Nike Case Study Analysis

By
Ahmed Samir
Haitham Salah
Magdy Essmat
Magdy Mohamed
Sherif
 Nike Over View

Nike is the Ancient Greek

goddess of victory It is one of
the most recognized symbols in
the world The Swoosh. Simple.
Fluid. Fast.
 Nike Over View cont.
Nike is the worlds largest designer, marketer, and distributor of sports-related
apparel, equipment , accessories, athletic footwear and athletic apparel.
Nike was founded in 1964 by Bill Bowerman and Phil Knight and opened its
first store in Santa Monica, California, in 1966.
The company introduced its Nike brand of shoes in 1972.
The company officially renamed itself Nike in 1978.
BY 1980, the company had reached a 50% market share in the U.S athletic
shoe market and had become a publicly traded company.
By 1985 new era by introduction of a Michael Jordan-endorsed basketball
shoe. By end of 1988 Nike to the top of industry.
By 1988 started to began diversify with purchase Cole Haan shoes and aquire
other brands

Bauer in 1995, Hurley in 2002, Converse in 2003, Starter in 2004, Umbro in 2008
 Nike Categories Structure

Footwear Apparel Equipment's

- Running - Shirts - Socks

- Training - Bags - Sports ball
- Basketball - Accessories - Eyewear
- Soccer - Running Short - Golf clubs
- Urban wear - Baseball Caps - Baseball bats
- gloves
 Nike Over View cont.
HQ: Beaverton, Oregon, in Washington County.
On 71 hectare, 17 buildings, and houses 600
employees
Inside U.S , Nike has 3 significant distribution and
service facilities:

- Memphis
- Tennessee
- Wilsonville
 The current vision of Nike
To bring inspiration and innovation to every
athlete in the world

The Proposed vision of Nike

Seizing the future athletic with brands represent

performance, quality, and fashionable sports
product.
 The current Nikes Mission
Nikes mission is to carry on Bowermans legacy
of innovative thinking, develop products that
help athletes of every level of ability reach their
full potential, and to create business
opportunities that set Nike apart from the
competition and provide value for their
shareholders
 The Proposed Nikes Mission
At Nike, we desire to deliver superior products to customers and athletes that are
both safe and dependable (1, 2 and 6). Our well trained employees and
experienced executives will ensure a competitive advantage for our markets,
growth for the company, and profits for our shareholders (5). Our commitment to
social responsibility and the communities in which we operate will ensure
business relationships and alliances for the future and a perception of concern
with our stakeholders (6, 8). We will continue to utilize innovation and
technology to provide our employees with the best possible work environment
while adapting to the many changes in the global market (3, 4, 7, and 9).

1. Customers
2. Products or services
3. Markets
4. Technology.
5. Concern for survival, growth, and profitability
6. Philosophy
7. Self-concept
8. Concern for public image
9. Concern for employees
 External Assessment
Opportunities
Should strive to penetrate the
new regions that have higher rate
of growth such as Brazil, Eastern
Europe, India, and China
New production line for
protective or safety footwear.
Pursue the government to
establish Anti-dumping duties on
Chinese products.
Internet website.
New production line for
fashionable footwear to attract
new consumers.
New era to concentrate on
children from 3 to 12 years old.
Threats
Competition in athletic footwear
and apparel is fierce.
Main competitor is Adidas,
Reebok, Taylor Made, and
Rockport.
Adidas contracts with Chinese
basketball superstar to produce
basketball shoes.
A new competitor who's sell the
footwear for leisure and fashion.
The competitors expand their
categories and countries with
deepen their relationships with
customers.
Consumer shifting to fashionable
footwear.
 Competitive Profile Matrix (CPM)
NIKE ADIDAS PUMA
Critical Success factors Weights Weighted Weighted Weighted
Rating Rating Rating
Score Score Score
0.0 to 1.0 1 to 4 1 to 4 1 to 4
Advertising 0.1 2 0.2 3 0.3 3 0.3
Product Quality 0.08 4 0.32 3 0.24 2 0.16
Price Competitiveness 0.08 2 0.16 3 0.24 1 0.08
Management 0.06 3 0.18 3 0.18 2 0.12
Financial Position 0.08 4 0.32 3 0.24 1 0.08
Customer Loyalty 0.05 3 0.15 2 0.1 1 0.05
Global Expansion 0.05 3 0.15 3 0.15 2 0.1
Market Share 0.08 4 0.32 2 0.16 1 0.08
Technology 0.09 4 0.36 3 0.27 1 0.09
Brand Recognition 0.1 4 0.4 4 0.4 3 0.3
Portfolio Diversification 0.08 3 0.24 4 0.32 2 0.16
Product Positioning 0.09 3 0.27 3 0.27 1 0.09
Research & Development 0.06 4 0.24 3 0.18 1 0.06
Totals 1 3.31 3.05 1.67
 External Factor Evaluation (EFE) Matrix
Opportunities Weight Rate Score
Should strive to penetrate the new regions that have
1 higher rate of growth such as Brazil, Eastern Europe,
India, and China 0.1 4 0.4
2 New production line for protective or safety footwear. 0.1 2 0.2
Pursue the government to establish Anti-dumping
3
duties on Chinese products. 0.05 1 0.05
4 Internet website. 0.05 1 0.05
New production line for fashionable footwear to attract
5
new consumers. 0.1 2 0.2
New era to concentrate on children from 3 to 12 years
6
old. 0.15 4 0.6
Threats
1 Competition in athletic footwear and apparel is fierce. 0.05 2 0.1
Main competitor is Adidas, Reebok, TaylorMade, and
2
Rockport. 0.05 3 0.15
Adidas contracts with Chinese basketball superstar to
3
produce basketball shoes. 0.1 2 0.2
A new competitor who's sell the footwear for leisure
4
and fashion. 0.05 2 0.1

The competitors expand their categories and countries

5
with deepen their relationships with customers.
0.1 1 0.1
6 Consumer shifting to fashionable footwear. 0.1 1 0.1
Total Score 1 2.25
Nikes revenues trend vs competitors
 Positioning Map
High Quality

Low Price High Price

Low Quality

Nike is take a leading in producing high quality products with higher price than Adidas and
Puma
 Internal Assessment
Growth trend in total Revenues Total
7000 growth
4%
6000
5000
In Million

4000
3000
2000
1000
0
2007 2008 2009
U.S 6131 6414 6542
EMEA 4764 5629 5512
Asia 2295 2887 3322
Americas 966 1164 1284
 Internal Assessment Cont.
Growth trend in Pre-Tax Income
Total
4000 growth
4%
3500
3000
2500
In million

2000
1500
1000
500
0
2007 2008 2009
Americas 199 242 274
Asia 515 694 853
EMEA 1050 1281 1316
U.S 1386 1402 1337
 Internal Assessment
Strengths Weakness
1. Nike is the worlds largest sports Nikes fiscal May 31, 2009 net
apparel producer.
income decreased 21% to $1.48
2. Nikes U.S retail stores about 338
outlets, and 336 outside U.S. billion.
3. International branch offices in 52 Only concentrate in youth and
countries. young adult market, from 12to24
4. Fiscal May 31, 2009 revenues years old age.
increased 2.9% to $19.1 billion
5. The companys website allows Lack of stores serving females.
consumers purchase directly from Heavy dependency on footwear
Nike.
sales.
6. Customization availability
7. Strong in Marketing and R&D
8. Diverse portfolio
9. Customer loyalty
10. Strong financial position
11. Strong international presence
12. Nike doesnt own any factories
 Internal Factor Evaluation (IFE) Matrix
Strenghts Weight Rate Score
Nike is the worlds largest sports apparel
1 0.08 4 0.32
producer.
Nikes U.S retail stores about 338 outlets, and
2 0.05 3 0.15
336 outlets outside U.S.
3 International branch offices in 52 countries. 0.05 4 0.2
Fiscal May 31, 2009 revenues increased 2.9% to
4 0.05 3 0.15
$19.1 billion
The companys website allows consumers
5 0.05 4 0.2
purchase directly from Nike.
6 Customization availability 0.02 4 0.08
7 Strong in Marketing and R&D 0.08 4 0.32
8 Diverse portfolio 0.08 4 0.32
9 Customer loyalty 0.02 4 0.08
10 Strong financial position 0.05 3 0.15
11 Strong international presence 0.05 4 0.2
12 Nike doesnt own any factories 0.05 3 0.15
Weaknesses
Nikes fiscal May 31, 2009 net income decreased
1 0.1 1 0.1
21% to $1.48 billion.
Only concentrate in youth and young adult market,
2 0.15 1 0.15
from 12to24 years old age.
3 Lack of stores serving females. 0.05 1 0.05
4 Heavy dependency on footwear sales. 0.07 1 0.07
Total Score 1 2.69
 SWOT Matrix
SO Strategies
- With some of the most recognizable
and followed athletes globally,
expanding into places like India and
forming alliances with different kinds of
sports leagues will be a valuable
strategy to expand.
- With strong international precense
should used to attract a new segment
like kids and women.
ST Strategies
- Should apply CRM system to sustain
the numbers of consumers and go
through product development and
market development against its
competitors in new markets
WO Strategies
- With the concept to increase the
consumer attractiveness should pay
more attention to the new era of
considerable in fashionable footwear.
WT Strategies
- Should pay more attention to the
Chinese market to and make a join
venture with some suppliers could offer
good quality raw material against the
severe competition.
 FS Financial Strengths
ROI
15
2
Space Matrix
Leverage 2
Liquidity 4
Financial Strengths
Working Capital 4
Cash Flow 3 Conservative Aggressive
ES Environmental Stability -10
+6
Business Risk -3 Nike
+5
Technological Changes -2
Market Penetration
Price range of competitors -1 +4
Market Development
Competitive pressure -2 +3 Product Development
Barriers to entry -2 Diversification
+2
CA Competitive advantage -10 Backward, Forward,
+1
Market Share -3 Competitive Horizontal Integration
Industry
Product Quality -2 advantage -6 -5 -4 -3 -2 -1 +1 +2 +3 +4 +5 +6 Strength
Customer loyality -2
-1
control over suppliers and distributors -3
-2
IS Industry Strength 11
Growth Potential 4 -3

Profit Potential 3 -4
Financial Stability 2
-5
Easy to entery market 2
-6

FS Average + ES Average 1 Defensive Competitive

IS average + CA average 0.25
Environmental Stability
Total 1.25
 Matrix Analysis
Alternative Strategies SWOT SPACE EFE BCG Count
Forward Integration YES YES YES YES 4
Backward Integration YES YES YES YES 4
Horizontal Integration YES YES YES YES 4
Market Penetration YES YES YES YES 4
Market Development YES YES YES YES 4
Product Development YES YES YES YES 4
Related Diversification YES YES YES YES 4
Unrelated Diversification 0
Joint Venture YES YES 2
Retrenchment 0
Divestiture 0
Liquidation 0
 Recommendation
The Strategic Position and Action Evaluation (SPACE) Matrix below
indicates whether aggressive, conservative, defensive, or
competitive strategies are most appropriate.
Based on SWOT matrix, CPM, and Space matrix, we conclude that
Nike should pursue some different strategies to sustain its
competitive advantage and maintain or grow its market share.
Spend more on R&D to discover new areas for kids and women.
To create sportswear that would incorporate recycled material.
To develop new alliances with companies which are well respected
regarding social responsibility.
To invest in additional marketing of existing products that will appeal
to new demographic groups.
To promote products as fashion wear, not just sportswear.
Thank You