2. “BRING INSPIRATION AND INNOVATION TO
ATHLETE* IN THE WORLD IN THE WORLD.”
*IF YOU HAVE A BODY, YOU ARE AN ATHLETE`

3. Strategy Analysis and Company Overview http://www.nike.com/us/en_us/c/better-world/
Nike Inc. is an American multinational corporation that is engaged in the design, development, manufacturing
and worldwide marketing and sales of footwear, apparel, equipment, accessories, and services.
Athletic Footwear,
Apparel, and
Equipment
Research,
Development,
and Design
Manufacturing,
Supply Chain,
and Marketing
Branding, Services,
and Social
Responsibility
Nike was founded in 1964 as Blue Ribbon Sports and initially operated as a distributor for the Japanese shoemaker Onitsuka. It officially became Nike Inc. in 1971

4. Strategy Analysis and Company Overview http://www.nike.com/us/en_us/c/better-world/
Name Nike Inc.
Year Founded 1964
Headquarters Beaverton, OR
Current CEO Mark Parker
Regional Involvement NA, SA, AS, EU, AF, AU
Category Involvement Footwear, Sportswear,
Equipment, Service
World Value Share 2014 25%
Nike, Inc. includes five distinct brands.
Although Nike has become a powerhouse in sportswear industry, there are many other companies that threaten Nike’s
competitive position. Nike’s strategic issue is that they rely solely on their branding strategies to differentiate
themselves in the industry. The company must continue creating product offerings that hold value to their customers
face the possibility of losing their competitive advantage in the market.
Nike is the largest seller of athletic footwear and athletic apparel in the
world. The company has a strong understanding of the market they serve
and bring value to their customers through their branding strategies. At
the end of fiscal year 2014, their brand value was $19 billion.
NIKE Brand
Converse, Inc.
Hurley International LLC.
Jordan Brand
NIKE Golf.

5. Nike Brand
34%
Jordan Brand
33%
Converse
33%
Footwear
58%
Apparel
31%
Equipment
5%
Converse
6%
Nike
Brand
45%
Converse
9%
Hurley
12%
Jordan
Brand
16%
Nike Golf
18%
Strategy Analysis and Company Overview http://www.nike.com/us/en_us/c/better-world/
2014 Revenue Breakdown by Product Category
The size of the overall US athletic footwear market is
estimated to be $21.2 billion in 2014. In the US, NIKE,
Converse, and the Jordan brands combined accounted
for over 60% of market share in athletic footwear. That’s
up from 35% in 2005 and 57% in 2013. Most gains came
at the expense of global rival Adidas, which lost 2%
share. Under Armour’s market share of footwear
products, meanwhile, rose by 1% to 3% in that time
frame. Skechers USA, too, expanded its share of the
footwear market, from 3% to 4% over the period.
Nike has a reported 60% market share for U.S. athletic
footwear and around a 25% share of the global market.
While Under Armour has grown substantially in its shoe
sales in the past few years, its substantial growth has
meant just increasing to not even 3% of the total U.S.
footwear market and an even smaller percentage
worldwide.

6. Strategy Analysis and Company Overview http://www.nike.com/us/en_us/c/better-world/
Strategic business
units
Celebrity endorsers Marketing strategies Labor scrutiny High pricing Reliance on footwear
Emerging markets Exponential growth in
technology
Support of sporting
events
High competition 3-D Screen-printing Currency volatility
Nike’s extensive variety
of footwear, apparel, and
equipment offerings are
recognized worldwide by
their signature logo. Nike
has taken advantage of
brand loyalty by raising
their prices above
competitors, and
receiving a higher profit.
Nike has carefully
selected celebrities and
athletes all over the
world to endorse their
products and develop it’s
competitive position in
the market as the iconic
brand it is today. These
athletes correspond to
the popular trends in the
differing markets and
add value to their brand.
Nike has always put a
lot of resources into
developing creative
marketing strategies to
convey the value their
products hold to their
customers. Whether it
be on TV, magazines, or
through social media,
people remember Nike
and believe in their
message.
Nike’s international
working conditions and
labor pay rates in have
been one of the main
issues the company
has faced in the past.
Advocates for social
responsibility have
publicized this issue,
hurting Nike’s image as
a wholesome company.
The company has
positioned its products
at higher price points in
the market, which
reinforces their strategy
of offering the highest
quality items. This
hurts the company as
some people just see
Nike as a company
who enjoys stealing
people’s money.
In 2014, Nike’s
footwear segment
accounted for nearly
60% of total revenues.
Nike has been able to
thrive off of the
popularity of the trends
towards sneakers, but
any changes in those
trends could be
detrimental to the
company..
In 2014, sales from
emerging markets
made up 14% of
Nike’s overall
revenues. Continued
exploration and
utilization of growing
economies can
benefit Nike in the
long run.
With the help of greater
advancement in
scientific studies and
technologies, Nike has
the potential to produce
products at more
effective rates and at
higher efficiencies than
its competitors.
Continued innovation is
one of Nike’s strengths.
Sponsorships in future
global sporting events
including the Olympic
Games, the Super
Bowl, and the World
Series will contribute to
Nike’s image as a
brand that inspires
athletes to work hard
and become
champions.
There has been an
increasing amount of
competition among
rivals who offer
relatively the same
basic products at lower
prices. People who do
not value Nike can
purchase their
sportswear cheaper at
Wal-Mart of Target.
3-D screen-printing
allows people the ability
to make their own
clothing at home. This
poses a threat to apparel
companies such as Nike,
Adidas, and Under
Armour as their signature
logos that keep their
customers interested
could be achieved at
home.
Nike’s diversification
into foreign markets
has made Nike a
worldly known
company, any volatility
in foreign markets can
cause fluctuations in
the American dollar,
devaluating their sales.

7. Strategy Analysis and Company Overview http://www.nike.com/us/en_us/c/better-world/
Cradle to Cradle Network and Sustainability Campaigns
In 2011, a nonprofit organization by the name of Green Sports Alliance
was founded by a collection of Pacific Northwest pro-sport teams with
the mission of bringing recognition of sustainable practices throughout
the sports industry. By using biometric approaches to the design of
products and systems, better known as the cradle to cradle framework,
companies were encouraged to view materials used in production as
nutrients that fueled fragile bodies. It suggests that industry must
protect and enrich ecosystems and nature's biological metabolism
while also maintaining a safe, productive technical metabolism for the
high-quality use and circulation of organic and technical nutrients.
http://buddhajeans.com/2013/05/05/update-eco-fashion-dictionary-may/
Since then, Nike has re-focused a segment of its business structure
towards marketing strategies that focus on creating projects that
benefit communities around the world and in building greater
sustainability. To further their support, Nike announced their plans for
transforming recycled materials into high-performance apparel and
footwear through the use of energy-efficient technologies.

8. Strategy Analysis and Company Overview http://www.nike.com/us/en_us/c/better-world/
Cradle to Cradle Network and Sustainability Campaigns
Nike’s decision to evolve with the cradle to cradle framework avoided the
possibility of being publicly scrutinized, as other companies such as Puma have
taken action as well. Nike’s humanitarian gestures has enhanced their company
image as a more wholesome, environmentally friendlier, and well rounded
company.
In November of 2011, Nike released its Material Sustainability
Index (MSI) sharing its framework developed from years of
sustainability research, design and collaboration. Additionally,
Nike established the Nike Better World Campaign to resolve
this rising issue in their business structure.
Much of the Nike Better World campaign
focuses on movements targeted
towards demographically relative markets.
It has reframed its sustainability message so
their young customers can relate and be motivated to take
action. Nike’s simple and clear “Better World” calls it like it is,
much like its predecessor, “Just Do It.” Beginning with their
highly acclaimed recycling advertisement, the website tells the
story of how sports and Nike have been “the vehicles of
making the world a better place.” The company has taken a
very systemic approach by dispersing its leverage over a large
team of department executives, using different advertising
mediums including building a strong social media platform and
focusing much of its effort on innovation through
collaboration.

9. Strategy Analysis and Company Overview http://www.nike.com/us/en_us/c/better-world/
Achieving Innovative Technology through Research and Development
The Nike Explore Team Sport Research Lab is located at the world Headquarters in Beaverton, Oregon. As a global hub of
sport science knowledge, the sport research lab has established research partnerships with major universities and institutions
throughout Asia, Europe and North America. These strategic partnerships, along with access to the world's best talent,
tools and athletes, work together to achieve value innovation at its highest potential.
Nike has been able to defeat their competitors by using their distinctive competences to market themselves as an innovative
company. Their ability to convey value through their messages, product offerings, and company culture leaves an inspiring
impression in the minds of their customers.
High-profile endorsements from world-class athletes contribute to Nike’s positive vision of motivating goal achievement and
success. Their partnerships with athletes shows that they care about the processes it takes to get there.
These inspiring ideas and images are the driving force behind Nike.
Nike sport research focuses on biomechanics, physiology, sensory/perception and data science and takes pride in product
innovation and creation which is made possible through their research lab. Products are specifically formed through
knowledge and insight gained from a scientific understanding of athletic performance.

10. Strategy Analysis and Company Overview http://www.nike.com/us/en_us/c/better-world/
Production and Distribution Channels
Nike sells their products to retail accounts in the United States, including a mix of footwear stores, sporting goods stores, athletic
specialty stores, department stores, skate, tennis, and golf shops, and other retail accounts. They also distribute products through
their own Direct to Consumer operations, through Nike-owned retail stores, internet websites, and through a mix of independent
distributors and licensees throughout the world. Virtually all of their products materials are sourced and manufactured by
independent contractors. Practically all of Nike’s footwear and apparel products are produced outside the United States, while
equipment products are produced both in the United States and abroad.
While Nike does not have to take on the development costs and
risks associated with doing business in the foreign markets, they
lose control of their manufacturing, marketing, and strategic
functions which in turns lowers their ability to take advantage of
scale economies. Nike operates in 43 different countries which
makes it hard to coordinate any strategic moves across differing
countries. One other disadvantage to Nike’s strategy is that
production in developing countries makes it hard to produce
technologically advanced product offerings, and limits their ability
to grow as a company.
1,011,420
785
Factories by ProductFactory Workers
by Region
Americas
Europe,
Middle
East, &
Africa
North Asia
South
Asia
Footwear
Apparel
Equipment

11. Strategy Analysis and Company Overview http://www.nike.com/us/en_us/c/better-world/
Threat of substitutes
Medium
Risk of entry
Low-medium
Rivalry
High
Supplier power
Low
Buyer power
Medium-high
• Athletic shoes are necessary
for sports, but clothing
products are interchangeable
and can be accommodated to
tastes, comfort preferences.
• Any apparel company can have
access to many of the same
general materials that Nike has
access to.
• The worldwide demand for
athletic footwear and
equipment is expected to grow
in the future and customers
cannot substitute these
products.
• The problem of counterfeit
products is an area of concern.
As the quality of counterfeit
products has been improving
recently, this could threaten
the company’s sales in
emerging markets and could
also potentially dilute Nike’s
brand value.
• Economies of scale must be
achieved in the sportswear
industry.
• Nike is a strong and well
established brand and enjoys a
great degree of brand
recognition and loyalty. It will
be difficult for a new player to
match its level.
• Absolute cost advantage.
• Significant capital resources
are required for creating a new
brand as large investments are
needed for marketing and
obtaining floor space. This
restricts the entry of newer
players.
• One opportunity is that
internet companies could start
selling competitors’ footwear,
apparel and equipment online
as the barriers to entry are low
in this business.
• The global market for athletic
footwear, apparel, and
equipment is characterized by
intense competition by rivals.
• The sportswear industry
experiences continuous changes
in consumer preferences and
technology. If Nike is unable to
adapt to these changes quickly,
it could suffer losses in its
market share.
• Rising competition from
emerging players such as Under
Armour and Lululemon
Athletica, which focus on niche
market segments such as
performance apparel and yoga-
focused apparel, pose a threat
to Nike’s share of selected
markets.
• Nike also faces competition
from local players in emerging
markets who are increasingly
improving their product quality.
• Nike’s footwear and apparel
products are manufactured by
third-party manufacturers
outside of the U.S.
• Nike’s footwear production is
largely conducted in Vietnam,
China and Indonesia as
contract factories in these
countries in fiscal 2013
comprised around 42%, 30%,
and 26% of total Nike brand
footwear production,
respectively. Both sovereign
issues and currency effects
could be a cause for concern
for Nike.
• There are high switching costs
to change suppliers, as no
single footwear factory or
apparel factory accounted for
more than 6% of total Nike
brand footwear production
and Nike brand apparel
production in fiscal 2013
• Low switching costs for the
end consumer. People will
often pay whatever price for
items depending on changing
price, style trends, brands,
and preferences.
• Nike is globally synonymous
with sports which results in a
universal demand for
sportswear.
• Nike caters to its customers
through both the wholesale
and direct-to-consumer
channels, which accounted
for 80.6% and 18.9% of total
Nike brand’s sales
respectively, in fiscal 2013.
• Certain big wholesale
customers hold bargaining
power as they could widen
their partnership with Nike’s
competitors or provide their
own private label offerings to
earn higher profitability.

12. $14.59
$15.65
$17.63
$22.66
$24.14
$3.97
$3.31
$4.30
$6.80
$10.96
$-
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
2001 2002 2003 2004 2005
MarketCap(Billions)
Year
Nike Adidas
2003- Signs LeBron James
2003- Signs Kobe Bryant
Strategy Analysis and Company Overview http://www.highsnobiety.com/2015/11/09/nike-adidas-
market-shares/
NIKE vs ADIDAS l MARKET CAPITALIZATIONS
2002- Nike acquires Hurley
2003- launches Y-3
2004- Acquired Starter
2005- Jordan XX
Launches 20th Jordan
shoe
2005– Adidas signs Lionel Messi,
Launches “Impossible Is Nothing”
Campaign with David Beckham &
Muhammed Ali
2001- Herbert Hainer takes over as Adidas CEO
2003- David Beckham signs $130M lifetime contract
2004- Phil Knight steps down as CEO
2003- Nike acquires Converse
Gradual increases in select acquisitions and engaging in
particular celebrity endorsement strategies throughout
the last 15 years has enabled Nike to increase its
market capital, beat out its competitors, and become
the most recognizable and valued sportswear company
in the world.
This graph illustrates the market capitalizations between
Nike and Adidas. As of 2014 Adidas was the second leading
manufacturer behind Nike.

13. $25.14
$30.70
$23.22
$29.03
$36.40
$9.03
$13.70
$7.90
$10.98
$13.56
$-
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
2006 2007 2008 2009 2010
MarketCap(Billions)
Year
Nike Adidas
2008- Nike acquires UMBRO
2008- Adidas signs Derrick Rose
Strategy Analysis and Company Overview http://www.highsnobiety.com/2015/11/09/nike-adidas-
market-shares/
NIKE vs ADIDAS lMARKET CAPITALIZATIONS
2006- Mike Parker
becomes Nike’s CEO
2007- Acquires
Reebok; Becomes
official NBA
merchandiser
2009- Nike launches Yeezy 1
2007- Signs Kevin Durant

14. $40.47 $41.36
$69.43
$83.66
$113.04
$13.76
$18.61
$26.21
$14.41
$18.75
$-
$20.00
$40.00
$60.00
$80.00
$100.00
$120.00
2011 2012 2013 2014 2015
MarketCap(Billions)
Year
Nike Adidas
2014- Nike signs Rory Mcilroy
2014- Nike signs Rafael Nadel
Strategy Analysis and Company Overview http://www.highsnobiety.com/2015/11/09/nike-adidas-
market-shares/
NIKE vs ADIDAS lMARKET CAPITALIZATIONS
2012
Sells UMBRO, drops Yeezy 2,
Flyknit fiasco, drops Roshe Run
2015- Adidas launches Yeezy
boost, signs James Harden
2011- Adidas launches “All In” campaign
featuring David Beckham, Lionel Messi, Katy
Perry and Derrick Rose
2014
Adidas signs Parrell and Nigo,
2014- Yeezy 2 RED October
2013- Nike sells Cole Haan
2012- Flyknit vs Primeknit fiasco
2013- Launches energy boost running technology
2013
Adidas signs
Kanye West
2014- Adidas launches Tubular

15. Strategy Analysis and Company Overview http://www.nike.com/us/en_us/c/better-world/
Branding Strategies
Product Innovation
Manufacturing
Celebrity Endorsements
Nike has enjoyed success from their
superior ability to market themselves in a
way that brings value to its customers.
Nike has reached economies of scales
by licensing their products to contract
manufacturers to international markets
where costs are lower.
Nike continues to develop new styles of footwear,
clothing and accessories that appeal to their
customers. The company began as a footwear
company but diversified its business and succeeds
at filling customer needs.
Since endorsing Michael Jordan in 1984, the
company has prides itself on the multiple
partnerships with other celebrities who
represent Nike in a positive way. These
ambassadors are seen as real life remodels
and create affect-based trust between the
customers and the company.
Cradle to Cradle Framework
Nike’s Better World campaign boosts the
company’s image as being compassionate for
the livelihoods of communities and growth in
economies.
Problem occurs when customers no longer see value.
Problem occurs when products no longer satisfy needs.
Problem occurs when celebrities are no longer trustworthy.
Problem occurs when customers do not believe their efforts are making a change.
Problem occurs when customers can buy their products elsewhere.

16. Strategy Analysis and Company Overview http://www.nike.com/us/en_us/c/better-world/
Nike’s company structure and strategies have no doubt placed them in a position that is hard to beat.
Although they have built a successful empire, the strategic issue remains. What will Nike do when their products
no longer hold value to the customers they serve?
Recommendations & Action Plan
• Be the first to establish a new trend, rather than being the company that has to catch up to it. Pioneer inventive
products that appeal to customers.
• Continue reaching customers by bringing awareness of Nike through different social media platforms.
• Become more relatable to regular people by sponsoring a YouTube personality.
• Create different ways to increase customer switching costs. This could include a shoe that is fitted specifically to the
foot of a customer.
• Continue research ways to make a healthier production process for all of those involved.

17. Sources
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• http://www.businessinsider.com/the-athlete-endorsements-helping-under-armour-compete-with-nike-2015-6
• http://www.highsnobiety.com/2015/11/09/nike-adidas-market-shares/
• http://www.trefis.com/stock/nke/articles/217421/marynike-through-the-lens-of-porters-five-forces/2013-12-02
• http://www.triplepundit.com/2011/11/nike-puma-reframing-sustainability-message-younger-market/
• http://www.triplepundit.com/2011/12/dear-nike-better-world-better-marketing/
• http://www.valueline.com/Stocks/Highlights/SWOT_Analysis__Nike.aspx#.Vh3VNCtSE4c
• http://news.nike.com/news/nike-inc-introduces-2015-global-growth-strategy
• http://www.nike.com/us/en_us/sl/store-locator
• http://www.statista.com/statistics/278834/revenue-nike-adidas-puma-footwear-segment/
• http://marketrealist.com/2014/12/understanding-nikes-pricing-power-and-premium-products-tilt/
• http://www.fool.com/investing/general/2015/02/12/nike-inc-vs-under-armor-inc-the-2015-matchup.aspx
• http://www.nikebiz.com/crreport/content/workers-and-factories/3-1-2-key-issues.php?cat=overviewb
• https://www.allfreepapers.com/Miscellaneous/Nike-Executive-Summary/28609.html
• http://www.nikeresponsibility.com/report/content/chapter/business-overview