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CHAPTER 1

1.0 INDUSTRY TYPE


Nike, Inc. is involved in the design, development, manufacturing and worldwide
marketing and sales of footwear, apparel, equipment, accessories and services. It is the
largest seller of athletic footwear and athletic apparel in the world which creates design
for men, women and even children. The top selling product category includes running,
basketball, children, cross-training and women shoes.
The company was founded on January 25, 1964 as Blue Ribbon Sports by Bill
Bowerman and Phil Knight officially became NIKE, Inc. on May 30, 1971. The company
takes its name Nike which means the Greek goddess of victory. Nike sponsors many
high-profile athletes and sports teams around the world, with the highly recognized
trademarks of Just Do It and the Swoosh logo or the other name is Nike tick.
Nike sells sports attire and accessories relevant to each sport like tennis, golf, soccer,
baseball, football, cycling, cheer leading, hiking and other athletic or recreational uses as
well as other sport-inspired lifestyle apparel like bags, socks, eyewear, protective
equipment and basic sport equipment.
In addition to Nikes footwear, apparel and accessories businesses, the company
sells products under other brand names in particular markets. Nike owns five footwear
and apparel companies that specialize in different sports such as Cole Haan, Converse
Inc., Hurley International LLC, Umbro Ltd and Nike Golf. These subsidiaries combined
together account for 13% of total revenues, $2.5 billion in fiscal 2009.

2.0 GEOGRAPHICAL REGION

At the beginning, Nike Brand was previously organized by four regions which are
United States, Asia Pacific, Americas and EMEA (Europe, Middle East and Africa).
During 2009, Nike, Inc. reorganized its Nike Brand into a new model consisting of six
new geographies which are North America, Western Europe, Eastern/Central Europe,
Greater China, Japan and Emerging Markets.

3.0 COUNTRY
Nikes world headquarters are based near the Beaverton, Oregon in the Portland
metropolitan area. The company is the worlds leading designer, marketer and
distributor of authentic athletic footwear, apparel, equipment and accessories for a wide
variety of sports and fitness activities.
All of Nikes footwear is manufactured outside the United States in the factories of
China, Vietnam, Indonesia and Thailand. Account for 98 percent of total Nike brand
footwear in 2009. Nike brand apparel is also manufactured almost entirely outside of the
United States, in 34 different countries.
Nike, Inc. makes use of suppliers anywhere in the world which is global sourcing.
They have 715 contract factories and 984.136 contract workers in 44 countries. Most of
the facilities are located in China, Thailand, Indonesia, Malaysia, Vietnam, Turkey, Sri
Lanka, Cambodia, Taiwan, El Salvador, Mexico, India and Israel.
Now, there are many Nike stores all over the world and it is increasing as the brand
is well known nowadays.

4.0 ORGANIZATIONS
Nike, Inc. was able to communicate and control the Corporate Strategic Plan
throughout the Global Organization. Figure 1.1 shows the diagram of Global
Organization. Global Headquarters is located at Portland, Oregon (USA). It is in charge
of United States, the Americas and Asia Pacific. Regional Headquarters is located in the
Netherlands and is responsible for 27 countries in the EMEA region. Meanwhile the
subsidiaries enjoy some autonomy within clearly set boundaries. Figure 1.2 shows
Organizational Structure in Regional headquarters.
Nike Hierarchy

Global Headquarters

Regional Headquarters ( EMEA)

Subsidiaries

Figure 1.1 Global Organization

Figure 1.2 Organizational Structure in Regional Headquarters

5.0 CONTACT DETAIS


ADDRESS:
Nike World Headquarters
One Bowerman Drive
Beaverton, OR 97005
Phone number : 1-503-671-6453
7:30 a.m. - 5:30 p.m. PT
Monday to Friday (Except Holidays)
Nike Malaysia
Unit 10-1 & 10-2, Level 10
Menara OBYU, No.4
Jalan PJU 8/8 A
Damasara Perdana,
47820 Petaling Jaya,
Selangor, Malaysia
Phone Number: 00-800-8888-6453

NIKE WEBSITE ADDRESS: http://www.nike.com/

NIKE WEBSITE ADDRESS HOMEPAGE :

6.0 REASONS FOR SELECTION


There are several reasons why we choose Nike brand as our assignments topic.
The main reason is Nike is one of the famous footwear and apparel brand among people
especially teenagers over the world. It is not only because of the trend but also the quality
of the products that they produce. The price may be expensive but still affordable. The
price that expensive is not that important compare to the quality of the product.
People worldwide like to choose Nike when it comes to purchasing athletic shoes,
equipment, apparel and accessories. This is because Nike is a brand that appeals almost
every age group with its unique designs of sports and it can be said that Nike is the most
valuable brand when it comes to sports businesses. This is because Nike offers its
products for everyone including the children and it is user friendly.
Furthermore, the Nike caters to the specific needs of various sports teams. There are
various products that it has specially developed for specific games. For example, Nike
designed SB shoes for skateboarders and launched Air Zoom Yorker light shoes for
cricketers.

Lastly, people like being comfortable. People choose Nike because they feel comfortable
when using Nikes product. Customers of Nike tend to buy another Nikes product as
they already experience using the product of the brand.

7.0 PRIMARY ACTIVITIES


7.1 INBOUND LOGISTIC

NIKEs main environmental impacts, by far, are realized in the products we


sell and the materials used to make them. The materials we choose have impacts that
ripple across every stage of the value chain. The approximately 900 million units
produced annually through our supply chain are made from more than 16,000
materials selected from more than 1,500 different vendors, chosen from a staggering
80,000 material options.
Nike used the good material but the production cost is low. From our analysis,
we focus on product design, marketing and product technology from growing cotton
and harvesting rubber, to raising livestock for leather and extracting oil for polyester.
Represents 21% of the total energy use throughout our value chain, 73% of the water
consumption and 33% of the greenhouse gas emissions. When you include materials
processing activities, such as the dyeing and finishing of fabrics, those percentages
increase to 54% of total energy use, 83% of water consumption and 56% of GHG
emissions.

7.2 OPERATIONS
Manufacturing is another major part of the equation. We estimate that more than
2.5 million people work at various stages throughout our supply chain, including
more than 1 million in the factories we contract with directly. This makes
manufacturing our biggest area of impact on people. These efforts led to an insight
that has been critical in our work with factories: that lean manufacturing benefits
factory owners and workers, increases productivity, reduces environmental impacts,
enhances our brand, and that workers are key to the successful implementation of
lean.

NIKEs footwear is manufactured outside the US by independent contract


manufacturers that often operate multiple factories. In year 2014, the company was
supplied by 150 footwear factories in 14 countries. Contract factories in Vietnam,
China, and Indonesia respectively manufactured approximately 43%, 28%, and 25%
of total NIKEs footwear. The largest single footwear factory accounted for ~5% of
total NIKE brand footwear production.

7.3 OUTBOUND LOGISTIC

NIKE has five primary distribution centers in the US located in Memphis,


Tennessee, three of which operate on a leased basis. The company had 16 distribution
centers outside the US at the end of fiscal year 2014. NIKE brand apparel and
equipment products are also have good relation from its distribution center in
Foothill Ranch, California. Converse and Hurley products are shipped primarily from
Ontario, California.

7.4 MARKETING AND SALES

NIKE is the worlds number one sports brand. But ranked no 38 in the world
for all brand. Its brand value was estimated at $19 billion by Forbes magazine in
2014. Nike is the world most recognized athletes brand in the world. It makes Nike
easier to sales and markets their product because people already knew about their
brand.

NIKE is the market leader in basketball by a wide margin. NIKEs Brand


Jordan is named after iconic player Michael Jordan. The Brand Jordan division
designs, distributes, and licenses athletic and casual footwear, apparel, and
accessories under the Jump man trademark. The category targets basketball-related
products. Sales of Brand Jordan products are included within the Basketball category.

7.5 SERVICE

NIKEs effort that


focuses on services is
the NIKE+ digital platform that enables athletes to track and analyze movement. For
example, to share their workout and calories burned and personal targets and
performance. NIKE+ has grown into a full ecosystem, delivered with different apps
and services, with more than 18 million members spanning the globe at the end of
FY13. Collectively, members have run more than 1 billion miles, the equivalent of
40,000 times around the earth at the equator.
This expanding business supports athletes health and wellness, opening
additional opportunities to NIKE. In early 2013, we launched the first NIKE+
Accelerator, which hosted 10 companies for a three-month, immersive, mentordriven startup program. Leveraging the success of NIKE+, participants worked to
create products and services to inspire athletes across a broad range of activity and
health goals, including training, coaching, gaming, data visualization and
quantified self. Participating companies pitched their business concepts to more
than 1,000 investors, potential strategic partners and prospective collaborators.

Through the program, we received more than 1,000 requests for access to the NIKE+
development platform.

8.0 SUPPORT ACTIVITIES


8.1 Firm Infrastructure
Nike is a strong brand, product, marketplace solution, delivery and support. Their
brand value from $35 on year 1973 to $1.07 Billion on year 2014. They also have
empowerment of top management. It also has a great financial discipline with low debt.
Nike also has played a leadership role along with business and multilateral development
organizations, in supporting infrastructure in Vietnam. Nike also was the founder and
director of public-private partnership that offered an Infrastructure Exchange
Programmed for Vietnamese government officials. With the existence of infrastructure
specifically road and port that will lead to additional investment and job creation in
Vietnam, thereby improving economic opportunities and the standard of living.
8.2 HR Management
In terms of health and safety, Nike have its own guidelines. Proper ventilation and
facilities at production area is given so as they may not get any sort of problem. Every
type of measures is being taken when any conditions are happen there or fire is broke out.
HR management also provides some extra facilities to old employees and women with
very small kids etc. Nike are concerning about the health and conditions of its employees
such as each step is taken to make the conditions are applicable to adjust accordingly
based on employees.

8.3 Technology Development


The research and development of Nike has been initiated United States (US) located
in Beaverton in the state of Oregon. The Nike Lab was opened in 1980 which owned by
American apparel and footwear maker Nike. Nike is the most innovative company in
2013.The wow factor that leads Nike to the most innovative company in 2013 are fuel
band and fly knit.

FUEL BAND

FLY KNIT

8.4 Procurement
Sustainability is a catalyst for revolutionizing the way NIKE, Inc. It does its business
by innovating better solutions to create a limitless future that benefits athletes, the
company and the world. Nikes Global Procurement team manages the procurement
process, including selecting and contracting with the right suppliers for the right goods

and services. Through their strategic sourcing initiatives, we have also begun to reduce
Nikes footprint and lessen their impact. They are committed to increasing the purchase
of sustainable products.

9.0 CONCLUSION
Nowadays, Nike, Inc. has become a well known company that produce sports
products with good quality and last longer compare to the other brand. The company have
put many effort to ensure that they produce a product that satisfied customer. Based on
our research about Nike company, the product are sold in nearly all countries around the
world. Nike products are manufactured by contarct factories in more than 40 countries. In
2013, Nike global workforce was approximately 48000 empolyees located in more than
110 sales offices & showrooms , approximately 90 administrative offices and more than
750 retail stores. At Nike, the company seek to deliver the shareholder value through
sustainable growth. One of the ways to achieve this goal os to fond avenues to reach our
long-term vision of decoupling profitable growth form contrained resources. Nike are
working to integrate sustainability into every aspect of their business that aim to
challenge ,push and explore ways that change the game entirely for materials, design and
manufacturing. Nike dont grow just to get bigger.Nike grow to be better and do better.

References
1. https://en.wikipedia.org/wiki/Nike,_Inc.
2. http://www.nike.com/
3. http://marketrealist.com/#article-1147028