Nike Case Study

John Liedtke head of Active Gear, Inc. (AGI) is contemplating whether to invest in Mercury Athletic a subsidiary of West Coast Fashions (WCF). Mercury was purchased by WCF in hopes to increase business revenue however this was not the case. Business did not do as expected, WCF was then eager to abandon its apparel. John Liedtke saw this as an opportunity to take over Mercury and as result increase its business revenue. In order to determine whether this is an essential business opportunity John needs to complete preliminary financial valuations to make a solid decision.

Nike started to open up manufacturing factories in countries like Indonesia, Pakistan and Vietnam. Due to the wants of Nike to increase their revenue they tried to outsource the labor of their products since labor work in the US is very high and expensive. This was a bad idea due to that Indonesia pays their workers extremely low wages. Pakistan doesn’t have an age limit for them to be able to legally to work so many children in Pakistan were making

The report focuses on the Economic Value Added of Nike Inc. The analysis is conducted through a detailed assessment of the financial statements including income statement, balance sheet, and cash flow. Such financial statements are then applied to derive common-size statements for income statement and balance. The trends and predictions obtained from the common-size statements predict the future economic value. Similarly, the Pro-forma financial statements derived provide vital future economic performances of Nike Inc. According to the regression analysis and the assessment of the common-size and Pro-forma financial statements; Nike Inc. has a growth in revenue and earnings per share. The EVA computed using WACC, Net Operating Profit after Taxes (NOPAT), and Invested Capital is positive (+$391.24); this shows that Nike Inc. is financially stable and will grow in the next three years.

Have you ever seen someone wearing a very rare pair of shoes that you have never seen before? Have you ever wondered how they got these shoes and how much they cost? Believe it or not Nike’s Air Jordan line of shoes has been at the forefront of a decade-long sneaker craze, which has grown so much it has become its own stock market. Jordan’s have been popular for many years and it is shown throughout pop culture, the increase in price and demand, the resale market that has skyrocketed in the last five years, and the history behind the shoe that made them so popular. Jordan’s are very well advertised through several popular outlets.

Nike Enterprise possesses heaps of segments all over the world such as North America, Central & Eastern Europe, Greater China, Japan, and Emerging Markets. In addition, there are also manifold merchandises manufactured and distributed beyond the United States. Hence, large amount of purchase and sale transactions in different currencies are executed by Nike enterprise. If foreign currency exchange rates and interest rates waver, Nike enterprise may suffer a decline in revenues, growth in cost, and lower margins and earnings.

The aim of this paper is to use the “Nike - The art of selling air.” case study and concepts from strategic marketing theory to identify marketing challenges and how those challenges could be best addressed using marketing principles. The paper will:

S &A / Sales, Current Assets / Sales, and Current Liability / Sales have been adopted from previous income statements and balance sheets from 1995 to 2001. Perhaps, we can take new assumptions. Generally, the case issue is to examine if the share price of Nike is undervalue or overvalue and the common stock of Nike Inc should be added to the North

The current enterprise value is $41,335 million and the equity value is $34,455 million. According to yahoo finance, the shares outstanding of our company are 647.31 million, so we can calculate the stock price for next year is $53.23. It will increase in following years.

The cost to the retailer is approximately 35.50$ which includes in the Research and development ($0.25), promotion/advertising ($4.00), Sales/distribution/admin ($5.00) and Nike’s operating profit ($6.23). While the cost of the user is $70.00 which holds in it the Retailer’s rent ($9.00), personnel ($9.50), other ($7.00) and Retailer’s operating profit ($9.00) (Break Down of Nike’s cost, 1995). In the first quarter of 2015, the revenues for Nike increased 15% from 7.4$ to $8.0billion. Gross margin elevated 46.6%. The increase was due to higher margin products and higher average prices. Selling/administrative expense exceeded 21% , reaching to $2.5 billion. Operating expense increased 19% to $1.6 billion and the net income increased 23% to $962 million (Leonard, 2015). Nike’s Inventories were $4.0 billion, short-term investments and cash were $1.0 billion, $4.6 billion, which was lower compared to the last year. (Nike News,

to the NorthPoint Large-Cap Fund because the stock is undervalued. I recommend a buy decision, which concurs with Lehman Brothers report, as Nike has a growth potential that would be beneficial to the fund if it s included in the portfolio.

1. A decision to retain an in-house arm of agency Weiden & Kennedy by Nike exemplify the concept of organizational design by allowing Nike use the agency’s creative designers to focus solely on Nike work, giving them un-parallel access to executives, researchers and anyone else who might provide Nike advertisers with their next inspiration for marketing greatness before listening to any other organization. Having the agency in the building is having them at their disposal at anytime they need them and also the agency will have to consider them first incase of any new ad or good idea discovered by the agency or when Nike needs to salvage a problem with the help of the agency. Thus, the agency at their finger-tips serves great advantages

On July 5, 2001, Kimi Ford, a portfolio manager at NorthPoint Group, a mutual-fund management firm, pored over analysts' write-ups of Nike, Inc., the athletic-shoe manufacturer. Nike's share price had declined significantly from the beginning of the year. Ford was considering buying some shares for the fund she managed, the NorthPoint Large-Cap Fund, which invested mostly in Fortune 500 companies, with an emphasis on value investing. Its top holdings included ExxonMobil, General Motors, McDonald's, 3M, and other large-cap, generally old-economy stocks. While the stock market had declined over the last 18 months, the NorthPoint Large-Cap Fund had performed extremely well. In 2000, the fund

Enderle, K., Hirsch, D., Micka, L., Saving, B., Shah, S., Szerwinski, T. (2000, March 14). Strategic Analysis of Nike, Inc. Retrieved on December 14, 2005, from

Kimi Ford is a portfolio manager at NorthPoint Group, a mutual-fund management firm. She is evaluating Nike, Inc. (“Nike”) to potentially buy shares of their stock for the fund she manages, the NorthPoint Large-Cap Fund. This fund mostly invests in Fortune 500 companies, with an emphasis on value investing. This Fund has performed well over the last 18 months despite the decline in the stock market.

Report on the Case Study Nike This report has been produced to provide an insight into the consumer decision-making process, buyer behaviour factors that consumers of Nike are influenced by. The report also details recommendations based on the findings. 2.0 Summary = =