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Nike Strategic Business Plan
Transcript of Nike Strategic Business Plan
Nearly $20 billion in yearly revenues
Featured on the NYSE at a current share price of $82.54
Has a market capitalization of $38.99 billion
Operating Margin of 13.24 and a Net Profit Margin of 10.03 Compound Annual Growth Rate CAGR in Revenues is 7.2%
CAGR in Current Assets is 9.5% CAGR in Net Income is 12.45% VS. Receivables Turnover Ratio & Current Ratio ROE & ROA Receivables Turnover Current Ratio Measures a firms' ability to efficiently use its assets through extending credit and collecting debt Nike has maintained a stable ratio while Under Armou's has steadily increased before dropping off in January 2011. Under Armour has slight edge in category Measures a firms' ability to liquidate assets and pay off short-term obligations Although Under Armour has a slight edge in this category, Nike's CR has remained over 3, so there is not much cause for concern. Return on Equity Return on Assets Measures a corporations' profitability based on shareholder equity Nike's ROE is substantially higher than Under Armour's, showing that Nike generates more profit through the money shareholders invest Measures how efficient a company is at using its assets to generate earnings. Nike beats out Under Armour in ROA as well, showing that it allocates its assets in a much more efficient manner than Under Armour Through a series of calculations we determined that..... Nike stock is underpriced Maybe you should invest? Internal Positive External Negative Strengths Weaknesses Opportunities Threats Brand recognition; Nike has established itself as one of the top producers of sportswear apparel in the world
Fortune 500 Company
Offers a broad variety of apparel products to its customers
Excellent marketing campaigns including "Just Do It"
Nike contracts work to various factory owners, doesn't have much money tied up in properties
One of the best R&D programs in the industry
Competitve nature of CEO Phil Knight crafted Nike into one of the most forward-driven and competitvely adept companies in the world Publically criticized about taking advantage of low-wage sweat shops in Indoneasia
Revenues within Nike highly dependent on footwear products.
Prices are relatively high, making it difficult to afford for third world countries Initiation of Nike HealthWalker could be an opportunity for entrance into the market of health, nutrition and eco-friendly operations
Emergence of Nike as a fashion brand for young cultures and rising stars
Promotion through big sporting events (World Cup & Olympics)
Emerging markets (BRIC) could increase sales for Nike with broadening income classes Emergence of new competition into the marketplace
Operating internationally poses the threat of manufacturing and selling products at a loss due to the nature of internation trade
Price sensitivity and the demand for lower cost products due our current economic conditions may cause consumers to choose more cost-effective products Targets sports franchises and universities Steps to Nike's Marketing Strategy Markets itself through sponsoring celebrity athletes Targets consumers who care about utility and quality of product over price Takeover as official outfitter of NFL Step 1 Step 2 Step 3 Step 4 Step 5 Nike Responsibility In 2009, Nike partnered with (RED) to fight against HIV and AIDS in Africa
100% of profits from (NIKE)RED laces will be split equally between The Global Fund to fight AIDS, Tuberculosis, and Malaria.
Partnership delivers programs to medicate and educate Created in 2007 to support a community's major school district to improve the education of our kids.
A 9,000,000, 5-year committment
Fund helps over 100,000 students Future Strategies Nike Scholarship Given to a student athlete in each state
Awards academic excellence, involvement in community and exemplary character
Honored with NikeScholarship for college
Goal is to encourage high school students to do well in school How can we raise money? Create a new product line, NikeEducate
30% of profit goes straight to the NikeScholarship fund
Creates marketing strategy for customers to buy Nike products Nike Official Outfitters Nike is hoping to promote its product through the NFL to get to other professional sports such as the NBA, NHL, and the MLS NikeCredit Nike has a high rate of loyal customers
Loyal customers would be willing to apply for a Nike credit card
Customers will be given a point for ever dollar they spend on Nike product
Customers will receive rewards for every 1,000 points
Nike will generate more loyal customers and large profits If Nike ever faces a financial issue and goes bankrupt, the best solution would be the merge with another company Most companies would merge with Nike because of its well-known brand image If Nike goes bankrupt due to an unethical issue, relocating to another country would be the best solution BRIC countries (Brazil, Russia, India and China) are developing countries that Nike should relocate to in the event of a catastrophe