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Introduction of nike company
The current state of competition in the Nike industry
Essay on the beginning of nike
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Nike Inc. was founded in 1962 by Bill Bowerman and Phil Knight as a partnership under the name, Blue Ribbon Sports. Our modest goal then was to distribute low-cost, high-quality Japanese athletic shoes to American consumers in an attempt to break Germany's domination of the domestic industry. Today in 2000, Nike Inc. not only manufactures and distributes athletic shoes at every marketable price point to a global market, but over 40% of our sales come from athletic apparel, sports equipment, and subsidiary ventures. Nike maintains traditional and non-traditional distribution channels in more than 100 countries targeting its primary market regions: United States, Europe, Asia Pacific, and the Americas (not including the United States). We utilize over 20,000 retailers, Nike factory stores, Nike stores, NikeTowns, Cole Haan stores, and internet-based Web sites to sell our sports and leisure products. We dominate sales in the athletic footwear industry with a 33% global market share. Nike Inc. has been able to attain this premier position through "quality production, innovative products, and aggressive marketing." As a result, for the fiscal year end 1999, Nike's 20,700 employees generated almost $8.8 billion in revenue. Our primary product focus is athletic footwear designed for specific-sport and/or leisure use(s). We also sell athletic apparel carrying the same trademarks and brand names as many of our footwear lines. Among our newer product offerings, we sell a line of performance equipment under the Nike brand name that includes sport balls, timepieces, eyewear, skates, bats, and other equipment designed for sports activities. In addition, we utilize the following wholly-owned subsidiaries to sell additional sports-related merchandise and raw materials: Cole Haan Holdings Inc., Nike Team Sports, Inc., Nike IHM, Inc., and Bauer Nike Hockey Inc. Our most popular product categories include the following: • Running • Basketball • Cross-Training • Outdoor Activities • Tennis • Golf • Soccer • Baseball • Football • Bicycling • Volleyball • Wrestling • Cheerleading • Aquatic Activities • Auto Racing • Other athletic and recreational uses Sales and Income Trends Revenues in the fiscal year ended May 31, 1999, declined by 8% over the prior year to $8.777 billion. As illustrated in the graph below, this marked the first time since 1994 that revenues have declined. Regardless of this year's decline, Nike Inc. achieved 300% revenue growth over a 10-year period, rising from 1990 sales of $2.235 billion. Exhibit 1 * Obtained from Nike, Inc. 1999 Annual Report Although revenues declined in 1999, net income increased by 13% over the prior year. As the graph below illustrates, net income has been volatile in the latter half of the 90's.
Nike has been a publicly traded company for 32 years, in those there are only a total of five in which this firm has seen revenue declines. During times when most people felt the United States economy was going to fail completely Nike posted an almost $100 billion dollar revenue. As shown in charts attached Nike has seen a very steady holding pattern with in their net income, numbers for the last five years are $2.13, $1.90, $1.49, $1.88, and $1.49 billion dollars. According to these numbers Nike has been efficient in maximizing profits. (All financial information is near the end of the paper.)
Sports giant Nike is the leading player in the global athletic footwear market with an estimated market share of about 20%. The company is well positioned to grow its market share in the long run. Factors that are expected to benefit its position account of factors such as high growth rate in footwear sales, a strong competitive position and rapid growth in key footwear markets.
Product Line Strategy – Offering products for athletes’ better performance and comfort in a widening variety of sports.
The main purpose of this meeting was to communicate the new strategy to revitalize the company. Nike has seen its revenue stream stagnate since 1997 to a level of $9.0 billion. Within this time period, net income had decreased from $220 million to $580 million in 2001. Recent reports have shown that Nike’s market share in the U.S. The athletic shoe market fell from 48% in 1997 to 42% in 2000.
Also in 2015, both companies had an increase in gross profits yet, Nike’s profitability totaled $15. 2
Nike Inc. (2007). Corporate Responsibility Report FY07-09. Retrieved 2014 йил 18-May from Nike Inc.: http://www.nikebiz.com/crreport/content/pdf/documents/en-US/full-report.pdf
Nike’s goal is to remain unique and different from others in terms of the items offered on the market. Arguably, Nike belongs to a monopolistically competitive market as there only a few organizations with the ability to regulate the amount charged for their product which means they cannot make their prices high as this is likely to make customers move on to other available choices (Nike, Inc., 2012). However, Nike can find a balance between the prices to charge for their products and remaining competitive with other companies in the industry. Nike has formed a distinction between the appearance and performance of their footwear and that of their competitors. Although products are differentiated from other companies, they still influence each other because they are items of the same
Every box of Nike shoes states, “engineered and built to the exact specifications for championship athletes around the world.” Nike has become the measuring stick in the world of merchandising and endorsing. Top athletes around the world are often seen with a famous Nike swoosh on their shoes. It is not uncommon to see some form of Nike product everywhere you look. Nike “head honcho” Phil Knight wants to keep it that way, too.
Nike was established in 1957 by a coach and an athlete. The two went on to establish the most successful footwear company in the world. Bill Bowerman and Phil Knight are the two founders. From 1961 to 1971, Knight joined with a Japanese company named Tiger. He thought that the company would end Germany’s domination over the footwear industry. When he met with the company, they asked what company he represented and Knight came up instantly with the name “Blue Ribbon Sports”. The company would later become Nike. Blue Ribbon’s revenue continued to rise and in 1971, a student names Carolyn Davidson designed the Nike Swoosh symbol for $35. In 1972, Blue Ribbon separated from Tiger and became Nike. The company arrived at the name from the Greek Goddess of victory, Nike. The 2700 employee company went public in 1980. From 1981 to 1991, Nike began to sponsor the top athletes in the world of sports. Nike pursued the likes of athletes such as Carl Lewis and Michael Jordan. Nike Company topped the 107 billion-dollar mark in 1986. The company established the “Just Do It” campaign in 1987. Nike continues to dominate the footwear category not only in the United States, but also in Canada, Japan, and Taiwan.
Nike’s Asian operations had previously continued to soar generating US$300 million in 1994 in revenues to a whopping US$1.2 billion in 1997. However based on the Asian economic crisis, this had adversely affected revenues, while regional layoffs were inevitable. Nike also performed well in the European market generating about US$2 billion in sales and a good growth momentum was expected, however, some parts of Europe were only slowly recovering from an economic downturn. In the Americas (Canada and the U.S.A.), Nike experienced a growth rate for several quarters. The U.S. alone generated approximately US$5 billion in sales. The Latin American market at this point was exposed to economic volatility; however Nike still saw them as a market with “great potential for the future”.
Nike began with the help of two very innovative men: Bill Bowerman and Phil Knight. Bowerman was the University of Oregon’s track and field coach. He often tested different track surfaces in hope of making a better running shoe for his team. However, manufacturers at the time ignored his ideas, so Bowerman began creating shoes on his own for his runners at Oregon. Knight had been a member of Oregon’s track team in 1955 and later he earned his MBA in finance from Stanford University. During his education, Knight wrote a paper about designing and selling track shoes. After...
Nike is a worldwide known business that many people around the globe are attracted to purchase. They make a variety of products ranging from shoes and clothes to sports gear, sports products, and many different accessories. Nike is designed for everyone ranging from infants to elderly. Because of their range of age for products, this makes them a huge competitor. Being able to appeal to all ages and styles of people.
Nike, Inc. (Nike) is among the world’s largest designer, distributor and marketer of sports footwear, apparel, equipment and accessories for different athletic and fitness activities (MarketLine, 2013). Nike is one of the most powerful brands in the world, and the company sells its products sells its products across 190 countries in the Americas, Asia Pacific, Europe, Middle East and Africa (MarketLine, 2013). Headquartered in Beaverton, Oregon, Nike currently has 44,000 employees. Nike has a global market share of the internati...
Ford held an analysts’ meeting to disclose its fiscal-year 2001 results and most importantly, to communicate a strategy for revitalizing the company. Nike had maintained revenue of about 9 billion since 1997. However, its net income had fallen from almost $800 million to $580 million. Moreover, Nike’s market share in U.S. athletic shoes had fallen from 48% since 1997 to 42% in 2000.
Nike’s positioning in the market has more of a mass appeal compared to their main competitor Adidas who strive to make products for elite athletes. The positioning strategy for Nike is currently working at a satisfactory level as Nikes global annual sales between 2013-2014 was reported as 27.8 billion (Statista, 2014) compared to Adidas’ 19.95 billion (Statista, 2014). The global market for sports apparel is expected to grow at a compound annual growth rate of 4% between 2012-2019, Nikes compound annual growth rate during 2010-2012 was 12.3% which is an excellent result as the brand’s growth was larger than the market as well as outgrowing Nike’s closest competitors Adidas, Puma and Asics (Forbes,