Nike Nature Of The Business Marketing Essay

Nike Incorporation is the worlds leading sporting goods manufacturer. The company produces the sports goods all-encompassing: clothing, footwear, sports equipment and so on.

The company headquartered in Beaverton, Oregon. Nike with its impressive performance impresses its founder; Bill Bowerman once said the sentence: “As long as you have a body, you are world athletes, and Nike will continue to develop grow.”

Before the company became Nike, the original name of the company is Blue Ribbon Sports on January 25, 1964. The company then officially became Nike Inc. on May 30, 1978.

Nike has been provided the best products to every athlete around the world. The language of movement is the Nike language. The company committed always to create every chance to show themselves after three years. Nike knows: The best products are only produced by the use of advanced technology. So, by the way, Nike put a lot of manpower and material resources for the research and development of new products.

 Years ago, a lot of high potential athletes and sports teams around the world have been sponsored by Nike. The Swoosh logo and trademarks of “Just Do It” are highly recognized.

Nike – Nature of the Business

NIKE, Inc. is a worldwide marketing which engaged in development and design for footwear, equipment and accessory products. It is approximately 18,000 retail accounts by sells its products in the United States. Nearly 200 countries are through a combination of independent distributors, licensees and subsidiaries. Although a few of the products are worn for leisure purposes, NIKE’s athletic footwear products are still in specific designed for athletic use.

All equipments for men, women and children have been designed and created by the company. Either is indoor or outdoor activities, NIKE have a good market shoes or clothes such as tennis, golf, football, volleyball, wrestling, aquatic activities, hiking and others. Active sports apparel like most of these categories are sold by NIKE, for athletically lifestyle inspired apparel.

Objective of the Nike

Nikes main objective is to build up all athletes of every different of level of ability to their potential with advance the products. Indeed, it is to create job chances for provide value in its shareholders apart from the competition.

Besides that, their aim also is to maintain the costs down which driven by the intense competition. By the way, a lot of other companies also operate these low-wage countries within the athletics industry according on cost reason. Because of difficulty due to less developed countries, their ability is easily moved to become economically dependent on the corporations.

Strategies of Nike

There are four main categories of strategies of Nike to continue develop growth in this along the years. They are financial perspective, customer perspective, internal perspective, and learning & growth perspective.

Financial Perspective

Growth strategy

Focus on Emerging Markets (i.e. BRIC)

Products in new niche activities

New customer segments

Productivity strategy

Increase Asset Utilization : increase employee by 5%

Reduce Operational Cost

Customer Perspective

Maintain Product Leadership

Provide high quality & innovative products

Improve Customer Relationship and Service

Launch 250-300 Nike retail outlets in next three years

Improve image

“Nike Community” for welfare manufacturing workers

Align incentives of workers

Internal Perspective

Follow “Cost Out” strategy

Reduce marketing spent

11% of revenue only, focus on local sport heroes

Integrate New Segments & Markets and their attributes with current processes like customer

Improve Innovation Cycle

With smarter and more intelligent customer feedback mechanisms through e-channels

Implement CSR

Expand its alliance with other non-profit organizations to work together

Learning & Growth Perspective

Retain and Train key employees

Ensure attrition rate is between 2-3%

Improve IT Assets

Enhance CRM, e-channel, social media platform

Invests 2-2.5% Rev in IT Systems

Create a customer centric culture

Executive team to provide a strong and visionary leadership

Targeting Market

Nike’s targeting market is for those who like the higher quality sporting goods, especially footwear. Therefore, Nike focuses on creating premium consumer experiences on product innovation, brand leadership and elevated retail presence.

Nike also target market for their shoes, clothes, and other accessories are males and females, especially among 18 and 35 years old. Nike Company has expanded and dominated in the international market.

Size of Nike

The size or range of the Nike Company is increases throughout the years. The total number of employees of Nike Company is about 38000 people around the world. In 2009, the company had a net income of around $1.49 billion. They have offices in 45 different countries. Besides that, the number of Nike stores globally is 700 around the world.

Types of products sold

Nike Company has a wide range of sports equipment. The first products that Nike produce is track running shoes.

Besides that, Nike also offers a range of shoes for sports like, tennis, golf, soccer, baseball, football, bicycling, volleyball, cheerleading, hiking and others. They manufacture casual clothes, running clothes, yoga clothes, tennis clothes (dresses and skirts), thongs, socks, caps, aquatic gear, duffel bags, sunglasses, skates, bats, gloves, women’s sport bras, ice skates, roller blades, roller skates, protective gear, hockey sticks, hockey jerseys and many more small accessories.

http://upload.wikimedia.org/wikipedia/commons/thumb/1/17/Zoom_elite_2.png/220px-Zoom_elite_2.png Nike Pro Core Compression

Nike brand, athletic shoes Nike brand, Tennis(Girls’ shorts)

Services

Nike Company has a great service which known as NIKEiD. It is a service that allowing customers to customize the products purchased from Nike. It must be through the online purchased.

Besides that, The NIKEiD studios give customers have a great personal experience to work with. For iPhone and iPod Touch was released from the NIKEiD App on the iTunes App Store on 14 October 2009 to allow users to search products.

Nike PhotoiD service is by taking picture or image with their mobile and sends to Nike so that new software designed will analyze the image, and then based on it designing a shoe. After that, an image of their desired shoe will be received by the customer. Lastly, they can choose to save the image or purchase the new design.

Strengths and weaknesses of Nike

Strengths

Weaknesses

Brand recognition

High product quality

Effective marketing strategy

Capacity of innovation

Strong distribution chain

Strong R&D

Strong customer relationship

Overseas manufacturing dependency

Decreasing United States market share

High product price compared to Adidas

Currency exposure

Medium retail presence

Competitors

Adidas is the major competitor to Nike Company. Adidas is about to launch a new innovative campaign praising the Team Spirit in sports. Any company that produces athletic footwear or athletic apparel is a competitor to Nike such as Puma, Reebok(now is owned by Adidas), Asics, Under Armour, and so on. However, according to graph below, Nike Company is the best sells compete with others.

http://cstl.syr.edu/fipse/TabBar/BldCirc/circlgif/fig17.gif

Financial Model of Nike

Since year 1997, Nike Company’s revenues had plateaued at around $9 billion.

Net income had fallen from almost $800 million to &580 million. However, market share in US athletic shoes had fallen from 48%, in 1997, to 42% in year 2000. It adverse effect of a strong dollar had negatively affected revenue.

The management is concerned about the top-line growth and operating performance. To boost revenue, the company would develop more athletic-shoe products in the mod-priced segment- a segment that Nike had overlooked on the recent years.

The company has also planned to push its apparel line. The company has planned to exert more effort on the expense control. Long term revenue growth target is 8%-10%. Earnings growth target is 15%.