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NIKE CASE STUDY

Name:
| Strategic Analysis Methods and Tools | September 2016

Contents
I.

NIKE OVERVIEW......................................................................................... 3
1.

History of Nike........................................................................................ 3

2.

Mission and Value................................................................................... 5

3.

Competitors............................................................................................ 5

4.

Products.................................................................................................. 5

II.

PESTLE ANALYSIS....................................................................................... 6
1.

Political factors....................................................................................... 6

2.

ECONOMIC FACTORS............................................................................... 6

3.

SOCIAL Factors........................................................................................ 6

4.

TECHNOLOGICAL FACTORS.....................................................................6

5.

LEGAL FACTORS...................................................................................... 6

6.

ENVIRONMENTAL FACTORS.....................................................................6

III.

SWOT ANALYSIS...................................................................................... 7

IV.

PORTERS FIVE FORCES ANALYSIS...........................................................7

1.

THREAT OF ENTRY................................................................................... 8

2.

THREAT OF SUBSTITUES.........................................................................8

3.

POWER OF BUYERS.................................................................................8

4.

POWER OF SUPPLIERS............................................................................. 8

5.

COMPETITVE RIVALRY.............................................................................8

V.

BUSINESS MODEL CANVAS (question 5 - Ian).............................................8

VI.

COMPANYS STRATEGY (question 6 Linh)..............................................8

VII.

BCG MATRIX (question 8 Jenna)...........................................................8

VIII.

VALUE CHAIN ANALYSIS (question 6 Tif)...............................................8

IX.
COMPETITVE ADAVANTAGE (question 4 Anu) and prove by financial
indicators......................................................................................................... 8

PAGE 1

I.

COMPETITVE ADAVANTAGE, prove by financial indicators. (question


4 Anu)

NIKE VS ADIDAS : MARKET CAPITALIZATION


NIKE
ADIDAS

2001
3.97
3.59

2002
4.26
3.31

2003
4.56
4.3

2004
7.04
6.8

2005
15.9
10.96

2006
16.39
9.03

2007
21.75
13.66

2008
23.68
7.68

2009
22.03
10.98

NUMBERS IN BILIONS (bn)

2010

2011

NIKE

63.45

71.15

ADIDAS

14.61

13.97

201
2
86.8
9
18.1
6

2013

2014

2015

48.6
9

69.28

86.2

25.38

16.12

17.1

NIKE, Inc.
CONSOLIDATED STATEMENTS OF INCOME

ADIDAS

THREE MONTHS ENDED


$ in millions,
except / share
data
Revenues
Cost of sales
Gross profit
Gross margin

8/31/
15

8/31/
14

Cha
nge

$8,41
4
4,419

$7,9
82
4,26
1
3,72
1
46.6

5%

3,995
47.5
%

2015

2014

change

9.190 $
48.3%

7.790 $
47.6%

18%

4%
7%

PAGE 2

Demand
creation
expense
Operating
overhead
expense
Total selling
and
administrative
expense
% of revenue

832

%
897

1,74
5

1,58
3

10%

2,577
30.6
%

2,48
0
31.1
%

4%

Interest
expense
(income), net
Other (income)
expense, net
Income before
income taxes
Income tax
expense
Effective tax
rate
NET INCOME

4
(31)

9
3

1,445
266

1,22
9
267

18%
0%

18.4
%
1,179

21.7
%
$962

Earnings per
common
share:
Basic

$1.38

Diluted

$1.34

$1.1
1
$1.0
9

-7%

8.303. $

6.980

19%

1.916
397

1.027
305

87%
30%

32.9%

29.7%

23%

1519

722

24%

3.32

2.72

22%

23%

3.32

2.72

22%

1.80

1.68

Weighted
average
common shares
outstanding:

Basic

854.5

Diluted

877.3

Dividends
declared per

$0.28

864.
9
886.
2
$0.2
4

PAGE 3

common share

FOOT WEAR MARKET SHARES

NIKE 31%

ADIDAS 16%

REEBOK 6%

PUMA 7%

CONVERSE 4%

OTHERS

In this graph we can observe that Nike is the leader of the worlds footwear
market standing fare from there competitors with 31% of the shares. While
Adidas has only 16% and Reebok only 6%.
Furthermore after observing the US, which represents 40% of NIKEs total
sells, NIKE possess 60% of the running gear Market, 90% of the Basketball
sneakers (which represents almost all the market).These numbers clearly
witnesses the undefeatable leading position Nike keeps in the world.
Pricing strategy: Nike has value based/price leadership strategy that offers
the customer with the price that customer value so it has high prices for its
products as it has niche market to serve with valuable products.
Nike has become so well known that most people will pay more dollar for
quality products for this product. That is why Nike uses Cost Based/Value
Based Pricing other than its competitors
http://www.annualreports.com/Company/adidas-ag
http://investors.nike.com/investors/news-events-and-reports/investornews/investor-news-details/2015/NIKE-Inc-Reports-Fiscal-2016-First-QuarterResults/default.aspx

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