thenikefinal

.

Just Do It.

Brian Johnson

Zach Lomas

Samuel Brace

Leslie Powell

Shawn Mitchell Ashley Hugh

“Business professional is an oxymoron. Business professional at Nike are Levis, running

shoes, and a Nike shirt. It’s an old school thought that stuck with University’s and

haven’t changed with the times.”

9

Nelson Farris

Director of Corporate Education

Created by the University of Oregon track athlete Phillip Knight

and his coach Bill Bowerman

Founded in 1964 as Blue Ribbon Sports, and later became Nike Inc.

in 1972.

Mission:"To bring inspiration and innovation to

every athlete in the world. If you have a body, you are an athlete."

Nike Overview

27

Nike Overview

Operates in more than 160 countries

Goal: to set Nike apart from the competition by providing products to athletes of every ability

Over 30,000 employees globally

World’s largest provider of shoes and athletic apparel 27

The Nike Campus (Headquarters) is located in Beaverton, Oregon

7,000 employees

Campus is 193 acres

Consists of 17 main buildings whose names pay tribute to legendary Nike athletes

The buildings on campus total more than 2 million square feet or about 35 football fields

Nike Campus

27

Nike Stats

The Nike name came from the Greek winged

Goddess of victory—Nike.

Nike paid only $35 for the

Swoosh logo.

The first Nike shoe was

created when Bowerman

poured liquid urethane into a

waffle iron.

The first pairs of Nike shoes were sold out

of Bowerman’s car for $3.30

each.

27-1-23-22

Acquire other footwear and

apparel companies.

Related Diversification Strategic Fit

Corporate Level Strategy

33

Our stuff’s Different…

“To build our business, we have to fuel and respond to consumer interest

around the world and continually appeal to changing demographics and new

markets in a deeply competitive

industry.”

33

Differentiation R&D

Considered Design

GX (GreenxChange)

BICEP

Generate Demand

Sports marketing (Athletes, Bball, Football, College

sports)

Advertising

("Nike Biz")

Business Level Strategy

26

Industry• Textile- Apparel Footwear & Accessories

Target Customer?

Competitor Analysis

2-23-27

“Everyone that has a body is an athlete.” - Nike.Com

• Brand Equity

Marketing

• Adidas concept stores• Puma retail stores

Manufacturing & Operations

Industry Key Success Factors

3-4-21-23-24-28-30

Acquisitions

Key Success Factors -

Nike• Converse $305 mil.• Hurley $50 mil.• Umbro $600 mil.

Puma • Cobra golf

Adidas• Reebok $3.8 Billion

New Balance• Vital

3-4-21-23-24-28-30

49%

36%

4%

9%2%

Financial Performance Nike Adidas New Balance Puma Under Armor

3-21-23-28-30

Nike’s Code of Conduct

Forced Labor

Child Labor

Compensation

Benefits

Hours of Work/ Overtime

Environment Safety & Health

Documentation & Inspection

2

Human Trafficking

Poor living conditions

Passports taken away

Excessive Overtime

Incidents have grown year after

year

Too many styles is contributor to

OT

Labor Practices & Factory Conditions

25

Minimum Wage Rates (Monthly)

Vietnam

$95

China

$140

Malaysia

$177

Brazil

$268

Mexico

$712

United States $1160

Australia $1856

8-13-14-17-18-31-32

Solutions

Conduct audits at minimum quarterly

Incentives for factories that excel in audits

Strategic partners & Bid Process

Increase expenses

Improve brand image

Promote better quality

Implications

$250 billion per year industry

Product enforcement doubled last year

4 of 5 counterfeit items originate in China

•Cargo Boat/Plane

•US Customs inspection rate of only 2%

•Transshipping through Canada/Mexico

How do counterfeits make it to the US?

Direct counterfeit vs. Generic “look-alike”

Counterfeiting

11-15

•Cheap, skilled labor

•Technical expertise

Nike produces a majority of their products in China

•Nike loses millions in potential revenues

•Intellectual property rights are stolen•Millio

ns spent on R&D

Why is this a problem?

Nike Counterfeits

29

Nike Counterfeits

High-markup products that can be produced at a low cost

Nike counterfeits:

• Footwear• Apparel• Golf products

Where is the market?

• Online auctions - eBay• Flea markets• Street sales

20,000 pairs of Nike sneakers

Nike hats, apparel, and other clothing worth an estimated $25 million

Accounting ledgers traced to China

Long Island, NY warehouse 1

100,000 items worth $20 million

Nike footwear, apparel, bags floor to ceiling

All products originated in China

Bay Ridge, Brooklyn

warehouse 4

Recent Counterfeit Seizures

5-20

Solutions

Stronger Internal Controls• Production facility

audits• Employee inspections

External Controls• Inspect flea markets• Work with

authorities• Further lobbying

Solutions

• Security Devices• Holograms• Individualized Serial

Numbers

Product Development

• How to Spot Counterfeits• Online Verification System

Customer Education

ImplicationsTighten controls in an effort to recover

lost revenues

Higher costs related to

Litigation

Must weigh the costs/benefits

Training

More overseas personnel to

inspect factories

Internet counterfeit experts

Product development

Individualizing products (serial

numbers)

Growth & Expansion

Nike needs to grow through increased

revenues and profits from increased sales

They can expand the Nike brand through

the “un-thought” sports

“Apparel is the single biggest opportunity for NIKE, Inc. We are already one of the world’s largest apparel companies but that is nothing compared to what is possible in this space.” • – Mark Parker, Nike CEO

Retail Sales Growth

$4.4 Billion in sales

29.9% Gross Profit Margin

3.1% Net Profit Margin

$4.85 Billion in sales

27.9% Gross Profit Margin

1% Net Profit Margin 7-10

Brand Expansion

• Nike sponsored India’s premier team to learn how to build better performing apparel and equipment

Cricket

“There are many unique customer groups and we want find a way to serve all of them.” – Farris

6

Australia New Zealand Argentina South

Africa England

Scotland Ireland Wales France

Brand Expansion

Rugby

Implications

Financial•Increased Debt & Liabilities•Decreased Cash

Marketing•Expand team and athlete sponsorships in the

“un-thought” sports

Management•Widen Horizontal

structure•Create new sports

divisions

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5) Associated Press, The. “Police Seize Fake Goods Worth Millions.” New York Times, p. 2. 17 Apr. 2008.

Sources Cited-

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9) Farris, Nelson. Telephone interview. 14 Apr. 2010.

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Sources Cited-

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