1. Business Strategy
Bargaining power of Customers
It is very important to analyze customer power in this type of analysis. It helps companies like
Nike to target the most appropriate customers for their products. The bargaining power of
customers in the Pakistani market is influenced by the following factors (JIAN, ZHAO, 2006).
Size of purchases
Customer can easily exercise the bargaining power, if the volume of purchases generated by the
same customer is significant in the total turnover. Bargaining power increases, especially when
you can have the same product from other enough easily.
Concentration of customers
It depends upon the purchasing power of the customers. The purchasing power of the Pakistani
customers is improving as country is coming out of recession.
Bargaining power of suppliers
Supplier analysis aims to analyze the ability of suppliers to affect the company. Suppliers can
affect the entire procurement cycle through the level of purchase prices, the arrangements for
payment (deferred or not), the quality and continuity of supplies, the level of technical support if
necessary and the time delivery. Bargaining power of the supplier depends on the following
elements

2. % of purchases from a single supplier
If there is a only one in the market then supplier will probably have a very high power, since
without him the company would close. Suppliers in the Pakistani market have low level of
bargaining power.
Existence of substitute products
The existence of substitute products can really affect the bargaining power of the suppliers. Nike
should develop unique product features in Pakistani market to neutralize the bargaining power.
In the case the company cannot replace provider at least until he finds another person, who sells
a product with the same characteristics.
Vendor switching costs
Vendor switching costs also play an important role as greater costs affect the relationship of
different suppliers with the company. The greater vendor switching costs means greater
bargaining power of the suppliers. Even in the absence of clauses onerous contract, there may be
substantial inefficiencies related to the fact that the new supplier cannot agree the same discount,
or the same level of the previous service (HONG, W. Y., 2010).
Possibility of vertical integration
As it is clear from the earlier analysis of the customer, we can say that if a sports goods supplier
in Pakistan can exercise bargaining power, if it decides to produce T-shirts and clothing, or it can
integrate with the distribution by creating "downstream" as its distribution channel.
Barriers to entry and Exit
The higher barriers to entry or exiting the market make it very difficult for the company to enter
the market. The traditional barriers to entry includes the size of the required investment ,the
identity of the brand ,access to distribution channels , Economies of scale and learning

3. ,Government policies and the other type of external threat is the possibility that there are
replacement products.
Internal Analysis
Value Chain analysis
Nike case shows the process , when the company denied all responsibility to incorporate it as
part of their value chain. It is one of the examples, often cited with Shell, which shows how a
company can go through a deep scandal, making fundamental changes in its operation and exit
achieving improved management. The value chain of the company consists of various risks and
potential benefits that exist in globalization . It was one of the first companies to discover the
impact that activities in the chain can have on the reputation of the brand. Criticism of Nike
began in the nineties, regarding the subcontracting companies that made in countries where low
wages, poor working conditions and violations affected human rights.
The cases related to the human rights violation include negligible remuneration in Indonesia,
child labor in Cambodia and Pakistan, and poor working conditions in China and Vietnam.
NGOs and representatives of the workers managed to draw the attention of the means and thus
caused the scandal that damaged the reputation of the company. In the following years, several
NGOs focused their work only in Nike and the company became the aim of the anti-
globalization movements and sweatshops. In just ten years they were published 600 items
including Nike sweatshop words and as factories where exploited Workers. Nike's first reaction
was to deny all responsibility on malpractices in factories, arguing that the affected workers were
not employees of the company. In 1992 the company developed its first code of conduct, which
required its suppliers meet basic standards in labor, environmental and health issues. The
providers only had to sign the code and expose in their factories, which of new company

4. received criticism, saying it was only a gesture to public opinion, as the code was minimal and
there was no real purpose to fulfill, since most workers could not read and had no means to
enforce them
Market Selection
We have selected Pakistan as a new market for reentry of the Nike products. Pakistan is the sixth
most populous country in the world, with a series of challenges on the political and economic
fronts. Historically, the confrontation with neighboring India has resulted in a negative
perception of Pakistan, especially in Western countries, which has led to a shortage of direct
foreign investment in the nation. But it must take into account that the economic state of Pakistan
has improved in recent years, in parallel to a big improvement in its position in the foreign
exchange market: more precisely, the assets of the balance of payments and the rapid growth of
its foreign exchange reserves. In addition, the reduced tension with India and the ongoing peace
process give new hopes for prosperity and stability in South Asia (SANTOS, Nicholas and
Laczniak, Gene, 2015).
The Pakistani economy, which was thought to be highly vulnerable to external shocks and
internal, has proved unexpectedly strong during a series of potentially destructive events such as
the Asian financial crisis, the global recession, famine, military action in Afghanistan after
September 11, and tensions with India. The KSE-100 index of the Pakistani stock market has
been the one with the world's best performing stock market from the years 2013-16. Lately the
Pakistani manufacturing sector has had growth rates in double figures, with large-scale
manufacturing grew by 18% in last decade.
SWOT analysis

5. Nike Inc is one of the top sports manufacturing companies in the world. It supplies sport goods
and equipments all over the world. It can take advantage of the Asian emerging economies. Nike
can take advantages of the opportunities by the emerging economies like Pakistan and Sri Lanka.
Nike is facing some kind of threat from emerging companies in the developing economies like
Pakistan. Forward contract and Sega Sports are two most popular sports manufacturing
companies in Pakistan.
Market entry Strategy
Franchising
The undoubted success of franchises in the world is undoubtedly due to the enormous
advantages, becoming an excellent opportunity to expand a business and dominate markets
model, as well as the safest and least risky way for an investor to have its own business.
Franchise offers an enormous opportunity for the Nike to take benefit from the synergy that
represents belonging to a regional, national and even global network in the Pakistani Sports
Market.
Advantages for the Nike Inc
Following are the most important advantages for the Nike to follow the franchising strategy
Strengthening and preservation of its brand
Low capital investment in business expansion
Increased operational efficiency in new units directly operated and supervised by the
Franchisees.
Increased coverage and market development
Charging an initial fee for use of trademark rights (thereby recovering in the medium term
investment Franchise Development System)

6. Monthly charge royalties based on gross sales of goods or services marketed through the
awarded franchises.
Advantages for the Franchisee
Reduced risk and uncertainty by investing in a proven business format
Continuous innovation in methodological and technological aspects
Ongoing technical assistance by the Franchisor
Documented training with Operation Manuals
Access to administrative control systems and performance evaluation of its selling point
Training in production of goods and services
Sense of belonging to a consolidated network of Franchisees
Access to promotion and advertising programs
Increased his personal prestige by getting involved with a business concept of success
Marketing
Once you developed the product to switch to the marketing stage will need to choose where, how
and when to launch the product dl.
Resources
NIKE Resource Based-View Tangible resources
Physical assets
Land, buildings (858 Stores worldwide, research centers, HQ, distribution facilities), machinery,
equipment
Financial assets
Strong financial position (constant growth); ROI, ROA is higher than industry’s average
Technological resources

7. Patents (Nike Air, Nike Zoom, Nike Air Max, Nike Shox), trademarks (Swoosh), contracts with
sport legends to promote their brand
Organizational resources
Big and loyal customer base, effective distribution network and control system over the Supply
Chain (teaming with Hewlett-Packard to supply hardware, software and consulting services to
host the worldwide Nike Supply Chain (NSC) project)
NIKE Resource based-view Intangible resources
 Human resources requirements are 56.500 employees worldwide, powerful research team
(specialists such as bio mechanics, industrial designers, and exercise physiologists).
 Innovation resources- knowledge transfer, integrated research laboratories, dynamic
technological innovation design, exclusive worldwide patents, an online website ideal for
customization (“customer-designer”).
 Reputation resources- brand name, identifiable distinctive trademarks (“Just Do It”), logos
(Swoosh logo).
NIKE Resource based-view Organizational capabilities
 Cost effectiveness
 A streamlined management structure
 Human resource management strategy focused on training (training programs with contract
manufacturers)
 Good inventory management
 Product design capabilities (perfect combination of performance, comfort and fashion)
 Distinctive customer service (Nike Support, best e-commerce experience)

8. Conclusion and Recommendations
With 200 million individuals and 60 million working class purchasers, Pakistan is a quickly
developing business market for companies like Nike Inc. A huge trainable workforce combined
with good demographics and rising residential utilization, give a scope of convincing foundation
and corporate open doors in Pakistan. Be that as it may, the development and return potential in
Pakistan has yet to be opened by residential and worldwide financial specialists.
Pakistan has extensive requirement for capital speculation, given its colossal foundation
necessities and unexploited potential in for all intents and purposes each significant area. Given
political soundness, protection from outer turbulence and the right full scale monetary
environment, Pakistan can enroll a drawn out time of locally determined development. These
requirements and potential can be easily tapped by the Sport companies like Nike inc.
Pakistan's administrative surroundings is among the most financial specialist well-disposed on
the planet. There are no confinements on remote proprietorship (dissimilar to India and most
other developing markets); outside trade change, repatriation of benefits or employing of exiles.
Pakistan offers low corporate duty rates and expense motivators for vital speculations. Generally,
outside speculation returns in Pakistan have been high.
Today, in Pakistan, there are significant open doors in underestimated resources and
organizations, a dynamic privatization activity, extensive framework related venture ventures
(particularly under the China-Pakistan Economic Corridor), development in neighborhood
utilization and a to a great extent undiscovered fare potential. This potential can be easily utilized
by companies like Nike Inc. With an enormous diasporas of exceptionally qualified Pakistani
administrators and a vast store of local ability, capital putting resources into Pakistan can enter a
managed and remunerating stage.

9. Appendix
Porter Five forces analysis
Competition Nike should pay special attention on direct competitors. It should keep an
eye on other companies operating on the same market in the same productive
sector
Concentration refers to the number of enterprises operating in a given
market. If in fact there is one enterprise leading the latter would have a
considerable discretion in imposing their prices to the market
The more business you look for goals, strategies, and structures cost, origins,
then harder it will be for them to escape price competition
If there is a similarity between the products offered by companies then
customers will chose products on the basis of the price. Pakistan has
different types of sports manufacturing companies such as Forward goods
and Sega sports etc.
Bargaining
Power of
Consumers
Customer can easily exercise the bargaining power, if the volume of
purchases generated by the same customer is significant in the total turnover
It depends upon the purchasing power of the customers. The purchasing
power of the Pakistani customers is improving as country is coming out of
recession
The cost structure is the ratio of costs fixed and variable costs. The objective
of the scheme of analysis is to have a complete picture of how actors move
in the market real, with reference to their current strategies adopted
comparison with the current strategy of our company.
The cost structure in the Pakistani companies is very simple as compared to
the American companies. The labor is very cheap in the Pakistan and this
factor helps companies to produce very cheap sports goods
Bargaining
Power of
suppliers
The existence of substitute products can really affect the bargaining power of
the suppliers. Nike should develop unique product features in Pakistani
market to neutralize the bargaining power
If there is a only one in the market then supplier will probably have a very
high power, since without him the company would close. Suppliers in the
Pakistani market have low level of bargaining power
Vendor switching costs also play an important role as greater costs affect the
relationship of different suppliers with the company. The greater vendor
switching costs means greater bargaining power of the suppliers.
Substitute
Products
The existence of substitute products can really affect the bargaining power of
the suppliers. Nike should develop unique product features in Pakistani
market to neutralize the bargaining power. In the case the company cannot
replace provider at least until he finds another person, who sells a product

10. with the same characteristics.
Threat of Entry
and exit
The higher barriers to entry or exiting the market make it very difficult for
the company to enter the market. The traditional barriers to entry includes
the size of the required investment ,the identity of the brand ,access to
distribution channels , Economies of scale and learning ,Government
policies and the other type of external threat is the possibility that there are
replacement products.
SWOT Analysis
Factors
Strengths Nike has a very strong brand value
Its slogan is another thing that has led the company to be a global success.
Excellent quality of services that make Nike is a company of great prestige
Weaknesses In countries where Nike has its factories, there is a manipulation to different
employees.
Some companies make imitations of Nike products, and sell them at a lower
price, and this represents a substantial loss for Nike.
Competition, such as Reebok, which has a worldwide success.
Nike, however, failed to foresee the problems posed by the extortionist
explained on labor and factory conditions at production sites in Asia. This leads
to bad publicity and a decline in sales as a society and consumers are
demanding more of corporate social responsibility.
Threats The policy can affect the economic environment because if there are problems
in this union may have low sales.
Globalization currently affecting all companies worldwide.
It could be affected if employees come to form a union to demand their rights.
Companies representing its competition (Reebok, Adidas, etc.),
Opportunities The structure of the company is well established.
The quality and quantity of customers that give you the opportunity to Nike to
reach their homes
Nike can increase its market share by expanding its market.
Any type of activity that is present at any given time you can patronize this
company and make your company more is known.
PEST Analysis
PEST Analysis
Political The Pakistani government has created economic policies that will encourage

11. business growth in the coming years
Economic In the economic field, the biggest threat to Nike will be the economic recession.
During the recession, the growth of Nike will be harmed. The Pakistani
economy is out of recession but still there are threats of recession. Consumer
purchases have been slowed in last few months
Social Pakistani People are more health conscious today. Diet and health is gaining
increased prominence in their lives. As a result, more and more people join
fitness and sports clubs. There is a demand that accompanies sports fitness
products, especially clothing, footwear and equipment
Technological Nike effectively uses IT in marketing information system s. Nike marketing
information systems apply the economics of innovation, segmentation and
differentiation for most of the business. Nike owes its leadership status in most
of the use of information technology is very valuable, and apply it to every
aspect of the product of the development of the distribution
Porter Five Analysis
Ansoff Matrix
Following are the strategies available to the Nike for the Pakistani Market
The two main variables in a strategic marketing decision:
• The market in which the firm was going to operate.
• The product intended for sale.
Product development
• Sell new products in existing markets i.e. soft drinks
• Low risk
• Low cost
• Established companies can use this strategy because they already have an existing market
• May require a complete marketing mix strategy
Market Penetration
• Sell more products (existing) in existing markets
• Could be use to move stock
• Low risk/cost
• Marketing mix strategy especially price

12. • Used frequently if competition exists (substitute goods)
• Attempting to sell a product for a different occasion
Market Development
• Achieve high sales/higher market share of existing products in new markets
• Medium risk
• Marketing strategy i.e. promotion
• New segments/maybe overseas markets
• Example = Lucozade – originally used for health/flu now a sports drink
Diversification
• Selling new products in new markets
• Highly expensive
• Time consuming
• Can help to spread risk
• Proctor/gamble
• May have little expertise
• Example = Virgin changing to an airline/train
12 C Factors
12 C Factors Selected Markets
Country Pakistan GDP growth -3.4 % (2015-16)
Srilanka GDP growth -3.3 % (2015-16)
Consumption Pakistan-
Srilanka -
Concentration Pakistan -The territory is quite diverse, as you go from the high peaks of the
Karakoram to the north (with K2 is the second highest mountain on Earth) to
the wide plains of the Indus River, which crosses from north to south across
the country, up to the chains Eastern mountain, near the border with
Afghanistan and Iran.
Srilanka -South Asian island is located in the Indian Ocean SE extreme
southern tip of the Deccan peninsula. It is formed from a flat strip N partly
covered by savannas; in the southern part a forested plateau culminates in

13. Mount Pidurutalagala (2524 m). From the central mountainous area radiating
various streams, the largest of which is the Mahaweli Ganga. The climate is
hot and humid, characterized by modest temperature variations.
Capacity Pakistan-Economic growth is sustained by foreign investment and agricultural
economy.
Srilanka -Economic growth is sustained by foreign investment, particularly
from China, and tourism
Culture Pakistan – Pakistan is not a country from the tourists, the main attractions are
given by the impressive northern mountain ranges and rich culture and history
which can offer.
Srilanka –Sri Lanka has a very rich South Asian culture with different cultural
traditions
Consumer
Behavior
Pakistan –It has very strong consumer attitude for buying sports good
produced by Nike
Sri Lanka- It has very strong consumer attitude for buying sports good
produced by Nike
Change Pakistan –The information technology sector is growing very fast in the
country
Sri Lanka-Srilanka has a very low level of technology advancement
Choices
Pakistan-Pakistan has a middle class with great love of sports like Cricket
,Tennis and hockey
SriLanka-Srilanka has a very vibrant middle class interested in sports
goods.The sports culture in the country is also very strong
Market entry
Franchising

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