1. NIKE
BY
B.C.VENKATAGIRI
MBA IST YEAR
11HM08
NATIONAL INSTITUTE OF TECHNOLGY
KARNATAKA,SURATHKAL
2. Introduction
Nike operates within the sports footwear and apparel
market. Originally designing and producing running
shoes, their portfolio has broadened to include a wide
range of sports and leisure wear. This is all endorsed
by top sporting personalities.
3. VALUE CHAIN
Nike’s Value chain provides a clear view of the
extent of the global nature of the company.
Nike’s headquarters are in America;
however, virtually all of its production takes
place outside of the United States.
Nike’s value chain upstream begins with the
materials used in the production of its products.
Many of these materials used in production are
available in the locations which the
manufacturing takes place, but some
specialised materials have to be imported to the
manufacturing company.
4. Nike Branding
Global brand
Consumers are willing to pay a premium price for; as they
imply credibility, high quality and up-to-date global trend.
When companies are bought trade under their name.
Moving into a new market with a brand that is already global
you can reduce cost of introductory and follow-up marketing
programs.
Ensures customer loyalty and to widen portfolio.
Concentrating on core products as Nike, allowing growth in
new diverse markets
significant scales of economy are achieved , this is in terms of
brand development, packaging and manufacturing.
5.
6. MARKETING STRATEGY
Sports personalities have endorsed the Nike
product, although with numerous different sports and
countries targeted this has been costly. The amount
each personality has received is considered high.
This forces the competitors to market their products
in the same way.
Trends within the industry have increased the number
of female consumers.
With advertising Nike has targeted segments of the
market, this costly. Nike should review their
advertising policies.
7.
8. 4PS
The athletic shoe industry is highly competitive as well as a
demanding market where fierce competition, price conscience
consumers, and constant changing market trends and fads have
all been attributing factors in how a manufacturer responds.
Highly focused brand includes Nike, Adidas, and Reebok, they
target a precise market. However, there is evidence that a brand
will widen its target market as it reaches a greater level of
maturity. In the case of Nike, for example, there was a move into
new sports areas away from the running heritage. Nike’s target
audience has moved from more masculine towards female and
Generation Y.
Price is related to Product, through the characteristics of the
brand, it’s packaging and overall image. People are buying into
an ideal, not just the item. Consumers believe that there is a link
between quality of a product and the price. Consumers question
what they are getting for their money. Brand
Management, customer awareness and loyalty, is directly
linked to the price, therefore maintenance of the relationship
between brand images; quality and price have to be consistent.
9.
10. DISTRIBUTION AND RETAILERS
Nike has a strong network of retailers in 200 coutries
world wide through distributors, licensees and
subsidiaries. Within the USA there are 18000 stores
that retail nike products. These are well established
channels.
Nike made itself heavily dependant on one retailer
Footlocker, representing 10% of their revenue. When
Footlocker reduced their purchasing form Nike, it
created a reduction in turnover in the short term.
Organisations that are over dependant on one retailer
are open to cash flow problems, if the retailer
switches suppliers, reduces purchasing or ceases
trading .
11. SUPPLY CHAIN
Like every large IT undertaking, the team responsible
for the implementation of Nike Supply Chain (NSC)
began with a set of specific, stated goals:
Enhancing Nike’s ability to respond to changing
conditions;
Reducing inventory and capital investment risk;
Improving service to meet customer/consumer needs;
Improving process, information and product quality;
and
Providing an efficient global supply chain with local
implementation.
12. BCG MATRIX
Nike is established within its
markets, benefiting from economies of scale.
This places them in the Cash Cows category
on the Matrix.
Cash cows market growth has slowed, and
the products hold a fairly stable market
share.
