PRESENTED BY:-

AKRITI NANDA
AKASH BASHA
DEEPIKA N.
DIVYA SINGH
PRITI JAISWAL
1

Major publicly traded clothing, footwear,

sportswear, and equipment supplier based in the
United States
Headquartered near Beaverton, Oregon, in
the Portland metropolitan area
Revenue in excess of US$19 billion in its fiscal year
2010
Employs more than 34,400 people worldwide as of
May 2010
2

Shoes
Running
Basketball
Soccer
Sport-inspired urban
shoes
Childrens shoes

Miscellaneous
Bags
Socks
Sports balls
Eyewear
Timepieces
Apparels
Bats
Gloves
Protective equipments
3

Originally known as Blue Ribbon Sports (BRS)

Founded by University of Oregon track athlete Philip
Knight and his coach Bill Bowerman in January 1964

Initially operated as a distributor for Japanese shoe

maker Onitsuka Tiger (now ASICS)
Launched its own line of shoes branded as Nike in 1971
.The Swoosh was first used by Nike on June 18, 1971,
and was registered with the U.S. Patent and Trademark
Office on January 22, 1974

Threat of New entrants(Low)

High Barriers to Entry
Capital Intensive
Strong Brand Following
Economies of scale
High Marketing & R&D Costs
Industry in consolidation phase
Internal Rivalry (Low)
Bargaining Power of Supplier
(Low)

Fierce Competition

Abundantly available raw

materials

Mostly Non-Price competition

Cheap resources-commodity item

Differentiation strategy

Mature Industry

Industry in consolidation phase

Bargaining Power of
Buyer (Low)
End user brand loyalty
Price sensitivity issues
Retail and vendor consolidations
Growing power of retail chains
Good Infrastructure

Threat of Substitutes (Low)

Other types of shoes
Other sport apparel
5

Threat of New entrants(High)

Less/Not explored Markets

Un-Sophisticated market needs

Less Capital Intensive
No major brand following
Local players advantage
Bargaining Power of
Bargaining Power of Supplier
(Low)

Internal Rivalry (High)

Buyer (High)

Inexpensive labor

Fierce Competition from global

brands

Consumer needs to be educated

Local players with cultural

advantage

High Price sensitivity

Abundantly available raw

materials
Cheap resources-commodity item

Retailers need to be educated

Brand image to be re-established
Lack of proper infrastructure

Threat of Substitutes (High)

Bare foot, walking with slippers
e.g. India
Leather boots and slippers
6

Infrastructure: free space, good roads, jogging

parks
Sports equipments:
Backpack, balls, bats, rackets, etc.

Partnerships with other products are

widening the domains of complementors for
sportswear products. E.g. Nike+iPod Sports kit

The company sells its products to retail accounts, through its

owned retail stores, and through a mix of independent
distributors and licensees, as well as through internet website
www.nikestore.com

It has 4 major subsidiaries:

Converse

Cole Haan Holdings

Nike Bauer Hockey

Hurley International
10

Technology in Products Historically had some of the most cutting-edge

products on the market. E.g. Nike + iPod

Manufacturing Skills Use of low cost contract manufacturers, based

outside USA, for its manufacturing

Strength of patents
Nike Air

Nike Zoom
Nike Air Max
Nike Shox

Economies of scale

Application of IT Nike relies heavily on IT in order to manage its supply

chains
11

Marketing Nike is a marketing company

Research & Development Nikes R & D lab
evaluated as far & away the best in the industry. -Large number of patents testimony to its
commitment to R & D.
Extensive SCM capabilities has attained
competency in leveraging low cost countries like
China & Vietnam as its manufacturing hub. Sources
its products from 900 factories spread across 50
countries.

12

Nikes distinctive competency lies in the area of

marketing, particularity in the area of consumer
brand awareness and brand power.
While the reasons that Nike is successful in
marketing products are numerous, this key
distinctive competency towers over its competitors.
As a result, Nikes market share is number-one in
the athletic footwear industry. Catch phrases like,
"Just Do It," and symbols like the Nike "Swoosh,"
couple with sports icons to serve as instant
reminders of the Nike Empire.
13

Nike brand is the most valuable among sports

businesses
Of the company's $18.4 billion in revenues in 2009,
90% was attributable to merchandise emblazoned
with either the Nike or Nike Golf logos.
Nikes brand value is US$ 18.6 billion in 2012,
comprising more than 52% of its enterprise value*
30th most powerful brand in the world, and the
number one in its industry. Its nearest rival Adidas is
ranked at distant 135, while Reebok is ranked at 408.

* source: Brandirectory, 2012.

14

Nikes key resource evaluated on RBV framework

The test of inimitability: Nikes brand value cannot be duplicated or matched

in the short-term.
The test of durability: By continually investing significantly in brand building
exercise, Nike has maintained and increased its brand value. Nike spent more
than US$ 3 billion in 2010 on marketing.
The test of appropriability: Since a lot of value that Nike creates is owing to its
brand value, it derives maximum benefit from the value creation process.
The test of substitutability: Brand as a resource is intangible. The only way it
can be trumped is by creating a stronger rival brand (something that can take
years to build and leverage) or by diluting Nikes brand value
The test of competitive superiority: Forbes ranked Nike as the top-most sports
brand for a number of consecutive years. Its brand value is 10 times that of
Reebok and more than 50% greater than that of Adidas.

15

1.

Athletic Footwear
54 % of total revenue
Casual Footwear Line

2.

Apparel
27 % of total revenue

3.

Rest
Equipment
Sports related business
16

To distribute low-cost, high-quality Japanese

athletic shoes to American consumers in an attempt
to break Germanys domination of the domestic
industry

17

Quality Products

Constant Innovation

Aggressive Marketing

18

180 Countries

Total
Revenue
6.7

17.3

34.1

US
Europe

Middle East
Africa
28.7
19

High-end
High Income Level between the age of 16-55

20

21

Sports
Attitude
Lifestyle
Just do it

You dont win silver,

You lose gold

22

Flag Ship stores

Nike Town shops

NikeId

Big Retail Discount Stores

23

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Departments by both geographic divisions and

product categories
Created overlapping management responsibilities
and a fluid leadership structure

26

Sweat Shop debacle, 1990s

Diversity and Inclusion
Cultivate diversity and inclusion to develop worldclass, high-performing teams
Ignite change and inspire critical conversations
around diversity, inclusion and innovation
Create venues and environments for open dialogue,
diverse opinions and a multitude of perspectives
27

28

THREAT OF
SUBSTITUTION

THREAT OF
IMITATION
ADDED

APPROPRIATED

THREAT OF
SLACK

VALUE

VALUE

THREAT
OF HOLDUP

29

Barriers to Imitation
Economies of scale

Shared distribution channels and efficient production reduces costs

Patents & copyrights

Nike has around 3775 patents in the sports shoes, apparels and the
equipments domain
e.g. Nike AIR technology, self lacing shoes, etc.
Innovation

Strong emphasis on R&D and product development through new

designs(more than 300 designs a year)
e.g. recycled polyester for jerseys
Brand reputation and Image

Celebrity endorsements & sponsorships of sports events

30

Responses to substitution
Customization of footwear
Online customization of footwear

Aggressive advertising
Just Do It campaign

Mergers and Acquisition

Umbro, Converse, etc.

31

Responses to Holdup
Multiple sourcing and Contracting
Contract suppliers in China, Vietnam, Indonesia and Thailand; Argentina,
Brazil, India, and Mexico
Building relationships with complementors

Tie up with Apple for the Nike + iPod sports kit

Increase Bargaining power
Just Do It advertising campaign
Forward Vertical Integration
Opened Discount stores in rural areas and flagship stores in urban areas
Building Trust
Improving working conditions through various programs
e.g. Joining FLA & GAWC, transparency through publishing monitoring results
on the website

32

Responses to Slack
Performance based incentives
Pay dividends to the shareholders
Nike encourages outsiders to become part of

board, in order to avoid bias connected with

corporate conformism

33

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