Global Environment

1
Global Environment

• Nike Leads in Global Reach

2
Presentation Outline

• Background
• Industry Characteristics
• Company History
• Company Overview
• Article Summary
• Nikes Currency Advantage
• Nikes Rising US Competition
• Problem Resolution
• Marketing Implications
• Overview

3
Background

• Industry Characteristics Retail Sportswear
• Tremendous Financial Success
• Free Market Entry has Allowed Global Growth
• Strong Influence over Consumer
• High US Competition
• Unfavorable Labor Publicity

4
Background

• Company History
• Founded in 1947
• Largest sportswear supplier in the world.
• Nike - Greek goddess of Victory
• 60 of TR comes from International Sales
• Reported Net Revenue at 15.0 billion

5
Background

• Company Overview
• Nike-Owned Major Subsidiaries
• Cole Haan
• Nike Bauer Hockey
• Hurley
• Converse
• Exeter Brands Group- licensee of Shaq Dunkman
  Brands
• Nike IHM- makes AIR-SOLE cushioning components

6
Background

• Nike International
• Sells Products to 20,000 US Retailers
• Sales in Approx. 110 Countries around World
• 500 International Store Locations
• Corp Offices in 45 Different Countries
• Employs 29,000 People Worldwide
• Approx 650,000 Workers in Contract Factories
• Asia- No. 1 Manufacturing
• Europe- Largest Revenue Generator

7
Background

• Corporate Changes Due to Criticism
• Regulations on Subcontractors Factory Conditions
• Increase in Factory Worker Wage Rate
• Age Requirements in Shoes/Apparel Factories
• Internal and Independent Auditing

8
Article Summary

• Nikes Gain on Global Reach
• Nike has an extensive reach on the international
  community, while the U.S dollar plumbs new lows
  against the Euro, Nikes international market
  accounts for 60 of its total revenue. Nike has
  boosted impressive gains in the international
  community with 51 profit gain predicted for the
  fist fiscal quarter of 2008, while other major
  competitive athletic chains have seen a decline
  in sales and revenues. What sets Nike apart from
  its competitors? In China Nike has developed a
  formula of opening one or two stores daily in
  that market with positive same-store results.
  While other American companies has seen drops in
  sales as the U.S dollar decreases in value
  compared to the Euro, Nike has seen a gain of 7
  revenues growth in Europe, 4 in the Americas,
  and 2 growth in Asia-Pacific regions. With such
  impressive growth Nike has set a revenue target
  of 23billon by 2011.

9
Nikes Currency Advantage

• US Dollar drops to new lows against Euro
• 51 gain on profit due to currency translation
• 16 Growth in Europe, Middle East, Africa
• 22 Growth in Asia
• 15 Growth in Americas

10
Nikes Rising US Competition

• Mall chain stores have rigid retail conditions
• Foot Locker
• Finish Line
• Major Brands
• Adidas
• Fila USA
• New Balance
• Puma

11
Problem Resolution

• Nike can Increase US Sales Volume by
• Increasing sales in other sporting goods market
• Soccer
• Running apparel
• Nike should research target customers and raise
  sales within U.S boarders

12
Marketing Implications

• 4 Ps Adaptation vs. Standardization
• Ethnocentric View

13
What can Nike Do Better?

• Research
• Market Entry
• Global Localization

14
What can Nike Do Better?

• Increase Sales in United States
• Localize Marketing Campaigns
• Increase Brand Awareness
• Create Stronger Public Relations in Foreign
  Countries

15
Overview

• Background
• Industry Characteristics
• Company History
• Company Overview
• Article Summary
• Nikes Currency Advantage
• Nikes Rising US Competition
• Problem Resolution
• Marketing Implications

16
Any Questions???