the criticisms focusing on the production of its apparel and shoes. Nike has been criticized for its use of “sweatshops” in China, Vietnam, Indonesia, and Mexico. Human rights groups have documented that Nike’s factories have violated minimum wage and overtime laws dating back more than 30 years, though Nike claims that these practices have been stopped. However, as of 2011 Nike has stated that most of its factories in China still do not meet its standards for worker treatment. There have reports from multiple sources that consistently state that Nike has failed to improve its working conditions for factory employees in many countries besides China.

Nike also faced criticism for its employment of child laborers in Cambodia and Pakistan. Despite its acknowledgement of this practice, Nike has also failed to curb the practice as it continues to provide contracts to companies in countries that are known to not regulate child labor forces. In 2001, a BBC documentary delved deeper into this issue and discovered child labor and poor working conditions in a sweatshop in Cambodia. It chronicled the lives of six girls who worked seven days a week for 16 hours a day in the factory.

In addition to the poor working conditions, Nike also faced a boycott in 2014 from workers in a factory that produced its shoes. The workers claimed that the factory was severely underpaying them and it was discovered that the practice had been going on for over 20 years before it was uncovered.

Nike’s main competitors are Adidas, Puma, and New Balance. Though Nike has dominated the athleticwear game since the 80’s, one thing that Adidas has recently beaten Nike at is their venture into the world of high fashion. Adidas has succeeded in partnering with famous designers to create apparel that is both sporty and fashionable, but Nike is fast on its heels. Nike recently unveiled a collaboration with Olivier Rousteing, a designer for the luxury brand Balmain, in an attempt to combat Adidas’s dominance in this business.

Mark G. Parker has been Chief Executive Officer and President of Nike since January 2006. He has worked at Nike since 1979 when he joined the company in the research, design and development department, and since then has been employed in various leadership positions throughout the company. In 2001 Parker was promoted to President of the Nike Brand, a post which he served at until 2006 when he became CEO. In addition to serving on Nike’s board, he also serves on the Disney’s Board of Directors. Mr. Parker graduated from Penn State in 1979 with a degree in Political Science. In 2015 Mr. Parker was paid $16.8 million and he has a net worth of $250 million. As CEO Mr. Parker is responsible for growing Nike’s global brands and businesses including Converse, Cole Haan and the Nike brand.

The company’s Board of Directors is comprised of 13 members. Three of the 13 directors are women, and three of the directors are minorities. Some of the more notable directors include Phil Knight, Nike’s founder, Travis Knight, his son, Mark Parker, the current CEO of Nike, and Timothy Cook, CEO of Apple. Other directors include the Chairman of PayPal, the former head coach of Georgetown University’s men’s basketball team, and the Vice Chairman of General Electric.

Nike focuses its business in four segments: footwear, apparel, equipment and global brands. The footwear division handles the production and design of all of Nike and Nike subsidiary shoe brands which manufacture sneakers and cleats for all sports as well as leisure shoes. The apparel segment handles all of Nike’s clothing production for all sports and is casual brands as well. Nike’s equipment division makes just about every piece of equipment imaginable and necessary for every sport as well as manufacturing cases for digital devices. The global brands segments is responsible for overseeing the development of all of Nike’s subsidiary brands including Jordan, Hurley and Converse. Much of Nike’s business success has come from its ability to attract top talent to endorse its apparel and sneakers. Some of its most famous athletes include Michael Jordan, Kobe Bryant and Lebron James. Recently, Nike signed Lebron James to a lifetime endorsement deal valued at over $1 billion dollars which is just a sign of how profitable Lebron is for the company.

Nike’s CFO and Executive Vice President is Andy Campion, a veteran of the company since joining in 2007 as Vice President of Global Planning and Development. He was made CFO of the Nike brand in 2010, responsible for leading long-range financial and strategic planning, and from that position he rose to become Senior VP of Strategy, Finance, and Investor Relations for Nike in 2014, before ascending to his current position in late 2015. Prior to working at Nike Campion held leadership positions in the finance department of the Walt Disney Company. His current responsibilities include leading all aspects of financial management for the global powerhouse. Though he hasn’t been CFO for a full year yet, and as such no records for his compensation have been made public, his predecessor was paid $2.5 million in 2015 which serves as a pretty strong indicator of what his pay will be like in 2016. Nike’s stock price as of its last close is $56.19. Nike’s net income for fiscal year 2015 was $3.27 billion, and it paid a tax of $4.21 billion on its gross profit of over $14 billion.

So much of Nike’s success has hinged on its brand image and the responsibility for crafting that image falls on one man: John Slusher. Slusher serves as Nike’s Executive Vice President of Global Sports Marketing, a position he has held since November 2007. Slusher has been responsible for managing all dealings with U.S. pro leagues and has led negotiation teams for many of Nike’s sports marketing agreements, including those for Jordan Brand and Converse. He led development and implementation of sports marketing strategies in both the Asia Pacific and Americas regions, including relationships with U.S. professional sports leagues in the regions and endorsement, sponsorship and licensing. One of Slusher’s greatest accomplishments has been ousting Adidas as the manufacturer of the jerseys worn by the players in both the NFL and the NBA. Slusher is arguably the most important executive at Nike because of the influence he has on developing the company’s image worldwide. Slusher joined Nike in 1998 and served in a variety of roles in the global sports marketing group, including Manager of Business Affairs and Associate Director, before becoming Vice President of Global Sports Marketing. Prior to joining Nike Slusher worked as an attorney at the law firm O’Melveny & Myers. He attended Dartmouth College before earning his law degree from the University of Southern California.

Nike’s COO is Eric Sprunk, a company man since 1993 when he joined Nike from the accounting firm PriceWaterhouse Coopers where he managed the Nike account. Sprunk previously served as Executive Vice President of Product & Merchandising where he was responsible for all Nike Brand product across the company’s footwear, equipment and apparel engines. Sprunk led product creation from innovation to design to sourcing to manufacturing to merchandising, giving him the insight needed to serve as the company’s COO, because nobody had better knowledge of the entire production process than him. As COO, Sprunk is responsible for maintaining Nike’s entire supply chain which spans manufacturing, sourcing, IT, demand, supply planning and procurement. Sprunk focuses Nike’s internal operations, making sure that its infrastructure is strong enough to maintain the continued growth necessary to support its global brand. Sprunk’s compensation for 2015 was almost $5 million, which was comprised of equity, cash bonus, and other forms of compensation. As COO, Sprunk is responsible for overseeing Nike’s 62,600 employees worldwide.

To me, Nike’s success is beyond doubt. No other company is as universally adopted in day to day life. Everywhere I go I see Nike shoes, shirts, shorts, gear, or even if it’s not Nike it’s one of its subsidiary brands that people are wearing. Becoming the official gear supplier of the NFL and NBA will be Nike’s most successful endorsement deal, and it has barely reaped the rewards of that sponsorship yet. And as new countries grow and become economically viable, Nike will expand there and find new markets in which to sell all of its products. While retailers have been struggling recently, names like Nike will never go away. The company’s ability to adapt to trends of the day and rise above its competitors in anything that it attempts has set it above its competitors like Adidas. Its global reach and appeal will only continue to expand, and the company will continue to dominate worldwide.

Works Cited

1. Executives. About Nike. Nike, Inc., n.d. Web. 29 May 2016.
2. Alemi, Golie. 8 Leadership Lessons from Nike CFO Andy Campion. ‘UCLA Anderson School of Management Blog’ UCLA, 15 Mar. 2016. Web. 29 May 2016.
3. Euse, Erica. Nike Unveils Collaboration With Balmain Designer Olivier Rousteing. Complex. N.p., 23 May 2016. Web. 29 May 2016.
4. Low, Elaine. Under Armour Shoe Sales Ramp Up, Nike Slows. Investor’s Business Daily. N.p., 23 May 2016. Web. 29 May 2016.
5. Corporate Governance. NIKE, Inc. Nike, Inc., n.d. Web. 29 May 2016.
6. O’Reilly, Lara. 11 Things Hardly Anyone Knows About Nike. Business Insider. Business Insider, Inc, 04 Nov. 2014. Web. 29 May 2016.
7. Nike, Inc. Reference for Business. N.p., n.d. Web. 29 May 2016.
8. John Slusher. SportsBusiness Daily. N.p., 3 Mar. 2008. Web. 29 May 2016.

Nike Company: Pestle And Swot Analysis

Abstract

Nike is a leading manufacturer of shoes and sportswear, and has achieved tremendous success around the world. In this report, Nike’s business environment was analyzed using Pestle analysis and Porter’s five forces. The company’s internal environment was analyzed by using SWOT analysis, value chain analysis, core competencies, and competitive advantage. It was concluded that Nike is a leader in its business, operates in a competitive business environment and uses a business strategy that ensures its short- and long-term success. It can be recommended that Nike should take advantage of the opportunities available to it and reduce threats.

Company Overview

Nike, the world-renowned brand of athletes, is also the largest and best brand of footwear and sportswear in the world. While Nike designs products for sports use primarily, its popularity as a clothing for leisure continues to grow worldwide. The company continued to focus on two important things – product innovation and product quality. Founded in 1967, Nike has gained world-class reputation for its excellent product quality and marketing strategy (Anon., n.d.).

Business environment analysis

External analysis means examining the company’s industrial environment, including factors such as competitive structure, competitive position, dynamics and history. At the macro level, external analysis includes macroeconomic, global, political, social, demographic and technological analysis (Elearn, 2008).

Nike’s international brand has expanded rapidly, as evidenced by its growing revenues over the past five years. Its share of non-US revenue exceeded 50% in 2017. However, the United States remains the largest market for Nike, accounting for about 46% of its total revenue. Its major suppliers of shoes are 127 shoe factories located in 15 countries. Nike has the largest number of Nike suppliers in Asia, accounting for more than 90% of its shoe production. In 2017, Nike spent $ 3,341 million on marketing and promotion. Nike also spends a lot on advertising plus R & D. The brand is experiencing a faster growth in e-commerce through its active websites in more than 45 countries (Anon., n.d.).

PESTLE Analysis

Political factors

Taxes and industrial rules and regulations are very important in mind. There may be several political rules of export laws that may affect a multinational company to distribute its products globally.

Economic factors

Developed countries have an almost stable economy with the same purchasing power of customers. Nike can also develop favorable economic policies to target developing countries. The economic factors that could be an opportunity for Nike are the economic stability of the developed economy, and the rapid growth of developing markets can once again be seen as the Organization’s greatest opportunity.

Social factors

People actively participate in fitness clubs and sports competitions. Nike can take advantage of this dynamic social dynamic by offering its high quality sports products. The important social culture factors are increasing wealth opportunities for individuals. Product safety is another important area to consider when it comes to social and economic factors. Improve attitudes towards the positive side and enhance leisure time.

Technological factors

Nike is very interested in marketing and technology techniques. It primarily includes marketing information systems (MIS) to innovate their business operations. The technology used to produce products must be monitored, delivered to customers, and all these activities are promoted through the latest technologies to compete with competitors. The technological externalities affecting Nike are investment in R & D among companies that pose a threat as well.

Environmental factors

Eco-friendly products are gaining more acceptance by customers and government alike. Nike should focus on its production techniques to get these types of products to gain a greater market share in the sports industry. The expansion of environmental laws has been a good area when it comes to environmental factors. Climate change is another important factor to be observed.

Legal factors

Legal rules and regulations include the copyrights of shoe designs and clothing produced by Nike against its competitors. In addition, some regulatory bodies also impose rules on the business process such as child labor and employment laws. The expansion of health and safety rules in some countries is always exploring new opportunities for companies (PANDEY, 2017).

Porter’s Five Forces

Supplier bargaining power (low):

Suppliers are small compared to Nike, and are spread around the world with little financial strength. There is a very large part of Nike’s supply chain in Asia, because of the availability of excess raw materials, and cheap labor there. Furthermore, Nike partners are only those who can match their quality standards. Nike has established rules and regulations relating to work, product quality and other things including the environmental impact that suppliers must follow.

Bargaining power customers (high):

Nike is focusing not only on product innovation but quality to better meet the needs of the new generation. They also design better customer experiences to retain them. This is somewhat controlled by strong brand image, marketing capabilities, level of trust and customer loyalty.

Threat of substitute products (moderate):

There are a large number of brands that operate domestically and internationally in the global market that sells sports shoes and apparel. The overall threat of alternative products is moderate due to Nike’s brand image as well as trust and customer loyalty.

Threat of new entrants (low):

As brands enter a smaller and local level, it is very difficult to build a market-leading brand of small investment. There is a very big investment in building a large brand like Nike which requires investment in infrastructure and technology as well as human resources and marketing. There are also legal barriers that prevent new brands from practicing the market.

Competitive rival (high):

While the number of major brands playing in the international market is limited, the level of competition remains very high because each brand invests heavily in product quality, innovation, marketing as well as research and development (LISA WURDEN, 2015).

Nike’s Internal Analysis

Internal analysis is an exploration of the company’s efficiency, cost position and market competitiveness. An internal analysis often involves measures that provide useful information about the company’s strengths, weaknesses, opportunities, and threats – SWOT analysis. Data generated by internal analysis is important because it can be used to develop strategic planning objectives to sustain and develop business (Elearn, 2008).

Value Chain Analysis Nike

Primary activities

Inbound Logistics: Nike has a global procurement team to manage the procurement part of supply chain management. Including selection and communication with appropriate suppliers of appropriate goods and services. In recent years, it has seriously focused on sustainability and is working to reduce its environmental impact. The number of suppliers is now lower in number and who remain committed to the quality and sustainability standards of Nike. Its supply strategy gives priority to suppliers who want to exceed minimum standards and can strictly follow the rules on sustainability. At Nike, almost all of its products are manufactured by independent contractors. The focus in all these manufacturing facilities remains on transparency, quality and sustainability, which is why only the most responsible are becoming part of their supply chain. Products obtained from these suppliers are sent to different markets through the regional offices and distribution centers of Nike (Barrientos, 2019).

Outbound logistics: External logistics is an extremely important part of Nike’s value chain. There are more than 500 factories manufacturing Nike products in 42 countries. Products shipped from these manufacturers must be sent to Nike distribution centers to retail stores for sales. Nike has used a series of regional distribution centers to meet the needs of its retail stores so customers do not have to wait long for a new product after it is released. An efficient distribution system also helps manage deliveries and shipments. The Memphis and Tennessee distribution system keeps shoes, clothing and equipment for the Nike and Jordan brands distributed to individual and wholesale customers as well as Nike retail stores. Its European logistics campus is located in Belgium, enabling a faster and smarter supply chain management (Barrientos, 2019).

Operations: Nike is headquartered in Oregon, North America. It is also Nike’s largest office with the largest number of Nike employees. Nike also has offices in Europe, the Middle East, Africa, Greater China, Asia Pacific and Latin America. The brand is located worldwide, and each of its offices serves wide geographical areas in many countries.

Sales and marketing: Regardless of its great quality, Nike is internationally renowned for its excellent marketing strategy starting with the Swoosh logo and can be found in all Nike products. However, Nike also invests heavily in marketing and athletes such as football celebrities are used to market their products and brand and promote them. The video marketing strategy is highly appreciated by Nike fans. Nike’s main sales channels are both physical and online. Their own stores, including retail stores, factory and online sales sites and mobile phone sales channels are sold directly to customers. It also uses a mix of independent distributors, licensees and sales representatives worldwide for sales (Ahmed, 2016).

Support activities

Technique: Nike’s production strategy has innovative technology at its core, and sustainability has become an important focus in the production and supply chain. Nike uses the best technologies to reuse the waste generated by its plants.

HRM: A global organization like Nike relies on a large number of skilled staff. Globally, Nike employs more than 70,000 people. It has created a culture and an environment that promotes diversity and inclusiveness.

Management: For Nike, quality is a very important focus. Therefore, the entire procurement team is dedicated to the analysis and evaluation of qualified suppliers. Only suppliers who can guarantee more than minimum quality requirements, remain in their own supply chain.

Solid Infrastructure: Nike headquarters is located in a state-of-the-art building with a lake and excellent facilities for its staff (Ahmed, 2016).

Core competencies of the Nike

• Brand Name: Nike is a world famous brand of sports shoes, apparel and equipment.
• Modern Technology & Innovation: Nike has always focused on modern technologies, product innovation and growth by investing in a better customer experience.
• Product quality and style: The quality of the product and the stylish designs have always been a priority for Nike, which has resulted in the popularity of its products as clothing for entertainment.
• Marketing possibilities: Nike’s excellent marketing capabilities are distinguished by its brand portfolio (UKEssays, 2018).

Nike’s Competitive Advantage

Competitive advantages are the conditions that allow a company or country to produce a commodity or service of equal value at a lower price or in a more favorable manner. These conditions allow the product entity to achieve more sales or margins than its competitors in the market. Competitive advantages are attributed to a variety of factors including cost structure, brand, quality of product offerings, distribution network, intellectual property and customer service (Porter, 1980).

Behind Nike’s success, there are fantastic business and marketing strategies in addition to some excellent sources of sustainable competitive advantage:

• Global Presence – The global presence of the brand is also a major source of advantage.
• Brand image / property rights – The brand enjoys a very high level of trust between its customers and the market as a whole.
• Customer loyalty: Based on the high level of satisfaction generated by Nike, it enjoys great loyalty to customers compared to its opponents.
• Supply chain management: The excellent management of the supply chain is also a major source of competitive advantage of the brand (Godfrey, 2015).

Nike’s SWOT Analysis

SWOT analysis is a simple technique used to design business strategies. Each character in the shortcut represents an important aspect in the process. S means strengths in work or organization. W means the weaknesses that the company must address if it wishes to maintain its competitiveness and sustainability. ‘O’ is for opportunities that reach a peak in a particular industry. Analysis of segment ‘O’ helps the company identify situations, events and factors that can be exploited. Finally, T refers to threats that refer to factors inside or outside the work that may make the implementation of the strategy difficult or impossible (Böhm, 2009).

Strengths

• Strong core brand. The Nike brand itself is one of the strongest – if not the strongest – names in the entire sporting apparel industry. In most parts of the world, Nike is one of the first companies to come to the public’s mind when they think of stylish sneakers.
• Brand portfolio diversified. Although the Nike brand itself is incredibly strong, the company has a variety of brands beyond that. This suggests that Nike has its foundations well spread throughout the shoe industry, allowing it to overcome the painless changes in preference.
• Low cost product. Because many Nike products are manufactured in developing Southeast Asian countries such as Indonesia and Thailand, Nike has very low labor costs. What’s more, Nike also uses relatively inexpensive materials for many of its shoes. Together, these factors – cost of labor and cost of materials – allow Nike to manufacture its shoes at very low prices.

Weaknesses

• Relying on the US market. In 2018, more than 40% of Nike’s revenue came from the US market; this shows a significant dependence on the US market as part of Nike’s business model. If US tax or legal policies change, which in any way affect Nike’s ability to sell in the US market, it will seriously hurt the profits of the sportswear company.
• Manufacturing outsourcing. Despite the low cost associated with overseas manufacturing products, there are already downside to doing so. On the one hand, overseas manufacturing requires you to either create a custom manufacture that works in the country you have chosen or outsource to your existing manufacturers. Nike chose to do the latter, which means that its products are not always high quality.
• Focus shoes. Although Nike is relatively diverse within the shoe industry itself, Nike has not diversified much across other industries. Although the shoe industry may remain here, Nike may consider expanding its horizons.

Opportunities

• The growing market. There are more and more people in this world, and a lot of them are gradually becoming more active. Together, these two factors are compounding the creation of a constantly growing shoe market. If played correctly, Nike must be able to get a large part of the business of this growing market, allowing the company to increase its profits.
• Developing markets. Since countries around the world are richer and richer, citizens in developing countries have more disposable incomes. In regions such as Southeast Asia, growing disposable income represents an opportunity for new markets to sell products. If Nike can market itself in these emerging markets, it can increase its reach and reduce dependence on the US market.
• Responsible manufacturer. In many Western countries, there is an increasing trend to know where the products came from and how the environment and workers were treated. This is another chance for Nike. If they are able to brand themselves as a manufacturer responsible for sporting goods, they may be able to increase their penetration into the market among the most environmentally conscious consumers.

Threats

• Taxation. There is growing debate about how much money is given to large corporations when it comes to tax matters, and their freedom to pay low taxes may end someday. This would provide a much lower net profit than Nike.
• Competition. Nike competes in a highly competitive sportswear market, with other big names such as Adidas, PUMA and Reebok ready to snap on any new opportunities. As such, Nike needs to walk very carefully to ensure that it is not replaced with one of these elements, or – dramatically less – not losing a potential return.
• Counterfeiting. Like many valuable brand goods, Nike clothes are subject to large amounts of counterfeiting. Counterfeit goods from Nike are available everywhere – even online. Nike needs to develop a strategy to ensure that counterfeiting does not affect its core business model, perhaps by taking legal action against counterfeiters or with a smart marketing campaign that encourages consumers to buy the real thing.

Thanks to its very strong brand and low cost, Nike has managed to net several billion dollars on an annual basis. Unfortunately, Nike is largely dependent on the US market and its small variety outside the footwear and sportswear markets. Nike needs to be cautious about the threats associated with these vulnerabilities, and other challenges such as taxation or fraud. Fortunately, Nike has many opportunities to grow its business, including making the most of the rapidly expanding apparel market (Eric MacIntosh, 2019).

Conclusion

Nike is the world’s largest brand of footwear and sportswear which has focused on product innovation and marketing to achieve growth. Its excellent marketing capabilities have helped its superiority among a range of brands. Competitive pressures against the brand continued to grow. To maintain its growth rate, the brand must retain a focus on product innovation and marketing. They can also try back integration because they rely heavily on independent manufacturers in their own supply chain. Nike is a well-known brand that attracts consumers in the market. Continuous product innovation and effective distribution network make sure that the sporting goods of the company are accessible to consumers. However, the company must reduce excessive dependence on the US market. Acquisitions and expansion in emerging markets can help the company maintain its position at the top of the sporting goods industry. If the company fully embraces digitization, its sales may grow exponentially. The company faces some threats, but continues to progress with confidence. Overall, Nike’s outlook is bright and positive.

References

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Nike Company: Background, Targeting Strategy And Market Insights

Nike is an American worldwide clothing company that was found in 1964 in the city of Oregon in the united states of America by Phil knight and Bill Bowerman. Nowadays Nike is one of the most famous international brands in the world with a market capitalization of more than 65.8 billion dollars and net worth of 29.6 billion dollars in 2017 and 32.4 billion dollars In 2019, Nike has also been identified as the richest sports brand in 2020 and one of the most successful clothing brands around the world. and with more than 80 branches in the United Arab Emirates, Nike has been the most successful sports brand here in the UAE.

Company’s background

With selling around 900 million shirts and 850 shoes in a year, Nike have managed to overcome any competitor in the sports market that threatens its market such as ( Puma, Adidas, and New balance), and also one the most important things that made Nike more famous and popular worldwide is that they have sponsored many celebrities like ( Cristiano Ronaldo, Lebron James, Roger Federer etc.…) In fact, Nike has worked with the famous footballer (Cristiano Ronaldo) since 2003 with a deal worth as much as $1 billion dollars. Nike doesn’t only sponsor famous celebrities but in fact they sponsor some sports teams in different sport such as; Fc Barcelona, Chelsea, and Paris-saint Germain in football, while in basketball they sponsor big teams like; Los angles Lakers, Miami heat, and Chicago Bulls. But Nike has a big disadvantage which is the high prices on most of their items, for example a Nike Jordan shoes is at least 400 DHS here in the UAE and also a normal football or basketball jersey doesn’t get under 300 Dirhams, this reason made the customers see Nike as a place that they buy from once a month or even once a year.

Home country detail

Nike is one of the most popular brands worldwide In general, and they have a lot of customers around the world and also a huge amount of celebrities that they sponsor, but there are some countries that Nike is not sold in such as; Indonesia , Iran, and Vietnam. The reason behind not selling Nike in those countries is because they don’t have the policy from the company to open it in their country or maybe they have some political problems with USA such as; Iran, but that doesn’t mean that Nike is not popular in the Middle east, In fact the branches of Nike in the middle east is more than the branches in the whole continent of Africa, Nike has also a lot of Muslims customers around the world and especially in the middle east, so to satisfy these customers they have made some Muslim traditional outfits to sell in the branches that are available in the middle east such as; hijab, and swimming outfit for the Muslim women who loves sports and also loves to wear Nike products. Nike has also done a lot of charitable volunteers to many poor countries in Africa.

Segmentation and targeting strategy

As we said Nike is so popular in the middle east countries, here in the united Arab emirates 14 main branches that are available in famous places such as; the Dubai mall, midriff city center and also in Festival city mall, these are the most popular places for Nike in the UAE , Nike has created its branches in the most popular places in the UAE and most the visited ones, which is a smart way to attract costumers from inside and outside the UAE, another targeting strategy that Nike uses is that they use a lot of advertisements in all social media applications to attract the costumers and they also have online websites for the people that Nike is too far from their homes.

Marketing Mix

Nike has always put the 4p’s (price, product, place, promotion) under consideration, In fact Nike company is based on these things, the most important thing that Nike focuses on is the quality of their product, because Nike is not a normal company that have cheap quality items with high prices, so it should focus more about its quality. The second thing that Nike cares about is their prices which counts as a disadvantage for company because most of their items are so expensive to the level that the “Mag self-lacing trainers” which is a Nike shoes is worth 200,000$ and they also have different sneakers from the famous celebrity (Kanye west) which are called the Yeezy that are worth more than 1,000$. Nike also care about the place of its market, As we see in most of the countries and especially in the United Arab emirates, Nike shops are always in the most attracted places from the visitors such as; the Dubai Mall, Festival city and city walk . even in the United states of America, Nike shops are in the main places which are the central park and the times square. Nike have good way to promote their company. They use sales promotions for motivating the new customers by giving some additional benefits like; the savings the customers can make by purchasing when a discount or a special offer is applied.

How the company develop market insights?

Nike is a company that uses both primary and secondary data to get the customers opinions about their company, for example Nike collect some information to see which branch in the UAE that is not selling many items as the other branches, which will force them to close it and open it in a place that attract customers and visitors inside and outside the UAE, for example the Nike branch that was located at Sharjah was closed because it wasn’t selling the amount that was expected to be, so they opened it near the terminal 3 airport and made the store larger and they also included some new items to satisfy customers and the residents inside the UAE. Nike has also a customer feedback section in their online stores so that the customer can give his opinion about the product he bought from them, which is also a smart move from the company to satisfy this customer so he would buy again from Nike.

Price

When it comes to price Nike is somehow average in selling their items just like the other sport markets, for example Nike sell some items that are rare with a high quality in high prices and they sell their normal colored shirt in an average price, but there are some items that the company overrate their prices such as; the Yeezy shoes that is worth 2,000 Dirhams and also some items that are above 1,000 Dirhams such as; normal football and basketball jerseys.

Place

When It comes to place Nike is one of the markets that have many branches, especially here in the UAE, Nike have approximately 2 or more branches in every city in the UAE, but the most branches are available in Dubai since it is the most famous city in the country with the biggest amount of tourists.

Nike can be considered both (B2B and B2C), for example a company called (Sun and Sand sports) buy many products from most of the sport market in the Middle east and one of them is Nike, which counts as business to business.

Nike is one of the biggest markets in the UAE, it has over 80 branches in all cities, Nike knows how much its popular in the middle east and especially in the United Arab emirates, so to satisfy these Arab customers Nike has added some familiar and famous Arab costumes to its market such as; the hijab which is an Islamic outfit for the women, Nike is company that doesn’t discriminate between their customers, which is a reason why the company is successful.

Conclusion

After doing this amazing research, I have learned a lot about Nike and its markets around the world. And I also understood most of the details inside this huge company, and how much its popular in the middle east and worldwide, and also who were the celebrities to get sponsored by this company such as; Cristiano Ronaldo and Lebron James, and the most important thing that made me like this company even more is that it satisfies every customer they deal with and also including Muslim costumes in their stores which is a great move by them, Nike is a very successful company from the past till Nowadays.

The Competitive And Environmental Factors Surrounding Nike

Analysis of Environment Factors of Nike Inc

Nike Inc, for most a household name, there are not too many places you can go these days without setting your eyes on the iconic swoosh know by everyone as Nike. What makes up this company though, what affects this company. As consumers these are realities of the company, we often do not think about it. It’s not out job so we don’t have to, what if we did though what would we find. In this is analysis we will look beyond the swish and examine the factors

Examination of Environment Factors of Nike Inc

Nike Inc, for most an easily recognized name, there are not very numerous spots you can go nowadays without setting your eyes on the notorious swoosh know by everybody as Nike. What makes up this organization however, what influences this organization. As customers these are substances of the organization, we frequently don’t consider it. It’s not out employment so we don’t need to, imagine a scenario where we did however what might we find. In this is investigation we will look past the wash and analyze the elements focused and macro-environmental behind the brand we search for.

Money related

Nike has used its set up brand an incentive to abuse creating customer ask for in rising economies (Whitehead, 2012). Nike has defended the CSR examines by pugnacity that it has given work in commonly youthful economies and paid the set up adjacent rate for work (Whitehead, 2012).

Political

It is accepted by some that, Nike has and will keep on having advantage from the development arranged polices put forward by the United States government. Which has kept up low loan fees, cash trade dependability, and universally aggressive duty plans (Whitehead, 2012). Politically, expansive organizations, for example, Nike additionally face abnormal amounts of strain to create footwear of an astounding dimension, due to the consistently evolving wellbeing/wellness arrangements present in the UK.

Social

In the full-scale financial sense, Nike (and its adversaries in the sportswear region) are the beneficiaries of a creating societal obsession with prosperity and wellbeing (Davis, 1992). Nike was compensated for lost time in the advancing talk around globalization, seen by many weight get-togethers to be ‘Extending the irregular characteristics of political power and effect, similarly as including new segments of divergence’ (Hurrell and Woods, 1999). From the 1990s onwards, Nike got the standard business routine with respect to redistributing a ton of its capable, semi-skilled and clumsy gathering to rising economies, consolidating those in the Asia Pacific region (Foster and Harney, 2005).

Customers

Nike’s target market and customer base includes all desk class age clusters that are excited about diversion and rich footwear. Nike footwear attracts these customers as a result of its consistency in structure improvement and the magnificent shades and new imaginative advances being made to the mentors. Association: Three factors that were seen basically in the examination of Micro parts related to the association were, support ability, business/specialist relations and brand mission.

Contenders

Main features that were clear while looking at contender factors were: ‘Nike offered’, esteem pioneers and highlight on structure and backings. Go-between: The centers gathered from the examination turning around center individuals were, Nike online list, outlet stores and wearing locales. Action Points TOWS Analysis Jamie Brighton – Threats Jamie Roach – Strengths Ollie Bennett – Weaknesses David Harris – Opportunities Thomas James – TOWS Review

References

1. Nike Inc. PESTEL/PESTLE Analysis & Recommendations, ( FEBRUARY 7, 2017) retrieved from http://panmore.com/nike-inc-pestel-pestle-analysis-recommendations
2. A PESTLE Analysis of Nike, (Jun 8, 2016) retrieved from https://pestleanalysis.com/pestle-analysis-of-nike/
3. Macro and Micro factors, (March 1, 2013) retrieved from http://nikeresearch.blogspot.com/2013/03/macro-and-micro-factors.html

Organizational And Management System Of Nike Company

Introduction

In today’s globalized world business and management is developing dramatically around the world and most people always want to achieve higher goals in various ways. Even though background plays an important role to be popular and admirable businessman, individual’s leadership entrepreneurship abilities are a transcendent part of increasing business profit and work productivity. Because, success never comes it is always achieved, therefore the only thing that is required from people is hardworking and trying to attain their aim with various ways.

The preponderance of entrepreneurship skills, how the business can be improved and the management system among employees as well as work productivity are illustrated as an example of the company NIKE which is keeping its reputation high around the world through this report

Background

The company of “Blue Ribbon Sports” later known as the name of NIKE was founded with the partnership of Bill Bowerman and Phil Knight in the year of 1964 January 25 close to Beaverton, Oregon, in the Portland metropolitan area. At first, they both contributed 500 US dollar and with the manufacturing sport wears they could sell 300 pairs of trainers during three weeks. After eight years, they produced a new sport footwear which is called NIKE as it taken the name of Greek Victory God and during 1980’s by entering to public NIKE brand became predominant over the globe. Furthermore, in this period of time with the “Swoosh” trademark company, they made alliance under the slogan of “Just Do It” and they made an irreplaceable brand image also they started sponsoring for a myriad of sport teams and athletes. For the first time in 1986, the revenues of the company multiplied over 1 billion US dollar and NIKE could achieve to expand its manufacturing rate substantially with the acquisition of the American popular Cole Haan brand, together the

The world’s largest athletic shoes supporter and a huge manufacturer of sports bags and clothes deserves more than 24.1 US dollars billion in the fiscal year of 2012. During this year, it hired more than 44 thousand people around the world. In 2014 the value of brand alone was at 19 billion US dollar, it made the most valuable brand logo around businesses areas of sport. In the top 500 US largest companies NIKE got 89th level with being suitable for 29,6 billion US dollars.

Management style

Manager should have multitasking virtuosities that can do everything in its time and solve different kind of problems which require much energy and deep thinking. In addition to this their attitudes towards controlling workers in the company is also based on their behavior and interpersonal skills, because they should always motivate their workers with different ways such by giving various certificates or bonuses in order to increase workforce and productivity. Moreover, setting information sharing and friendly atmosphere make staffs energetic and more creative. For example, successful leaders should have such kind of characteristics (Ferrell, Hirt and Ferrell 2011):

• Outstanding interpersonal relationships.
• Effective communication
• Collaboration and teamwork
• Comprehending financial aspects of business
• Improving an environment where people can get more experience
• Following the rules and routines
• Assist people to grow and develop morally and personally

NIKE controls more than 73000 employees worldwide and use different categories to them to improve workforce. For instance, managers who work in this company and in its branches always encourage their workers by giving monetary bounce for the people who create new designs and high quality models. Their aim is in this way: Moreover, they pay attention supply and demand amount wisely where most consumed their products which are more popular and where the price is not affordable and others.

Altercations of NIKE Company

Nike has made contracts with overr700 stores and markets around the globe and its branches are situated in 45 countries except the United States of America. .Cornucopia of manufacturing factories got place throughout Asia, such as Indonesia, China, Taiwan, India, Thailand, Vietnam, Pakistan, Philippines, and Malaysia.[89] Nike does not always want to tell about their contracts with other companies which they work together. But, owing to various criticism from some corporations like CorpWatch, Nike has informed about their contracts to the public.

Sweatshops

Nike was under the criticizes that they making contracts with companies such as Nike Sweatshops in most countries, for example, Vietnam, China, Mexico and Indonesia. Vietnam Labor Watch group has made contract documents with Nike has been punished with low wages due to strict rules in Vietnam during 1996, even though, Nike claimed that they stopped the process. [90] this corporation was in the center of many critics such as not satisfying working conditions, low salary employed in most free trade areas where their products are particularly produced and the main supporter of this criticism consisted of Naomi Klein book like No Logo as well as documentaries of Michael Moore.

In July 2011, Nike corporation announced that two-thirds of their products did not support their company’s demands for treatment of their employees and as an Associated Press reported that workers in the Indonesia branch of this company complained from their managers owing to being under offence.

Child labor actions

In 1990s, Nike was under the criticizes that being used child workforce in the factories of Pakistan and Cambodia that they contracted to produce football balls. Even though Nike started controlling and diminish the practice, they did not stop making contracts with other companies which manufacture in places where insufficient regulations and controlling make it difficult to support that labor of children is not being utilized.

In the year of 2001, documentary of BBC investigate the process of children workforce and poor working conditions in the factory of Cambodia used by Nike and this was mainly based on six girls who frequently worked 16 hours per day during all weekdays.

Big strike in Nike manufacturing factory of China

Workers in the factory of Dongguan Industrial Holdings of Yue Yuan in the heartland of China branch of Nike started giving up their work in April 2014 because of low salary which is 40.82 US Dollars per month. However, the average wage rate was 489.84 US Dollars and the number of employees was about 70,000.

Marketing strategy of Nike Company

Nike increases the value of its products by different agreements like sponsorship with famous sportsman, professional teams and other athletic teams.

The first most popular three advertisements of Nike were show on national TV program which were formed by Widen and Kennedy (W+K) advertisement agency in 1982. This agency with advertising this company’s products achieved top honor and they called s the name of Nike the Cannes Advertising Festival in the year of 1994 and 2003.

Recommendation

Nike does not support people with sport equipment and clothes but also, they motivate individuals through various ways like advertisement and by being sponsors to most football teams, sport clubs and others. The quality of their products is very high and they are durable to any kind of weather conditions, they are manufacturing eco-friendlier sneakers.

Conclusion

In conclusion Nike company can be represented as one of the best styles of managing staff and organizing work more efficiently. Thus their work productivity is high and their future intended plans are implemented well. Because their leadership skills and solving problems analytically and wide range of solution by team working and its working conditions makes it the place which has the best career opportunities with job perspectives

References

1. Sage, Alexandria (June 26, 2008). ‘Nike profit up but shares tumble on U.S. concerns’. Reuters. Retrieved July 10, 2008.
2. Ozanian, Mike (July 10, 2014). ‘The Forbes Fab 40: The World’s Most Valuable Sports Brands 2014’. Forbes. Retrieved October 10, 2014.
3. ‘Nike – pg.16’. Forbes. Retrieved September 27, 2017.
4. ‘Fortune 500 Companies 2018: Who Made the List’. Fortune. Retrieved November 10, 2018.
5. Associated Press, ‘Nike still dogged by worker abuses’, Japan Times, July 15, 2011, p. 4.
6. ‘MIT’ (PDF). Retrieved September 18, 2010.
7. More than ten thousand workers stage strike at massive Dongguan shoe factory, April 14, 2014
8. Yue Yuen shoe factory workers’ strike at Dongguan plants continues April 17, 2014.
9. Yue Yuen strikers vow to continue until benefit contribution deficit paid in full, South China Morning Post, April 18, 2013.
10. “Paradise papers’ expose tax evasion schemes of the global elite’. Deutsche Welle. 5 November 2017.

Poor Working Conditions In Nike’s Factories: Verbal Abuse of Workers

How would you feel if you knew that Nike factory workers in Indonesia are payed $1.60 a day for a 40 hour workweek? People who work in some of our favorite company’s factories are being mistreated everyday. One example of people being mistreated in Nike factories are the low wages. Another example is that workers are being abused by other workers and owners. Finally, people who work in Nike factories have unbelievably dangerous working conditions.

Low wages is a major problem in Nike factories. In the article NIKE CHALLENGES DOONESBURY STRIP, it shows examples of low wages in Nike factories. The article says “The strip that ran in the last week of May showed a worker saying ”I cannot even afford to eat” on a wage of $1.60 a day.” (NIKE CHALLENGES DOONESBURY STRIP 1). The article demonstrates that workers can barley survive with that little money. In the article Did Nike Say to `Just Do It’ – Brutally?, it shows an example of low wages in Nike factories. The article says “The 22-year-old said she and her fellow workers were paid 60 cents an hour to sit on hard, backless benches in hot, dust-filled rooms and were forbidden to use the bathroom more than once during a 12-hour shift.” (Selinger 1). This shows that the workers were payed very little while sitting in very uncomfortable seats and having to follow very strict rules. In the article Ex-worker accuses Nike of poor factory conditions, it shows an example of low wages in Nike factories. The article says “Ms. Sukaesih, speaking with the aid of an interpreter, said she was paid $1.20 a day for a 40-hour workweek in Indonesia.” (Bowers 1). This shows that the wages and hours in the factories are unbelievably bad. Low wages are a major problem in Nike factories.

Worker abuse is a major problem in Nike factories. In the article STUDY FINDS ABUSE IN NIKE FACTORIES, it demonstrates worker abuse in Nike factories. The article says ‘Workers reported that harsh words or verbal abuse are common in their factory environment and considered a normal part of these relationships,’ according to the study, pegging the frequency of verbal abuse being observed at 56.8 percent.” (Ramey 1) This quote shows that verbal abuse is used constantly in Nike factories. In the article Report: Workers sexually abused in Nike factories, it demonstrates worker abuse in Nike factories. The article says “Nearly 8 percent of workers reported receiving unwanted sexual comments and nearly 2.5 percent said they have received unwanted sexual touching, the report said.” (Report: Workers sexually abused in Nike factories 1). This quote shows that sexual abuse has been shown numerous of times in Nike factories but much less than verbal abuse. In the article Report: Workers sexually abused in Nike factories, it demonstrates worker abuse in Nike factories. The article says “Global Alliance said that workers’ reports of physical abuse from a line supervisor or manager, such as throwing objects, hitting, pushing, or shoving, ranged from a low of one percent in one factory to almost 14 percent in another.” (Report: Workers sexually abused in Nike factories 1). This quote shows that physical abuse is frequently shown in Nike factories but less than verbal abuse and more than sexual abuse. Worker abuse is a major problem in Nike factories.

Dangerous working conditions is a major problem in Nike factories. In the article STUDY FINDS ABUSE IN NIKE FACTORIES, it demonstrates dangerous working conditions. The article says “’If the workers collapse, they are asked to take rest at the factory and asked to continue working when they wake up,’ the study said.” (Ramey 1). The quote shows that the conditions are so bad that workers could have very bad health risks and the owners don’t care. All the owners care about is that they make enough clothing for the day. In the article COLA Letter Advocates for Regulation of Nike Factory Conditions, it demonstrates dangerous working conditions. The article says “In 2015, Nike denied the Worker Rights Consortium — an independent labor watchdog — access to its factory in Hansae, Vietnam, which produces university logo goods, according to COLA’s letter to administrators. This denial of access was the result of a worker walkout over labor abuses and poor working conditions — including pregnant women fainting due to extreme heat.” (COLA Letter Advocates for Regulation of Nike Factory Conditions 1). The quote shows that the conditions are so bad that workers are getting very dehydrated and the owners don’t care if someone gets hurt and needs help. In the article Did Nike Say to `Just Do It’ — Brutally?, it demonstrates dangerous working conditions. The article says “Pleites claims she and fellow workers endured brutal conditions making Nike shirts in a factory near San Salvador.” (Selinger 1). The quote shows that there are very dangerous working conditions while working in Nike factories. Dangerous working conditions is a major problem in Nike factories.

People who work in some of our favorite company’s factories are being mistreated everyday. One example of people being mistreated in Nike factories are the low wages. Another example is that workers are being abused by other workers and owners. Finally, people who work in Nike factories have unbelievably dangerous working conditions. I think we can fix this situation by stop buying their products and starting a blog about what’s really happening. Some people will listen and stop buying too. If the blog gets a lot of attention maybe the president will help to do something about it.

Works Cited

1. Bowers, Paige. ‘Ex-worker accuses Nike of poor factory conditions.’ Washington Times [Washington, DC], 16 July 1996. Reported in Gale OneFile: News
2. ‘COLA Letter Advocates for Regulation of Nike Factory Conditions.’ UWIRE Text. 5 Oct. 2016. Reported in Gale OneFile: News
3. ‘NIKE CHALLENGES DOONESBURY STRIP.’ Cincinnati Post [Cincinnati, OH], 6 June 1997. Reported in Gale OneFile: News
4. ‘Report: Workers sexually abused in Nike factories.’ UPI Archive: General News. 22 Feb. 2001. Reported in Gale OneFile: News
5. Ramey, Joanna. ‘STUDY FINDS ABUSE IN NIKE FACTORIES.’ WWD. 23 Feb. 2001. Reported in Gale OneFile: Popular Magazines
6. Selinger, Marc. ‘Did Nike Say to `Just Do It’ — Brutally?’ Insight on the News. 28 Dec. 1998. Reported in Gale OneFile: Popular Magazines

Nike Market Demand Analysis

The firm I have chosen is Nike so I decided to examine some key details in determining the market demand for my company. Some of the factors I will be using to show how Nike’s popularity affects their demand are populations and demographics, price of related goods, and taste. Nike’s mission is ‘to bring inspiration and innovation to every athlete in the world. If you have a body, you are an athlete’ (Nike.com). When looking at Nike’s target audience as well as consumers they are between the ages of 15 – 40 years old (marketrealist.com). The population of consumers consist of preteens, teens,young adults, athletes, and the everyday working person. Nike also targets 3 kinds of consumers which are women, runners, and young athletes (businessinsider.com. According to businessinsider.com the sale of woman running and training apparel has started to outpace the men’s business. Women in their 20s and 30s are largely driving the ‘athleisure trend’. This trend is primarily women wearing leggings to different occasions such as gym, brunch and to run errands.

Now that we understand what nikes population and demographic looks like we can begin to examine some of the other key factors. I will explain how income, price and taste tie into the market demand of the NIKE Brand. Nike pricing consideration plays a huge factor in their success. They utilize value based pricing and segmented pricing to determine their products cost. Value based pricing is when a company set their prices according to the value the customer places on the product. Nike is focused on bringing quality to their customers which means that the price will also reflect the quality of the product. This may increase the price of some products but because of how Nike promotes their products with the use of ads. Ads which claim that their products are the top of the range, this persuades consumers to still buy even if slightly higher price. Another pricing strategy used is segmented pricing which is simply adjusted pricing for their target audience. For example, the cost of shoe difference between kids versus mens size. Pricing is important because it directly affects the demand for the product. The higher the cost the lower the demand, but when the cost is reduced the demand will increase. Nike understands how to entice their consumers at any price point.

Income plays an important factor because that is the determining factor of how these consumers spend their money. The availability of funds will impact the demand of Nike. An increase in income means an increase in demand but also vice versa a decrease in income means demand also drops. Nikes popularity and also the use of professional athletes to promote their products keeps Nike in demand. The taste for NIke is high and people are willing to spend their money on it.

When looking at Nike over the years, we can see that they continue to increase sales. Nike is a global brand and they have become extremely popular. Footwear and apparel are their largest areas of growth. The demand for nike is rapidly growing and people are willing to spend regardless of the price. Nike has advertised their products as the top of line and the consumers have responded positively and embraced their mission.

Nike has the demand but now we must discuss the supply to cover the demands of the consumers. Nike has over 1000 locations worldwide which allows them to meet the demand of the consumers. In the US Nike has 384 retails and 750 internationally according to the SEC filings. The amounts of retails stores show how much of a demand Nike has which is also reflected in the supply needed.

Price elasticity of demand is the measure of change in the quantity demanded or purchased of a product based on its price change over time (Investopedia.com). Expressed mathematically, it is: Price Elasticity of Demand = % Change in Quantity Demanded/ % Change in Price (Investopedia.com). Price elasticity shows us the change in supply and demand when the price of a product changes. There are 2 ways to categorize the change in price. Some products are elastic which means change in price affects the demand for the product and some products are inelastic which means the change in price does not affect the demand for the product.

In regards to Nike footwear such as the Jordans or AirMax would be considered an inelastic product. The reason why is simple, regardless of the high price the demand for this product never changes. The popularity of Nikes are unmatched, over the years they have gained so much attraction with consumers. The advertising of Nike’s and also the endorsements by professional sports athletes have made them a very sought out product. Consumers wait on lines awaiting the release of a new pair of jordans that are quickly sold out upon release. A generic pair of nikes would most likely be an elastic product because the demand is not as strong and change in price also affects the demand. One thing that shows how consumers react to footwear such as Jordans is the act of buying and reselling. Consumers will purchase limited editions or popular shoes only to resell at a high marked up price. This causes some products to be very sought out because the demand is very high while the supply is low.

Nikes are still regarded as the most popular footwear even compared to its competitors. A pair of men’s or women’s Nike shoes can cost anywhere from around $60 to over $200 (usually limited editions or collaborations with high-end fashion designers) are priced typically around $400 (Snipesusa.com). While the price may be high the consumers still go out there to purchase and the demand remains high. Nike still outpace its competitors even at a higher cost.

Nikes are priced at the value the consumer places on the product and Nike understands the strength of its brand. The changing of price does not have an effect on the demand of Nike products. The market for Nike footwear is a growing business and is still on top of all the competitors. Over the years it has proven that it can withstand the test of time and consumers have shown their loyalty to the company.

References

1. https://www.investopedia.com/terms/p/priceelasticity.asp
2. https://www.investopedia.com/ask/answers/012915/what-difference-between-inelasticity-and-elasticity-demand.asp
3. https://www.businessinsider.com/nike-is-going-after-3-kinds-of-customers-2015-4
4. https://www.nike.com/help/a/nikeinc-mission
5. https://marketrealist.com/2019/10/nikes-target-markets-everything-you-need-to-know/#:~:text=Nike’s%20target%20market%20is%20largely,collaboration%20with%20Apple%20(AAPL)
6. https://www.snipesusa.com/nike.html#:~:text=A%20pair%20of%20men’s%20or,is%20dependent%20on%20the%20shoe.

Essay on Nike Social Responsibility

Nike is a well-known public limited liability company. This means that anyone can invest in Nike by buying shares meaning they will be sharing the risks of the company. With the investments of these shareholders, Nike can chase new projects and also pay off their debts. Nike’s main objective is to make profits so they can satisfy their shareholders. This massive shoe and apparel company was started by 2 men named Bill Bowerman and Phil Knight. Bill Bowerman was a coach and he was trying to find ways to improve the performance of his athletes and that is where the idea of shoe manufacturing came from. This was Phil’s idea, others did not believe in it but Bill did so they formed it calling it Blue Ribbon Sports. This company grew so much into the company we know as Nike today. As of October, Nike had a market capital of $115 billion and is still growing. As of today, almost 85% of the shares held by the company are held by institutions and these are the top holders:

1. The Vanguard Group holds a total of 103.5 million shares which is equivalent to 8.27% of the total shares.
2. Capital Research and Management holds a total of 79.3 million shares which is equivalent to 6.35% of the total shares.
3. SSGA Funds Management Co. holds a total of 59.3 million shares which is equivalent to 4.75% of the total shares.
4. Blackrock Advisors holds a total of 59 million shares which is equivalent to 4.7% of the total shares.
5. Wellington Mgmt. Holding a total of 28 million shares which is equivalent to 2.24% of the total shares.

Nike is a major sporting brand worldwide that produces a variety of products like clothing, shoes, accessories, sports gear and so much more. They are currently the best at what they do and they have attained brand loyalty from countless individuals because of the quality of their products. As of 2019, Nike had a total of 76700 individuals working for them worldwide and as of 2020 have a value of approximately $34.8 billion which has increased by $2 billion since 2019. Nike is also very successful because of their dominating marketing strategy, their adverts, and their research on their customers. Nike has also endorsed a lot of sports associations such as the NBA and also some colleges and major events like the Olympics. Nike also uses some of the most popular and top athletes in the world to advertise and increase their brand awareness and that is one of the major reasons they are at the top today. They use these athletes to advertise their products. Some of these popular athletes include Cristiano Ronaldo, Lebron James, Serena Williams and so much more. These individuals have millions of social media followers and posting themselves wearing the brand’s products will encourage others to buy and also increase brand awareness.

Nike maintains a program called Corporate Social Responsibility (CSR) which was formed to address the interests of Nike’s stakeholders. Nike influences its stakeholders and Nike’s stakeholders also influence them. The image of Nike and the sales performance of all their products are subject to the effects of the interest of the stakeholders.

A massive business like Nike has various stakeholders who influence the sales of its products. However, the company’s CSR only targets several top stakeholder groups. These are their stakeholders arranged in order of significance:

Customers: The customers are Nike’s top priority as a stakeholder group. The customers are important because it’s the company’s main source of revenue. These stakeholders expect top-quality products from Nike sold at reasonable prices. Because of this, Nike continues to supply top-quality products and offer them at prices reasonable to the customers which effectively satisfies the customers as their top priority stakeholder group and this leads to high profitability and an increase in sales.

Communities- Nike’s CSR identifies communities as a stakeholder group that has a significant influence on the company. Customers are more likely to buy products that have a positive impact on communities. The main interest of this stakeholder group is to develop communities. Nike has addressed this interest through the Nike foundation which is the company’s primary means of supporting the development of communities which means Nike has addressed the interests of this stakeholder group.

Employees- Nike’s CSR sees the employees as stakeholders who influence the effectiveness of the organization. The performance of the employees affects the performance of the business. The interests of these stakeholders include fair payment, career development opportunities, and a sense of purpose. These interests are addressed through Corporate Social Responsibility policies and programs that mainly focus on internal leadership growth, talent management through coaching and mentoring, and teamwork building. These efforts are expected to make Nike’s products top quality and more popular.

Government- Part of the company’s corporate social responsibility strategy is to identify the Government as a stakeholder group. This stakeholder group is important to Nike because they have a say or effect on how Nike operates in terms of permits, limits, and legal actions in specific markets for its products. The Government has a high interest in the legal and regulatory acquiescence, and also their contributions to tax revenue and community progress. Nike’s corporate social responsibility has addressed the interest in community growth through their programs. Nike has various policies and standards which ensure the compliance of the company in all areas. Therefore, Nike satisfies all the interests of the government as a stakeholder.

Interest groups- Nike’s corporate social responsibility addresses the interests of the interest groups. This stakeholder group affects Nike in terms of influencing the decisions of the government potentially and also in terms of customer perception regarding Nike’s products. Their interests include fair labor practices, business sustainability, and environmental conservation. These interests are addressed through Nike Foundation initiatives and also sponsorships of various related programs. Nike has corporate social responsibility policies that improve the management of labor and also environmental impact. Therefore, Nike satisfies the interests of interest groups as a stakeholder.