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Directed by:RAVISH ROSHAN

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STUDENT- PGDMINSTITUTE OF MANAGEMENT STUDIES, NOIDA

Prepared by –1.RAVISH ROSHAN (atulravish@gmail.com),9968009808 (m

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Nike2003Nike

History1962: Phillip Knight, a Stanford University business graduate and

former member of the track team, arranges to import athletic shoes from Japan and sell them in the U.S.. Knight created Blue Ribbon Sports as a cover name for his small-scale shoe-selling operations

1964: William Bowerman becomes a partner by matching Knight's investment of $500.

1965: Hires a full time employee, and annual sales reach $2,000.1966: Blue Ribbon Sports, also known as BRS, rents its first retail

space; employees can now stop selling shoes from their cars.1969: It now has several stores and employees; sales are close to

$300,000.1971: Nike, capitalizing on the Greek goddess of victory. The first

Nike product sold with the new symbol is a soccer shoe.

History1976: The popularity of jogging increases revenue to $14 million.1978: The company changes its name to Nike. 1980: Nike goes public, offering 2 million shares of stock.1990: Nike files suit against competitors for copying the patented

designs of its shoes, and also engaged in a dispute with the U.S. Customs Service over import duties on its Air Jordan basketball shoes.

1997: Feb., Stocks reaches a high of $76 per share.1998: Sept., Stocks tumbles to $31 per share.2000: The National Football League declines to renew its exclusive

apparel licensing arrangement with Nike.2001: Nike opens its first Nike Goddess store, a unit targeting

women, in Newport Beach, CA.2003: Nike purchases Converse Inc. for $ 305 million.

Nike Overview • Nike’s principal business activity is the design, development and worldwide

marketing of high quality footwear, apparel, equipment, and accessory product

• Distributed in over 160 countries around the world: (Asia, Australia, Canada, Europe, Latin America, and the United States)

• Nike is the largest seller of athletic footwear and athletic apparel in the world.

• Employees: 26,000 worldwide.

650,000 in Nike contracted factories around the globe.

Origin of the Name and the Swoosh

• Nike is the Ancient Greek goddess of victory

“It is one of the most recognized symbols in the world – The Swoosh. Simple. Fluid. Fast.”

(Quote from Nike’s website)

Evolution of the Swoosh Logo

Key facts (2003)

• Headquarters: Beaverton• Sector: Consumer Goods• Industry: Textile - Apparel Footwear &

Accessories• Market Cap: 21.738 billion• Ticker Symbol: NKE• Ranked 173 in the Annual ranking of

America's largest corporations (Fortune 500 magazine)

What Nike Does

• Create authentic athletic footwear, apparel, equipment and accessories for sports and fitness enthusiasts

• Through subsidiaries, design and sell a line of men’s and women’s dress and casual shoes and accessories

Principle Products

• Began with long distance running shoes in 1963

• Wide range of shoes, apparel and equipment

Our Brands

Nike Stock (NKE) Information

• Stock Symbol: NKE.

• Went public in December 1980 and is traded on the New York Stock Exchange.

• Price:– Dec 31st, 2003: $68.46– May 1st, 2006: $82.21

Vision Statement

“To bring inspiration and innovation to every athlete* in the world”

(* “If you have a body, you

are an athlete”

Bill Bowerman, co-founder)

Mission Statement

Nike is the "largest seller of athletic footwear and athletic apparel in the world. Performance and reliability of shoes, apparel, and equipment, new product development, price, product identity through marketing and promotion, and customer support and service are important aspects of competition in the athletic footwear, apparel, and equipment industry.  We believe we are competitive in all of these areas." The company aims to " lead in corporate citizenship through proactive programs that reflect caring for the world family of Nike, our teammates, our consumers, and those who provide services to Nike."

Internal strengths Internal strengths and weaknesses and weaknesses

STRENGTHS:

• Strong brand recognition

• Internet sales

• Growing international presence

• Superior research and development department

• Strong financial returns

Cont’d

• Strong sense of culture in the working

environment

• Great celebrity spokesperson

• Successful marketing campaign

WEAKNESSES

• Lack of stores catering to the active females

• Poor employment practices at their international manufacturing sites giving a bad reputation

• Heavy dependency on footwear sales

• Issues with Footlocker

External Opportunities and Threats

OPPORTUNITIES:

Customer use of company’s products change from athletic purpose to a fashion item• Development of international trade (GATT and NAFTA)

• Generation Y children will reach 60 million

•General demand for clothing/footwear for leisure activities continues to increase

• Growing e-commerce’s

•Women demand for athletic footwear and clothing is increasing significantly

THREATS:

• Competitors which copy company's business model

• Reebok's strong presence with 204 factory direct stores

• Adidas-Salomon AG, top European competitor

• The impact of foreign currency fluctuation and interest rates, and political instability

Athletic Shoe Market Share (2007)

Business Structure

Operating Segments:– Footwear– Apparel– Equipment

Operating Regions:– US– Europe, Middle

East Africa – Asia Pacific– Americas

Decisions

• Primary: Focus on finding the most promising customers (kids and women) and introduce more products or improve current ones to satisfy potential increase in demand

• Alternative: – Keep expanding into current and future foreign markets by being

aggressive and the worldwide leader of the footwear industry– Accelerate funding for numerous marketing campaigns in order to get to

specific markets or customer groups– Focus on improving working conditions and human rights at

international manufacturer centers and at the same time increasing their productivity

– Implement product diversification with company’s newest technologies so resulting increased earnings could be reinvested into R&D plans

Why this strategy?

• U.S. Women: Prefer fashion, not footwear, they prefer clothing, we must create a shopping style based in athletic shopping.

• U.S. Kids: E-commerce, influenced by innovation and design, not only comfort or sports

• We need to consolidate US sales compared to international sales and international competitors

• Difficult to expand towards other sports or population segments

Recommendation & implimentation

Actions:• Women:

– Open 25 specific stores specialized only for women– Increase R&D expenses by 7% in women products– Increase Marketing expenses by 10%, designing a specific

campaign for women using female endorsements– Create a new logo for women market which would be associated

with fashion trends and introduce new products• Kids:

– Increase R&D expenses by 7% in kids products– Increase Marketing expenses by 10%, designing a specific

campaign for kids– Introduce more soccer and basketball products targeting potential

youth market• Research in international market to find out what are the new

trends related with women and kids products (Long-term)

Thank you!

• Questions?

• Comments?