Strategic Analysis Nike Essay Example

Strategic Analysis Nike Paper Nike: Strategic Analysis Nike’s Global Business Strategy When first founded in 1962 under the name of Blue Ribbon Sports, the strategy was â€Å"to distribute low-cost, high-quality Japanese athletic shoes to American consumers in an attempt to break Germany’s domination of the domestic industry. † Today Nike offers athletic shoes at every marketable price point to a global market. Nike sustains its leading position through emphasizing quality products, constant innovation, and aggressive marketing. Nike sells its products in more than 180 countries under not only its namesake brand but brands such as Cole Haan, Converse, Hurley International, and Umbro Inc. It uses distribution channels such as company-owned stores and websites or sports retailers, such as Foot Locker. As mentioned earlier, Nike is a truly global company, which means that its success story is transferrable over borders. It divides its sales into four main regions- the US, Europe, Middle East and Africa (EMEA), Asia Pacific, and Central and South America. For 2009 each of these regions accounted respectively for 34. 1%, 28. 7%, 17. 3%, and 6. 7% of total revenue. Segmentation Strategy: Nike realizes that in order to be number one they need to offer a wide range of products to be able to develop a culture and fulfill their loyal customers’ needs. Nike’s strategy in terms of segmentation is excellent. Their core product is footwear but they also manufacture apparel and equipment and thus, they spread their influence in other sport-related markets. Nike also has several sub-brands to grasp different consumer groups. We will write a custom essay sample on Strategic Analysis Nike specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Strategic Analysis Nike specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Strategic Analysis Nike specifically for you FOR ONLY $16.38 $13.9/page Hire Writer Nike’s main source of revenue is athletic footwear, which is also its core competency. It accounts for 54% of total revenues. It is designated for running, cross-training, basketball, soccer and it includes even a casual footwear line. Sales in this segment increased by 14% in 2009 from which a big portion was a result of the increase in sales in the Asia Pacific region. The second most profitable segment for Nike is apparel, such as t-shirts, shorts, sweatpants, and licensed apparel made specifically for universities with their own logos. With an increase of only 0. 2%, apparel sales accounted for 27% of the company’s revenue in 2009. However, sales in this segment grew by 14% in the previous period, between 2007 and 2008, due to the growth of 25% of revenues in emerging markets, such as Russia, and other EMEA countries but also a substantial revenue growth of 50% in China. Unlike footwear, which main market is the US, the majority of apparel sales come from the EMEA region accounting for 38% of total apparel revenue. Equipment, such as balls, golf clubs etc. ccounts for 6% of total revenues in 2009 and 13% come from other brands under Nike, such as Cole Haan, Converse, Umbro etc. these different sub-brands supplement Nike product lines. For instance, Umbro specializes in selling soccer apparel and footwear. Nike Golf targets golf players and offers specialized golf equipment, apparel and footwear. Cole Haan on the other hand offers premium dress and casual footwear. Hurley International offers products suitabl e for snowboarding, skating, and surfing. Marketing Strategy: Significant role for the competition of market share in the footwear industry plays marketing in order to strengthen the brand image, develop product identity and expand customer loyalty. Competition between players is non-price but rather based on differentiation in brand image and product innovations. Therefore, substantial investments in marketing campaigns are required. Nike invests annually between 11% and 13% of revenue in marketing. Advertising strategy: Nike’s strategy was to create dominant presence in media. Nike created media presence in several trend setting United States cities. TV ads linking Nike to a city were used, but real drivers were huge oversized billboards and murals on buildings that blanketed cities with messages featuring key Nike-sponsored athletes, not products. The company focuses its marketing on celebrity endorsement, i. e. athletes in basketball, golf, soccer, and tennis. Lately, Nike has also began to sponsor big sporting events so as to create huge awareness and brand following. In 2008, Nike spent significant amount on advertising in the Beijing 2008 Olympics and the Football Championship. After the recent Tiger Woods scandal Nike plans on revisiting it celebrity endorsement strategy. It can be noted that the ‘swoosh logo’ is one of the most famous in the world due to these huge advertising efforts. Branding Strategy: Nike’s strategy in this front is to develop a premium brand associated with high quality product that satisfies customer needs. Nike’s brand is associated with an aggressive attitude portrayed by, â€Å"you don’t win silver, you lose gold,† which clearly suggests that winning is vital. The Nike customer associated the Nike brand with being the ‘American’ way: Being individual and aggressive like Michael Jordan and John McEnroe. Nike built its brand around sports, attitude and lifestyle. Nike backed this strategy with marketing campaigns like â€Å"Just do it† and with the companies front athletes like Michael Jordan and Tiger Woods. Selling Strategy: Nike’s strategy in early 2000s was to develop, flag ship stores, NikeTown shops in bigger cities, first national, and then abroad. Nike was the first company to establish flagship stores and it turned out to be a sensation. There are independent small retail stores that sell Nike products all around the world as well. Also, on seeing the potential of the low price market, Nike took efforts in 2005 to tap in to the low price segment by striking a deal with big retail discount stores like Walmart and rolled out starter shoes at a cheaper price, competing with private label brands. However, to avoid brand dilution, Nike did not use the swoosh logo in these shoes. Currently, Nike has a high quality website and uses it as an online selling channel. NikeId , a part of the website allows a customer to customize his own shoes and buy it. The website is available in 14 languages and is different according to the country requirements. Manufacturing Strategy: Nike manufactures all of its footwear from outside United States. Nike has contract suppliers in China, Vietnam, Indonesia and Thailand. These countries accounted for 36%, 36%, 22% and 6% of total NIKE brand footwear respectively. Nike also has manufacturing agreements with independent factories in Argentina, Brazil, India, and Mexico to manufacture footwear for sale primarily within these countries. Primary reason for this is that it is cheaper to manufacture in South East Asia and transport it to USA and Europe, regardless of the transportation and tariff costs involved. Organizational Strategy: With over 21,000 employees worldwide, the company was organized into departments by both geographic divisions and product categories, which created overlapping management responsibilities and a fluid leadership structure. For example, a footwear manager in Europe answered to both the Vice President of Footwear and the Vice President of Europe. However, there was no formal communication link between the regional vice presidents (those in the United States, Europe, Asia-Pacific, and Latin America) and the product vice presidents (footwear, apparel, equipment). Human Resources Management Strategy: The sweat shop debacle in late 1990s has led Nike to form a distinctive strategy to provide a good working environment for employees. They have several internal guidelines and compliance standards apart from state laws for ensuring proper working conditions for all workers in its contracted supplier factories. Due to the magnitude of Nike and their number of stores and manufacturing plants throughout the world, Nike has taken the time to recognize the importance of each individual and what they can contribute to the team. For this reason, Nike does not call its employees, ‘employees’ but rather ‘team members’ because each part of the team has something to add to the business. They have also admitted that they have a very large array of workers and this brings many diverse cultures and points of views together. According to one of its statement, diversity and inclusion is a crucial factor in Nike’s diplomacy in their many locations and globally. In identifying the differences they have set apart the opportunities to better understand how their teams will work together and what adversity they may face because of this. In order to strive to reach this mission they have put into action these strategies: * Cultivate diversity and inclusion to develop world-class, high-performing teams * Ignite change and inspire critical conversations around diversity, inclusion and innovation * Create venues and environments for open dialogue, diverse opinions and a multitude of perspectives All of the above will in future venture apply and assist them in working more efficiently and having more satisfied employees for longer periods of time. Technology and Innovation strategy: Nike fields some of the best in class technological practices and has a few patents to its credit. Nike emphasizes on these and has developed a lot of new products with use of high technology and sophistication. An example of that is the microprocessor shoe to give great experience and comfort to the customer. However, Adidas is also working on high tech innovations to provide high quality shoes. Lately, Adidas and Nike have been doing entertainment based marketing campaign by forming alliances with technology/entertainment companies. Nike had an alliance with Apple to sell Nike shoes with Apple iPods while Adidas tied up with Microsoft to sell Adidas goods with Microsoft Xbox gaming systems. So far the success of these alliances is yet to be quantified. Manufacturing strategy: Nike follows a 100% outsourcing strategy. Most competitors follow the outsourcing strategy. Exceptions to this are New Balance and other smaller players. New Balance claims that 75% of its production is from the US and other small companies produce in the US as well.

The eNotes Blog Top Ten Summer Readings for2013

Top Ten Summer Readings for2013 Ahhhh, summer! Finally, some time for a bit of pleasure reading. Got a gift certificate youve been hanging on to? (Ha. Mine are gone minutes after they hit my hands.) Or maybe you are just overwhelmed with choices and dont want to waste precious free time on something that isnt so great. Well, we at want to help you get the most out of your summer reading Here are ten suggestions offered by my very well-read friends who occasionally hang up their tweed jackets and loosen their professorial buns (no, not hair).   Here you will find a combination of new and older works, both fiction and non-fiction, serious and comedic.   So pick a few and let us know what YOU think! 1.   Mad Women: The Other Side of Life on Madison Avenue by Jane Maas Are you a fan of AMCs Mad Men and Peggy and Joan in particular? Curious about what life was really like on Madison Avenue in the 60s? Then you will enjoy Maass exploration of life in the ad game in the 1960s and beyond . 2.   Confessions of an Ex-Girlfriend by Lynda Curnyn A good beach read by a first time novelist. A friend says it is the only romance novel Ive ever finished. Suddenly single when her aspiring screenwriter boyfriend takes off for a hot job in L.A., bridal magazine editor Emma Carter is forced to reassess her appearance, her job, and her prospects-and take action. A diverse cast of engaging, occasionally offbeat characters, the hilarious sayings attributed to them, and a fast-paced style facilitated by Emmas pithy sound-bite confessions add to the fun in a lively Manhattan-set story that, while not a true romance, leaves the heroine happily pursuing her dreams and involved in a satisfying romantic relationship. This work may appeal to those who enjoy Bridget Jones-type books and like their stories urban, trendy, and slightly ambiguous. Curnyn is a fiction editor and lives in New York. This is her first novel. Library Journal 3. The Worst Hard Time by Timothy Egan As a Steinbeck scholar, this has been on my own list for a long time, and I was pleased to see that several friends highly recommend it as well. Egens gripping true story of living through the Dust Bowl is also a National Book Award winner. 4.   Wash by Margaret Wrinkle This novel was recommended by one of my closest friends so I will be popping this into my shopping cart soon. It sounds fascinating. The Atlanta Journal Constitution calls Wash Amazing . . . Never has a fictionalized window into the relationship between slave and master opened onto such believable territory . . . Wash unfolds like a dreamy, impressionistic landscape . 5.   Who I Am  by Pete Townshend Rock n roll bios seem to make the list every year and this summer is no exception. If youve ever fantasized about pummeling a guitar to bits on stagethis is the book for you. Rock out by the pool and learn the story of a man who. wanted The Who to be called The Hair. loved The Everly Brothers, but not that drawling dope Elvis. wanted to be a sculptor, a journalist, a dancer and a graphic designer. became a musician, composer, librettist, fiction writer, literary editor, sailor. smashed his first guitar onstage, in 1964, by accident. heard the voice of God on a vibrating bed in rural Illinois.. Whats not to love? 6.   Shadow of the Wind by Carlos Ruiz Zafon Another recommendation from a good friend (I am going to be so broke by the time this list is done). Barcelona, 1945: A city slowly heals in the aftermath of the Spanish Civil War, and Daniel, an antiquarian book dealer’s son who mourns the loss of his mother, finds solace in a mysterious book entitled The Shadow of the Wind, by one Julin Carax. But when he sets out to find the author’s other works, he makes a shocking discovery: someone has been systematically destroying every copy of every book Carax has written. In fact, Daniel may have the last of Carax’s books in existence. Soon Daniel’s seemingly innocent quest opens a door into one of Barcelona’s darkest secretsan epic story of murder, madness, and doomed love. 7.   Chanel Bonfire: A Memoir by Wendy Lawless Another friend suggests this, saying:    Chanel Bonfire is brilliant. Its a memoir by the witty, sharp daughter of a beautiful 1970s jet setter. The social climbing Mom has mental illness and alcoholism. Its actually quite funny, in a black humour sense. Highly recommend it. 8.   Devil in the White City: Murder, Madness, and Magic at the Fair That Changed America by Erik Larson This friend says, Devil in the White City is a fascinating intertwining of two contemporaneous true events: a serial murderer operating in Chicago and the lead-up to, running, and aftermath of the Chicago Worlds Fair. Its heavy on history and architecture, but I really liked it. 9.   Defending Jacob by William Landay What is it about legal thrillers and summer? Lots of people love them and a very literate friend suggests this one, so on the list it goes. Award-winning author William Landay has written the consummate novel of an embattled family in crisis- a suspenseful, character-driven mystery that is also a spellbinding tale of guilt, betrayal, and the terrifying speed at which our lives can spin out of control. 10.   Tales of the South Pacific by James A. Michener Every man I have ever known loves Michener.   Published in 2011, this volume is a collection of tales is set against the background of the South Pacific, the endless ocean, the coral specks called islands, the coconut palms, the reefs, the lagoons, the jungles, and the full moon rising against the volcanoes. Sounds like the perfect summer mental escape!

How the World might change in the next 25 years Assignment

How the World might change in the next 25 years - Assignment Example Deforestation is increasing the global warming problem and is diminishing the capacity of earth to generate oxygen through its plants. The purpose of this paper is to discuss and predict how advances in the management of natural resources are going to change the reality of humanity by the year 2037. The two social problems correlated to natural resources that are going to be emphasized in this discussion are food and air. The changes that are going to occur will come from exploitation of existing technologies and the creation of new innovations. There are a lot of people suffering from hunger today. Approximately 13% of the world’s population suffers from hunger which represents about 925 million people (http://www.worldhunger.org/articles/Learn/world%20hunger%20facts%202002.htm). A lot of experts believe that the world’s current agricultural capacity has the ability to feed everyone on the planet, but hunger is still occurring. One of the problems with the spread of hunger is that certain regions such as Sub-Saharan Africa do not have the arable land and the basic infrastructure such as water and electricity to create food. In the future this constraint will be eliminated as new technologies will enable the planet to turn salt water into drinkable water. About 20 % of the world land is covered by the five major oceans (http://www.gdrc.org/oceans/world-oceans.htm). The second innovation that will revolutionized agriculture worldwide is the creation on synthetic terrain. This new form of land can be transported anywhere and by used to regenerate the soil in places that lack arable land such as Haiti. A second major problem that is going to be resolved is the elimination of deforestation. This will occur prior to 2037 due to the fact that the paper wood milling industry will seize to exist. The world will not longer accept humanity cutting down trees to create books, magazines, or any form of wood pulp paper. Luckily this transition