nike – Management Report
B00222492
Degree Programme
2011
Module
School of Engineering and Science
University of the West of Scotland
December 2011
Contents Page
Page 1
Front cover
Page 2
Contents page
Page 4
1.0 Introduction
Page 5
2.0 Organisation Structure 2.1 Brief History 2.2 Sources of revenue streams 2.3 Recent Developments 2.4 Presents Standing
Page 8 3.0 SWOT Analysis 3.1 Strengths 3.2 Weakness 3.3 Opportunities 3.4 Threats
Page 9 4.0 PEST Analysis 4.1 Political 4.2 Economic 4.3 Sociological 4.4 Technology Page 13 5.0 Market Segmentation 5.1 The Customers 5.2 Consumer Behavior
Page 16 6.0 Marketing Activity 6.1 Products
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2011). Later that year they started by selling trainers from a company based in Japan called Tiger. Their first shipment of 300 Tiger running shoes arrived in April and within 3 weeks sells out. Knight took the product directly to the consumers/athletes, sending emails to local running tracks informing them about Blue Ribbon Sportswear. They grossed $8000 in the first year (Nike Inc. 2011).
The Nike Swoosh logo that represents Nike today was design and created by Carolyn Davidson in 1971. The Swoosh logo and slogan Just Do it, expresses the brand and its philosophy. Caroline a student at the Portland State University in advertising designed the logo that would be place on the side of the shoe, it was understood that this logo was for a fee of $35.00. In May 1978 Blue Ribbon Sports changed its name to Nike Inc. and rose from $10 million to $270 million in sales (Nike Inc. 2011).
2.2 Sources of revenue streams
Nike Inc. has many sources of revenue streams which is that broken down into different segments. Each segment represents the different fields in which Nike operates. The segments are targeted towards design for men, women and children. Running, basketball, cross training and women’s shoes are the company’s top-selling products categories. Nike also produces shoes for the outdoor categories, tennis, golf, football, baseball, cycling and other athletic and recreational uses. Today Nike, Inc. is now the world’s prominent innovator
Bill Bowerman and Phil Knight started Nike Inc. in 1971, formally known as Blue Ribbon Sports. Bill Bowerman was a former track and field coach at the University of Oregon, and Phil Knight was a student-athlete at the University of Oregon. After numerous years of supplying under Blue Ribbon Sports, the two decided to enter the athletic shoe manufacturing business. The first employee of the company was Jeff Johnson, who helped them with branding what is known today as NIKE Inc.
NIKE, Inc., is a company that was founded in by William Jay Bowerman and Philip H. Knight in 1964, and was originally called Blue Ribbon Sports, Inc. It’s name was changed to Nike, Inc. in 1971. It’s base of operation is located in Beaverton, Oregon. NIKE, Inc., is the world’s leading designer, marketer and distributor of authentic athletic footwear, apparel, equipment and accessories for a wide variety of sports and fitness activities worldwide. Entirely owned Nike subsidiaries include Converse Inc., a brand that develops, advertises, and sells athletic apparel and accessories; and also Hurley International LLC, which designs, markets and sells surf and youth lifestyle clothing and many different accessories. Its athletic footwear products are designed primarily for specific athletic use, although a large percentage of the products are worn for casual or leisure purposes. Nike offers products in many different categories such as men’s/women’s training, running, basketball, golf, and more. The company also sells products designed for children and youth athletic activities such as baseball, cricket, lacrosse, outdoor activities, football, tennis, volleyball, walking, and wrestling. Also, Nike sells sports apparel and accessories; and markets apparel with licensed college and professional team and league logos. Further, it sells a line of performance equipment and accessories, including sports bags, balls, eyewear, digital devices, bats, gloves, protective equipment, golf
Nike was founded on January 25, 1964, as Blue Ribbon Sports by Bill Bowerman and Phil Knight (Citation) and was officially named Nike Inc. on May 30, 1971. The company initially operated as a distributer for Japanese shoe maker Onitsuka Tiger (Citation). Nike first started making shoes by the help of Bowerman. He made track shoes for Phil Knight, a track and field athlete, at the time, attending the University of Oregon. In Blue Ribbon Sports first year of business, they sold 1,300 pairs of running shoes. In 1966, Blue Ribbon Sports opened their first retail store located in Santa Monica, California next to a beauty salon (Citation). Then the infamous Nike swoosh was created in 1971 by Carolyn Davidson (Citation). The company has been flourishing ever since opening and is showing nothing, but upside for its consumers.
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.
Nike is the leading and yet renowned supplier of athletic apparel and shoes. The company controls close to 33% of the global athletic shoe market (Dogiamis & Vijayashanker,2009).Nike was founded by Bill Power and Phil Knight in 1962 as a Blue Ribbon Support and then was later on renamed to Nike in the year 1968 (Patrow,2003).The company supplies very high quality product in close to 100 countries with major markets being located in the U.S,U,K, Asia Pacific as well as in the Americas. The company has managed to attain its lead and legendary position via the application of innovative and yet attractive product design which is backed by quality production as well as well crafted marketing strategies.
Nike is the English version of the name of the Greek goddess Nike, which, according to legend, helped the Greeks to win on the battlefield. The American company Nike has transferred this meaning to their products - shoes, which help to achieve great sporting achievements. History of the brand had started with a search for the founders of the niche of sports footwear in the US market, which was free that time. In the early 60-is of Bill Bowerman and Phil Knight founded the company, the initial capital of it was $ 1,000. Phil Knight decided to develop high quality sports shoes in the United States, produced in Asia and sold in the United States. The company originally existed under the name Blue Ribbon Sports, but in 1971
By the end of 1963, the pair of men had sold $8,000 worth of Tiger shoes. Knight and Bowerman eventually hired a full-time salesman in Jeff Johnson after accumulating more than $1 million in sales. In 1971, the Nike swoosh was created by Caroline Davidson. In the late 1970’s, Blue Ribbon Sports permanently changed its name to Nike, and thus the clothing giant was born.
1964 marked the creation of “Nike” which at first was called “Blue Ribbon sports”. Nike was created by Phil Knight and Bill Bowerman. At first
NIKE, Inc. designs, develops, markets and sells footwear, apparel, and equipment, accessories and services. Its athletic footwear products are designed primarily for specific athletic use, although a large percentage of the products are worn for casual or leisure purposes. It focuses on NIKE Brand and Brand Jordan product offerings in seven key categories: running, basketball, football, men's training, women's training, NIKE sportswear, and action sports. It also markets product designed for kids, as well as for other athletic and recreational uses such as baseball, cricket, golf, lacrosse, outdoor activities, football, tennis, volleyball, walking, and wrestling.
1964 marked the creation of “Nike” which at first was called “Blue Ribbon sports”. Nike was created by Phil Knight and Bill
Nike considers their structure a “Matrix Organization” (Nikebiz.com, 2010). This structure allows Nike to deal with the fast-moving market and keep their industry leading position. It can be costly, but has proven to be well worth the money for Nike. All work is collaborative; team members report to two areas; known as, geography and the global function area (Nikebiz.com, 2010).
Phil Knight and his track coach Bill Bowerman founded Blue Ribbon Sports in 1964. The company started as being a distributor of Onituska Tiger athletic shoes which were imported from Japan. In 1971 they broke away from Onituska and created their own of shoes. The company was renamed, Nike. It became the largest worldwide seller of athletic shoes. They branched out and created various products lines; shoes, clothing, sporting goods and digital devices. They used celebrities to promote their products. The first athlete to wear and promote their show was runner Steve Prefontaine. Their now well know swoosh was first seen in the 1972 US Track and Field Trials. Every basketball player in high school wanted a pair of Michael Jordan’s,
Competition is very fierce due to the number of companies competing for sales. Lots of money goes to marketing and promotions using various channels to reach the young demographic group of consumers who spend the most money on Nike’s products. Growth is slowing down in the athletic footwear industry. But new markets are emerging with high growth rates. These markets include extreme sports market and the corporate merchandise market.
In 1963 Phil Knight went to Japan and had a meeting with a running shoe manufacturing company called Tiger. He
Before Nike came into existence Nike's brand was conceptualized at the University of Oregon .at university bill Bowerman was knights track coach.. After his running days were over at university knight enrolled at the prestigious Stanford business school for his master's degree in finance. Whilst