Nike is the largest seller of athletic footwear and apparel, founded in 1972. It has a diverse product portfolio including shoes, apparel and equipment for various sports sold in over 160 countries. Nike pursues a strategy of acquisitions of complementary brands and diversification to protect its premium brands and revive struggling brands. It focuses on innovation through R&D, celebrity endorsements, and targeting specific consumer groups through localized marketing. Issues around working conditions at some supplier factories have led to increased monitoring and transparency efforts.

2. About the Company Founded in 1972 Largest seller of athletic footwear & apparel Core competencies – Design Innovation & Marketing Distributed in over 160 countries around the world Wholly owned subsidiary Converse, Cole Haan, Bragano, Hurley, NIKE Hockey, and Exeter brands Market Cap: US$ 33.99 billion (2008)

3. Product line in Athletic Shoes “ Wide Portfolio of Products” helped adapting well to the changing Market conditions Such a strategy is important because Successful experience with one product of brand spurs sales of other products If Nike doesn’t get into these product categories, competition will in any case Range of offerings from a brand is a measure of the “goodness” of a brand Important to cater to all possible segments Narrowing the offering will impact the top line drastically which in other words means a loss in market share.

4. Strategic Previous Acquisitions Converse: Retro & Classic Market (2003) Hurley: Surfing, Skateboarding (2002) Impact Golf Technologies (2002) Michael Jordon Air Mada Canstar Sports: Hockey Equipment (1995) S ports Specialities: Cap Making (1993) Cole Haan & Accesssories (1990) NIKE

5. Future Course of Action Buy Complementary brands, reach consumers at all Levels Eg. Converse Expand Portfolio of business Diversification Strategy : Acquire smaller athletic shoe making companies in markets where it has low market share Thereby protecting the acquirer's high-end offerings & opportunity to revitalize struggling brands Vertical Integration Backward Integration: Eg; Buying component manufacturers ( laces, buttons) Forward Integration : Eg; Distribution operations

6. Own Production Highly diversified portfolio – broad range of products Evolving market calls for flexible & adaptive production facilities Risk pooling – diversification of risk Gaining entry into new market Access to cheap resources Tax advantages Political security Buffered from fluctuating demand Liquidity – availability of working capital

7. International Marketing Marketing tools Online store @ www.nike.com Celebrity Endorsements Sponsorships Events National Teams Print Media

8. Marketing Approach Target ads to specific groups / types of people Localization of advertisements Locals develop ads to fit local cultures Ad expenditure as % of Revenue 2002 2003 % Increase Advertising $ 1.0279 BN $ 1.168 BN 13.63 Revenue $ 9.893 BN $ 10.697 BN 8.18 Ad % of Rev. 10.39 10.92

9. Baby Boomers Fitness , Healthy living and Exercise Now exercise not as popular Average age: 50-55 years Advertising: Promote light exercise, walking Organise marathons, campaigns (Walk your way to fitness) Remove negative connotation with age and exercise Product: R&D: Develop special soles, stress relieving, acupressure Endorse and advocate through doctors and physiotherapists

10. Gen Y Average age: 20-25 years, 60 million Fashion oriented sportswear Cynical & practical, not swayed easily Advertising: Internet branding: Blogs Widgets Youth targeted print media Youth icon endorsments Product: Different shoes for different sports Customise your shoe for a premium Wear your attitude Kaleidoscope of themes, colors, designs Promote creativity in design and organise contents

11. Competitive Advantage over Reebok Continuous focus on R&D – Innovation; Core strength of Nike Consistently leverage on the Brand Equity Strategically use the economies of scale built through contract manufacturing Build a bigger and wider Geographical outreach Advertising, PR, Sponsorship events

12. Nike Employee Treatment Exploitative practices of managers in some Asian Countries Sexual harassment Physical & verbal abuse Restrictions in health services Forced Over time Inappropriate punishments

13. Nike’s Response Promise to investigate & improve inappropriate conditions whenever they exist Established a separate labor practices department Position of VP of Social Responsibility Joined a number of organizations that monitor unfair labor practices Fair Labor Association (FLA) Global Alliance for Workers in Communities (GAWC) Developed a process for ensuring that factories comply with the company’s code of conduct Conducted a number of SHAPE audits – internal audits by staff Transparency – Published results of monitoring on its Website on a quarterly basis

14. Increasing International Sales 2003 – over 50% of revenues from international sales International market potential Growing competition in Europe Need to maintain, if not increase market share Stagnating / Decreasing market share in US Growth in other markets needed to sustain

15. Target Nike has done well to focus on each target segment separately. As is mentioned in the case the company needs to do more in terms of targeting women to increase their market share in this segment which is well below industry standards. Nike has done well to sponsor and endorse women athletes. The company can step up these efforts Increase R&D investments in products specifically with women Experiment with a woman only brand to make inroads into the women segment Evaluate distribution strategy. Is Nike Goddess being perceived as required by women?

16. Thank You !