Print Email Download Reference This Send to Kindle Reddit This
submit to reddit

Business Strategy and SWOT analysis of nike

Executive Summary.

Nike is a One of the leading company in the world which generally activated in design, development and global market with high quality of equipment, footwear and accessory products. Nike is one the biggest seller of athletic footwear and apparel in the world. The Nike is got the best position in the market to go with the approach of athletic market. The company is excavate into any niche in relates with sports market as well as technical breakthroughs, retailing, management of sports and sports promotions. Nike is now going into the particular market of the Pakistan. This is the best time for Nike to introduce its women’s footwear, apparel and equipment for the women’s of Pakistan because the women’s are getting freedom in Pakistan. Pakistan is already one of the biggest supplier for the Nike’s soccer. History of Nike’s.

In 1962, two people from the University of Oregon created a undersized company with the name of Blue Ribbon.In the 1972, the company transformed his name and became in to the market with the name of Nike. In the current situation, Nike owns amenities in Oregon, Tennessee, Netherlands and the North Carolina. It also working in leased services for 15 Nike-towns, more than 80 Nike Factory Stores, 2 NIKE goddess boutiques and more than 100 sales and administrative offices. There are just about 23,000 people engaged by the Nike, wide-reaching. The company's first year sales did not cross $ 10,000 however, its present revenues exceed well over$10billion.

Nike research lab is frequently pursuing modernization in the field of sports. The research work in the lab is circulated into three categories including biomechanics, physiology and sensory/perceptual attributes. The researches main purpose is to focuses on differentiating factors like geography, sexual category, age and skill level.

Products of Nike can largely be scattered into two categories as footwear and equipment. The footwear has been sub characterized into various product lines including sports culture, running, basketball and soccer. Nike is doing their business in a very customer slanting market. This means that the requirement for the Nike's goods seriously depends on the attractiveness of the different fitness actions. The company adjusts incessantly their product mix in direct to meet demands. It manages its business cautiously, leading in hostile marketing styles and pioneering products.

Nike Mission statement.

“our mission is to bring inspiration and and innovation to every athlete in the world”

“if u have body, u are an athlete”

(My strategic plan,2008)

Nike as Innovative Company.

According to (S. Parkash Sethi,2003) Nike is one of the highly enterprunual and innovative company that is running on more than one ways it took all the relevancy and utilitarian in all purposes its aims to one type fits all Nike has the high tech and high quality footwear and athletic sports equipment for all seasons.

Business Plan.

Pakistan is the most passionate country in the world in terms of sports. It is the time for Nike to introduce his footwear and apparel for women’s because women’s of the Pakistan are now participating shoulder to shoulder with men in all fields of life. Most important challenges confronted women in Pakistan in the start of 1990s: rousingly

practical literacy, attainment access to service opportunities at all levels in the

economic, promoting revolutionize in the sensitivity of women's roles and status, and

getting hold of a public vote both inside and outside of the political process. Kiran khan and Robab Naz are considering role module for Pakistani women’s. After the getting ranking in international ranking now Pakistani women’s cricket is also very popular in the Pakistan.

SWOT analysis.

According to (Bohim,2008) Examining a company internal and external environmental is essential in the process of strategic planning the swot analysis which includes the analysis strength , weakness, opportunities and threats investigates both internal and external as well as positive and negative factors of a corporation on the basis of swot analysis a marketing strategy can be deverlped using corporate strengths as well as avoiding corporate weaknesses to enable a company to benefits from future opportunities with regards of future risk.

Strengths

Weaknesses

Brand Name

Dependent on footwear sale.

Innovation.

Don’t have Nike’s own retailers.

Famous Spokespersons.

Doesn’t able to capture the local market like international market.

Gradually growth

Strong Research and development department.

Opportunities

Threats

Jumped into recycling.

Currency fluctuation

Sunglasses and jewellery

By the competitors alternative brands

Maintaing e-co friendly envirement

Companies financial status

Nikes Company Situation Analysis.

Critical success factors

Waight

Nike

Under-Armour

Addida-Rebok

Quality

0.50

10=5.0

10=5.0

10=5.0

Markiting

0.25

10=2.5

08=2.0

08=2.5

Price

0.25

09=2.5

08=2.0

09=2.5

1.00

09.75

09.00

09.25

(David C Kimball, etc ,2009)

Market Analysis.

Market Segmentation.

“Market Segmentation is the process of identifying different group of users with in a market who could possibly be targeted with a separate products or marketing programs.”(Michael j croft n.d )

Market Size.

“Pakistan with population of over 140 million has a demand of 220 million pairs of shoes annually.”

(Daily times, 2003)

Pakistan have the population of 140 million and the Women’s in that are 47.5% of the total.

Location.

Nike’s targeted location is the Pakistani market particularly women’s markets so they need to design the product according to the needs and of the Pakistani women’s.

Gender.

Nike’s targeted gender are the women’s in the Pakistan that are the 47.5% of the total population that is the niche market for the Nike’s and the Pakistani women’s are not very much use to of exercise so they need to be very focused.

Age Group.

Nike’s targeted customers are from all the group fellows. The products must be varied from every group the mostly used customers are the teenagers between 13 to 25.

Religion.

In Pakistan the majority of the Muslims and the other religions like Christians and Hindus are also have the customers in Pakistan. So the company needs to be care full the norms and values of the religion.

Buying Power.

The economy of the Pakistan is not so strong so the company needs to set their prices at that level where majority of people are willing to accept that product.

Education.

The education level is not fully up to standard but now a day’s Pakistan sloly and gradually going towards the bitterness’ and people are now able to under to understand the importance of health and safety.

Cultural Influence and Business.

“Culture is the part of human action that is socially as opposed to gentacally transmitted. It comprises the idea through which we perceive and interpret the world, symbols we use to communicate thsese idieas, and institution which enable individuals to become socialised and satisfy their needs”(David Needle 1994 )

The culture of the Pakistan is very rich and the company needs to look at the culture of Pakistan where women’s are not mostly allowed to wear tide dress and so the company needs to understand the pros and norms of the particular culture and design the product according to the needs of that culture.

PEST Analysis.

http://www.learnmarketing.net/pestmarketing.jpg

(Source,; website)

According to (Management Bluffers 2000) Now a day’s environmental is changing day by day and its reached there where it wasn’t before constantly changing the environmental make mangers job is so tough now a days. That’s why the PEST analysis is useful and simple tool for the manager where they can track the environmental changes impacts on the business it includes the social, Political , Economical ,and technological. It is difficult for others to resist comparison with (a) an inept user and (b) vermin to be eliminated.

Political.

“Countries have both market and non-market environment. The market environment involves the interaction between households( or individuals ) and companies to allocate resources, free from governmental ownership or control. The non-market government agencies and government owned business ).(Johan D,Daniel , lee 1998)

According to the current political situation of the Pakistan is trying to stable the economy of the country and if Nike’s introduce new products into the market the market condition will be more better because the Nike’s has the brand name in the footwear industry.

Economical.

“Economics factors are affect the purchasing power of potential customer and firms cost of capital”(John William, Curtis,2006)

Nike’s needs to consider the economic factor as a main role in Pakistan. During the year of 2008 Pak rupee value is decreased and Pakistan is facing the Bank crisis as well so company needs to have a very strong capital to face these situation. The company needs to consider the following steps.

Current economic system in the Pakistan.

Exchange rate and stability.

Business cycle.

Economic rate of growth

Rate of unemployment

Rate of Inflation.

Social Factor.

Social factors includes the demography of the people. How the people behave to towards the products and What are the norms and value of respective countries. In Pakistan women’s are not allowed to go out for exercise so company needs to give the awareness and provide the facilities to the women’s of Pakistan.

Technological Factor.

According to blab bulb is needs to be consider

New purchasing mechanism

New production technology

New distribution mechanism

New method of working

Opportunities for new products to sell

The Pakistan is developing country so the trend of online shopping is not so much popular in Pakistan still people go to the market for shopping so and distribution method is also same like people would like to by through suppliers chain.

Competitors.

“No firm can exists in vacuum”(Lay young Man,1998)

It is really very important for the company to know who are their potential competitors and what the strategies they are using to capture the market as the CEO Philip kotler says a quite that” business is a war without bullets”. Nike’s main competitors are in the Pakistan market are

Addidas

Puma

Reebok

And local Firms

http://www.psfk.com/wp-content/uploads/HLIC/1ac79b884a0c8da1796d12e024fce542.jpg

Although Nike is one of the biggest company in the world in soccer and footwear with a high brand name but its rival company Addidas giving really very tough time in china addidas take over china with 60% shares and Nikes is 2% behind the addidas but in Pakistan culture people are mostly brand oriented and Nike is already working in soccer industry in Pakistan so Nike has competitive advantage that Nike is contributing in the economy of the Pakistan.

To introduce the new product into the market the company needs to analyse the the porter five forces as well to compete with rivals the company needs to understand and make a good strategy for these forces.

Marketing Mix .

“ The set of tools that management can use to influence sales”(Philip Kotler)

Every targeted market needs to be a exceptional marketing mix to convince the needs of the beleaguered consumer to achieve the firms goal the strategy must be followed by the each of the every single 4p and Because these four ps are the basics of the strategies that to achieve the firms goals. Nike also must follows this strategy to enter into the Market of Pakistan.

Product.

Nike’s Product in respect of Pakistan market is the women’s footwear and apparel Nike’s needs to design the product as the demand of the market in Pakistan and needs to keep in mind the cultural barriers that are faced by the women’s of Pakistan.

Price.

According to(Stafanie Hoffmen 2005) Price is a potential marketing mix because it has the direct impact on the consumer , economy and the company as well. The price is major indicator about the quality of the product. Due to depressed economy and like other developing countries people of Pakistan buying power is not so strong 98% people are living average level life so Nike’s needs to set that price for the products that are acceptable by the majority of the population .

Place or Distribution.

Place or distribution strategies are concern with “making product available when and where customer want them”(Charlas W lamb,2009 )

In Pakistan the areas of capturing where the more output the company get is the main cities of Pakistan like Karachi, Lahore, Islamabad. These are the main markets for the Nike’s to be captured. And needs to be the access able for the customers.

Promotion.

“Promotion or Marketing communication is the component of marketing mix used to inform and persuade the targeted audience to buy or use and organization products promotion is the element in the marketing mix that communicates the key message to targeted audience”(Richard barker, Gorge,nd )

In Pakistan Nike’s has the best opportunity for promotion to use the Pakistani women’s hero’s like Robab and Kiran khan and the Pakistani women’s cricket team players to promote and products and the brand name in the country. The best method of advertising and promotion in Pakistan is electronic media.

Financial data.

NIKE, Inc.

 

CONSOLIDATED FINANCIAL STATEMENTS

 

FOR THE PERIOD ENDED MAY 31, 2010

 

(In millions, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

QUARTER ENDED

 

YEAR TO DATE ENDED

 

INCOME STATEMENT

31/05/2010

31/05/2009

% Chg

31/05/2010

31/05/2009

% Chg

Revenues

$5,076.9

$4,713.0

8%

$19,014.0

$19,176.1

-1%

Cost of sales

2,670.7

2,669.2

0%

10,213.6

10,571.7

-3%

Gross margin

2,406.2

2,043.8

18%

8,800.4

8,604.4

2%

 

47.4%

43.4%

 

46.3%

44.9%

 

 

 

 

 

 

 

 

Selling and administrative expense

1,737.9

1,394.3

25%

6,326.4

6,149.6

3%

 

34.2%

29.6%

 

33.3%

32.1%

 

 

 

 

 

 

 

 

Restructuring Charges

0.0

195.0

-100%

0.0

195.0

-100%

Goodwill Impairment

0.0

0.0

0%

0.0

199.3

-100%

Intangible and other asset impairment

0.0

0.0

0%

0.0

202.0

-100%

Other (income), net

(17.0)

(34.4)

-51%

(49.2)

(88.5)

-44%

Interest expense (income), net

2.5

2.6

-4%

6.3

(9.5)

 

 

 

 

 

 

 

Income before income taxes

682.8

486.3

40%

2,516.9

1,956.5

29%

 

 

 

 

 

 

 

Income taxes

160.9

144.9

11%

610.2

469.8

30%

 

23.6%

29.8%

 

24.2%

24.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

$521.9

$341.4

53%

$1,906.7

$1,486.7

28%

 

 

 

 

 

 

 

Diluted EPS

$1.06

$0.70

51%

$3.86

$3.03

27%

 

 

 

 

 

 

 

Basic EPS

$1.08

$0.70

54%

$3.93

$3.07

28%

 

 

 

 

 

 

Weighted Average Common Shares Outstanding:

 

 

 

 

 

Diluted

493.9

489.4

 

493.9

490.7

 

Basic

484.4

484.8

 

485.5

484.9

 

Dividends declared

$0.27

$0.25

 

$1.06

$0.98

 

(Source,;website)

Balance Sheet of Nike.

 

 

 

 

NIKE, Inc.

 

 

 

 

 

 

 

BALANCE SHEET

31/05/2010

31/05/2009

 

 

(In millions)

ASSETS

 

 

 

Current assets:

 

 

 

Cash and equivalents

$3,079.1

$2,291.1

 

Short-term investments

2,066.8

1,164.0

 

Accounts receivable, net

2,649.8

2,883.9

 

Inventories

2,040.8

2,357.0

 

Deferred income taxes

248.8

272.4

 

Prepaid expenses and other current assets

873.9

765.6

 

Total current assets

10,959.2

9,734.0

 

 

 

 

 

Property, plant and equipment

4,389.8

4,255.7

 

Less accumulated depreciation

2,457.9

2,298.0

 

Property, plant and equipment, net

1,931.9

1,957.7

 

 

 

 

 

Identifiable intangible assets, net

467.0

467.4

 

Goodwill

187.6

193.5

 

Deferred income taxes and other assets

873.6

897.0

 

Total assets

$14,419.3

$13,249.6

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

Current liabilities:

 

 

 

Current portion of long-term debt

$7.4

$32.0

 

Notes payable

138.6

342.9

 

Accounts payable

1,254.5

1,031.9

 

Accrued liabilities

1,904.4

1,783.9

 

Income taxes payable

59.3

86.3

 

Total current liabilities

3,364.2

3,277.0

 

 

 

 

 

Long-term debt

445.8

437.2

 

Deferred income taxes and other liabilities

855.3

842.0

 

Redeemable preferred stock

0.3

0.3

 

Shareholders' equity

9,753.7

8,693.1

 

Total liabilities and shareholders' equity

$14,419.3

$13,249.6

 

(source,; website)

Recommendations.

In current situation Pakistan market is niche for women footwear and apparel. According to the research. It is recommended that Nike’s needs a very strong and tactical strategy for Pakistan because in Pakistan women’s are getting rights but still that is a conservative country. Pakistan is an Islamic state where women’s are not allowed to wear tides and bikinis and also in Pakistan only in big cities there are separate exercise clubs for the women’s so Nike’s also needs to develop health clubs and take a part in spreading the awareness of health issues. Pakistan market is good market but more than 80% population is under the poverty level so price needs to consider most in this.

Print Email Download Reference This Send to Kindle Reddit This

Share This Essay

To share this essay on Reddit, Facebook, Twitter, or Google+ just click on the buttons below:

Request Removal

If you are the original writer of this essay and no longer wish to have the essay published on the UK Essays website then please click on the link below to request removal:

Request the removal of this essay.


More from UK Essays

Doing your resits? We can help!