Académique Documents
Professionnel Documents
Culture Documents
2011
Anirban Mazumdar
Case-Study Overview
Internal: Analysis
History, Nike overview, Key SWOT Matrix
Facts, Our Brands and Stock SPACE
Information
BCG
Nike Actual & Proposed Vision
and Mission IE matrix
Economic Performance Grand Strategy Matrix
Evolution of Financial Ratios QSPM
Strengths and weaknesses Possible strategies: Matrix
Analysis: IFE Analysis
External: Decisions
Industry overview and Why our decision?
comparison of financial ratios Strategic implementation
Manufacturing Actions
Opportunities and threats Evaluation Procedure
Analysis: EFE Current Update
Competitors
Market Share
Analysis: CPM
History
1962: 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 20 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.
1970 1975: Steve Prefontaine was turned to the University of
Oregon by Bill Bowerman and wore Nike products.
History
1976: 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.
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 Nikes website)
Evolution of the Swoosh Logo
Nike Overview
Nikes 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.
Fiscal year ended May 2003: Revenues of $10,697 million (increase of
8.1% against 2002)
Employees: 26,000 worldwide.
650,000 in Nike contracted factories around the globe.
Facilities: in Oregon, Tennessee, North Carolina and The Netherlands.
Also operates leased facilities for:
* 14 Niketowns,
* Over 200 Nike Factory Stores,
* 12 NikeWomen stores
* Over 100 sales and administrative offices.
Key facts (2003)
Headquarters: Beaverton, OR
Index Membership: S&P 500
S&P 1500 Super Comp
Sector: Consumer Goods
Industry: Textile - Apparel Footwear & Accessories
Other Brands: Cole Haan, Converse, Hurley,
Bauer Hockey, Starter Apparel
Market Cap: 21.738 billion
Ticker Symbol: NKE
Ranked 173 in the Annual ranking of America's largest
corporations (Fortune 500 magazine)
Our Brands
Cole Haan, based in Maine, sells dress
and casual footwear and accessories for
men and women under the brand names
of Cole Haan, g Series, and Bragano.
Nike Bauer Hockey, based in New
Hampshire, manufactures and distributes
hockey ice skates, apparel and equipment,
as well as equipment for in-line skating,
and street and roller hockey.
Hurley International, based in California,
designs and distributes a line of action
sports apparel for surfing, skateboarding
and snowboarding, and youth lifestyle
apparel and footwear.
Converse, based in Massachusetts,
designs and distributes athletic and casual
footwear, apparel, and accessories.
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
Shares Outstanding (July 2003): 263.7 mill
Stock Price Performance
Historical Stock Price
Performance
Vision Statement
To bring inspiration and innovation to
every athlete* in the world
Question marks
Stars
Cash-Cow Dogs
IE Matrix
The Grand Strategy Matrix
Potential Strategies:
- Market Development
- Market Penetration
- Product Development
- Backward Integration
- Forward Integration
- Concentric
Diversification
Matrix Analysis
QSPM
Decisions
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 companys 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
Implementation
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)
Showing Cost: EPS-EBIT Analysis
Evaluations
Nike annual financial reports
Sales and profits reports (on-line and off-line) based
on Women stores and Kids products
Frequent management meetings between VP Global
Brand Management (US), VP Global Footwear, VP
Global Apparel, and VP Subsidiaries and New
Business Development
Evaluation reports
Update: 2004-2006
2004: Nike introduces Swift technology.
Nike Swift increases track times by up to 1.13%.
Football (soccer) wear becomes #1 in Europe.
Nike SHOX footwear introduced in other footwear types and continues to boom.