Nike International Business


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Nike International Business

  1. 1. Adnan Abdullah (12856) M Imran Najeeb (12875) Salahuddin Jumani (12672) Usman Khalil (12874) International Business
  2. 2. Contents  NIKE’s Introduction  Environmental Analysis  Marketing Strategy of Nike  Cultural Implication/ Strategy around the Globe  Growing Internationally, Facing Global Competition  Global Business Challenges and Issues  Opportunities and Barriers  Recommendation
  3. 3. Introduction  Distribution channels in almost 200 countries with primary market regions in the United States, Europe, Asia Pacific, and the Americas  20,000 retailers worldwide including Nike factory stores, Nike stores, Nike Towns, Cole Haan stores, and Web sites which sell Nike's sports and leisure products  Produces footwear, clothing, equipment and accessory products for the sports and athletic market  Have around 700 contract factories, within which around 20% of the workers are creating Nike products
  4. 4. Environmental Analysis A) Political Analysis  Nike, has been helped by the US policies  Legal issues have been handled by Nike as per the surrounding  Main trades are in America (where Nike originated) and the United Kingdom and other European countries  Nike has to be aware of pressure groups trying to get bans on methods that Nike use  Nike should take help from governments
  5. 5. Cont… B) Economic Analysis  Economic Recession in America  Asian economic crisis  The labor costs and material prices are going up  Nike's growth is also affected by international economy
  6. 6. Cont… C) Society/ Social Analysis  More and more people are joining fitness clubs  Nike, however, failed to foresee problems brought about by sweatshop  These affects the decisions that they make when designing a new product  Have to take into accounts religious and political features of the countries they are trading in
  7. 7. Cont… D) Technology Analysis  Nike uses IT in its marketing information systems very effectively  Using technology in every aspect of the product from development to distribution  Making products  Bringing new advances  Using intense technology in Advertising
  8. 8. Marketing Strategy Product: Offers a diverse range of high quality sporting goods Price: A premium product commands a premium price, at the same time as the Company also compete heavily with their main rival Adidas Promotion: The business has a rich history and bright future using sponsorship to generate brand authenticity in their markets Place: Nike is a truly global corporation seeking to further segment its current markets and increase its impact in China, Russia, Brazil and India in particular
  9. 9. Cultural Implication Corporate Culture:  Nike has created a corporate culture rich with employee loyalty and team spirit.  Nike calls “Campus” instead of Office, , Employees as "players," supervisors as "coaches" and meetings as "huddles."  Just Do It’: Nike has been striving towards an inner culture that reflects this mantra Flexibility in working hour Sports highlights Weekly email updates
  10. 10. Rewards and Benefits: Health coverage, fitness center memberships, time off and retirement savings to employees Ethnicity Gender: Global workforce is half male, half female. Nike employed slightly more women than men in Central and Eastern Europe
  11. 11. Growing Internationally Understanding Customer’s Needs  In different countries, consumers have different needs as they view the product differently.  For example, Nike's Air Jordan basketball shoes in America and in Europe. Keeping Ahead of Competition  Nike differentiated itself by creating and marketing well designed athletics and non-athletic footwear and clothing.  sport icons to endorse the brand
  12. 12. Communicating Effectively With Customers  Brand endorsers  Nike tries to extend its personal relationships by sponsoring events  Nike uses its customer's information to send them personalized direct mail
  13. 13. Global Business Challenges & Issues  Unfortunately, companies like Nike must overcome some difficult obstacles before establishing a successful business in a foreign country. Some of the issues of concern are child labor laws, wages, and outsourcing’s effect on sales. Because of this, NIKE tries to defend positions on conducting business in the foreign country.
  14. 14.  Sweatshop labor  Improvising of Unsafe Work Place  In Low Wages Row  Accusation of Slave “Child Labor Law  Strategic and operational challenges
  15. 15. Opportunities  Product development offers Nike many opportunities. The brand is brutally defended by its owners whom truly believe that Nike is not a fashion brand. However, like it or not, consumers that wear Nike product do not always buy it to participate in sport. Some would argue that in youth culture especially, Nike is a fashion brand. This creates its own opportunities, since product could become unfashionable before it wears out i.e. consumers need to replace shoes.
  16. 16.  There is also the opportunity to develop products such as sport wear, sunglasses and jewelry. Such high value items do tend to have associated with them, high profits.
  17. 17.  The business could also be developed internationally, building upon its strong global brand recognition. There are many markets that have the disposable income to spend on high value sports goods. For example, emerging markets such as China and India have a new richer generation of consumers. There are also global marketing events that can be utilized to support the brand such as the World Cup (soccer) and The Olympics.
  18. 18. Barriers  Nike is exposed to the international nature of trade. It buys and sells in different currencies and so costs and margins are not stable over long periods of time. Such an exposure could mean that Nike may be manufacturing and/or selling at a loss. This is an issue that faces all global brands.
  19. 19.  The market for sports shoes and garments is very competitive. High value branded product manufactured at a low cost is now commonly used and to an extent is no longer a basis for sustainable competitive advantage. Competitors are developing alternative brands to take away Nike's market share.
  20. 20.  The retail sector is becoming price competitive. This ultimately means that consumers are shopping around for a better deal. So if one store charges a price for a pair of sports shoes, the consumer could go to the store along the street to compare prices for the exactly the same item, and buy the cheaper of the two. Such consumer price sensitivity is a potential external threat to Nike
  21. 21. Recommendation  Societal standards within other countries are sometimes different from those found within the Home Country. It means that NIKE should not consider the same rules, regulations and societal standards in host country but however, should strive to abide by that country.
  22. 22.  The factories and sweatshops established overseas by Nike should launch a debate regarding whether they were in compliance or violation of ethical guidelines and regulations
  23. 23.  Nike should focus on the protests regarding violation of child labor laws and unsafe working environments.
  24. 24.  Although Nike was not violating the local rules and regulations; however, it could prevented some of the stakeholder reaction by being more proactive in certain ways. For example, it could voluntarily install certain equipment into foreign factories at its expense, which would have made for a better working environment. Knowing that certain chemicals are not good for the health, Nike could provide certain measures to purify the air and could have used less harmful chemicals in the production of their products.
  25. 25.  Nike should work with the proper regulatory consent of Governmental Organization, in which they are currently operating or have an intention to work in future, so that they can ensure safe and ethical business practices and to monitor the sweatshops established overseas.
  26. 26.  Nike should change its operational and strategic plans drastically in order to remain successful and settle labor and civil rights unions
  27. 27. Thank You