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Nike: Corporate Strategy

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Nike: Corporate Strategy

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Nike: Corporate Strategy

  1. 1. Competitiveness and External Factors Analysis of Nike © Yusskei, http://yusskei.net
  2. 2. Contents 1. Introduction 2. Company profile 3. Competitiveness analysis 3-1. Porter’s Five Forces 3-2. Porter’s Generic Strategies 3-3. Ansoff Matrix 3-4. Product Life Cycle 4. External factors analysis 4-1. Social 4-2. Technological 4-3. Environmental 5. Conclusion 6. References 1© Yusskei, http://yusskei.net
  3. 3. 1. Introduction Purpose of this Presentation 1. To analyse Nike’s core competences and competitiveness by using models and frameworks. 2. To identify and explain three external business environment factors which will impact on Nike’s competitiveness over the next five years.  To hypothesise three external business environment factors that will impact on Nike’s core competencies and competitiveness over the next five years. Objectives 2© Yusskei, http://yusskei.net
  4. 4. 2. Company Profile Nike, Inc. The leading company in the world sportswear industry 3 Design, development, marketing and sales of Adapted from: FY2012 Annual Report (Nike Inc, 2012) and FY2014 Annual Report (Nike Inc, 2014a) 1968 Established in Oregon, US 56,500 employees in 52countries 45 Made in countries by manufacturers 190 Sold in countries by retailers, Nike stores and online © Yusskei, http://yusskei.net
  5. 5. 10 15 20 25 30 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Stable finance: Growing revenue and net income 1.0 1.5 2.0 2.5 3.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Revenue ($ billion) Net Income ($ billion) 13.7 27.8 2.7 1.2 Adapted from: Nike, Inc. Ten Year Financial History (Nike Inc., 2014b) 4© Yusskei, http://yusskei.net
  6. 6. 4. External Factors Analysis Legal Political Economic Technolo gical Social Environm ental • Direct impact on competitiveness • Certainty to occur • Longevity: Over 5 years Source: Adapted from; Johnson et al. (2011) Exploring strategy: text & cases, 9th ed., Harlow: Pearson Education Limited 20© Yusskei, http://yusskei.net
  7. 7. 4-1. Social Factor` Consumer Trend: •“Because NIKE is a consumer products company, the relative popularity of various sports and fitness activities and changing design trends affect the demand for our products” Nike, Inc. (2014a: 48) Consumer trend in sport and fashion will impact on Nike’s competitiveness Since a trend is ever-changing, Nike will fail unless it catches the current trend and supplies innovative products. Social Factor: •Changing culture and demographics (Johnson et al., 2011), income, education, life-style changes, attitudes to work and leisure (Bowman and Faulkner, 1997). 21© Yusskei, http://yusskei.net
  8. 8. Sport Participation Trend Individual and team sports have dropped while outdoor and fitness sports have grown in the US. (The Sports and Fitness Industry Association, 2013) Adapted from: 2013 Sports, Fitness, and Leisure Activities Topline Participation Report 22© Yusskei, http://yusskei.net
  9. 9. Among the key sports in which Nike has invested, only running, yoga and ice hokey have been growing in the US. (The Sports and Fitness Industry Association, 2013) Adapted from: 2013 Sports, Fitness, and Leisure Activities Topline Participation Report 0 20 40 60 2008 2009 2010 2011 2012 Sports Participation (million people) and Growth Rate 2008 to 2012 Tennis, -4% Baseball, -16% Football, -7% Basketball, -9% Yoga, +32% Running, +25% Ice Hokey, +26% Skateboarding, -23% American Football, -20% 23© Yusskei, http://yusskei.net
  10. 10. Sportswear Trend Yoga trend has boosted the “activewear” market in the US. Activewear: •Clothes that combine sportswear and everyday apparel, functionality and fashionability (Burn-Callander, 2015). •Predominantly women’s wear, e.g. leggings (Rizzo, 2015). Market: •$33.7 billion market with 7% growth (NPD Group, 2014), •Outpacing the sportswear market’s rate, 6% (Euromonitor International, 2014). •Lululemon Athletica and Athleta founded in 1998, then Nike and Adidas have followed since 2004 (Sherman, 2014). •Nike aims $2 billion sales increase in women’s wear, to $7 billion, by 2017 worldwide (Paton, 2014). 24© Yusskei, http://yusskei.net
  11. 11. Consumer attitude changes: “Wearing gym clothes beyond the gym” “This is not a fashion trend, it’s a lifestyle trend” (Sherman, 2014) La Mariposa (2014) 25© Yusskei, http://yusskei.net
  12. 12. © Yusskei, http://yusskei.net

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