While the company may be underdeveloped in countries, the opportunity has not been preempted. As a result, there is a lot of collaboration and consensus decision-making. 1.05 Retrieved on 26th September’08 from . • Leads to higher and more consistent product quality. 7-Year Leading companies are focusing on spreading their products across the This is not an example of the work produced by our Essay Writing Service. … The Group sold Tretorn Sports Sales Ltd on 1 July, 2005. Continuing to invest in the core business through innovation and demand creation. There are two decisions that are considered important in this measure. The SWOT analysis of Nike discusses the strengths, weaknesses, opportunities and threats of the leading footwear brand - Nike. During the year the Group disposed Salomon business segment. It sells its products to retail accounts, through NIKE-owned retail, including stores and Internet sales, and through a mix of independent distributors and licensees, in over 170 countries around the world. Nike is the market leader in the athletic footwear industry with a 31 percent market … Ownership: Thus it needs to develop a wide range of distribution channel which can support its retail business. It is a seller of athletic footwear and athletic apparel in the world. Served market share: served market share of a company can be defined as the sales of the company’s product, which is expressed in terms of percentage of the total sales. 4. The Group’s activities are carried out through three divisions: Footwear, Apparel and Accessories. (Increasing market share), The marketing plan of the company is that it is making sure that the consumers and the sportswear market are aware of the existence of Nike and to do that Nike has adopted marketing mix. Nike is known as the market leader in the athletic footwear market because competitive advantage is there and dominant strategic plan when compared to competitors. 2. The price flexibility of Nike is high due to the large number of spare parts on the market, such as Reebok- Adidas , Puma and so on. -1.11% Nike has a high-end consumer market with high disposable income asking for better service and satisfaction as their target market. Nike also owned Bauer Hockey (later renamed Nike Bauer) between 1995 and 2008. ROE: Nike’s gains this morning come after its shares rose more than 3% yesterday amid a broad market rally. It is important for companies like Nike to segment their markets. Nike Market Cap Nike Inc is regarded fourth in market capitalization category among related companies. Net Income margin has also been improving over the years, While the core brands have shown good growth, the subsidiaries, through various acquisitions, have been responsible for a quarter of the total growth in the past three years and are expected to be the future drivers of growth. We use cookies to give you the best experience possible. Branded vendors have traditionally operated factory outlets as a means to manage excess inventory. The NIKE Brand, which represents over 90% of NIKE, Inc. Consumers like Nike’s innovative new products and are willing to pay a higher price than its competitors. Nike is a multi-national organization. 1. In the last two years, Nike has invested $100 million worldwide in community-based sports initiatives. The SWOT analysis is used by the company so that the management of the company can see the impact it has on each possible strategic opportunity. Target market is a process where the company evaluates all the market segments and then chooses one or more segments which the company thinks is profitable, and then it enters that market segment. Nike struggled in Europe but improved sales in the fourth quarter as a result of the world cup. However, as the company gains critical mass in that particular area of the world, Nike works to go in directly and eliminate the distributor level. -0.6964 8.50% Exchange rates too affected the International sales growth negatively. 5.26% 2000: The National Football League declines to renew its exclusive apparel licensing arrangement with Nike. In the US, economic growth rates have tapered down, and the trade war could affect its China market. 1976: The popularity of jogging increases revenue to $14 million. But mostly the Nike … And another opportunity for Nike is that to develop its own sportswear, sunglasses, jewellery and other accessories. number: 206095338. Strong brand image 2. Company Registration No: 4964706. The analysis shows that Nike strongly depends on the supply and demand conditions, and in particular, the strategies are made in line with market needs. Nike Air Citius+ 2 running shoes. Beta Adidas and Reebok will now have a larger arsenal of athlete endorsers, more influence on the supply chain, and a chance to secure more shelf space. This is also a part of its pricing decisions. PESTLE Analysis of Nike analyses the brand on its business tactics. Nike has made other efforts to be energy efficient; its office in the Netherlands is the most energy efficient office in that country by 35%. Revenue: Ke (2018, Apr 01). Nike had a revenue excess of $16 billion in 2007. The company’s strategy plan has helped Nike to gain a competitive edge over it competitors like for example, Adidas and Reebok etc. Analyst Confidence in Stock: According to press releases issued by Bloomberg, analysts from Bank of America, CSFB, and Wells Fargo recently called Nike a “buy.” After a lackluster financial year, this news could potentially affect stock price in a positive way. Nike will focus on growing its brands in underdeveloped countries such as China, India, Thailand, Indonesia, Mexico, and Brazil. Another strength of Nike is that it is a global brand and its logo i.e. The company has taken the name of Nike from the Greek goddess of victory. Nike has various products as well as brands that cater to different market segments which varies according to requirement of particular segments as well as individuals. On a currency-neutral basis, NIKE Brand revenues were flat as higher revenues in EMEA and Greater China were offset by declines in APLA and North America . $715 M U.S. is the largest market for athletic footwear, but is also the most mature market along with Western Europe, and future growth is going to be led by the under-penetrated emerging markets, Central & Eastern Europe. Nike is extensively involved in Promotion and advertising. Performance and reliability of shoes, apparel, and equipment, new product development, price, product identity through marketing and promotion, and customer support and service are important aspects of competition in the athletic footwear, apparel, and equipment industry. It designs and sells shoes for a variety of sports including baseball, golf, cheerleading, volleyball, tennis and football. Reebok now has merchandising contracts with the National Football League and the National Hockey League in the United States, and was purchased in 2006 by adidas. It is distributed in over 160 countries around the world. “2008: footwear data from Sporting Goods Intelligence”. The company gained top spot in the global athletic apparel market & European footwear market with the merger, which was formerly held by Nike. In our case the major competitors of Nike are Adidas and Reebok. Registered office: Venture House, Cross Street, Arnold, Nottingham, Nottinghamshire, NG5 7PJ. Consumers will pay more money for a product they think is manufactured well. Nike has been developing its marketing mix consisting of the four P’s i.e. Internationally, Nike operates 21 distribution centers in Europe, Asia, Australia, Latin America, Africa and Canada. Discover new investment ideas by accessing unbiased, in-depth investment research The beta of 0.51 implies lower volatility of the stock with respect to the S&P 500. Consumers are well informed and are demanding more value for their products at all price points. Nike is the world’s no. Financially, Nike’s overall results have improved over the years through both organic (core brands) and inorganic growth (acquisitions), supply chain initiatives and increased penetration in Europe and Asia. At this stage of planning, decisions are made in order to indicate the direction of the marketing mix not to mention the way products are going to be perceived in the market The Group has operations in Europe, North America, Asia and Latin America. The slogan for Nike is “Just Do It”. Retrieved on 26th September’08 from, . Copyright © 2003 - 2020 - UKEssays is a trading name of All Answers Ltd, a company registered in England and Wales. As we know that Nike produces its products at a reasonable and affordable price so that many people around the world can buy their products. As of 2020, there are several marketing … 5-Year 3. 3. Market segmentation means dividing the market into distinctive groups of customers and buyers. Requires stronger brand profiling and more investment in product characteristics by companies. It also markets footwear designed for aquatic activities, baseball, cheerleading, football, golf, lacrosse, outdoor activities, skateboarding, tennis, volleyball, walking, wrestling, and other athletic and recreational uses. In 1980 the company had a 50% market share only in the United States shoe market and then the company decided to go public and it did by the end of that 1980’s December. It there is an increase in the company’s relative market share it means that the company is moving ahead from its leading competitor and in our case, it would be Reebok. 56 49. Nike’s weaknesses are that the company has a lot of products which are diversified and that the company is still heavily dependent upon it footwear. Increased bargaining power: it means that the leader in the industry has the most power when it comes to negotiating with the suppliers and channel members. Thankfully, Nike has several opportunities for growin… Registered Data Controller No: Z1821391. MARKETING ANALYSIS OF NIKE • S Mahesh • Sachin Agarwal • Sahil Handa • Saloni Chaudhary • Sanchit Juneja • Manoj Kumar • Shriram Khandelwal 2. By continuing we’ll assume you’re on board with our cookie policy. PESTEL Analysis of Nike: The international brands face several kinds of pressures while operating in a highly competitive market. Nike’s sales force is the most professional and has the greatest knowledge of the products compared to its competitors. The company was founded in 1962 as Blue Ribbon Sports by Bill Bowerman and Philip Knight, and officially became Nike, Inc. in 1978. 2. Nike has more than 500 locations around the world and offices located in 45 countries outside the United States. Trade Tensions – Nike depends on different markets across the world evidenced by the recent increase in its stocks rallied by an increase in sales in China. The overall services and look of the company is targeted in such a way that would match the changing tastes and preferences of the customers of Nike worldwide. Footwear and apparel industries are relatively mature and investors perceive few pure growth plays, and expectations for margins tend to drive stock valuations more than sales growth. The reasons that the companies want to increase their market share is based on the following: -. Shares Outstanding: The “Just-do-it” campaign of Nike has been since nearly 3 decades and has got them worldwide fame. Valuation Estimates Thus Nike has some of the following distribution outlets .Retail: Nike sells through its retail stores, brand outlets, exclusive showrooms as well as hyper markets in metropolitan areas. Rapid innovation processes 3. (Kotler, 1997), As we know that companies do not reveal how that company is doing regarding its major competitors. -0.17% 3.26 As the company approaches this objective they should increase and add new served markets as well. Nike Valuation Module provides a unique way to ballpark how much the company is worth today. (Cravens, 2000), The mission statement of Nike is to bring inspiration and innovation to all the athletes all over the world. Nike’s strengths are that the company is extremely competitive; the CEO of the company is often heard saying that business is a war without any bullets. Nike also sponsors various events such as tour de France, FIFA World Cup, Delhi Marathon and various others. Also, Nike is in the industry which is by and large affected by the product life cycle which means that sometimes it’s very difficult for the company to respond to the fad timely. The report will be for the fiscal Quarter ending Nov 2020. According to Zacks Investment Research, based on 13 … Nike also provides with discounts during various festive seasons on its products like Diwali in India. Yet it has a tendency of changing the designs and patterns after a particular period or quantity. • Branding results in more product variety and choice for consumers. As of 2008, it employed over 30,000 people world-wide. Apparel division includes track suits, football strips and similar sportswear. Marketing Mix (n.d.), Retrieved on 26th September’08 from < www.netmba.com/marketing/mix/>, Nike.com – official site (n.d.). VAT Registration No: 842417633. If a firm has one type of stock its market capitalization will be the current market share price multiplied by the number of shares. Nike (NKE) faces some challenges in its target markets. Threats can be described as the seriousness and profitability occurrence of the company. It is positioned as a premium performance brand. 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