This document provides a case write-up for Nike that includes: 1. A short history of Nike's founding by Bill Bowerman and Phil Knight. 2. Analysis of Nike's mission statement, objectives, strategies, and competitive positioning using tools like Porter's 5 Forces, SWOT analysis, and strategic frameworks. 3. Recommendations that Nike should continue its focus on innovation, brand strength, and staying ahead of trends to maintain success in the athletic footwear industry.

1. Case
Write-up
for Nike
May 18
2012
By FredSosa
Nike Case
Write-up

2. 2
A) Positioning
1. Short Company History- Before there was the Swoosh, before there was Nike; there were two
visionary men who pioneered a revolution in athletic footwear that redefined the industry. Bill
Bowerman was a nationally respected track and field coach at the University of Oregon, who was
constantly seeking ways to give his athletes a competitive advantage. He experimented with
different track surfaces, re-hydration drinks and – most importantly – innovations in running
shoes. But the established footwear manufacturers of the 1950s ignored the ideas he tried to offer
them, so Bowerman began cobbling shoes for his runners. Phil Knight was a talented middle-
distance runner from Portland, who enrolled at Oregon in the fall of 1955 and competed for
Bowerman’s track program. Upon graduating from Oregon, Knight earned his MBA in finance
from Stanford University, where he wrote a paper that proposed quality running shoes could be
manufactured in Japan that would compete with more established German brands. But his letters
to manufacturers in Japan and Asia went unanswered, so Knight took a chance. He made a cold-
call on the Onitsuka Co. in Kobe, Japan, and persuaded the manufacturer of Tiger shoes to make
Knight a distributor of Tiger running shoes in the United States. When the first set of sample shoes
arrived, Knight sent several pairs to Bowerman, hoping to make a sale. Instead, Bowerman
stunned Knight by offering to become his partner, and to provide his footwear design ideas to
Tiger. (Nike)
2. Mission Statement- “IF YOU HAVE A BODY, YOU ARE AN ATHLETE” (Nike)
3. Stated Objectives-Our goal is to carry on his legacy of innovative thinking, whether to develop
products that help athletes of every level of ability reach their potential, or to create business
opportunities that set Nike apart from the competition and provide value for our shareholders.
4. Stated Strategies- The key for NIKE, Inc. in any market is to drive innovation at every level –
brand, product, retail, operations, events, and communications. That’s at the core of our growth
strategy. In May 2010, I stated a goal for NIKE, Inc. to deliver $27 billionof revenue in fiscal 2015.
I’m excited to tell you that we’re ahead of schedule, so we’re revising that number. When I look at
the strengths of our company and the opportunity we have going forward, I believe we can exceed

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that goal and reach $28-30 billion in revenue by fiscal 2015. Today we have seven distinct, high-
energy brands – each with a powerful connection to its consumers. Those connections give us the
insights we need to create amazing products and experiences. That’s the fundamental cyclethat
continually drives growth. And while each brand has enormous potential in its own right, the real
power of NIKE, Inc. comes from making the overall value of our portfolio greater than the sum of
the parts. We define our portfolio as the NIKE, Inc. brands and everything that drives them: our
products, retail partners and executions, supply chain, strong balance sheet and a very focused
management team. We use the power of our portfolio to manage risk and attack our biggest
growth opportunities. It’s the source of our financial capital. It gives us the scale necessary to
drive down costs. It enables us to leverage our resources across multiple brands and categories.
And it all revolves around one thing: innovation. We innovate to serve the athlete. We innovate to
grow the company. And we innovate to inspire the world. (Mark Parker President & CFO of NIKE
Inc)
5. Revised mission statement-As the saying goes “If it aint broke don’t fix it”

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6. The Industry: Porter’s Five Forces-
7. Competitor Profile Matrix

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8. Strengths-Weaknesses-Opportunities-Threats (SWOT)
Strengths-
 Brand
 Loyalty
 Top Management
 Innovativeness
Weaknesses-
 Ethics (labor practices)
 Highly competitive market
 Changing trends
Opportunities-
 Research and Development
 Niche
Threats-
 cutback in consumer spending.

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 Consumers may be scanning the market for new and different footwear and apparel products
9. External Factors Matrix
Opportunities Weight Rating Score
Research &
Development
.35 4 1.4
Specialization in
products for athletes
(niche)
.30 4 1.2
Threats Weight Rating Score
competition .15 2 .30
consumer changes .20 2 .40
Totals 1.00 3.3
10. Internal Factors Matrix
Internal Strengths Weight Rating Score
Brand .2 4 .8
Advertisingcampaign .2 4 .8
Multi Brand .1 3 .3
Product Design and
Development
.2 4 .8
Internal Weaknesses Weight Rating Score
Ethics .15 1 .15
Labor practices .1 1 .1
Changingtrends .05 2 .1
Totals 1.00 3.05
11. Ratio Analysis

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a) Financial and performance ratios: company, competitors, industry, sector
What can you conclude by looking at these numbers?
Quick ratio-greater than 1.0 so Nike is sufficiently able to meet their short-term liabilities.
Current ratio-is well above the industry showing ease of converting assets to cash to cover short-term obligations.
High inventory turnover ratio -Nike benefits from greater cash flows, reduced storage costs
Gross margin- (dollar of revenue that the company retains as gross profit) Nike has gross margins above industry
Return on equity-(how much profit a company generates with the money shareholders have invested.) Nike has a positive return
on equity
B) Strategy & Policy

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1. Internal-External Matrix
Accordingto the I/E matrix the grow and build strategy is suggested. This means intensive and
aggressive tactical strategies. The strategies should focus on market penetration, market
development, and product development.
2. Space Matrix

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Financial Strength (FS) Values:+1
(worst) to +6 (best)
Return on investment 6
Leverage 4
Liquidity 5
Cash flow 4
Brand Image 4
Control over supplier 4
Average= 4.5
Total X axis score=1.67
Competitive Advantage CA
Values:-1 (best) to - 6 (worst)
Market share -2
Product quality-1
Product life cycle -4
Customer loyalty-2
Technological know-how-2
Control over suppliers & distributors -6
Average=-2.83
Industry Strength (IS) Values:+1
(worst) to
+6 (best)
Growth potential 4
Profit potential 4
Financial stability 5
Technological know-how 4
Resource utilization 4
Ease of entryinto market 4
Average= 4.16
Total Y axis score=1.16
Environmental Stability(ES) Values:
-1 (best) to -6 (worst)
Technological changes-3
Riskinvolvedinbusiness-4
Price elasticityof demand--demand
variability-5
Rate of inflation-3
Price range ofcompetingproducts-3
Av erage=-3.0
Internal StrategicPosition External Strategic Position

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Accordingto the graph above Nike Fallsintothe AggressiveQuadrantwhichmeansitshould
focuson marketpenetration,marketdevelopment,productdevelopmentanddiversification

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3. Grand Strategy Matrix
SLOW

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4. SWOT Matrix
Strengths
– S
Brand
Loyalty
Top Management
Innovativeness
Weaknesse
s – W
Highly competitive
market
Ethics (labor practices)
Changing trends
Opportuniti
es – O
Emerging markets
Specialization
Research and Development
SO Strategies
Take advantage of emerging specialty
market
Keep producing quality products
Keep being innovative
WO
Strategies
Stand out-Create a specialized
product
Product Development
Threats – T
Competition
Changes in economic conditions
Cutback in consumer spending.
Consumers may be scanning the
market for new and different
footwear and apparel products
ST Strategies
Use Brand Loyalty to further yourself
from the competition
Create Something different that sets you
apart from competitors
WT
Strategies
Keep providing affordable footwear
at different price ranges
Stay on top of current trends and
technological advances

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5. Quantitative Strategic Planning Matrix
AS = AttractivenessScore;TAS= Total AttractivenessScore
1=Not Attractive 2=SomewhatAttractive 3=ReasonablyAttractive 4=HighlyAttractive
Accordingto the QSPMwe can come to the conclusionthatResearch& Developmentisabetter
option.Thisisgivenbythe TAS Scores.
C)Conclusion
1. Impact of globalizationonthe firm- BeingthatNike iswell knownoverseasitwouldhave a
verysmall effectonthe firm.

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2. Ethical Issues?“Green”Issues?Nike hashadmanyethical issueswhenItcomestochildlabor
practicesand thisissomethingthathasnot affectedthemtoomuchinterms of still being
financiallysuccessful,butitcouldpotentiallybe averybad situationif itdoesn’timprove.
3. How doesthe companycompete?Nike holdsahuge share of the marketand isa much larger
companyand itis consideredone of the maincompetitorsforeveryothershoe company,so
to answeryourquestion,Nikecompetesverywell.
4. What recommendationsorchangeswouldyoumake?My recommendationtoNike wouldbe
to keepbeinginnovativeandkeeptryingtopushforward,besidesthatNike reallyhasthe
hang of things.
5. Compare yourrecommendationstostrategiesplannedbythe company
My recommendationsare exactlyalongthe linesof whatthe companyisalreadydoing.
6. Businesslessonslearned...Whatisyourtake-awayfromthiscase?
My take awayfrom thiscase is that Nike knowswhatisdoingandif it continuestodowhatit
isalreadydoingthenitwill continue toprosper

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Works Cited
Mark ParkerPresident&CFOof NIKE Inc.(n.d.).
http://investors.nikeinc.com/Theme/Nike/files/doc_financials/AnnualReports/2011/index.html#mark_p
arker_letter. Retrievedfrom
http://investors.nikeinc.com/Theme/Nike/files/doc_financials/AnnualReports/2011/index.html#mark_p
arker_letter:
http://investors.nikeinc.com/Theme/Nike/files/doc_financials/AnnualReports/2011/index.html#mark_p
arker_letter
Nike.(n.d.). http://nikeinc.com/pages/about-nike-inc.Retrievedfromhttp://nikeinc.com/pages/about-
nike-inc:http://nikeinc.com/pages/about-nike-inc

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Executive Summary
Nike, the true Cinderella story of the Footwear industry, It all started with two guys that
took a chance on something that could have easily flopped but it didn’t and here Nike stands
today as one of the biggest Athletic Footwear companies in the market, Who would have known?
The main difference between the Nike of today and the Nike of the past is its financial resources.
Nike is now in a position where it can invest money into these huge advertising and marketing
campaigns and have its own production factories and even its own “Nike Town’s”.
The athletic footwear industry is a challenging and saturated market. With Intense
competition, fashion trends, and price conscious consumers In order to have an edge over the
leaders, companies must be able to compete at all levels such as reasonable pricing, efficient
production, and high product quality. As stated in the strategies “The key for NIKE, Inc. in any
market is to drive innovation at every level – brand, product, retail, operations, events, and
communications.” This is what makes them leaders of the industry understanding that you have
to constantly reinvent yourself and be unique in everything you do to be successful in this
industry. Even though Nike faces the problem of changing consumer trends (as all companies in
this industry face) it can easily overcome this because of its innovativeness. In terms of changes
I think the only thing Nike should “just do” is what it already is doing and it will have no
problem staying at the top.