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Nike Business Summative

Industry: Sporting Goods

Jonathan Zhou

on 17 January 2015

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Transcript of Nike Business Summative


Human resources
Many of Nike's advertisements appeal to
. For instance, Nike's "Just Do It" campaign challenges people to exceed their physical limitations.
Maslow's Hierarchy of Needs:
Productive Resources
Nike is the owner of many well-known brand names in the sporting goods industry. Aside from their own line of Nike Sport, Air Jordan and Nike Golf products, they also have acquired key subsidiaries such as
Converse, Umbro, and Hurley.
Income Statement
Balance Sheet
* These financial statements show the annual data of every year from 2014 to 2011. They are provided by www.nasdaq.com.
Diagram of Total Nike Inc. Employees by Region
Nike believes that technical innovation and quality control in the design and manufacturing
process of footwear, apparel, and athletic equipment is essential to the success of their products. This is stated in their 2014 Annual Report to shareholders.
Core Product:
Convenience, function and warmth from the sportwear/footwear

Actual Product:
"Nike Air Jordan Retro 4", "Nike Vapor Jet 3.0 Football Gloves", "Nike Swoosh Basketball"

Augmented Product:
Doorstep delivery with online orders, Nike.com customer service and Nike's guaranteed 30-day return policy
Nike Product Life Cycle
Life Cycle
Nike Mercurial Superfly's Position
I believe that Nike's current line of products fit best into the growth/maturity stage of the product life cycle.
Of media
4 p's of
Nike received a lot of publicity and TV air time during the summer of 2014 when they sponsored the World Cup. Nike sponsored 10 teams in the tournament-more than any other apparel company. Nike supplied jerseys for the United States and for Brazil, the host nation.
Core, Actual
& Augmented
Nike filed a patent for an "automatic lacing system" in 2008, and the patent illustration is identical to the futuristic shoes worn by McFly.
2008 Nike patent for "Mags"
(an automatic lacing system)
Nike made efforts in 2014 to expand their women's apparel business with plans to garner $2 billion in women's apparel annual sales by 2017. Women's apparel represented about 20% of Nike's sales as of July 2014, but the athletic apparel company is working on new lines and designs to compete directly with Lululemon.
Nike's had a long struggle to cut costs while avoiding workplace disasters in developing countries.
Over the years, Nike's use of overseas manufacturers has periodically sullied its image, and its campaign to eliminate such problems hasn't been easy. It has plowed money into helping factories and sacrificed sales at key moments when standards were breached. It has largely eliminated problems such as factory-worker deaths and the use of certain hazardous chemicals.
By Jonathan Zhou
Jonathan Zhou
BBI 2O1-02
Sporting Goods
Nike Mercurial Superfly Soccer Cleats
For example, Nike's product, the Mercurial Superfly soccer cleats are in the maturity stage because this product fits into the category due to:

- a high number of sales and large profits
- an established and well-known brandname
- a large amount competitors already in the market

However, it can be argued that Nike's products are still in the growth stage because over the past five years there have been a relatively significant growth in Nike's revenue. Since there is growth, Nike's products have not necessary reached maturity so I consider it to be between the two stages.
3 Levels of Product: Nike Brand Footwear and Sportwear
The proliferation of NIKE AIR, Lunar, Shox, Free, Flywire, Dri-Fit, Flyknit, NIKE+, and NIKE Fuel technologies through Running, Basketball, Men’s Training, Women’s Training, and Sportswear, among others, typifies the Company’s dedication to designing innovative products.
E. Price
E. Quantity
The executive officers on the board of directors of NIKE, Inc. as of July 18, 2014 are as follows:

Nike Air Jordan Retro 4
Nike's advertisements appeal to self-actualization because they suggest that their products will help you achieve your highest potential. Additionally, many of Nike's ads use professional atheletes to promote their products. This appeals to esteem because you feel that you could be like that athelte if you purchase their products.
Nike's logo is identified by a check mark type symbol known as the "Nike swoosh". It is one of the most recognized brand logos in the world
Nike's slogan is "Just Do It." It is meant to motivate and encourage Nike's demographic of athletes to strive for their goals and to take risks.
The price of Nike's products are varied and range from cheaply-priced to expensive luxury or professional products ($$-$$$):

Nike products are sold in sporting goods retail stores such as Footlocker and Sportchek and Nike-exclusive stores known as Nike Factory Stores. They are well-established in over 160 countries worldwide and you can purchase their products in store locations across the Americas, Europe, Middle East, Africa and Asia.
A Nike Factory Store in America
Channels of Distribution
Air Jordan
The slogan was coined in 1988 at an advertising agency meeting. The founder of Wieden+Kennedy agency, Dan Wieden credits the inspiration for his "Just Do It" Nike slogan to Gary Gilmore's last words.
Footlocker (Nike Retailer) and Nike Factory Store Locations Across Canada and the United States
economic system
The Nike "Swoosh" is a corporate trademark created in 1971 by Carolyn Davidson.
Nike Zoom Soldier VIII - $129.99
Footwear: ~$20-$500
Sports Equipment : ~$5-$150
and Accessories
Nike True Grip Basketball - $149.99
Nike Benassi JDI Slide Slippers - $24.99
Nike is one the biggest companies in the sporting goods industry. They manufacture a large variety of
sportswear and footwear
. They produce
for sports including:
- Soccer
- Baseball
- Basketball
- Hockey
- Cross Country
- Football

- Golf
- Lacrosse
- Running
- Tennis
- Volleyball
- Wrestling
Michael Jordan, a famous Basketball player, promotes Nike Air in an ad.
2014 Nike Television and Internet Ad featuring Ronaldo, Neymar Jr., Rooney, Ibrahimović, Iniesta & more
A billboard ad created by Nike to promote their new Nike CR Safari Soccer Cleats.
Nike makes a large amount of their sales through online orders. Their products can be purchased from their site at Nike.com.
Importers, Wholesalers, Retailers:
Many of Nike's products have to go through one or more intermediaries before reaching the consumer. Importers, wholesalers and retailers purchase products from Nike then sell them again until they reach the consumer.
are examples of retailers.
Maker-User Relationship:
As stated in their annual report, Nike has formed many "Direct to Consumer" stores to exclusively sell their products in. This creates a direct relationship/connection between the consumers and the company, Nike. Some examples of these "Direct to Comsumer stores include NikeTown, Nike Factory and Converse Factory stores. However, most of these stores are in foreign countries because virtually all of Nike's footwear is produced outside of the United States.
Nike uses many print ads to promote their products. For example, this magazine advertisement promotes their training shoes.
According to Nike's 2014 Annual Report, they believe that research, design, and development efforts are key factors in Nike's success. Nike has specialists in the areas of biomechanics, chemistry, exercise physiology, engineering, industrial design, sustainability, and related fields.
For instance, they have conducted and published a product/motivational research on the environmental influence of their new footwear designs. It also addresses consumer reactions and benefits to consumers. This is from a primary source because the researches collected the information specifically for this research.
Increase in Supply

New technology has led to machines being able to create Nike soccer balls more efficiently and cheaper than before.
Due to this, there would be an increased supply of Nike soccer balls.
E. Price
E. Quantity
Decrease in Demand
Change in
Change in
Nike Soccer Balls

Professional football players and product reviewers publicly denounce Nike's Football Gloves. They heavily criticize Nike's gloves and suggest their fans purchase gloves from another company.
Due to this, there would be a decrease in the demand of Nike Football Gloves.
Nike Football Gloves
"Direct to Consumer" Nike Factory Store in China
Since Nike is a footwear and sporting goods
, they produce their own products.
Nike's brand sportswear and footwear is produced by independent contract manufacturers located in 34 countries.

Refer to
In fiscal 2013, contract suppliers in China, Vietnam, Indonesia and Thailand manufactured 36%, 36%, 22% and 6% of total NIKE brand footwear, respectively. We also have manufacturing agreements with independent factories in Argentina, Brazil, India, and Mexico.
Quantity demanded
Change in
Decrease in Quantity Demanded

Nike decides to increase the price of their golf balls.
Due to this, there would be a decrease in the quantity demanded of Nike golf balls.
Nike Golf Balls
I believe that Nike has a mixed economic system.
Nike's objectives include seeking seamless access and open markets through the elimination or reduction of import duties, protecting intellectual property rights and establishing mechanisms that promote sustainable trade and growth.
They believe in allowing everyone to come up with ideas in an open market. Also, Nike challenges trade barriers that have impacts their business and to advocates for trade liberalization.
They also seek to uphold government policies that promote the ethnic and fair transportation and manufacturing of products.
Nike follows government guidelines and has strict polices and a "code of conduct" regarding environmental and labour practices.

The main consumers of Nike's sportswear and footwear are athletes or people who strive to become more fit. For instance, the targeted demographic of Air Jordan Basketball shoes are Basketball players or enthusiasts.


Sporting Goods
Nike's leaders work every day to ensure Nike, Inc. realizes its potential by inspiring every one of our more than 44,000 employees to realize their potential. Human Resources professionals at Nike strike to create talented, diverse and inclusive teams organized effectively against their biggest opportunities of driving innovation and business performance.

Functions of Business
Human Resources


Board of

Philip H. Knight
Mark G. Parker
David J. Ayre
Donald W. Blair
Trevor A. Edwards
Jeanne P. Jackson
Hilary K. Krane
Bernard F. Pliska
John F. Slusher
Eric D. Sprunk
Philip H. Knight - Executive Committee (Chair)
Mr. Knight, 76, a director since 1968, is Chairman of the Board of Directors of NIKE. Mr. Knight is a co-founder of the Company and, except for the period from June 1983 through September 1984, served as its President from 1968 to 1990, and from June 2000 to 2004. Prior to 1968, Mr. Knight was a certified public accountant with Price Waterhouse and Coopers & Lybrand and was an Assistant Professor of Business Administration at Portland State University. Mr. Knight led NIKE from a small partnership founded on a handshake to the world’s largest footwear, apparel, and equipment company.
Nike's entire Board of Directors. (www.investors.nike.com/investors/corporate-governance/?toggle=directors)
There are several competitors of Nike in the sporting goods industry. Rival companies such as Adidas, Lululemon and Puma force Nike to use competitive pricing, smart
and strategic
and Savings
Nike owns a total of $32,290,000 in current and long-term assets. This is an increase from the previous year.
Nike owes $7,770,000 in current liabilities, long term debt and deferred liability charges. This is an increase from the previous year, but it is reasonable due to the increase of assets
In 2014, Nike has a total revenue amount of $27,799,000. This is an increase from their 2013 total revenue of $25,313,000.
Additionally, the have a total revenue cost of $15, 353,000 and operating expense of $8,766,000.
In 2014, Nike made a
Net Income of $2,693,000
Shown below is value in USD$ millions of the land and capital of Nike.
Nike acquires the material they need for their products from over 500 different suppliers worldwide. A full list of the suppliers can be found on this PDF:
Innovation and
Nike is focused on using environmentally-friendly resources in their products. They strive to use natural resources that won't harm the world we live in.
Nike has company/employee managers in countries all over the world to deal with
human resources
Forms of
Nike's Management Framework
Nike is listed under the New York Stock Exchange as NKE. These are the current statistics of NKE stock:
The company of Nike, Inc. was founded on January 25, 1964, as Blue Ribbon Sports, by Bill Bowerman and Phil Knight and was officially incorporated on May 30, 1971.
In 2014, NYSE:NKE stock had a
Earnings Per Share (EPS) of

and a
current yield of 1.2%
I believe that, overall, Nike uses an a
style of leadership. My reasoning for this is because Nike is such a large corporation that they can't possibly be give democratic privileges to all their employees. This is evident in their use of unjust labour in overseas countries. Also they enforce a strict code of conduct to control the quality of their products and work conditions.

However, since there is a Board of Directors. It is arguable that Nike has elements of a
style of leadership.
(Detailed descriptions are in the next image)
Quarterly dividends on NIKE common stock, when declared by the Board of Directors, are paid on or about July 5, October 5, January 5 and April 5.
According to investors.nike.com, the last dividend declared on June 2, 2014 and paid on July 7, 2014. The amount paid per share was $0.24
The value of Nike's common stocks have been gradually increasing over the past 5 years, as seen above.
A majority (82.55%) of Nike's stocks are held by institutions.
There is a total of
NKE shares held.
There are 566,601,598 held NYSE:NKE common stocks
Nike believes international trade, and the ability to move products around the world without barriers, remains a cornerstone of Nike, Inc’s success as a company. While the global economic crisis has resulted in a significant slow down in international trade for every major economy, in some countries the crisis has also led to a sharp rise in trade defence actions.
Current Assets (Cash, accounts recievable, ect):
Current Liabilities (Accounts Payable, ect.):
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