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Nike.

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Punam Sisodiya

on 6 March 2014

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Transcript of Nike.

''TO BRING INSPIRATION AND INNOVATION TO EVERY ATHLETE IN THE WORLD''.
(Nike, 2013)
Bill Bourman & Phil Knight.
-1964.
-160 countries.
-Owns 7 brands
including converse.
-Headquarters in the
US.
-6 continents.
-40,000+ employees.

SUCCESS.
-North America & Western Europe is Nikes largest markets.
-Revenue: 25.3 billion ($).
-Net income: 696 million ($).


EVERYONE IS AND ATHLETE.
-'If you have a body, you are an athlete'.
-Sports Fanatic OR Fashion trend= Lifestyle statement
-Footwear: 55.6% of total sales, Nike Air collection and Jordan brand being the most popular.
-High level of customer service and communication within stores with upbeat, knowledgeable and inspiring employees.
Where are they now
GLOBAL REACH – NIKES INTERNATIONAL DOMINATION

STATISTICS:
-756 STORES WORLDWIDE :
363 STORES IN USA,
393 INTERNATIONALLY.
-45 OFFICES IN COUNTRIES OUTSIDE THE US.
-FACTORIES/MANUFACTURING : ASIA, INDONESIA, CHINA, TAIWAN, INDIA, THAILAND, VIETNAM, PAKISTAN, PHILLIPINES AND MALAYSIA.
-NIKE REDREW ITS WORLD MAP GROWING FROM 4 REGIONS TO 6, WITH LEADERS IN EACH.

COMPARITIVE COMPETITIVE PICTURE – ADIDAS INTERNATIONAL PRESENCE

DIRECT COMPETITION.
- ADIDAS HAS POSITIONED ITSELF AS A FASHION BRAND OFFERING MORE THAN SPORTSWEAR TO ITS CONSUMER WITH ITS COLLABORATION WITH JEREMY SCOTT.
- CONSUMERS AT ADIDAS ALIKE NIKE ARE NOW MORE FASHION CONSCIOUS AS SPORTSWEAR TAKES OFF AS A TREND.



INTERNATIONALIZATION
BARRIERS TO ENTRY
-High barriers to entry.
MODES OF ENTRY
China
-Subcontracting:
-Undersold competition by using outsourcing when competition was manufacturing in Germany and the U.S, the more costly option.
-Sponsoring athletes.
- Could have been a risk if China took advantage of the technology given to the country.

India
-Licensing agreement with SIE.
-Royalty fee's.(% of net sales payed to nike).
- Lowered the risk of being exposed to political and economic instability, lowered demand for resources.
-Adapting to local trends.
-The mark of the 'Swoosh'.

Middle East
-Licensing agreement between shooting starts company and Nordic to represent their football clubs which created strong local presence as the club had positioned itself in a key market.

Europe
-Nikes agreement to kit England football team this year till 2018 taking over Umbro.
STRATEGY
Vertical linkage & outsourcing
-Competitive advantage with Design, development & marketing rather than manufacture.
-Outsourced to China, Brazil & Taiwan
-9000 people and indirectly employ 75000 people.
-Market: High fashion statement & a superior athletic brand.
-1998 Nike began to craft new lines of shoes for new market segments, u sing market development and product profiliation.
-Research & development.
-Nike produced new lines of shoes through market development and product profiliation.
-Porters generic strategies: differentiation model, consumer is willing to pay premium price.


INTERNATIONALIZING
-Motives: market saturation in the United States.
-A glocal approach 'think globally, act locally'.
Serving local expectations.
-Helfferich (1997) 5 parameters of international retailing.
Serves over 2 continents.
Spread over 2 cultural zones.
Mixed cultural orientation.
Minimal adaptation.
Serves homogenous markets.
Centralized management.

-Salmon & Tordjman (1989).
-Theory of Standardizing the marketing mix, whereas Nike adjusts theirs moderately.
-Design & quality of products must be kept at high standards in relation of Nikes brand reputation.
-Centralization.



-The Nike Air Bakin caused outrage in 1997 from the muslim community.
GROWTH
-Nikes obvious growth comes from its observation, interview and documentation of consumers and changes in global trends.
-First model: Market penetration.
- Second model: Market development & product proliferation created diversity for Nike and managed to attract a wider market.
-Treadgold 'World Powers'.

GOING FORWARD
WHERE CAN NIKE
NEXT EXPAND?
IS THERE CONSUMER
DEMAND?
FACTORS TO CONSIDER & ISSUES FACING NIKE .
-FIERCE COMPETITION: THE GROWTH OF ADIDAS.

- IMITATION PRODUCTS:
COPIES THAT ARE AN ACCESSIBLE PRICE TO MASS MARKET.

-RECESSION –
CONSUMERS SPENDING LESS
BUYING DECISIONS
WAGES SLASHED.

-TRENDS FADING OUT.
2012 SAW THE RISE OF SPORTSWEAR.
CONSUMERS BUYING INTO NIKE TRAINERS.

-TECHNOLOGY –
INNOVATION IN TECHNOLOGY
CHASING CURRENT TOOLS.

-GLOBAL EVENTS –
NATURAL DISASTERS IN MANUFACTURING COMPANIES OLYMPICS/SPORTING EVENTS.

-SATURATION OF MARKET
BRAZIL
CHINA
LATIN AMERICA-
- ECONOMIC PROSPERITY.
- GLOBAL EVENTS WORLD CUP 2014 BRAZIL.
- HEALTHY LIFESTYLE.
- EMBRACING TECHNOLOGIES/E-TAILING.
ASIA PACIFIC -CHINA.
- RECOVERY AFTER REVENUE DROPS 9% in 2013.
- OFFERING DISCOUNTS.
- NIKE IS RE-DESIGNING ITSELF TO SUIT CHINESE PREFERENCES
- WEALTHY CONSUMER BASE..
- INNOVATIVE/ RAPID/EFFICIENT MANUFACTURERS.
STRATEGIC RECOMMENDATIONS
REPUTATION – CORPORATE SOCIAL RESPONSIBILITY
1)
EXTERNAL MONITORING OF COMPANY’S FACTORIES.
TO MEASURE HOW MUCH THEY ARE STICKING TO CODE OF CONDUCT.DEMONSTRATING HOW THEY HAVE MADE CHANGES TO PREVENT NEGATIVE PRESS.
2)
ENFORCE THERE ‘RE-USE A SHOE’ RECYCLING SCHEME
(MAY 2013) GLOBALLYTO REDUCE CLOTHING WASTE AND LANDFILL ISSUES.

- PRODUCT/INNOVATION/COLLABORATIONS
1)
COLLABORATIONS WITH A FASHION DESIGNER.
SO THE BRAND CAN REPOSITION ITSELF/ MEETING DEMANDS FOR THE FASHION HUNGRY/FASHION TRENDS.COMPETE WITH JEREMY SCOTT’S ADIDAS LINE
2)
INNOVATION IN PRODUCT
(SHOES FOR PREGNANT WOMEN/ELDERLY/DISABILITIES).
3)
DRAW A FOCUS ON FEMALE ATHLETES.
REFERENCES
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Accessed on 12th November 2013,
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STRENGTHS
WEAKNESSES
- Nike Inc was the largest apparel company in the world in 2012, with a global value share of 2.1% (euromonitor).

- Nike protects the value of its brands with a mixture of constant product innovation, tight retail control and top level sports star endorsement.

-Nike is one of the most visible global apparel brands, thanks to sponsorships links that include FC Barcelona, the team uniforms for the NFL from 2012, and tennis stars Roger Federer and Rafael Nadal.
- Nike has a strong history of growth by acquisition e.g. Umbro.

-Although The company’s Nike brand is its core marketing tool and main earner as it has massive levels of consumer awareness and brand equity
-Nike Inc, ‘Locations’ Online Available at: http://nikeinc.com/pages/locations
Accessed on 12/11/13
-Nike, Store Locator, Online Available at: http://www.nike.com/us/en_us/sl/store-locator/ Accessed on 12/11/13
-‘Large Scale Maps’ World Map, Connexions, Online Available at http://cnx.org/content/m25286/latest/ Accessed on 12/11/13
-‘Adidas is trying to hard’ Upper Reserve April 2013, Image, Online Available at http://upperreserved.com/adidas-is-trying-too-hard/ Accessed on 14/11/13
-‘A Quick chat with Jeremy Scott’ Idol Magazine, Image, Online, Available at: http://idolmag.co.uk/blog/quick-chat-jeremy-scott Accessed on 14/11/13
-‘Young Latin Americans Embrace the internet – and start shopping’ The Guardian, 13th Nov 2013, Report, Online, Available at http://www.theguardian.com/media-network/media-network-blog/2013/nov/13/latin-america-internet-shopping-mobile-online Accessed on 15/11/13
-‘Latin America’s New Tigers Forge Ahead’ Wall Street Journal, July 2012, Report, Online Available at : http://www.marketwatch.com/story/latin-americas-new-tigers-forge-ahead-2012-07-25 Accessed on 15/11/13
WHERE DO THEY WANT TO BE?
LONG TERM
SHORT TERM
-In 2010 nike announced a revenue target of $27 billion by the end of fiscal 2015 based on growth expectations across its portfolio.

-However in October 2013 after its first analyst meeting in over two years, Nike Inc. announced an ambitious growth plan, targeting sales of $36 billion by 2017.

-Community engagement strategies; Use the leverage of the brand to positively impact energy, labor, chemistry, water and waste which also influences the communities across their value chain

-Create value, Strengthen Brand Equity and address Impacts throughout supply chain.




-The company plans to step away from wholesale; rise in nike owned and operated stores and gradual decline in number of retail accounts eg third party sellers.

-Nike is investing more marketing on digital initiatives



-Still wholesale led.

-Footwear lead sales.

DIFFERENTATION
- Global premium brand.
-Symbolic message and positioning:
Self-image purposes
Belongingness
-High quality products, the same swoosh logo and just do it slogan is used to a global scale
-'Buy the maker not the product' (Sorell, 1989)

DIVERSITY
-6 employee networks:
1. Latino
2. Abilty
3. Native American
4. Homosexuality
5. Black employee & friends
6. Asia Pacific
-Creating cultural awareness.
I
MAGES
-Colour box, (n/a) white world map, (image) available at: http://www.colourbox.com/image/white-world-map-isolated-on-black-background-abstract-art-illustration-image-1957526?ver=a&utm_expid=22365066-19.-Pt57g7ESZWN_tKflGYEWg.1&utm_referrer=https%3A%2F%2Fwww.google.co.uk%2Furl%3Fsa%3Di%26rct%3Dj%26q%3D%26esrc%3Ds%26source%3Dimages%26cd%3D%26docid%3DEvXk_amwiq_UFM%26tbnid%3DbFVyLdfb-MIwYM%3A%26ved%3D0CAUQjRw%26url%3Dhttp%253A%252F%252Fwww.colourbox.com%252Fimage%252Fwhite-world-map-isolated-on-black-background-abstract-art-illustration-image-1957526%26ei%3DHAONUtrqNISo0AXutYH4DA%26bvm%3Dbv.56643336%2Cd.d2k%26psig%3DAFQjCNEemvJ_p8CTDVt9Da-cbdMDuOWbfQ%26ust%3D1385059482260945 accessed on 15th November 2013.
-Free HD logos and images, nike logo, (n/a), (image) available at: http://freehdlogos.blogspot.co.uk/2012/04/nike-logos-hd-large-size.html accessed on 15th November 2013.
-Nike, U.S employee totals by ethnicity nike, 2013, (image) available at: http://www.nikeresponsibility.com/report/content/chapter/people-and-culture accessed on 15th November 2013.
-Nike Inc, ‘Locations’ Online Available at: http://nikeinc.com/pages/locationsAccessed on 12/11/13
-Nike, Store Locator, Online Available at: http://www.nike.com/us/en_us/sl/store-locator/ Accessed on 12/11/13
-‘Large Scale Maps’ World Map, Connexions, Online Available at http://cnx.org/content/m25286/latest/ Accessed on 12/11/13
-‘Adidas is trying to hard’ Upper Reserve April 2013, Image, Online Available at http://upperreserved.com/adidas-is-trying-too-hard/ Accessed on 14/11/13
-‘A Quick chat with Jeremy Scott’ Idol Magazine, Image, Online, Available at: http://idolmag.co.uk/blog/quick-chat-jeremy-scott Accessed on 14/11/13
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