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@Nike Presentation
- 2. Brandon Porter Kayla Sutherland MichaelLeBlanc Ayrin Budiarto Accounting Marketing Management Marketing Management
- 4. PHIL KNIGHT BILL BOWERMAN FOUNDERS “Nikehas always been more than just a company – it has been my life’s passion” “Victory is having done your best. If you’ve done your best, you’ve won.”
- 5. BACKGROUND INTERNAL EXTERNAL SWOTRECOMMENDATIONS SPIRITUAL
- 6.
- 7. 1964: Blue RibbonSports is Founded by Bill Bowerman and Sports Coach Phil Knight 1966: Blue Ribbon Sports’ First Retail Outlet Opens COMPANY HISTORY 1971: Shifts From Distributor to Manufacturer, Developing the NIKE Line 1972: Launches its First Nike Brand Shoes Model, the Cortez or Waffle Shoes 1978: Officially Named as Nike, Inc. 1980: Nike Stock Goes Public (First IPO: $0.14) 1980: Nike Sport Research Lab Opens 1983: Philip Knight Steps Down and Returns the Following Year 1985: Michael Jordan Signature Basketball Shoes Debut: Air Jordan
- 8. 1986: Surpasses $1Billion Dollar Revenue for the First Time 1988: Launches the “Just Do It” Campaign COMPANY HISTORY 1988: Acquires Cole Haan 1990: Opens the First NikeTown Chain Stores 1990: Moves to World Headquarters Campus in Beaverton, Oregon 1991: Shifts From Innovation to Consumer 1993: Adidas Made a Shift from Sales Driven to a Marketing Driven Company 1994: Acquires Bauer Hockey 1999: Bill Bowerman Passes Away
- 9. 1999: Nike BeginsOnline Commerce 2000: Creates Nike Tech Lab Division COMPANY HISTORY 2002: Acquires Hurley International 2003: Acquires Converse 2004: Acquires Starter: Uniform Lines 2004: Phil Knight Steps Down as CEO, Replaced by William D. Perez 2006: William D. Perez Resigns as CEO, Replaced by Mark Parker 2006: Launches Nike+ 2007: Launches NIKEiD
- 10. Sells Bauer Hockeyand Starter 2012: COMPANY HISTORY 2013: Quarterly Profit Rises Due to Increase in Global Orders for Merchandise 2014: 2014: Defunds Nike Wearables 2015: Phil Knight Announces His Plan to Step Down as Chairman 2015: Nike Partners with Apple for Wearables 2011: Sells Cole Haan and Umbro: “Sharpen its focus” New Environmental Awareness to Global Markets and Working Conditions 2008: Yue Yuen Strike in China Factory 2015: Nike begins $12 Billion Stock Buy-back Program and 2 for 1 Stock Split
- 11. 2015: Partnership With FlexManufacturing COMPANY HISTORY 2015: Steph Curry Signs with Under Armor After Dismissing Nike Negotiation 2016: Nike Announces 2 for 1 Stock Split 2016: Nike, Inc. Declares $0.16 Quarterly Dividend 2016: Nike Announces its First Chief Digital Officer: Adam Sussman 2016: 2015: Mark Parker Claims $50 Billion Dollar Revenue Goal by Fiscal Year 2020 2015: Mark Parker Exposes All Strategies Nike Invests Trade Promotion Authority With President Obama 2016: Nike Announces Phil Knight to Step Down in June
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- 13. To bring inspirationand innovation to every athlete in the world. “ “ MISSION STATEMENT “If you have a body, you are an athlete.”
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- 15. Our Definition Difficult toimitate SUSTAINABLE COMPETITIVE ADVANTAGE Customer experience augmented through value-added services High perceived value Value Based Pricing Measurable Advertising • Customer will be less price sensitive Unique and differentiated
- 16. “At NIKE, noone determines our future but us. We exist to serve the athlete and our success is determined by our ability to inspire and innovate to meet – and often exceed – their expectations. No matter the macro challenges, we have the plans and strategies to rise above. The breadth and depth of our powerful portfolio across brands, categories, geographies, gender and channel is unmatched. And we remain well-resourced and well-positioned to create competitive separation and deliver sustainable and profitable growth by continuing to leverage that portfolio. As always, the key to unlocking our highest earnings potential is our unshakable focus on the consumer.” -NIKE, 2015 Annual Report SUSTAINABLE COMPETITIVE ADVANTAGE
- 17. “At NIKE, noone determines our future but us. We exist to serve the athlete and our success is determined by our ability to inspire and innovate to meet – and often exceed – their expectations. No matter the macro challenges, we have the plans and strategies to rise above. The breadth and depth of our powerful portfolio across brands, categories, geographies, gender and channel is unmatched. And we remain well-resourced and well-positioned to create competitive separation and deliver sustainable and profitable growth by continuing to leverage that portfolio. As always, the key to unlocking our highest earnings potential is our unshakable focus on the consumer.” -NIKE, 2015 Annual Report SUSTAINABLE COMPETITIVE ADVANTAGE
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- 19. Based on ourthorough and extensive research, we have become experts of Nike, Inc. and have gained valuable understanding about its worldwide position in the highly competitive sports textile industry. Consequently, we have discovered existing, yet underleveraged opportunities and resources within the company. We have created programmatic recommendations that will allow the company to maximize these opportunities to mitigate risk and create a new form of sustainable competitive advantage. SIGNIFICANCE TO LEADERSHIP
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- 21. The sports textileindustry is highly-competitive, and driven by consumer needs. Industry participants must meet the consumer’s needs for time, convenience, and quality in order to overcome competition. NIKE has differentiated itself by boldly stating the company’s core values and strong convictions for high-quality products and ethical business conduct. NIKE has the opportunity to create new forms of sustainable competitive advantage through leveraging intellectual capital, insulating customer portfolios, and improving distribution channels. OPPORTUNITY STATEMENT
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- 23. If Implemented, NikeWill Experience An increased ability to leverage intellectual capital EXPECTED OUTCOMES Measurable advertising Enhanced customer loyalty Increased profit margins Differentiate customers based on value An increased ability to anticipate and meet customers’ needs Strengthened brand image
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- 25. Limitation of OurStudy Secondary research only RESEARCH METHODOLOGY Research Strategy Environmental scanning Environmental monitoring Sources Consulted Example: Nike News, Nike Annual Reports, Yahoo Finance
- 26. BACKGROUND INTERNAL EXTERNAL SWOTRECOMMENDATIONS SPIRITUAL
- 27.
- 28. PHIL KNIGHT -Founder + Chairman LEADERSHIP Visionary | Marketing Savvy | Passionate | Competitive Director since 1968 Served as the President from 1968-1990, 2000-2004 Remains as Chairman in the Board of Directors "Play by the rules. But be ferocious."
- 29. LEADERSHIP “If you comefrom the world of packaged goods, where data is always valuable, Nike is very different. Judgment is very important. Feel is very important. You can't replace that with facts. But you can use data to guide you.” WILLIAM PEREZ - Former CEO Data-Oriented | Consumer-Product Marketing Former CEO, SC Johnson from 1970-2004 Served as President from 2004 to 2006 Current Senior Advisor of Greenhill & Co.
- 30. LEADERSHIP “To be thecompany that constantly inspires others it’s crucial that we feel inspired ourselves. And that inspiration strikes in so many ways from collaborating with one another, from staying open to the world around us and from engaging in our work environments.” MARK PARKER - Nike CEO “Multiplier” Leader | Visionary | Creative | Ambitious Joined Nike as a footwear designer in 1979 Broad range of leadership styles in Nike before becoming a CEO Become Nike CEO in 2006
- 31. LEADERSHIP "We're really expandingout the idea of brand not only being about great products but also being about great services in terms of how we connect with our consumers." TREVOR EDWARDS - President, Nike Brand Digital Influence | Transformative Leadership Joined Nike in 1992 as a Regional Marketing Manager Named President in 2013 Will be succeeding Mark Parker as next CEO
- 32. LEADERSHIP “Adam is justas passionate about solving a problem for one athlete as he is introducing that innovation to a global community.” - Trevor Edwards ADAM SUSSMAN - Chief Digital Officer Consumer Technology | Strategic Leadership Prior to joining Nike, Sussman worked at EA and Disney Hired as Nike’s first Chief Digital Officer in 2016
- 33. SUMMARY United as aTeam Passionate about Nike’s Brands Share the same philosophy, vision and mission of Nike LEADERSHIP “We are big believers in the power of the collective – in uniting individuals with different strengths, experiences and points of view. The chemistry across our diverse teams makes us stronger together than we could ever be as individuals.” - Mark Parker, CEO
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- 35. CORPORATE CULTURE “Every dayat Nike we dream up new ways to inspire athletes to expand their potential. To do that, we relentlessly evolve how we inspire our own teams and design environments that foster chemistry and collaboration. Our expanding World Headquarters reflects the best of Nike’s culture — a place where we obsess the athlete and invent future products and experiences for consumers everywhere.” - Mark Parker, CEO
- 36. CORPORATE CULTURE Sports createdNike, but design and innovation made it grow. Our challenge — and our opportunity - is to use all three to help people reach their true potential. - Mark Parker, CEO “ “
- 37. CORPORATE CULTURE At Nike,we’ve built a culture that attracts smart, curious and highly creative employees. Of course a passion for sport is also critical because no matter where you work — in design, at retail or in the supply chain — we are all focused on serving the athlete. - Mark Parker, CEO “ “
- 38. CORPORATE CULTURE Source: FY15/15 Sustainability Report
- 39. Environment Conservation CORPORATE CULTURE:SUSTAINABLE INNOVATION Drive innovation and collaboration and engage in public policy advocacy to deliver carbon reductions across the value chain
- 40. Environment Conservation CORPORATE CULTURE:SUSTAINABLE INNOVATION Drive innovation and collaboration and engage in public policy advocacy to deliver carbon reductions across the value chain Empower Workers Transform our working relationship with contract factories to incentivize changes that benefit their workers Lean approach Conducting worldwide survey of employees WE Portal - the dragonfly effect
- 41. Empower Workers: SatisfactionSurvey CORPORATE CULTURE QI: Issues of High Satisfaction & High Importance Q2: Issues of Low Satisfaction & High Importance Q3: Issues of Low Satisfaction & Low Importance Q4: Issues of High Satisfaction & Low Importance Source: FY 15/15 Sustainability Report
- 42. Empower Workers: WEPortal - Dragonfly Effect CORPORATE CULTURE
- 43. Environment Conservation CORPORATE CULTURE:SUSTAINABLE INNOVATION Drive innovation and collaboration and engage in public policy advocacy to deliver carbon reductions across the value chain Empower Workers Transform our working relationship with contract factories to incentivize changes that benefit their workers Support Communities Catalyze human potential by creating community and business impact through a portfolio of innovation partnerships, advocacy and movement- making initiatives with a strong focus on sport and physical activity
- 44. Support Communities CORPORATE CULTURE Source:FY 12/13 Sustainability Report
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- 46. HUMAN RESOURCE MANAGEMENT “EmpowerYour Players. Follow a Collaborative Playbook. Practice as a Team” - NIKE website Source: FY 15/15 Sustainability Report
- 47. Recruiting and Hiring Seeksindividuals that exemplify Nike’s culture Recruits online and in person Partners with collegiate campuses HUMAN RESOURCE MANAGEMENT: ATTRACT Searches for diversity
- 48. HUMAN RESOURCE MANAGEMENT:ATTRACT
- 49. HUMAN RESOURCE MANAGEMENT:ATTRACT Source: Nike Jobs
- 50. HUMAN RESOURCE MANAGEMENT:ATTRACT
- 51. Training Informal and formaltraining Internship program Lean management approach HUMAN RESOURCE MANAGEMENT: DEVELOP Source: FY 15/15 Sustainability Report, Nike Retail Jobs
- 52. Retaining Benefits program Making animpact in the sports industry Provides platform to grow workers’ potential HUMAN RESOURCE MANAGEMENT: EMPOWER Source: Nike Retail Jobs, FY 15/15 Sustainability Report
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- 54. ORGANIZATIONAL STRUCTURE Digital ChiefOfficer "It’s a mix. Traditional hierarchic top-down is archaic, it’s just not real. On the other side, everything is not bubble-up. That ratio, top-down to bubble-up, will shift based on situations. I’m a big believer that there’s no one single approach." - Mark Parker, CEO
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- 56. HEAD QUARTERS Source: NikeInvestor Relations Expansion Deadline 2018 Adding 3.2 million square feet Nike makes corporate tax deal with Oregon
- 57. Outsourcing MANUFACTURING Global manufacturing outsourced “Sweatshop” accusations Codeof Conduct Source: FY 15/15 Sustainability Report
- 58. Outsourcing MANUFACTURING Source: FY 15/15Sustainability Report
- 59. Distribution Centers 5 Centers DISTRIBUTIONCHANNELS 24 Hours/ 7 Days a week Rapid shipping Sustainable design Source: Nike News
- 60. DISTRIBUTION CHANNELS Main Channels Manufacturers Retail Partnerships Distribution Centers GlobalBrands Direct-to- Consumer Wholesalers
- 61. Wholesalers Largest revenue category DISTRIBUTIONCHANNELS Contributes 83.3% of retail sales Lower profit margins Nike reduces competitive stake Increasing focus on direct-to- consumer Retail Partnerships Footlocker Department Stores Lifestyle Clothing Sports Retailers Source: Nike Investor Relations
- 62. CORPORATE CULTURE ...we cannotcompletely control the use of our licensed brands by our licensees. The misuse of a brand by a licensee could have a material adverse effect on that brand and on us. 2015 Annual Report “ “
- 63. Direct-to Consumer Higher ProfitMargins DISTRIBUTION CHANNELS Growing Category 23% of Sales E-commerce Factory Stores Source: Nike Investor Relations
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- 65. FINANCE: COMPETITOR Publicly tradedcompany Many competitors are foreign or privately held. Why Under Armour Competing with Nike strategies
- 66. NIKE INC MARKETPRICE Source: Google Finance NYSE Data Last Opened: May 167 2016 9:53 AM EDT
- 67.
- 68. CONSOLIDATED INCOME STATEMENT Source:Nike Inc., 2015 10K Annual Report
- 69. INCOME STATEMENT Source: NikeInc., 2012 10K Annual Report
- 70. REVENUE OBSERVATIONS Source: NikeInc., 2015 10K Annual Report
- 71.
- 72. GROSS PROFIT MARGIN GrossProfit Margin Gross Profit Total Revenue Current Profit Margin 45.9%
- 73. 2015 8 Billion in stockbuybacks EARNINGS PER SHARE EPS NI - Pref Dividends Outstanding Shares Consistent 14.41% increase in earnings Source: Nike Inc., Motley Fool
- 74. NIKE INC MARKETPRICE Source: Nike Inc., 2015 10K Annual Report
- 75. Current PE Ratio 27.5% PRICE-EARNINGSRATIO PE Ratio Stock Price EPS Nike is 28.85 above industry standard EPS Growth
- 76. UA NIKE VS UNDERARMOUR 5 YEAR STOCK PRICE NIKE Source: Google Finance
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- 78. CURRENT RATIO Current Ratio CurrentAssets Current Liabilities 2015 Current Ratio 2.52 Source: Nike 2015 10K Annual Reports
- 79. CASH RATIO Cash Ratio Cashon Hand Current Liabilities 2015- $2,534 million 2013- Completed 4-year $5 billion share repurchase program Source: Nike 2015 10K Annual Reports
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- 81. DEBT TO EQUITYRATIO Debt to Equity Total Liabilities Shareholder’s Equity 10.2 below required maximum Nike below industry average of 39.6 UA Financing Growth with Debt Source: Yahoo Finance UA CFO Quote
- 82. INVENTORY TURNOVER Inventory Turnover COGS Inventory Increasein global wages Source: Nike 2015 10K Annual Reports
- 83. FINANCE: SUMMARY Nike leadsthe industry in the majority of categories Under Armour has been aggressively taking on debt to grow its company in its efforts to compete with Nike There is still a $13 billion gap in revenues between Nike and Under Armour Observations
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- 85. Core Product Group PRODUCT ProductDifferentiation Nike+ Innovation is key 1. Team, Trefis. "Nike Faces Tough Competition In Europe and China." Forbes. Forbes Magazine, 4 Mar. 2014. Web. 13 Mar. 2016. 2. Siegel. "Nike and Adidas: Different Strategies for Telling Their Brand Stories." Siegel + Gale. N.p., n.d. Web. Highly Competitive Industry Shoes, Apparel, Equipment “But at NIKE, innovation is more than something we do – it’s who we are.” - NIKE Annual Report “The plus means more. More gear, events, and coaching, just for you.” - NIKE Website Differentiated by NIKE brand Creates powerful experiences Personalized service Expanded benefits Oriented around customer needs
- 86. PRODUCT Personal expert appointments Freeshipping Email promotions Nike+
- 87. Nike+ PRODUCT Nike+ Running App Nike+Fuel App Nike+ FuelBand SE
- 88. Cost Plus Pricing(Past) PRICE Price + Revenue Increases Footwear prices increased 5% (2014) Increased customer perceived value 1. MacLeod, Ryan. "NIKE Pricing Strategy: Cost-Plus vs. Consumer Value Equation." Marketing Discussions. N.p., 18 Mar. 2015. Web. 13 Mar. 2016. Premium Pricing (2014) Nike increased sales by $168M by driving up average selling price¹ “NIKE brand footwear and apparel revenues increased 12% and 10% respectively…Footwear unit sales in fiscal 2014 increased approximately 7% and the average selling price per pair increased approximately 5%, driven nearly equally by price increases and a shift in mix to higher priced products.” - NIKE Annual Report 14’ Footwear revenue increased 12% (2014) Apparel revenue increased 10% (2014)
- 89. NIKE Stores PLACE Online Sales Increaseddata capture capabilities Innovation drives online growth 1. "Total Number of Nike Retail Stores Worldwide 2009-2015 | Statistic." Statista. N.p., n.d. Web. 14 Mar. 2016. Key Domestic Retail Partners Foot Locker Dick’s Sporting Goods Finish Line
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- 91. Goals of Promotions Increasebrand awareness Motivate response PROMOTIONAL GOALS Nike’s Goals Drastic shift from company’s inception Understanding the evolving needs of the consumer Build and insulate relationships Source: Nike Inc., 2015 10K Annual Report | Nike News “We’ve come around to saying that Nike is a marketing-oriented company, and the product is our most important marketing tool.” -Phil Knight
- 92. Create Awareness Increase brandimage ADVERTISING Advertising Budget In 2015, Nike spent $3.2B on “Demand Creation” People make decisions based on emotions Create Emotional Connections New product lines, sub-brands “That’s why you have to start with a good product. You can’t create an emotional tie to a bad product because it’s not honest. It doesn’t have any meaning, and people will find that out eventually.” - Phil Knight Source: Nike Inc., 2015 10K Annual Report | Nike News
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- 94. Recent Positive PR “NikeNamed Top Endorsed Brand.” “Nike in Top 10 for Social Responsibility Reporting.” PUBLIC RELATIONS “Nike Is the Most Valuable Apparel Brand in the World.” Pilon, Anne. "Celebrity Endorsements Survey: Nike Named Top Endorsed Brand." AYTM. N.p., n.d. Web. 14 Mar. 2016. "Nike Named Top 10 for Social Responsibility Reporting." NIKE, Inc. N.p., n.d. Web. 14 Mar. 2016. Friedman, Vanessa. "Nike Is the Most Valuable Apparel Brand in the World." The New York Times. The New York Times, 29 May 2015. Web. 14 Mar. 2016. Recent Negative PR “China Shoe Plant Strike Disrupts Output at Nike.” “Nike workers 'kicked, slapped and verbally abused' at factories making Converse.”
- 95. Jordan Brand Originally signedin 1984 ENDORSEMENTS LeBron Brand Original deal signed in 2003 for 7 years - $90M; resigned in 2010 Paid close to $100M in brand royalties per year $2.5B generated in sales/per year from Jordan Brand “We can confirm that we have agreed to a lifetime relationship with LeBron that provides significant value to our business, brand and shareholders. We have already built a strong LeBron business over the past 12 years, and we see the potential for this to continue to grow throughout his playing career and beyond.” - NIKE Public Statement $340M worth of LeBron shoes sold in 2015 First-ever lifetime contract signed by Nike in 2015 Source: Business Insider
- 96. Special Offers Dedicated sectionof their website to clearance items SALES PROMOTIONS Response Motivators Limited to select holidays and email subscribers
- 97. Front-line Employees Direct interactionwith the customer No separation in distribution channel PERSONAL SELLING Personalized Service Advanced Gait technology Complete video evaluation
- 98. DIRECT MARKETING Traditional DirectMarketing Email program Issued catalog Social media conversations Nike Plus Marketing Engage directly with customer Data driven interaction
- 99. New Strategy Nike FuelPR Social media campaigns SOCIAL MEDIA Main text here Enter statistic here. Add some % and some numbers Artistic branding
- 100. $7 billion goal E-COMMERCE C.D.OAdam Sussman Growth Plan Direct-to-consumer Nike Plus accounts Clearance Promotion Online Shopping Nike ID
- 101. BACKGROUND INTERNAL EXTERNAL SWOTRECOMMENDATIONS SPIRITUAL
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- 103. Great Risk MACROECONOMIC FACTORS Environmentalawareness Discrimination factors Factors affecting foreign production Economic recessions Global demands
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- 105. Millennials A growing partof the athletic apparel market Desire for the latest and greatest CUSTOMERS Athleisure trend growing
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- 107. DIRECT COMPETITORS Adidas Shoes New- to-Lifestyle AthleticBrand Reebok FIFA Under Armour Coaching Personalized Apps Community Rebranded Steph Curry
- 108. ADIDAS We are innovationand design leaders Mission Statement We are consumer focused CEO | Geoffrey Smith Socially and environmentally responsible Deliver consistent outstanding financial results Going forward, speed will be a key competitive advantage for us as we transform the adidas Group into the first true fast sports company Competitive Advantage
- 109. UNDER ARMOUR Make allathletes better through passion, design, and the relentless pursuit of innovation Mission Statement Being good at the underdog Competitive Advantage “I Will” campaign CEO | Kevin Plank
- 110. DIRECT COMPETITORS New Balance -Private -Running -Madein America -No Celebrity Endorsements Puma -Casual -Athletic -Strong Global Brand -Celebrity Endorsements Skechers -Less Technology -Comfort -New Athletic Focus -Purchased Umbro -$3 Billion Nike Lawsuit
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- 112. Lifestyle Apparel CasualFootwear INDIRECT COMPETITORS
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- 114. The Digitsole Smartshoes “TheSmartshoes are the first connected, interactive, heated, and shock absorbent shoes with automatic tightening that can be controlled via your smartphone.” TECHNOLOGY
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- 116.
- 117. BACKGROUND INTERNAL EXTERNAL SWOTRECOMMENDATIONS SPIRITUAL
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- 119. Brand Image Nike hasgrown to one of the most well-established brands in the world STRENGTHS Integrated Distribution Channels Increasing Profit Margins Corporate Culture Leverage over retail partners and tapping into e-commerce Innovative and highly motivated Premium pricing Charismatic Leadership Employees are inspired and empowered Internal R&D Intellectual Capital Financial Strength Innovative and proprietary technology Profit margins HR program
- 120. Negative Perception ofOutsourcing Previous scandal with “sweatshops” outsourcing WEAKNESSES Lack of Utilizing Customer Data Capture Opportunities Underleveraged Loyalty Program Not leveraging the customer’s data from retail partners Negatively affects brand image No significant differences for Nike+ members Inconsistent Pricing Strategies
- 121. OPPORTUNITIES Millennial Market An emergingmarket Athleisure popularity Direct-to-Consumer Selling E-commerce Publicize Corporate Responsibility Many ethical efforts on behalf of Nike are not widely known Deeper Customer Profiling Expand customer database through response motivators and other techniques
- 122. Consumer Behavior Shift andtrends directing 50 billion dollar initiative THREATS Indirect Competition Foreign Production Factors Millennial market is quick to change Different economies Direct-to-consumer approaches integrated with new technology Manufacturers gaining leverage
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- 124. Our Definition Difficult toimitate SUSTAINABLE COMPETITIVE ADVANTAGE Customer experience augmented through value-added services High perceived value Value Based Pricing Measurable Advertising • Customer will be less price sensitive Unique and differentiated
- 125. Direct-to-Consumer DTC programs Identify customerswith data POTENTIAL FORMS OF SCA Brand Image Remove clearance items Further premium product lines Leverage data Intellectual Capital Drive Nike’s innovation Training programs
- 126. BACKGROUND INTERNAL EXTERNAL SWOTRECOMMENDATIONS SPIRITUAL
- 127.
- 128. VIABLE ALTERNATIVE I “Weused to think that everything started in the lab. Now we realize that everything spins off the consumer.” -Phil Knight Direct-to-Consumer
- 129. Direct-to-Consumer Separate from third-partydistributors Employee engagement - live customer support VIABLE ALTERNATIVE I Increase online sales presence Expected Outcomes Higher profit margins More data capture opportunities Determined for Future Study Lack of primary research - third party contracts, slow process Greater feasibility in future timeline of Nike
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- 131. VIABLE ALTERNATIVE II EmployeeDevelopment Program “One of my biggest sources of angst is having people so comfortable with a formula that works that they are not challenging themselves or their ideas.” -Mark Parker
- 132. Employee Development Program Morecross-functional teaming Opt in opportunities VIABLE ALTERNATIVE II Communicate better with front- line employees Expected Outcomes Increase innovation Differentiate intellectual capital based on current and future value Determined for Future Study Difficult to change corporate culture Nike currently undergoing leadership transition Better data capture abilities
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- 134. Minor Recommendations MINOR RECOMMENDATIONS Leadershipsuccession plan Reorganize departmental goals to align with $50B growth strategy Value-based pricing Utilize PR efforts Measurable advertising Shareholder activism Strategic alliance for improved GPS tracking technology
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- 136.
- 138. PROGRAM OVERVIEW Personalized CustomerProfiles Exclusive benefits to our most valuable customers Expanded applications and customization Data Capture Platform Customer segmentation Needs anticipation
- 139. PROGRAM RATIONALE Underleveraged LoyaltyProgram Easily replicated Lack of augmented value-added services Underleveraged Customer Database Lack of application integration Restricted to application + services, rather than customer membership “You have to come up with what the consumer wants, and you need a vehicle to understand it.” -Phil Knight
- 140. PROGRAM OBJECTIVES Increase CustomerShare Insulate customer’s loyalty to the brand Increase long-term market share Differentiate Customers by Value 80% of sales come from top 20% of customers¹ Leverage data from highest valued customers 1. https://www.entrepreneur.com/article/229294 Integrate Program Personal Selling Augmented Services Profiling
- 141. THREE TIER PROGRAM BRONZESILVER GOLD Victory Shipping Further Customized NIKE ID Tablet Customer Experience Victory Shipping Further Customized NIKE ID Tablet Customer Experience Workout Workshops Celebrity Exercise Videos Event Access Access to Nike Headquarters Gym Partnerships Exclusive Product Releases Victory Shipping Further Customized NIKE ID Tablet Customer Experience Workout Workshops Celebrity Exercise Videos Event Access
- 142. BECOMING A VICTOR FutureValue Customers Invitation through Nike’s measurements Purchases Retention Present and Future Value
- 143. BRONZE Notifications Replacement Shoe Alert TabletCustomer ExperienceVictory Shipping
- 144. SILVER Bronze Benefits SilverAssociate Event Access Workout Workshops Celebrity Workout Videos Exclusive Product Previews Nike NewsShoe Cleaning
- 145. GOLD Bronze Benefits SilverBenefits Access to Nike Headquarters Gold Associate Express Checkout (POS) Exclusive Product Release Victory LacesExclusive Gym Partnerships
- 148. EXPECTED OUTCOMES Better anticipateand meet customers’ needs Increased customer share Strengthen brand image Enhanced customer database Customers organized by future value Customer LTV Insulated brand image
- 149. FEASIBILITY Stores equipped withnecessary technology Nike leverage on partnerships Nike+ application structure Current database Increasing profit margins
- 150. MEASURABILITY Data interaction Embedded responsemotivators Increase in membership Differentiate customers based on value Customer retention Per customer spending
- 151. AREAS OF FUTURESTUDY Initiate direct-to-customer strategies Employee development program Further expansion into global markets Domestic manufacturing HR Management Leadership succession plan
- 152. BACKGROUND INTERNAL EXTERNAL SWOTRECOMMENDATIONS SPIRITUAL
- 153.
- 154. Teamwork as theBody of Christ SPIRITUAL INTEGRATION 21 The eye cannot say to the hand, “I have no need of you,” nor again the head to the feet, “I have no need of you.” 22 On the contrary, the parts of the body that seem to be weaker are indispensable, 23 and on those parts of the body that we think less honorable we bestow the greater honor, and our unpresentable parts are treated with greater modesty, 24 which our more presentable parts do not require. But God has so composed the body, giving greater honor to the part that lacked it, 25 that there may be no division in the body, but that the members may have the same care for one another. 26 If one member suffers, all suffer together; if one member is honored, all rejoice together. (1 Corinthians 12: 21-26)
- 155. For the Gloryof God SPIRITUAL INTEGRATION 17 And whatever you do, in word or deed, do everything in the name of the Lord Jesus, giving thanks to God the Father through him. (Colossians 3:17) 31 So whether you eat or drink or whatever you do, do it all for the glory of God. (1 Corinthians 10:31)
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- 157.
- 158.
- 159. Nike’s Business SegmentsRevenues
- 160. Nike’s Business SegmentsRevenues
- 161. LEADERSHIP “I want tocreate a new long-term financial model that delivers sustainable profitable growth, more strategically bringing our category offense plan into our major markets.” ANDY CAMPION - CFO Strategic Planning | Organizational | Finances Joined Nike as VP Global Planning and Development in 2007 Appointed CFO in 2010 Added SVP Strategy to accompany CFO
- 162. LEADERSHIP "It's about puttingyour resources up against the most critical opportunities and supporting them with very great operating processes, great leaders and great managers." DAVID AYRE - Global Human Resources Inspiration | Development | Talent Scouting Prior to Nike, David led the Talent and Performance Rewards functions at PepsiCo. Hired as HR Executive for Nike in 2007
- 163. LEADERSHIP ERIC SPRUNK -Chief Operating Officer Strong Work Ethic | Competitive | Team Player Previously, Executive at Price Waterhouse managing the Nike account Joined Nike in 1993 as Finance Director Hired as the COO in 2013 “At Nike we are very competitive, we know we are competing for our consumers. We work very hard at it and I like that. But our culture is very team-oriented and that is what makes us so successful.”
- 164. Jeanne P. Jackson- President, Product & Merchandising LEADERSHIP “Jeanne is one of the most experienced and talented leaders in the retail industry and over the past eight years, she has been a strong and visionary director for our company. - Mark Parker Hilary Krane - Chief Administrative Officer & General Counsel “Hilary’s broad experience will be a great asset to Nike as we continue to grow our business globally,” - Mark Parker John Slusher - Global Sport Marketing "John is a fascinating mix of intelligence, negotiating savvy and compassion"- Chris Bevilacqua (a partner at SCP Worldwide)
- 165. Reasons of resignation: Knightis still heavily involved with NIKE’s leadership (Perez) WHY PEREZ STEPPED DOWN “Perez didn’t understand the unique the company and its Nike brand” (Knight) Nike was doing well before and there’s no big opportunity for Perez (Analyst) Overwhelmed with growth and prioritizing Nike’s many brands (Perez)
- 166. Yue Yuen Strikein China Factory Largest Strike Affects Industry Wide Nike “Sweatshop” Suppliers YUE-YUEN STRIKE Strike Negotiation Settles with Social Security Benefit 2014:
- 167. How Nike Managedto Solve Its Sweatshops Scandal? The real shift begins with a May 1998 speech by then-CEO Phil Knight. “The Nike product has become synonymous with slave wages, forced overtime, and arbitrary abuse,” Knight said. “I truly believe the American consumer doesn’t want to buy products made under abusive conditions.” In 1999, Nike begins creating the Fair Labor Association. In 2005, Nike becomes the first in its industry to publish a complete list of the factories it contracts with and published detailed reports about its factories and workers conditions 2005 until present, The company continues to post its commitments, standards, and audit data as part of its corporate social responsibility reports. SWEATSHOPS SCANDAL
- 168. Clothing and Gear Dri-FIT Dri-FITUV TECHNOLOGY Therma-FIT Storm-Fit
- 169. Shoes and Gear Lunarloncushioning TECHNOLOGY Max Air Nike Zoom Hyperfuse Nike Shox Nike Free Flywire Nike Air Dynamic Support Flyknit
- 170. Under Armour ConnectedFitness “Track, analyze, and share your fitness activity with the world’s first social network for athletes and fitness enthusiasts.” Family of Apps TECHNOLOGY UA Record MapMyFitness Endomondo MyFitnessPal
- 171. Support Communities: Programs HomelessWorld Cup Ninemillion.org Stand Up Speak Up Let Me Play in China Fighting HIV/AIDS through soccer The Girl Effect CORPORATE CULTURE: SUSTAINABILITY
- 172. NIKE INC MARKETPRICE Source: Yahoo Finance NYSE Data Last Opened: March 17, 2016 6:33 AM EDT
- 173. NIKE STORES (U.SOnly)
- 174. Nike sued Skechersfor infringing 8 patents It comes 4 months after Adidas sues Skechers for copying their design The "overall appearance of the designs of the Nike patents and the corresponding designs of Skechers' infringing shoes are substantially the same." Nike wants to ask the judge to order Skechers from selling those product. Nike also seeks additional remedies from the profits of selling those products. LAWSUIT WITH SKECHERS
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- 176. STATEMENT OF CASHFLOWS
- 177.
- 178. The dangers topulling out of all distributors Due to the high fixed cost structure associated with our Direct to Consumer operations, a decline in sales or the closure or poor performance of individual multiple stores could result in significant lease termination costs, write-offs of equipment and leasehold improvements and employee-related costs. VIABLE ALTERNATIVE I Source: Nike Inc., 2015 10 K Annual Report
- 179. The impact towardsNike Under Armour sales grew 754% in 2015 after Curry won MVP and Warriors won the NBA title. Steph Curry continues to be a rising star with the chance of becoming the new face of NBA like Jordan or Kobe. STEPH CURRY IMPACT ON NIKE Why Nike lost the deal with Curry Nike presented Curry wrongly during the pitch meeting
- 180. Runners Nike’s foundation Large innovationefforts at a fast pace CUSTOMERS Largest performance category
- 181. Women Sales growth hasoutpaced men’s business “Athleisure trend” CUSTOMERS Women’s line could add $2 billion in sales by 2017
- 182. Young Athletes Youth athletesare a growing part of the athletic apparel market Drawn in through local leagues, clubs, and federations, as well as partnerships with professional athletes CUSTOMERS
- 183. Our Definition Difficult toimitate SUSTAINABLE COMPETITIVE ADVANTAGE Customer experience augmented through value-added services High perceived value Value Based Pricing Measurable Advertising • Customer will be less price sensitive Unique and differentiated
- 184.
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- 186. Company Portfolio NIKE Brand NIKE’SCOMPANY PORTFOLIO Hurley Jordan Brand Cole Haan NIKE Golf Umbro Converse
- 187. Example of goldenquestions Do you participate in any athletic events? If so, what are they? What is your favorite line of Nike products? How often do you run? How do you rate yourself in athletic ability? How could your customer experience be improved? GOLDEN QUESTIONS
- 188. Direct to ConsumerStat In fiscal 2015, Nike’s DTC revenue came in at $6.6 billion—a 25.1% year-over-year growth. Nike derived 23.1% of its total sales from this channel in fiscal 2015, compared to 16.2% in fiscal 2012. Nike’s targeting $8 billion in DTC sales by fiscal 2017. NIKE Sales Mix - Direct to Consumer
- 189. Hedging Our investments inworking capital decreased due to increases in accrued liabilities, primarily resulting from the receipt of $968 million of cash collateral from counterparties as a result of hedging activity. Why Nike has much liabilities
- 190. Nike Buys BackShares September 2012 $8 billion buyback program 2015 Third Quarter Purchase 24.3 millions shares ($1.5 billion) Share Repurchase Program September 2012 $8 billion buyback program Source: Nike Inc., 2015 10Q Report
- 191. Earning per ShareProjections
- 192. North America RevenueBreakdown
- 195. NIKE INC MARKETPRICE
- 196. BALANCE SHEET Source: NikeInc., 2015 10K Annual Report
- 197.
- 198. Work Cited Nike Historyand Timeline. (n.d.). Retrieved May 16, 2016. O'Reilly, L. (2014). 11 Things Hardly Anyone Knows About Nike. Retrieved May 16, 2016 Studios, F. (n.d.). Just Watch It: The History Of Nike In 3 Minutes. Retrieved May 16, 2016 Mini-case study Nike's. (n.d.). Retrieved May 16, 2016 High-Performance Marketing: An Interview with Nike's Phil Knight. (1992). Retrieved May 16, 2016, A.(n.d.). History. Retrieved May 16, 2016, from http://www.adidas-group.com/en/group/history/ This is Nike's secret weapon: Converse. (n.d.). Retrieved May 16, 2016 Nike News. (n.d.). Mark Parker Named CEO, William D. Perez Resigns. Retrieved May 16, 2016 McGrath, M. (2015, November 19). Nike Pops After Announcing 2-For-1 Stock Split, Dividend Hike And $12 Billion Repurchase Program. Retrieved May 16, 2016 REFERENCE PAGE Situational Analysis Nike News. (n.d.). Sustainable Innovation. Retrieved May 16, 2016 Nike Innovation (Rep. No. FY 14/15). (n.d.). Retrieved May 16, 2016, from Nike website: http://about.nike.com/pages/sustainable-innovation Innovation drives us. (n.d.). Retrieved May 16, 2016, from http://retailjobs.nike.com/article/innovation GalbRaith, J. R. (n.d.). ORGANIZATION DESIGN Challenges Resulting from Big Data. Retrieved May 16, 2016 Nike Investor Relations (Rep. No. FY 15). (2015). Retrieved May 16, 2016, from Nike website: http://investors.nike.com/investors/news-events-and- reports/?toggle=earnings Soni, P. (2015, October 12). Why Under Armour Expects to Take on More Debt to Fund Growth. Retrieved May 16, 2016 1. Team, Trefis. "Nike Faces Tough Competition In Europe and China." Forbes. Forbes Magazine, 4 Mar. 2014. Web. 13 Mar. 2016. 2. Siegel. "Nike and Adidas: Different Strategies for Telling Their Brand Stories." Siegel + Gale. N.p., n.d. Web. MacLeod, Ryan. "NIKE Pricing Strategy: Cost-Plus vs. Consumer Value Equation." Marketing Discussions. N.p., 18 Mar. 2015. Web. 13 Mar. 2016. 1. "Total Number of Nike Retail Stores Worldwide 2009-2015 | Statistic." Statista. N.p., n.d. Web. 14 Mar. 2016. . Pilon, Anne. "Celebrity Endorsements Survey: Nike Named Top Endorsed Brand." AYTM. N.p., n.d. Web. 14 Mar. 2016. 2. "Nike Named Top 10 for Social Responsibility Reporting." NIKE, Inc. N.p., n.d. Web. 14 Mar. 2016. 3. Friedman, Vanessa. "Nike Is the Most Valuable Apparel Brand in the World." The New York Times. The New York Times, 29 May 2015. Web. 14 Mar. 2016.