Nike is a major publicly traded sportswear and equipment supplier based in the United States. It is headquartered near Beaverton, Oregon and had revenue of over $19 billion in 2010. Nike sells a wide range of shoes and apparel for sports like running, basketball, soccer, and more. It was founded in 1964 as Blue Ribbon Sports to distribute Japanese running shoes and launched its own Nike brand in 1971. Nike has grown to be the largest seller of athletic footwear and apparel in the world due to its focus on innovation, marketing, and partnerships with athletes and teams.

1. PGDM – B
Group – 6
Avishek Singh 113
Mohammad Shadab 129
Pratik Akerkar 139
Somjeet Dutta 152
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2.  Major publicly traded clothing, footwear,
sportswear, and equipment supplier based in the
United States
 Headquartered near Beaverton, Oregon, in
the Portland metropolitan area
 Revenue in excess of US$19 billion in its fiscal
year 2010
 Employs more than 34,400 people worldwide as
of May 2010
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3. Shoes Miscellaneous
 Running  Bags
 Basketball  Socks
 Soccer  Sports balls
 Sport-inspired urban  Eyewear
shoes  Timepieces
 Children’s shoes  Apparels
 Bats
 Gloves
 Protective equipments
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4.  Originally known as Blue Ribbon Sports (BRS)
 Founded by University of Oregon track athlete Philip
Knight and his coach Bill Bowerman in January 1964
 Initially operated as a distributor for Japanese shoe
maker Onitsuka Tiger (now ASICS)
 Launched its own line of shoes branded as Nike in 1971
 .The Swoosh was first used by Nike on June 18, 1971,
and was registered with the U.S. Patent and Trademark
Office on January 22, 1974
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5. Threat of New entrants(Low)
High Barriers to Entry
Capital Intensive
Strong Brand Following
Economies of scale
High Marketing & R&D Costs
Industry in consolidation phase
Bargaining Power of
Internal Rivalry (Low)
Bargaining Power of Supplier Buyer (Low)
Fierce Competition
(Low) End user brand loyalty
Mature Industry
Abundantly available raw Price sensitivity issues
materials Mostly Non-Price competition
Retail and vendor consolidations
Cheap resources-commodity item Differentiation strategy
Growing power of retail chains
Industry in consolidation phase
Good Infrastructure
Threat of Substitutes (Low)
Other types of shoes
Other sport apparel
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6. Threat of New entrants(High)
Less/Not explored Markets
Un-Sophisticated market needs
Less Capital Intensive
No major brand following
Local players advantage
Bargaining Power of
Bargaining Power of Supplier Buyer (High)
(Low) Internal Rivalry (High)
Fierce Competition from global Consumer needs to be educated
Inexpensive labor
brands Retailers need to be educated
Abundantly available raw
materials Local players with cultural High Price sensitivity
advantage Brand image to be re-established
Cheap resources-commodity item
Lack of proper infrastructure
Threat of Substitutes (High)
Bare foot, walking with slippers
e.g. India
Leather boots and slippers
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7.  Infrastructure: free space, good roads,
jogging parks
 Sports equipments:
 Backpack, balls, bats, rackets, etc.
 Partnerships with other products are
widening the domains of complementors for
sportswear products. E.g. Nike+iPod Sports
kit
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10.  The company sells its products to retail accounts,
through its owned retail stores, and through a mix of
independent distributors and licensees, as well as
through internet website ‘www.nikestore.com’
 It has 4 major subsidiaries:
 Converse
 Cole Haan Holdings
 Nike Bauer Hockey
 Hurley International
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11.  Technology in Products– Historically had some of the
most cutting-edge products on the market. E.g. Nike +
iPod
 Manufacturing Skills– Use of low cost contract
manufacturers, based outside USA, for its manufacturing
 Strength of patents
 Nike Air
 Nike Zoom
 Nike Air Max
 Nike Shox
 Economies of scale
 Application of IT– Nike relies heavily on IT in order to
manage its supply chains 11

12.  Marketing– Nike is a marketing company
 Research & Development– Nike’s R & D lab
evaluated as “far & away the best” in the
industry. Large number of patents testimony to
its commitment to R & D.
 Extensive SCM capabilities– has attained
competency in leveraging low cost countries like
China & Vietnam as its manufacturing hub.
Sources its products from 900 factories spread
across 50 countries.
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13.  Nike’s distinctive competency lies in the area of
marketing, particularity in the area of consumer brand
awareness and brand power.
 While the reasons that Nike is successful in
marketing products are numerous, this key distinctive
competency towers over its competitors.
 As a result, Nike’s market share is number-one in
the athletic footwear industry. Catch phrases like,
"Just Do It," and symbols like the Nike "Swoosh,"
couple with sports icons to serve as instant reminders
of the Nike Empire.
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14.  Nike brand is the most valuable among sports
businesses
 Of the company's $18.4 billion in revenues in 2009,
90% was attributable to merchandise emblazoned
with either the Nike or Nike Golf logos.
 Nike’s brand value is US$ 18.6 billion in 2012,
comprising more than 52% of its enterprise value*
 30th most powerful brand in the world, and the
number one in its industry. Its nearest rival Adidas is
ranked at distant 135, while Reebok is ranked at 408.
* source: Brandirectory, 2012. 14

15. Nike’s key resource evaluated on RBV framework
 The test of inimitability: Nike’s brand value cannot be duplicated or
matched in the short-term.
 The test of durability: By continually investing significantly in brand building
exercise, Nike has maintained and increased its brand value. Nike spent more
than US$ 3 billion in 2010 on marketing.
 The test of appropriability: Since a lot of value that Nike creates is owing to
its brand value, it derives maximum benefit from the value creation process.
 The test of substitutability: Brand as a resource is intangible. The only way it
can be trumped is by creating a stronger rival brand (something that can take
years to build and leverage) or by diluting Nike’s brand value
 The test of competitive superiority: Forbes ranked Nike as the top-most
sports brand for a number of consecutive years. Its brand value is 10 times
that of Reebok and more than 50% greater than that of Adidas. 15

16. 1. Athletic Footwear
▪ 54 % of total revenue
▪ Casual Footwear Line
2. Apparel
▪ 27 % of total revenue
3. Rest
▪ Equipment
▪ Sports related business
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17.  “To distribute low-cost, high-quality Japanese
athletic shoes to American consumers in an attempt
to break Germany’s domination of the domestic
industry”
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18.  Quality Products
 Constant Innovation
 Aggressive Marketing
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19.  180 Countries Total
Revenue
6.7
17.3 34.1 US
Europe
Middle East
Africa
28.7
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20.  High-end, High Income Level between the
age of 16-55
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22.  Sports
 Attitude
 Lifestyle
 Just do it
 You don’t win silver,
You lose gold
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23.  Flag Ship stores
 Nike Town shops
 NikeId
 Big Retail Discount Stores
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26.  departments by both geographic divisions
and product categories
 created overlapping management
responsibilities and a fluid leadership
structure
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27.  Sweat Shop debacle, 1990s
 Diversity and Inclusion
 Cultivate diversity and inclusion to develop
world-class, high-performing teams
 Ignite change and inspire critical conversations
around diversity, inclusion and innovation
 Create venues and environments for open
dialogue, diverse opinions and a multitude of
perspectives
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29. THREAT OF
THREAT OF SUBSTITUTION
IMITATION
ADDED VALUE
APPROPRIATED
VALUE
THREAT OF THREAT
SLACK OF HOLDUP
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30.  Barriers to Imitation
 Economies of scale
▪ Shared distribution channels and efficient production reduces costs
 Patents & copyrights
▪ Nike has around 3775 patents in the sports shoes, apparels and the
equipments domain
e.g. Nike AIR technology, self lacing shoes, etc.
 Innovation
▪ Strong emphasis on R&D and product development through new
designs(more than 300 designs a year)
e.g. recycled polyester for jerseys
 Brand reputation and Image
▪ Celebrity endorsements & sponsorships of sports events 30

31.  Responses to substitution
 Customization of footwear
▪ Online customization of footwear
 Aggressive advertising
▪ ‘Just Do It’ campaign
 Mergers and Acquisition
▪ Umbro, Converse, etc.
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32.  Responses to Holdup
 Multiple sourcing and Contracting
▪ Contract suppliers in China, Vietnam, Indonesia and Thailand;
Argentina, Brazil, India, and Mexico
 Building relationships with complementors
▪ Tie up with Apple for the ‘Nike + iPod’ sports kit
 Increase Bargaining power
▪ ‘Just Do It’ advertising campaign
 Forward Vertical Integration
▪ Opened Discount stores in rural areas and flagship stores in urban areas
 Building Trust
▪ Improving working conditions through various programs
e.g. Joining FLA & GAWC, transparency through publishing monitoring results
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on the website

33.  Responses to Slack
 Performance based incentives
 Pay dividends to the shareholders
 Nike encourages outsiders to become part of
board, in order to avoid bias connected with
“corporate conformism”
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34.  Nike’s current policy of constantly widening the range of sports which they produce
could be continued and further expanded. Nike could look into different markets, for
example Fishing, Hiking, etc.
 Nike could attempt joint ventures or acquisitions with companies to expand their
product portfolio and also achieve economies of scale and access to markets.
 Nike could take their collaboration with Apple one step ahead by forming exclusive
gamepads featuring games like soccer, cricket, golf, NHL, NBA, etc.
 Focus on different segments as well e.g. Age group 50+ with shoes specially meant
for walking, custom footwear for women athletes.
 Nike should start ‘Ethical’ campaign against the counterfeit production to improve on
its image.
 Nike could get into partnerships with other firms and setup sporting academies in
developing markets as a brand building exercise.
 Nike could make available online training videos of sporting stars and give their
access to customers complementary along with certain range of products.
 Nike could also get into sporting accessories like sunglasses which are highly
profitable and are complementary in nature.
 Nike could cut down on the contracting in order to avoid threat of imitation and
future competition. 34

35.  Economies of scale
 Brand reputation and Image
 New designs and technology (recycled polyester for jerseys)
 Customization of footwear
 Relationships
 Aggressive advertising
 Sub brands ( Cole Haan, Converse, Hurley International, Hurley
International, and Umbro Inc)
 Competition is non priced based on differentiation
 Celebrity endorsements and sporting event sponsorships
 Just do it campaign – signifies attitude, sports and lifestyle
 Flagship stores for selling
 Partnerships with retail discount stores like walmart
 Contract suppliers in China, Vietnam, Indonesia and Thailand. And also
in Argentina, Brazil, India, and Mexico
 Nike + ipod
 Nike for women campaign
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