Nike Distribution system

Rachael
McGowan
Level
5
Fashion
Marke5ng
and
Communica5on
Distribu5on
System
Bianka
Renn

Table of
Contents
1. Overview
4.
Brand History
5.
Mission
6.
Posi4oning
2. Distribution Map
8.
Headquarters, Subcontractors
& Retail Stores
10.
Nike Town & Factories
3. Distribution Strategy
12.
Overview
16.
Distribu4on Channels
17.
Supply Chain Management
4. Factories
20.
Overview
21.
China
22.
USA
23.
Brazil
5. References
25. Bibliography
26.
List of Illustra4ons

1. Overview
4.
Brand History
5.
Mission
6.
Posi4oning

Brand History
Nike,
Inc
was
founded
by
Blue
Ribbon
sports
by
Bill
Bowermna
and
Phil
Knight
in
1964,
it
officially
became
Nike,
Inc.
on
May
30th
1971.
Nike
is
an
American
mul5na5onal
corpora5on
that
is
engaged
in
the
design,
development,
manufacturing
and
worldwide
marke5ng
and
selling
of
footwear,
apparel,
equipment,
accessories
and
services.
It
is
one
of
the
world's
largest
suppliers
of
athle5c
shoes
and
apparel
as
well
as
a
manufacturer
of
sports
equipment,
with
revenue
in
excess
of
US$24.1
billion
in
its
fiscal
year
2012
(ending
May
31,
2012).
As
of
2012,
it
employed
more
than
44,000
people
worldwide.
In
2010
the
brand
was
valued
at
$10.7
billion,
making
it
the
most
valuable
brand
among
sports
businesses.
Nike
market’s
it’s
products
under
it’s
own
brand
as
well
as
Nike
Golf,
Nike
Pro,
Nike+,
Air
Jordan,
Air
Force
1,
Nike
Dunk,
Foamposite,
Nike
Skateboarding,
and
subsidiaries
including
Brand
Jordan,
Hurley
Interna5onal
and
Converse
(Taken
from
Nikeinc.com:
2014)
Wordpress:
2014
4

“OUR MISSION:
TO BRING INSPIRATION
AND INNOVATION TO EVERY
ATHLETE IN THE WORLD.
IF YOU HAVE A BODY, YOU ARE AN ATHLETE”
Nikeinc.com:
2014

POSITIONING
Nike
understands
the
importance
of
defining
itself
early.
As
far
back
as
1972,
Phil
Knight,
the
founding
and
current
CEO,
persuaded
several
marathoners
to
wear
Nike
shoes
during
the
Olympic
trials
in
Eugene,
Oregon.
When
some
of
the
runners
made
the
cut,
Nike
ran
an
ad
campaign
saying
that
“Nikes
were
worn
by
four
of
the
top
seven
finishers.”
The
brand's
desired
afributes
are
reflected
in
everything
that
represents
its
products,
whether
in
the
tone
and
manner
of
an
ad
or
a
representa5ve
of
the
brand,
like
Carl
Lewis,
Michael
Jordan
or
Tiger
Woods:
ac5ve,
inspired,
intense,
energized,
a
winner.
Nike
appeals
to
everyone
with
products
suitable
for
all
ages
and
genders
in
a
variety
of
styles
and
colours.
They
are
suitable
for
everybody
worldwide
from
spor5ng
to
fashion
to
leisure.
They
are
a
respected
company
within
it’s
segment
and
within
the
world,
they
have
created
a
ubiquitous
without
harnessing
the
brand
and
maintaining
it’s
core
DNA.
Izyan:
2010
6

2. Distribution map
8.
Headquarters,
Subcontractors
& Retail stores
10.

The
Red
pins
are
the
headquarters
of
Nike.
The
aqua
pins
are
the
subcontractors
of
Nike
which
are
focused
in
Taiwan
and
South
Korea.
The
yellow
pins
are
for
the
retail
Maps.google.com,
2014
stores
of
Nike.
Headquarters, Subcontractors & Retail stores
8

The
Redlines
are
from
the
Headquarter
to
subcontractors.
The
blue
lines
are
from
subcontractors
to
Factories.
The
yellow
lines
are
from
factories
Maps.google.com,
2014
to
retail
stores
Headquarters, Subcontractors & Retail stores
9

The
red
pins
in
this
signify
the
NikeTown
stores
whilst
the
purple
lines
show
the
distribu5on
of
the
product
to
the
retailers.
The
green
pins
are
the
Furubayashi,
2014
factories
for
Nike.
10

3. DistrIbution
Strategy
12.
Overview
16.
Distribu4on Channels
17.
Supply Chain
Management
11

Overview
The
marke5ng
strategy
of
Nike
embraced
by
many
organiza5ons
can
either
provide
them
a
market
frame
or
make
them
insulate
the
market
frontrunner.
The
more
reliable
the
distribu5on
of
the
product
is
improves
the
sales
and
in
consequence
more
profits.
Product
delivery
at
the
required
5me
to
the
users
not
just
effect
usefulness
however
also
result
to
high
level
of
customer’s
sa5sfac5on
as
well
as
loyalty.
Nike
Company
distributes
its
items
base
on
the
level
or
number.
The
high
costs
premium
items
are
given
to
par5cular
distributors
while
leaving
products
with
low
priced
to
be
trade
at
discounted
price
at
various
retail
stores
including
Wal-‐Mart
whereas
other
company
such
as
Reebok
who
embraced
a
restricted
distribu5on
technique
Nike
Company
ventured
more
into
a
world
market
capitaliza5on.
(Sales-‐Management:
2014)
12

13
OVERVIEW
NIKETOWN & NIKE STORES

14
OVERVIEW
NIKE RUNNING STORES
Grey Pins

15
OVERVIEW
NIKE FACTORY STORES
(OUTLETS)

Distribution Channels
Currently
Nike
operates
3
distribu5on
centers
for
footwear.
Interna5onally,
Nike
operates
21
distribu5on
centers
in
Europe,
Asia,
Australia,
La5n
America,
Africa
and
Canada
(Sales-‐Management:
2014)
The
sells
theirs
products
to
retail
accounts,
through
NIKE-‐owned
retail,
including
stores
and
Internet
sales,
and
through
a
mix
of
independent
distributors
and
licensees.
In
addi5on
to
this
they
sell
through
brand
outlets,
exclusive
showooms
and
also
hyper
markets
in
metroplitan
area,
(UKEssays.com:
2014)
Primarily
they
distribute
through
a
combina5on
of
retail
accounts,
NIKE-‐owned
retail
stores,
independent
distributors
and
licensees,
in
the
United
States
and
over
160
countries
worldwide.
The
biggest
retail
account
is
FootLocker,
Inc.,
which
accounts
for
10%
of
Nike’s
sales
worldwide.
Nike
also
has
its
own
e-‐commerce.
(Nikeinc.com:
2014)
10steps.sg:
2014
16

Retail Distribution Wholesale Distribution Licensee Distribution
17
(Asian Markets)
NikeTown
Nike
stores
Mul5brand
stores
Department
stores
Factory
Outlet
stores
Department
stores
Nike
Stores
Mul5brand
stores
Department
stores
Nike
town
has
the
full
product
selec5on
and
then
slowly
it
trickles
down
to
the
Nike
stores
(specific
running
stores)
to
mul5brand
such
as
footlocker
and
other
spor5ng
shops,
department
stores
and
Nike
factory
outlets.

Supply Chain Management
Nike
environmental
programmed
is
not
only
about
improving
their
product,
but
also
about
the
performance
of
their
suppliers.
There
are
some
business
reasons
for
dealing
with
suppliers
who
are
environmentally
responsible
and
knowledgeable.
First,
contracted
manufacturers
are
encouraged
to
go
beyond
what
is
required
by
law
or
collec5ve
bargaining
to
provide
outplacement
or
retraining
assistance.
In
addi5on,
Contracted
manufacturers
are
also
required
to
make
payment
to
workers
of
re5rement
or
severance
funds
and
respect
their
employees'
right
to
freedom
of
associa5on
and
collec5ve
bargaining
to
the
extent
permifed
by
local
law.
(Nikebiz,
2014)
Wordpress:
2011

4. Factories
20.
Overview
21.
China
22.
USA
23.
Brazil

Overview
The
three
main
product
lines
of
Nike's
brand
-‐
footwear,
apparel
and
equipment
-‐
are
made
by
approximately
600
contract
factories
that
employ
more
than
800,000
workers
in
46
countries
around
the
world.
They
currently
have
factories
in:
-‐ Argen5na
-‐ Austrailia
-‐ Bangladesh
-‐ Boznia
-‐ Brazil
-‐ Bulgaria
-‐ Cambodia
-‐ Canada
-‐ China
-‐ Equador
-‐ Egypt
-‐ El
Salvador
-‐ Georgia
-‐ Guatemala
-‐ Honduras
-‐ Hong
Kong
-‐ India
-‐ Indonesia
-‐ Isarael
-‐ Italy
-‐ Japan
-‐ Jordan
-‐ Macau
-‐ Malaysia
-‐ Mexico
-‐ Moldova
-‐ Netherlands
-‐ Nigeria
-‐ Pakistan
-‐ Paraguay
-‐ Peru
-‐ Philippines
-‐ Poland
-‐ Portugal
-‐ South
Africa
-‐ South
Korea
-‐ Spain
-‐ Sri
Lanka
-‐ Taiwan
-‐ Thailand
-‐ Turkey
-‐ United
Kingdom
-‐ USA
-‐ Vietnam
Nikeinc.com:
2014
20

Nikeinc.com:
2014
China
currently
has
192
factories
around
the
country
who
distribute
worldwide
to
both
wholesalers
and
retailers.
This
is
the
largest
area
of
factories
for
Nike
focusing
on
all
CHINA aspects
of
the
brand.
21

USA USA
Nikeinc.com:
2014
have
70
factories
across
the
country
making
this
the
second
largest
area
for
Nike
Factories.
There
focus
is
more
towards
Apparel
with
almost
76%
of
the
factories
dedicated
to
this.
There
distribute
these
products
mainly
throughout
USA
and
UK
with
smaller
numbers
being
distributed
worldwide
22

Nikeinc.com:
2014
BRAZIL
Brazil
has
52
factories
located
along
the
coast
with
63%
of
their
business
focusing
on
footwear.
This
will
be
distributed
globally
as
it
is
the
area
which
has
the
largest
amount
of
this
product
catergory.
23

5. References
25.
Bibliography
26.
List of Illustra4ons

BIBLIOGRAPHY
Furubayashi,
J.
(2014).
Jade
Furubayashi
-‐
Nike,
INC
-‐
Google
Maps.
[online]
Maps.google.com.
Available
at:
hfps://maps.google.com/
maps/ms?
hl=en&ie=UTF8&oe=UTF8&msa=0&msid=214590828070701732358.0
0047a15fd32e16ce629b&dg=feature
[Accessed
2
Jul.
2014].
Maps.google.com,
(2014).
The
global
commodity
chain
of
Nike
Inc.
-‐
Google
Maps.
[online]
Available
at:
hfps://maps.google.com/maps/
ms?
msa=0&msid=214072597081436239917.0004b08baa735045f8b29&dg
=feature
[Accessed
2
Jul.
2014].
Nikebiz.com,
(2014).
1.3
About
Nike
Inc
-‐
NIKE,
Inc..
[online]
Nikebiz.com.
Available
at:
hfp://www.nikebiz.com/crreport/content/
about/1-‐3-‐0-‐about-‐nike-‐inc.php?cat=about
[Accessed
2
Jul.
2014].
Nikebiz.com,
(2014).
4.1
Overview
-‐
NIKE,
Inc..
[online]
Available
at:
hfp://www.nikebiz.com/crreport/content/environment/4-‐1-‐0-‐
overview.php?cat=overview
[Accessed
2
Jul.
2014].
Nikebiz.com,
(2014).
2.1.1
Overview
-‐
NIKE,
Inc..
[online]
Available
at:
hfp://www.nikebiz.com/crreport/content/strategy/2-‐1-‐1-‐corporate-‐
responsibility-‐strategy-‐overview.php?cat=cr-‐strategy
[Accessed
2
Jul.
2014].
Nikebiz.com,
(2014).
3.1
Overview
-‐
NIKE,
Inc..
[online]
Available
at:
hfp://www.nikebiz.com/crreport/content/workers-‐and-‐factories/
3-‐1-‐0-‐overview.php?cat=overview
[Accessed
2
Jul.
2014].
Nikebiz.com,
(2014).
6.1
Our
Workforce
-‐
NIKE,
Inc..
[online]
Available
at:
hfp://www.nikebiz.com/crreport/content/people-‐and-‐culture/
6-‐1-‐0-‐our-‐workforce.php?cat=our-‐workforce
[Accessed
2
Jul.
2014].
Nikeinc.com,
(2014).
NIKE,
Inc.
-‐
About
NIKE,
Inc..
[online]
Nikeinc.com.
Available
at:
hfp://nikeinc.com/pages/about-‐
nike-‐inc
[Accessed
2
Jul.
2014].
Nikeinc.com,
(2014).
NIKE,
Inc.
-‐
Manufacturing
Map.
[online]
Nikeinc.com.
Available
at:
hfp://nikeinc.com/pages/
manufacturing-‐map
[Accessed
2
Jul.
2014].
Sales-‐management-‐slides.com,
(2014).
MarkeMng
Strategy
of
Nike
|
Sales
&
MarkeMng
Slides.
[online]
Available
at:
hfp://
sales-‐management-‐slides.com/marke5ng-‐strategy-‐of-‐nike/
[Accessed
2
Jul.
2014].
UK
Essays,
A.
(2014).
Nike
market
analysis
and
business
overview.
[online]
Ukessays.com.
Available
at:
hfp://
www.ukessays.com/essays/marke5ng/nike-‐market-‐analysis-‐
and-‐business-‐overview-‐marke5ng-‐essay.php
[Accessed
2
Jul.
2014].

List of Illustrations
10steps.sg,
(2014).
Nike
My
Assault.
[image]
Available
at:
hfp://10steps.sg/inspira5ons/artworks/the-‐incredible-‐print-‐ads-‐of-‐nike/
[Accessed
2
Jul.
2014].
Izyan,
A.
(2010).
Nike
Advert
via
Behance.
[image]
Available
at:
hfps://www.behance.net/gallery/NIKE-‐ADVERT/866697
[Accessed
2
Jul.
2014].
Nike
Inc,
(2014).
Manufacturing
Map.
[image]
Available
at:
hfp://nikeinc.com/pages/manufacturing-‐map
[Accessed
2
Jul.
2014].
Nike,
(2014).
Nike
Meteor.
[image]
Available
at:
hfp://salene8814.files.wordpress.com/2010/09/
nike_meteors_ad_by_koston101.png
[Accessed
2
Jul.
2014].
Nikeinc.com,
(2014).
History
&
Heritage.
[image]
Available
at:
hfp://nikeinc.com/pages/history-‐heritage
[Accessed
2
Jul.
2014].
Shoutoufoyou.com,
(2013).
Nike
Street
Style.
[image]
Available
at:
hfp://www.shout-‐oufoyou.com/2013/03/inspira5on-‐nike-‐air-‐
max.html
[Accessed
2
Jul.
2014].
Wordpress,
(2011).
Nike
Shox.
[image]
Available
at:
hfp://oeilsj.files.wordpress.com/2011/02/nike-‐shox.jpeg
[Accessed
2
Jul.
2014].
26

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