Nike Stock Pitch with Fundamental Analysis, Ratio Analysis and Valuation report.

5. 57%
27%
6.5%
2%
6.5%
1%
Revenue in million USD
Footwear Apparel Equipment Global Brand Divisions Converse Corporate

6. North America
47%
Western Europe
19%
Central & Eastern Europe
6%
Greater China
10%
Japan
3%
Emerging Market
15%
SALES IN DIFFERENT REGION

7. Analysis
Fundamental
Analysis
SWOT
Analysis
PORTER’S
Five Forces
Analysis
PEST
Analysis
RATIO
Analysis

8. Strengths
Brand reputation
Runs offices in 45 countries
worldwide
Strong financial position
Sponsorships
Weaknesses
Heavily depend upon footwear
market
Labour law violations and child
labour
Price sensitive retail stores
Opportunities
Develop variety of products –
sunglasses, casual wears
Growth in emerging markets like –
India, China
Global brand recognition
Global marketing events
Threats
Aggressive competition
Negative image due to “sweatshops”
Financial crisis
Consumer price sensitivity

9. Threat of New
Entrants
Medium
• Significant capital resources are required for creating a new brand as large investments are needed for marketing and procuring
floor space; hence, this restricts the entry of newer players.
• Nike enjoys a great degree of brand recognition and loyalty, and it will be a difficult for a new player to match its level.
Bargaining Power
of Customers
Medium
• 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.
• Bargaining power of end-customers is low as Nike has a very strong brand image and holds an innovative product portfolio.
Competitive Rivalry
within the industry
Medium
• Nike faces rising competition from local players in emerging markets, who are increasingly improving their product quality.
• 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, also pose a threat to Nike’s share of selected markets.
Threat of Substitute
Products
Low
• The worldwide demand for athletic footwear, apparel and equipment is expected to grow in the future as customers cannot
substitute these products.
Bargaining Power
of Suppliers
Low
• No single footwear factory or apparel factory accounted for more than 6% of total Nike brand footwear production and Nike brand
apparel production respectively in fiscal 2013; hence, due to a large base of suppliers, we believe their bargaining power is limited.
• The switching costs in changing suppliers is significant.

10. Political factors
Favourable foreign
nations' relationship
Positive US
government policies
Currency exposure
risk
Risk of Terrorism in
home nation
Economic factors
Increase in the
shipping costs of raw
materials and
company resources
Increase in labour
costs and inflation in
China
Growth of the
performance shoe
industry
Under Armour shoe
sales relies on a
consumers
discretionary income
Increase in living
standards
Social Factors
Brand Consciousness
among customers
Sponsorship
Buying habits and
fashion in youths
Increase in
participation of women
in athletics
Increase in physically
active seniors
Technological factors
Increase in the use of
commerce conducted
electronically
Increase in mobile
and e-commerce
New technologies
emerging that allow
corporations to
become more energy
efficient as well as
reduce manufacturing
costs
Social Media for
marketing

12. Ratios Nike Adidas Puma
EBITDA Margin 12.75% 8.03% 12.93%
Return on Assets 14.48% 7.30% 31.62%
Return on Equity 24.88% 21.06% 55.80%
Asset Turnover 2.03 1.5 1.86
Current Ratio 1.76 1.8 2.22
Debt to Equity .12 0.53 1.72
P/E 28.85 18.97 16.8