SW

ANALYSIS
By- Rimanshu patel Under the guidance of- Mr. Amitava chowdhury

Company profile & background

NIKE, Inc. is engaged in the design, development and worldwide marketing of footwear, apparel, equipment and accessory products. . It sells its products to around 18,000 retail accounts in the United States and through a mix of independent distributors, licensees and subsidiaries in nearly 200 countries. NIKE is the largest seller of athletic footwear and athletic apparel in the world. The Company creates designs for men, women and children. The top selling product category includes running, basketball, children's, cross-training and women's shoes.
Index membership
S&P 500

Sector
Consumer Cyclical

Industry
footwear

Employees
23,300

Products
NIKE sells sports attire and accessories relevant to each sport and sports-inspired lifestyle apparel, like bags, socks, sport balls, eyewear, protective equipment, basic sport equipment, etc. In addition to NIKEs footwear, apparel, and accessories businesses, the Company sells products under other brand names in particular markets. These subsidiaries combined together account for 13% of total revenues, $2.5 billion, in fiscal 2009.

Marketing and Advertising

NIKE places a significant weight on marketing the company and its products. NIKE aggressively bonds the contracts with highly successful and influential athletes, coaches, teams, and leagues like Michael Jordan,to popularize its footwear, apparel and sports accessories. In order to sustain its dominance in the industry and stay competitive, NIKE actively responds to trends and changes in consumer preferences by adjusting the mix of existing product, developing new products, styles and categories, and influencing sports through aggressive marketing. Its primary areas of marketing remain Net TV and magazines.

Competitors
The rivalry in the sports wear industry is very high. NIKE competes with numerous athletic and leisure shoe companies worldwide. It faces fierce competition in product offerings, technologies, marketing expenditures, pricing, costs of production, and customer services.

SWOT Analysis
Strong customer relationship/satisfaction High product quality Capacity of innovation

S
Effective marketing strategy

trength

Strong distribution chain

Strong R&D

Brand recognition

SWOT Analysis
Overseas manufacturing dependency Decreasing United States market share High product price compared to Adidas

W
Currency exposure

eakness

Medium retail presence

SWOT Analysis
Expansion into emerging markets Increased demand in product innovation

O
Growing segment of women athletes

pportunities

Biggest opportunity for NIKE

Increase in the number of sports events like Olympic, FIFA

Product development offers NIKE a great opportunity. NIKE, being a sports brand, attracts the sports as well as non-sports population. The brand is intensely defended by its owners who truly believe that NIKE is not a fashion brand. But the consumers that wear NIKE product do not always buy it to participate in a sport event. For the younger generation i.e. youth especially, NIKE is a fashion brand. The youths spent a large amount of money in these accessories.

SWOT Analysis
Fierce industry competition Revenue relies on consumers discretionary income

T
Economic rescession

hreats

Fluctuation in the currency

Biggest threat for NIKE

The greatest threat for NIKE is the inevitable stiff competition from other sports brand, especially Adidas. NIKE operates in the sports shoe and garment industry which is one of the most competitive marketplaces. For a company to succeed in competition there is a continuous need to develop new products with higher quality than its competitors. The dynamic needs and demands of consumers serve as a challenge to the management.

Micro environment
Demographic
Company

Cultural
Publics

Economic
Suppliers

Company Political
Competitors Customers Intermediaries

Natural

Technological

Customer analysis (micro environment)

Customer Satisfaction -Good Customer Loyalty -Good Customer retention ratio -Good Market Share -Good Competitive Price -bad Number of Customers -Good Design own shoes optio -Good

NIKE focus has always been on the customer satisfaction. It invests a lot in its product research and development in order to offer better sports apparels to the customers. It has always striven to provide a competitive edge to foster the best possible performance in its athletes. The researchers work on the three primary area: Biomechanics (study of human movement), Physiology (study of the integration of the bodys energy systems and responses to the environmental stresses), and Sensory/Perception (subjective evaluation of product attributes, usability and durability).

Financial analysis (micro environment)

Profit Margin :10.03%- Good NIKE growth: 7% vs. industry growth 4.5% -Good High advertising cost -bad Better COGS% than competitors -Good

Internal analysis
NIKEs efficient internal operations are reflected through its better financial ratios. The key success factors associated with NIKEs success are its distinctive marketing capability, volume manufacturing capacity, extensive research and development effort to design premium concert athletic products for customers, product differentiation and innovation and distribution capabilities. Marketing capability through celebrity endorsement has always been the core competency of NIKE. Its efficient distribution capacity and use of IT to control inventory can be seen in better inventory turnover ratio.

Internal analysis (micro environment)

Marketing Innovative Products -Good Celebrity endorsement -Good Diversity of online product -Good R&D Integrated researches -Good Product technology -Good High quality product design -Good Good supplier relation -Good IT for inventory control -Good

Macro environment
national & International Economy Government & Politics The Natural Environment

Macro environment
Technology The Social Structure

Demographic Structure

Global Economy

THREATS Economic recession Consumer purchases slowing down Falling international economy; fluctuation in foreign currency & exchange rates OPPORTUNITIES International expansion, building upon its strong global brand recognition; strong economic conditions in other countries

Technology

OPPORTUNITIES Use of IT in marketing information system; Scientific research in products quality & innovation like Motion Analysis (kinematics), Foot-pressure Measurement, Ankle Range of Motion etc

Government/Politics

THREATS Increased legislation Higher price of products, Customer right OPPORTUNITIES Macroeconomic stability, low interest rates, stable currency conditions and international competitiveness of the tax system

Natural Environment
THREATS Natural disasters like earthquake in Japan resulted in loss of lives, resulting in customer loss OPPORTUNITIES Cold/Rainy climatic condition creates a demand for shoes.

Demographic

THREATS Baby boomers pushed into late forties are less inclined for sporty activities like running; lower income of customers; ethnic mix of some countries OPPORTUNITIES Young generation inclination in sports & fitness; large population more customers; high income customer buying at premium price

Socio-Cultural
OPPORTUNITIES Inclination towards fitness leading to demand for fitness products particularly exerciseapparel, shoes and equipments

T H A N K Y O U

S I R .