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NIKE
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Mission Statement
To lead in corporate citizenship
through proactive programs thatreflect caring for the worldfamily of Nike, our teammates,
our consumers, and those whoprovide services for Nike
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What Nike Does
Create authenticathletic footwear,apparel, equipment and
accessories for sportsand fitness enthusiasts
Through subsidiaries,design and sell a line of
mens and womensdress and casual shoesand accessories
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Principle Products
Began with longdistance running
shoes in 1963Past 17 years: AirJordan basketballshoes
Wide range ofshoes, apparel andequipment
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Brand and Logos
The Swoosh only
cost $35
Memorable, simplein form, workable inall sizes, invokes astrong signal
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Nike DominanceComparison of Annual Revenue
0
1
2
3
4
5
6
7
8
9
10
Nike Fila Reebok New Balance Adidas
Corporation
2001AnnualSales(In
Billions)
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Athletic Shoe Market Share
Athletic Shoe Market Share, 2000
Adidas
15.1%
Nike
39.2%
Asics
2.1%
Saucony
1.4%
K-Swiss
3.6%
Reebok
10.9%
New Balance
9.4%
Timberland
2.9%
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STRENGTHS
Strong and meaningfulresponse to laborcriticisms
High quality productsand good overallreputation
Phil Knightsmanagement andleadership
Brand recognition andeffective marketing
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WEAKNESSES
Poor communication of labor practices
Insufficient line of affordable shoes
Uninformed factory workers
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0.00%
5.00%10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
Well
Below
Average
Below
Average
Average Above
Average
Well
Above
Average
No
Opinion
Fairness of Nike's Labor Practices
Fairness of Nikes Labor
Practices
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0.00%
5.00%
10.00%15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
45.00%
Well
Below
Average
Below
Average
Average Above
Average
Well
Above
Average
No
Opinion
Quality of Nike's Products
Quality of Nikes Products
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Seven key marketsBrazil, China, India, Japan, U.K., U.S.and Russia.Seven key performance and lifestyle categoriesaction
sports, basketball, football, running, mens training,
womens training, and sportswear.
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OPPORTUNITIES
Increased sales due to thestrengthening economy
More positive public perception ofNikes social responsibility
Growth through increased presence in
low- to mid-priced shoe market
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THREATS
Increased awareness of human rights
Growing competition
Competitors attracting femaleconsumers
Mounting disapproval of allegedcorporatization of college athletics
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Comparison with Competitors
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Nike Brand Factories by Regionand Product
Contract Manufacturing Base
Overall manufacturing base is generally comprised of long-term partnerships,
with some fluctuation based on product sourcing requirements, changing
business and fashion trends or general factory performance.
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NIKE-Manufacturing
Contract Factory Disclosure
Nike was the first company in the industryto disclose its factory list. Nike iscommitted to supply chain transparency byupdating public disclosure of the contract
factories worldwide that are producingNike-branded product.
Focus Factories
prioritized monitoring by focusing on the20 percent of key contracted factories thataccount for approximately 80 percent ofNike's production by volume. 168 suchfactories
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NIKE-Business Strategy
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Strategy plans for ASIA-Long Term
Hire a market research firm familiar with Asia, specifically the
booming market of Japan, to study the buying habits of Asianconsumers. Determine what factors motivate their athleticfootwear and apparel purchases.
Sponsor regional sporting events for professional, amateur, and
collegiate teams.Conduct fashion shows at top retail venues to display our latestmerchandise offerings to consumers and the media.
Hire independent industrial engineers and analysts to work withmanufacturing facilities in order to maximize efficiency of
operations: shop layout, processes, etc.
Work with suppliers to implement the next generation ofelectronic data interchange (EDI) technology in an attempt toachieve just-in-time inventory.
St t i Pl f I di L T
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Strategic Plan for India-Long Term
Bulk buyers of sports products
School children constitute a largeportion of the sports market, and tend tostay loyal to a particular brand.
Traditional School
and CollegeFocus
India has traditionally seen lowerlevels of interest in activities thatconstitute Nikes main product portfolio
Focus on promoting Nikes coresegments like football, basketball
AthleticInterests
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Strategy-Product Differentiation
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Goals set in 2011
Investing insustainabilit
y as a keyinnovation/R+D priority on
consumerbrands'
agendas
Fast trackinnovation
throughinvestment
and
collaboration
Launch theGreenXchangeas a platform for
enabling thesharing of
intellectualproperty to fasttrack changes
efficiently
Build anadvocacyagenda topush for
large-scale
policies andinvestmentsin sustainable
innovation
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OBJECTIVE 1To increase positive public perception ofNikes labor practices by 20% by April
16, 2013
SHORT TERM STRATEGY
PLAN
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STRATEGY 1-1
Increase communication of positivesteps Nike is taking concerning labor
practices
Key Publics:
Media
Consumers (esp.university students)
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TACTICS
Create fact sheets outlining minimumwage discrepancies among countries
Circulate Letters to the Editorhighlighting positive aspects of Nikes
labor practices
Bring a visible Nike representative tocollege campuses
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TACTICS
Create focus groups to assess Nikes
labor practices
Distribute a video news releasepromoting Nikes efforts in the global
community
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STRATEGY 1-2
Make changes to improve Nikes current
labor conditions
Key Publics:
Foreign government agencies
Nike employees
Social activist organizations
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TACTICS
Create an anonymous system to protectwhistleblowers
Specify and inform employees of their rightsand responsibilities under the Nike code ofconduct
Provide employees with time and money toenroll in Nikes educational programs
Ensure surprise visits are a surprise
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EVALUATION
Repeat surveys atsix month intervals
to gauge publicperception
Revisit with focusgroups to record
their opinions ofimprovements
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OBJECTIVE 2
To increase American shoe sales by$500 million by April 16, 2013
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STRATEGY 2-1
Establish a better presence in theaffordable shoe market
Key Publics:
MediaConsumers only willing to spend lessthan $85
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TACTICS
Develop advertising tactics to promote NikesPresto line of shoes ($60-$85)
Aggressively target budget consumersthrough sales promotions and discounts onmid-priced shoes
Build a stronger relationship with moderately
priced retailers through sales associatesIncrease number of Nike outlet stores offeringdiscounted merchandise
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STRATEGY 2-2
Establish a competitive presenceamong female consumers
Key Publics:
Media
Female consumers(potential and real)
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TACTICS
Create advertisements that showcase Nikesfemale shoes by featuring professionalathletes and non-celebrity females who use
Nike productsDevelop a shoe named for a celebrity femaleathlete, such as Mia Hamm, comparable toAir Jordans
Actively pursue more female athletes forendorsements and advertisements byextending competitive contract offers
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Business Exit
>shoes, bagsand apparel forskateboarders-
Nike+Savier
>not able toachieve its
financial goals
>range of shoescalled Air Stabfrom its British
outlets after aspate of fatal knifeattacks across the
country
>Taken out ofdistribution
>football helmetchin straps
>reports of the
strap breaking andinjuries that inc. 2concussions, 2facial cuts that
required stitchesand a broken nose
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TIE-UPS
Nike has historically had some of the mostcutting-edge products on the market.
For example, Nike teamed up with Apple and
launched the Nike + iPod line of products.
This technology allows consumers to
connect their iPod devices to sensors insidethe shoes to record time, distance, pace, and
calories burned
Nike + iPodNike + iPod
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ADIDAS
High
Quality
Low
Quality
Low Price High Price
NIKE
REEBOK
ADIDAS
CONVERSE
Strategic Group Mapping
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5 Year Strategy Plan-
Sponsorships
NIKE, Inc. and the U.S. OlympicCommittee (USOC) announcedtoday that NIKE, Inc. will extendits sponsorship of the USOC asan official outfitter through 2016
London 2012 Olympic and
Paralympic Games, Sochi 2014Olympic and Paralympic WinterGames, as well as the Rio deJaneiro 2016 Olympic
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The Future: Closed-Loop BusinessModelFuture will demand closed-loop businessmodels that move closer to achieving zerowaste by completely reusing, recycling orcomposting all materials.
Includes up-front design of products that canbe manufactured using materials reclaimedthroughout the manufacturing process and atthe end of a product's life.
Innovators must create new ways to recycleand reuse waste and turn that into newproducts. Designers must look at newsustainable raw materials. Leaders mustexamine the impact on supply chains and
labor forces.
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Future Plans
A continued effort to eliminate PVC in its products;
The 'Reuse a Shoe' programme which has enabled some 13 millionpairs of athletic shoes to be recycled;
Working with organic cotton farmers to create a larger market for
their cotton: Nike's use of organic cotton has been climbing each
year since 1997, and it has a goal of 3% organic cotton use in everyunit of the company by 2012
Reducing emissions at factories worldwide and encouraging the
adoption of environmental management systems in each plant;
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RecommendationsFocus on Technology and Innovation
o With the market being mature in US and developed
countries, product differentiation is the best tool to gain
market share
o Focus on setting up a reliable Information system that iscapable of handling complex supply chains in a fool proof
manner
Revisit branding strategy by decoupling cheap and
low cost footwear from flagship itemso Cheap and low cost footwear should be decoupled from
the existing Nike brand. They might be sold under a
different name, but not Nike. For example, Nike starter
shoes should be sold as just starter and not Nike starter.
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Compete in full fledge in Emerging markets, particularly
in china make a website Store
Nike is currently the market leader in China. But competition is
catching up and Li Ning has been growing strongly. In this situation,Nike has to operate in full fledge to capture market share in emerging
markets. Basic things like an online store in a country like china will
seriously help drive a lot of business.
Follow both Differentiation and Pricing based strategy
o In a developing market, the market grows with a price competition
and later transforms into a high quality based market with non-price
competition. Since the industry in the developing economies is
growing, it is necessary to have an aggressive pricing based strategy as
well. As Nike has been building a high quality brand image so far, it
makes good sense to follow both differentiation and pricing based
strategy together.