Essay:

Essay details:

  • Subject area(s): Marketing
  • Price: Free download
  • Published on: 14th September 2019
  • File format: Text
  • Number of pages: 2

Text preview of this essay:

This page is a preview - download the full version of this essay above.

A STUDY ON

BUSINESS ENVIORNMENTAL AUDIT

 CRITICALLY ASSESS THE STARTEGIC

DIRECTION OF NIKE BRAND

PROJECT REPORT

SUBIMITTED BY:

YOGENDER BHATT

ENROLLMENT NO. A19201160716

PROJECT SUBIMITTED IN PARTIAL FULFILLMENT FOR THE AWARD OF THE DEGREE OF

MASTER OF BUSINESS ADMINSTARTION

IN

INTERNATIONAL BUSINESS

AMITY UNIVERSITY

NOIDA

NOVEMBER 2017

CERTIFICATE

This to Certify that Yogender Bhatt as carried out a project work presented in this entitled “BUSINESS ENVIORNMENTAL AUDIT CRITICALLY ASSESS THE STARTEGIC DIRECTION OF NIKE BRAND” under my supervision and merits the award of Master of Business Administration from Amity University. The project embodied result of original work and studies carried out by a student himself and the content of the project do not form the basis of the award of nay other degree to the candidate o to anyone else.

Signature of the Student      Signature of the Guide

   YOGENDER BHATT     PARTH VYAS   

CONTENT

CHAPTER 1- EXECUTIVE SUMMARY

CHAPTER 2- INTRODUCTION

CHAPTER 3- EXTERNAL MARKET DRIVERS

3.1 POLITICAL DRIVER

   3.2 ECONOMICAL DRIVER

   3.3 SOCIAL DRIVER

   3.4 TECHNOLOGICAL DRIVER

   3.5 ENVIORNMENTAL DRIVER

   3.6 LEGAL DRIVER

CHAPTER 4-COMPETITVE ENVIORNMENT

4.1 PORTERS FIVE FORCE MODEL

   4.2 COMPEITETIORS ANALYASIS

   4.3 NIKE VS FAKE GOODS

   4.4 STAKE HOLDERS

CHAPTER 5- RESEARCH METHODOLOGY

5.1 RESEARCH OBJECTIVE

   5.2 RESEARCH DESIGN

CHAPTER 6-DATA ANALYASIS

CHAPTER 7-CONCULSION AND FINDINGS

CHAPTER 8- RECOMMENDATION

CHAPTER 9-ANNEXURE

CHAPTER 10-BIBLOGRAPHY

CHAPTER 1- Executive Summary

Nike was founded in 1972 by Philip Knight and Bill Bowerman.

Bowerman is well known in America as the University of Oregon coach. He  brought  jogging to  America, built  an unrivalled  track  and field program at  that  university,  and  taught  his   athletes   to  seek  the competitive  advantage  everywhere - in  their  bodies, their   gear  and their  passion.

The Marketing men at Nike would like us believe that the brand is more than a product, it is an experience that we are buying into. Wherever a consumer interacts  with  the brand – in stores of  their  own or  those of their  retail partners, online, through advertising, at events their  goal is to elevate  that experience  through  compelling  products  and human stories.

Nike  operates on six continents. It employs suppliers, shippers, retailers and  service providers amounting  to a total  workforce  of  close  to 1 million people. The diversity inherent in such size is helping Nike evolve its  role  as  a global  company and achieve  vast  economies of  scale. Nike is trying  to include building sustainable business with  sound labour practices. Nike has built its empire by  transforming the technology and design of  its  high performance  sports  gear  into high  fashion,  vastly expanding its pool of potential customers.

Mintel   estimated that spending on sports  goods  increased to £4,480million  in  2003.  The  market  is driven  by consumer's appropriation  of sports clothing and footwear as general casual wear, and major sports brands  such as  Nike,  Adidas  and Reebok  which are worn by  a wide cross section of the population, the cult celebrity surrounding football in the UK  also  boosts  sales  of  these brands  and drives  sales of  replica shirts.

"Nike is a manufacturer, but really  it's just  a marketing company."   - John Shanley, Securities analyst at Wells Fargo's Shanley in 2003

CHAPTER2- Introduction

In  this  report  I   will  be critically  studying  Nikes  brand, evaluating  its strategic  direction and the market  to which it belongs. I  will  examine the internal  and external  environmental  factors  that have influenced The company and its  brand including  the strategic  position  that it has adopted, using PESTEL analysis. The report aims to analyse the success of  the brand and suggest possible  future  strategies  for further  brand development.

BillBowermanwasoncequotedassaying‘Ifyouhaveabody,youare anathlete.Andaslongasthereareathletes,therewillbeNike.'

Itdefineshowheviewedtheworld,anditdefineshowNikepursuesits destiny.  Nike claims tohave remainedtotally focused oncreating performance opportunities for everyone, and offering empowering messagesforeveryonewhowouldlisten.

Nike isnow theworld'smostcompetitivesportsandFitnessCompany. TheworldheadquartersisinBeaverton,Oregon.ThePacificNorthwest isNike's hometown.Ithasexpandedtheir horizonstoeverycornerof the world.  Nike  employs  approximately  24,300   people. Each  is significant  toNike's mission  of bringinginspiration andinnovation to everyathleteintheworld.

Inthepastfewyears,thecompanyhasdevotedasmuchenergyto theeverydaydetailsofrunningabusiness-suchasdevelopingtop- flightinformationsystems,logistics,andsupply-chainmanagement--as it  doestomarketing coupsandcutting-edge runningshoe design. Moreandmore, Nike issearchingfortheright balancebetweenits creative  andits  businesssides,relyingonanewfound financial and managerialdisciplinetodrivegrowth."Seniormanagementnowhasa clearunderstandingofmanagingthecreativeprocessandbringingit tothebottomline.That'sthebig differencecomparedtothepast," says RobertToomey,anequityanalystatRBCDainRauscherInc.in Seattle.

Bymethodicallystudyingnewmarkets,ithasbecomeapowerhouse overseas–particularlyinnewmarketsegmentsthat itoncescorned, suchasfootballandfashion.Ithasalsobeefedupitsmanagement team.Afterstumblingwithitsacquisitions,Nikehaslearnedtomanage thosebrands -- Cole  Haan dressshoes,Converse retro-style trainers, Hurley  International skateboardgear, andBauer in-line andhockey skates--moreefficiently.Indeed,partofNike's growthstrategyisto addtoitsportfolioofbrands.

CHAPTER3-ExternalMarketDrivers

Aswellastheimmediateenvironment,forcesinthewiderworldalsoshapemanagementpolicies.I willusePESTELanalysistoidentifylikely factorswhichthefigurebelowsummarises.

3.1Political Drivers

Nikeisthenumberoneinsportswear.Nike'sprofits,turnover,marketing, sponsorshipand advertisingsurmountallothersportswearcompanies. Nikenotonlyreferstoitspositionasamarketleader,butalsoseesitself asleadingtheindustryinlabourpracticesinitiatives.Nike  stateintheir codeof conduct ‘weseek  to do not onlywhat is required, but wheneverpossible,whatisexpectedofaleader'

Nike, Adidas, Puma,  Hi-Tec andReebok all sub-contract  theactual manufacturing  to suppliers  in  China, the  Philippines,Thailand,   or Indonesia,wherewagesarelow.ManynewsarticleswhichIhavereadhavedetailedNikeasoneofthe worst offenders.Nike referstothemselvesasanetworkfirm. Thismeanstheyemploy8000peopleinmanagement,design,sales,andpromotion,andleaves productioninthehandsofsome75,000 workershiredby independent contractors.Mostoftheout-sourcedproductiontakesplaceinIndonesia,whereapairofNikesthatsellsintheUKforaround£60isproducedforabout£3 andyoungwomenpaidaslittleas£0.10 perhour.AtthemomentIndonesiaisNike's biggestproductioncentre,with17footwearfactoriesthat employ90,000 workersandproduceabout7 millionpairsofshoeseachmonth.Christian Aid areasking thebig  companies, suchas Nike   totake responsibility forthe social andemploymentconditions  underwhich shoesaremade.Nike's rival Reebokhas  acodeofconductwhich comesclosesttotheChristianAidmodelbutdoesn'tgofarenough.

AlthoughNike havesufferedbadpublicityover thelastdecadefor variousmatters,itreallyisintheir bestintereststo becomeanethical companyineveryrespectandalthoughthismayinitiallycosttoset up, thebenefitswillbelongterm andwillprobablyincreasethebrands strength,anexampleofgoodpublicityfrom performinginanethical mannerwasanarticlewhichIfoundon.

Itistitled‘NikegainsaperfectscoreonthecorporateequalityIndex for the  fifth consecutive year'. This article is in reference   to Nike receivinga  perfect   score  on  the  Human   Rights   Campaign Foundation'sCorporateEqualityIndex.TheIndexrates corporate America'streatment   of  gay, lesbian,  bisexualand  transgender employees,thisisavery goodpieceofpublicrelationsandwillappeal tothosegroupswhohavebeenoftentreatedunfairly.

Nikes  commitmenttoindustry-leadingtransparencyinitssocial responsibilityreportinghasledtothecompanybeing namedthetop U.S.  Company  and one of  the world's  top 10  in  the current SustainabilityGlobalReportersProgramrankingreleasedtoday.

Nikes   inclusion  on the   list  signifies   its  leadership  in  corporate responsibilityandclearly sets  it  apart  as oneof theworld's  leading companiesinsustainabilityreporting,actinginsuchawayhasleadto widespread praiseforNike andawards  suchas  aplace  in  Fortune magazines'‘BestCompaniestoWorkFor'list.

It'sstrangetogo fromsuchanextremetoanotherbutnowIwilltakea look atvariousarticleswhichI havefoundtosuggestthatNike have unethicalpolicies,soasnottotakeonepointofview soI canattempt tounderstandmoreofNikespoliciesfrom avarietyofsources.

Nike claimtobe‘theonlybuyertorequirefullcashminimumwage' andsayits‘corporatepolicyistokeepordersatorbelowthelevel equivalent   to 48  hours of  work' per  week  in  order ‘to require contractorstocapmandatoryovertimeat60 hoursperweek,'Nike alsostatethat‘independentmonitorsandsources',suchasfirmslike Ernst&Young,‘areverifyingtheseissues  ona routinebasisforNike'.

Whilerights promisedinNike's codeofconductoftenmirror  therights activistsarecallingfor,thereseemstobeawidegulfbetweenthe codesandthe realityofconditionsinthefactories.Nike's oversightof theseconditionstoooftenfallsshort  ofitspromisesand this policy needstobe changed andfollowedcorrectly.

3.2EconomicDrivers

I  havealreadyshownthe increasein demandfor productsin the sportingclothingmarket,and for over the  last20 years,thesports industryhasbeenbig business,whichsuggestswhy Nike arehappyto spendmillionsofpoundsayearonsponsoringindividualsandteams. Wecanseetherearetrendsinplacewhichsuggestthatconsumers arecontinuingtospendmoreandmoremoneyinthisindustryandif thiscontinues,Nikeshouldbecomemoreprofitablethroughincreased sales,andloweredcoststhrougheconomiesofscale.

3.3Socio-CulturalDrivers

IntheUK,about22 percentofmenand23  percentofwomanare obese(atleasttwotothreestoneoverweight),meaningtheir weightis puttingtheir healthatconsiderablerisk.Thelevelofobesityhastripled inthepast20 years,andisstillrising. Obesityisrising amongchildren too.Inthepasttenyearsithasdoubledinsix-year-olds(to8.5percent) andtrebledamong15-year-olds(to15percent).

Theriseoftheinternetandpersonalcomputersarefrequentlycitedas contributors to the obesityepidemic.  Television, DVD players and computergameconsolesencouragesedentary  behaviourandlimit their engagement inhealthierpursuits–suchasjoggingorbiking.But recentdevelopmentshavesomewhat redefinedthecomputer, television,andvideogameaspotentiallyusefultoolsinfightingobesity.

Nike  and Apple  have teamed   up to launch  Nike  +  as  global collaborationbringstheworldsofsportsandmusictogetherlikenever beforewith thelaunch of  innovative Nike + Ipod products. The first productdevelopedthroughthispartnershipistheNike+iPodsportskit, awirelesssystemthatallowsNike+ footweartotalk toyouriPodnano to connect   you to the ultimate  personal  running  and workout experience.

As these emerging technologiesdemonstrate,in   the absence of

governmentintervention,entrepreneurshipandinnovationmaybean importantmeansoffightingobesity.

 

3.4TechnologicalDrivers

Product ResearchandDevelopment

Researchand developmentarea key   factorin  Nikes  success. Technicalinnovationinthedesignoffootwear,apparel,andathletic equipmentreceiveemphasisastheytrytoproduceproductsthathelp to reduce  injury,  enhance athletic   performanceand maximize comfort.Nikeemployspecialistsintheareasofbiomechanics,exercise physiology,engineering,industrialdesignandrelatedfields,theyalso utiliseresearchcommitteesandadvisoryboardsmadeupofathletes, coaches, trainers,equipment managers,orthopaedists,and other expertstoconsultand reviewdesigns,materialsandconceptsfor productimprovement.Employeeathletesandotherathleteswear-test andevaluateproductsduringthedesignanddevelopmentprocess.

3.5EnvironmentalDrivers

Nikehasmadetremendouseffortstowardscreatingabetterworldfor everyone.Nike implements aSustainable Product  Innovation Cycle; theystrive tocreateinnovative  andsustainable  products whichwill have applications beyond consumer  products. It can guidetheir operationsandthoseoftheir suppliersasenvironmentalimpactsoccur ateverystageinthelifecycleofNikeproducts.

Nikehavealsoanewenvironmentalinitiative,withtheuseofOrganic cotton,thisisbecausetheactofconventionalcottongrowingtakesa hugetollontheearth's air,water,soil,andaffectsthehealthofthe peoplelivinginthecottongrowingareas.

Andin 2002, Nike introducedawoman'slinethatwas100 percent

organiccottoncalled‘NikeOrganics'andmanyotherlineshavebeen

introducedsince.

EnvironmentalMission

Nike haveobviouslyseentheneedthatintoday'schangingculture, theenvironmentisavery importantaspectofpeoples opinionsand actions,andbusinessethicshasbecomeahigherprioritythanever before.

This  has  encouraged especially   the bigger businessesto create environmentalactionplansandthink moreaboutwhataffectstheir

‘carbonfootprint'

A goodenvironmentalplancanalsobeseenasa strongpublic relationstooland can enticecustomersand investors alike,man people feel strongly about  investing in something they believe in ethical.

Forexample,shownbelowisNikes newrangeofgreenerandmore

ethically-sourcedshoes.

Nike'sethicalshoes

Nike has released arange of greenerand moreethically-sourced shoes. It's called Nike  Considered,and consists of five pieces  of footwear - aboot,climbing  shoe,trainer,open-backed trainer and sandals. Apparently the  shoesare easiertorecycle, solvent useis reducedby over80%comparedwith Nike's  "typicalproducts"andall thematerials  aresourcedwithin 200 miles  of theunnamedfactory. NikealsoreckonstheBoot,RockandGemshoescreate63%lesswaste thanacomparableNikelighthikingshoe.

Conclusion

I  wouldliketomentionthattheEnvironmentalissues arereallysucha largepartoftoday'slifestyle;Ethicalproductsreallyarethe‘big thing' ofthis  decade.I foundanarticlefrom theFinancialTimespublished today(27thNovember2006)whichbacksthisup.

Itstatesthat‘Ethicalspendingandinvestmenttopped£29bnlastyear morethanconsumers'retailpurchasesofcigarettesandalcohol' Althoughusuallyethicalbehaviour affectsthe costsofmaterials pushingupthecostswhichlaterreflectthefinalprice,mostconsumers arewillingtopayextra,asthisethicalbehaviourisseentoaddvalue andpossiblybecomesasourceofcompetitiveadvantage.

Ethicalbehaviourisbeneficialtoall,ithelpsthedevelopingcountries with economicgrowthandinturn this mayresultinmoreconsumers andahigheraggregatedemandinamarketwhichNike couldretail in.

3.6Legal

Kaskyvs.Nike

Nike was suedby   apolitical activist Marc Kasky overmaking false statementsinregardstosweatshops. Itwasruledthatthestatements Nike madewereprimarilygearedtowardsconsumersandthatthey wereusedtoincreaseormaintainsaleswhichisaviolationofthelaw ofDeceptiveadvertising.

Stockholders vs.Nike

NikestockholdersclaimedthatNikeexecutiveshadwithheldnegative news and  profited from  the results. Allegations stated that Nike's actionsresultedinastockincrease.

Oakleyvs.Nike

Thiswasa copyrightinfringementcasethatwassettledoutofcourt. Bothsidescame toanagreementandbothsidesweresatisfiedwith theresults.Both NikeandOakleydeniedanywrongdoings.

Evenwith alltheproblemsNikehasfaced,ithadbeenrankednumber

31inBusinessEthicsMagazinestop100corporatecitizensfor2005

Conclusion

InspiteofNike's negativestheyareconsistentlyworkingto improve andexcel in theareas of  social responsibility. With public announcements of Nikes standpoint onissues   of social responsibility and  ethics,and  continuedplansarebeingimplementedtoimprove labour conditions in thecompanies600 contractfactories.  Reforms over new   labour  policies  for  health  and  safety, child  labour, independentmonitoringandworkereducationarestillunderway.

Nike has also hadtograpple with  the  touchytopicof sweatshop labouratthe900-oddindependent  overseasfactoriesthatmakeits clothesandsneakers.

Since2002, Nike hasbuiltanelaborateprogramtodealwith charges oflabourexploitation.ItallowsrandomfactoryinspectionsbytheFair LabourAssn., amonitoringoutfititfoundedwith humanrights groups and otherbigcompanies,suchasReebokInternational  Ltd.andLiz ClaiborneInc.thatuseoverseascontractors.Nikealsohasanin-house staff of 97 whichhas inspected600 factories in thepast  twoyears, grading themonlabourstandards.

3.7CharityWorks

Not onlyaretheconsumersofNike lookingforahighqualitypairof shoes,ortobeseenwearingthebrand,theyalsoexpectotherbenefits notonlytothem,whichmaybeseentojustifythehighercostthan somesubstitutes.

Consumersarelookingforasenseoffulfilment.Itisfashionabletobe seenasethicaland within higherclasscirclesitcan almostbecomea competitiontoprovetobethemostgenerous.Tocapitaliseonthese trendswithinthetargetsegments,Nikehavepublicisedtheir charitable nature, through pressreleasesonthewebsitewitharticlessuchas

‘NikeDonatesmorethan $29 Millionin Cash,ProductandIn-Kind

Services.

Nike hopetoshowthroughtheir contributionshowtheyfocusonthe importance  of  communityinvestment,and  their   commitment   to addresstheissues that mostpeoplecareabout,forindividuals andfor thecompany.

Nikes  grantmakingeffortsarefocusedprimarilyonprogrammesthat increasetheparticipation of youngpeople  in physical activity and programsthataddress innovativesolutionstothechallengesof globalisation.

Nike haveavery cleverstrategyinthiscase,itsnotonlygoodpublic

relationsandmakingthebrandstrongerbutifNike canencourage morepeopleintosporttherewillbeahigherlevelaggregatedemand inthesportsconsumermarketandtheirwillbecustomerloyaltyfrom thiswhichNikewillhopetoresultinincreasedsales.

Aswellashelpingoutthoselessfortunate,thisfacetofNikes activities

has  alsohelped toreinforcethepersonalityandcorevalues  of the brand.

CHAPTER  4-CompetitiveEnvironment

4.1Porter'sFiveForces

BarrierstoEntry-LowDuetothelargescaleofbothNike andAdidas, these firms are  able to control their  costs to retain performance advantageoveremergingcompetitorsintheindustry.Theirwebsites aremoresophisticatedand enticingtobrowse,bothcontributedto their  large  marketing budgets. The capital injection intoweb site development is highand must be updated frequently with  new promotionsand addedfeaturestoattractonlineshoppers.Thereare manyproprietaryproductdifferencesin  theindustrythereforebrand identity has an immediatecompetitive advantage. The Nike   and Adidas brandiswell renownedglobally  andplays amajor  role in consumerdecision making. Selling footwear online is  highly competitive;however,barrierstoenterintothis e-commerceindustry arequitelow.Thecapitalrequirementforsettingupanonlineshopis comparativelylowerthansettingupatraditionalbricks  andmortar establishment.  Therefore,  the  online footwear  industry  is   highly abundantwithhundredsofonlinemerchants.Switchingcostislowfor theconsumer,and mayoccurfrequentlydepending onconsumer preference andotherfactorsaffectingconsumerbuyingdecision,(i.e. pricesensitiveconsumers).Anothermajorbarrieris security.Although, Nike andAdidashaveinvestedmillionsofdollarsintotheir website, thereisanindustry wideproblemofsecuringdata overtheInternet medium.Hackers maypotentially  lacerate intothe site andcould retrievesensitivedatasuchasconsumerprofiles,creditcardnumbers, andothercorporatedata.Theycouldevenredirectthecompany's websitetraffictoanotherwebsitesimilartothecaseofNike inJune2000.  Nike experiencedahijackingofitswebsite.Thetrafficfrom www.nike.comwasredirectedtoaserverataScotland-basedWeb hostingcompany.

BargainingPower ofBuyers -HighTherearealargenumberofbuyers relativetothenumberoffirmsinthisindustry.Therefore,companieslike Nike   and Adidas  must continuously  market  their   product and differentiatetheir brandsagainstcompetitors,inordertoincreasesales andmarketshare.Theuseofonlinetoolshashelpedto enhancethe accessibility andintimacy among users. For example, Nike's "nikeid.com"linkallowsconsumerstocustomizeanddesigntheir own footwearby permittingcustomerstospecifythedesiredcoloursand theoptiontopersonalisethe footwearwiththeir name. Brandidentity playsacriticalrolein thebuyingbehaviour;strongidentitywilloffer consumerstrustandloyalty.Manyonlinebuyersarepricesensitiveand switchingcostislowforthe buyer.

BargainingPower of Suppliers -LowTherearemanysuppliersin  this industry. In essence, there is very little differentiation among  the suppliers  which makes  suppliers'  bargaining  power   non-existent. Leather,rubber,andcottonarecommodityitemsandareavailable abundantly in themarket  place.Conglomerates suchas Nike and Adidas havea  definite advantage and powerovertheir suppliers. Thesesuppliersbecomedependenton thesefirmsastheir meansto survival.  Additionally, Nike andAdidashavestandardised their  input procedures pertaining  to the materials   used, their   labour  force, supplies, services, and logistics. Firms are able toswitch between suppliers quickly andcheaply,  duetotheglobal network of cheap labouronvariouscontinents.Additionally,inputsarereadilysubstituted and  there  are  an  abundant  number ofsuppliers  available.

Threats of Substitutes  -  Low Buyers'  propensityto substitute is low. Consumersubstitutesforathleticfootwearproductsare lowbecause thereare little alternatives to  switch, some substitutes for athlete footwearcouldbeboots,sandals,dressshoesorbearfeet.Consumers arenotlikelytosubstituteduetotheperformancespecificationofthe product.For instance,  abasketball player would notwearboots to play basketball. Therefore, thereare  noreal substitutes for athletic footwear.

RivalryamongExisting Competitors-Hightherivalry amongexisting competitorsinthefootwearindustryisquitehigh.Largefirmssuchas Nike andAdidashavegrown immenselyoverthelasttwodecades. Their  global  reach has  expanded  through  all  continents;  this  is attributedtotheemergencesoftheInternetande-commerce.Online sellinghasenlargedthereachforthesefirmsallowingthemtoincrease saleswhileminimizingoperatingcosts.Almosteverylargefirm  hasa website, andmostof thesewebsites   contain virtual stores which provideconvenience toconsumers.MostindividualsinNorthAmerica have access  to high speed  Internet   and  onlinepurchasing   has become thenewtrendfor the  twentyfirstcentury.Competition is fiercein  thefootwearindustryandthosewhodominateorleadthe market doso with high  capital expenditures, aggressive sales and marketingstrategies,andstrongbrandidentity.

4.2CompetitorAnalysis

Regarding  competition, therecentAdidas-Reebok  mergerposesa challengetoNike.

Whenitcomestoathleticshoes,theadvantagehasalwaysbeenwith Nike, Nike havehadthelargershareofthecriticalUSMarketmaking themamuchmoredominantforceworldwide.

HoweverinthelastyearAdidashaveaddedsomemarketingmuscle with  the acquisition  of  Reebok  International  Ltd,  boosting  the combinedU.SshareofNo2 AdidasandNo3 Reebokto21  percent, whichseemsenoughtocontendwithNikeonalargerscale.

Thisshouldleadtoamoreseriouscompetitiveenvironmentthanthe

markethasbeenexposedtoforalongtime.

AlthoughAdidasplansto keepthebrandidentitiesseparateaswell,it willstrengthen theforceagainstNike, andcanfocusonexpanding ReeboksalesinEuropeandAsia.

ThetakeovershouldhopefullysaveAdidasabout$25 millionayear throughincreased economiesofscale,whichcouldleadtoAdidas andReebok affording tolower prices  while retaining currentprofit margins, mostlikely  resulting in increased sales, or simply increasing prices and  investingthe increased  revenues into research   and developmentintonewproductsprovingasourceofinnovationand competitiveadvantage.

ThecombinationofAdidasandReebok givesthemabout28%ofthe internationalmarketforathleticfootwear,nudgingthemmuchcloser tothe31%shareofsalesNikehasoutsidetheUS.

Nikeislikelytorespondtothisthreatwiththekindofmarketingskillsthat havemadeitthelargestathleticshoeand clothingmanufacturerin theworld.

4.3Nikevs.Fake Goods

Not onlydoesNikefacecompetitionfromothermajorsportsbrandsas previouslyshown,theyalso faceproblemsagainstfakeNikegoods.

Arecentarticlefrom theBBCabouttheUSseizingmorethan135,000

fakeNikerunningshoes,fromone ofthelargestcounterfeitsmuggling ringsinrecenthistory,suggeststhisisquiteaproblem.

ThefakeNike AirJordanshoesreportedlyhadaretailvalueof$16m

(£8.5m)andweretobesmuggledtotheUSin15shippingcontainers, sixpeoplehavebeenchargedwith trying toimportthefakegoods from China,USofficialssaid.

Thiswillincrease,asNike  hasbeenraisingtheir pricesoftrainers.This should result in amarket for  counterfeitgoods suchas this. Those peoplewhowant thenameandtheNikeswoosh,butdon'twant,or can'tpayNikeprices.

Speakingfrom experience,I havepurchasedcounterfeitgoodsinthe past,andhonestly,iftheopportunitycameabout,Iwouldinthefuture.

4.4Stakeholders

Today, engagementwith stakeholders  isincreasingly important; this includesnot onlyathletesand consumersbutanyofthosegroups affectedby, oraffectingtheir businessoperations.

Nike canlearnfrom thisinteraction,andusethemtounderstandnew issues  andviewpoints.

Nike's  core stakeholders  are employees,  shareholders,  athletes, suppliers, the community and consumers.Also indirectly the governmentandNon-GovernmentalOrganisations(NGOs)

Nike hasrelationshipswith alargenumberofexternalgroups.Inorder tohaveeffective, quality engagements, its important  Nike prioritise and select which groups they will  engage.   So  Nike  focuses  on Stakeholderswhohavefollowingcharacteristics.

Legitimacy.Theyhaveadirectstakein anissue,orthereisa generalpublicperceptionthattheyshouldbeatthetable.Networked.Theyarepartofextensivenetworksandcanbring perspectives  from   large  numbers  of   stakeholders  around a particularissueorwithin aparticularregion.Expertise,resources,capabilities.Theyhavespecificknowledge,resourcesorcapabilitiesthatcanhelpNike tounderstandand addresscorporateresponsibilitychallengesandopportunities.Willingnesstoengageconstructively.

GaugingEffectiveness

AsNike isworkingondevelopingsystemstohelpensurethattheyare responsivetostakeholderswhomareactivelyengaged.SustainAbility, a UK-based   research,  advocacy   and   consultancy   company, completedanassessmentofallthefeedbackwe havereceivedfrom stakeholdersinthepastseveralyears.

Nikeintendtocontinueseekingdirectfeedbackfrom stakeholders,but areexploringwaysthismightbeachievedthroughexistingnetworksor in conjunction with other  companies – to  reduce the burdenon stakeholdersandNikethemselves.

CHAPTER 5- Research Methodology

Research comprises  defining  and redefining  problems , formulating  hypothesis  and suggested  solutions, collecting, organise, evaluating, data, making deduction and research conclusion and at last carefully testing the conclusion to determine  whether they fit the formulating the hypothesis.

In short the search of knowledge of objective and systematic finding the solution to a problem Is research.

5.1 RESEAFCH OBJECTIVE.

• To study the taste and preference , buying behaviour  of consumers  in case of footwear of nike.

• To recommend strategies rot Nike to increase sales.

The main objective of the study are:

• to do Swot analysis of the product sold.

• Comparative study with the competitors.

5.2 RESEARCH DESIGN

TYPES OF RESEARCH: Descriptive research.

Descriptive Research include surveys and fact finding inquiry of different kind. The main characteristic this method is that the researcher has no controls over the variables, he can report what has happened and what is happening.

Data source:

There are too types of data. Source of primary data for the present study collected to questionnaire and answered by consumer to shoes. The secondary data is collected from ten journals, books and through internet research.

PRIMARY DATA

The data which that is collected the first hand by  someone specially on the purpose for face-lifting  study is known as primary data.so in this the date is collected from the respondent through questionnaire.

SECONDARY DATA.

for the company information I had used secondary data from broche, website of the company etc. The method used by me is survey method as the research done is descriptive research.

RESERACH INSTRUMENTS

Selected instrument for data collection for online survey is questionnaire.

QUESTIONNAIRE DESIGN FORMULATION

Undue this method , the list of question pertaining to survey are prepare consumer for shoes. Questionnaire  has structured type of question as well a s unstructured types of question. Structured objective  TYPES OF question are prepared for the respondent's for then fixed response categories.

TYPES OF QUESTION INCLUDED:

DICTHOUMOUS QUESTION

Which have only two answered yes or no.

MULTIPLE CHIOCE QUESTION

Where respondent is offered more than two choice.

IMPORTANCE SCALE

A SCALE THAT rates the importance of some attributes.

RATING SCALE

A SCALE that rates form attributes write from highly satisfied to highly unsatisfied,  or very efficient to very inefficient.

SAMPLING UNIT

who is to be survyed? The researcher must define the target population that is to be sampled.

The sample unit taken by me:50 respondent of all age group of diffrent gender and diffrent profession.

Sample size

Consumer of  shoes 50 nos.

STEPS FOLLOWED IN COMPLETING THE STUDY

(1) Internet sites containing information on Nike shoes and marketing are browsed.

(2) Sample survey was conducted

(3) Data was thoroughly checked for error.

DATA PROCESSING METHODOLOGY

(1) Once the primary data has been collected they are edited, inspected, corrected and modified.

(2) Tabulation-bring similar data together and totalling them in meaningful categories.

(3) Questionnaire are edited. The responses are thoroughly checked in home for incorrect and inconsequential or contradictions categories are often the replies has been reviewed.

(4) The collected data are placed into anorder. Percentage of respondent similarly are calculated and place into table. Then this is interpreted. This involved drawing conclusion from gathered data.

CONCULSION WAS DRAWN BASED ON THE SURVEY FINDINGS

Finally recommendation was made to improve the sales strategy of Nike shoes to increase sales volume.

LIMITATION OF RESEARCH

• The collected data are placed into anorder. Percentage of respondent similarly are calculated and place into table. Then this is interpreted. This involved drawing conclusion from gathered data.

• Due to limited time period and constrained working hour of the most of the respondent, the answer at the time were vague enough to be ignored.

CHAPTER6- DATA ANALYASIS

• 74% of the people are the brand conscious while purchasing shoes for themselves, whereas 26% do not consider brand name as deciding factor for buying shoes.

• When respondent was asked about brand preference, 40% said that they were prefer Nike, 16% preferred Adidas, 22% preferred puma 12% preferred Reebok and remaining 10% said they would have preferred other brands. These means that most of the people preferred buying Nike shoes.

• The deciding factor for the buying shoes for the people are mainly comfort quality and brand name whereas packing and personality do not matter to people.

• 30% respondent are brand loyal to nike,26% people regular shift to other brand of shoes. These means that larger no of people prefer Nike over other brand.  

CHAPTER7-CONCLUSIONS &FINDINGS

FINDINGS

Q1. ARE YOU BRAND CONCIOUS OF FOOTWEAR?

Q2.IF YOU ARE GOING TO BUY A PAIR OF SPORTS SHPES, WHICH BRAND YOU WOULD YOU LIKE TO PREFER?

Q3. WHAT DO YOU THINK NIKE IS OS SUCCESFULL?

Q4. WHY WOULD YOU CLASS AS NIKE MAIN COMPETITORS?

Q5. WHY WOULD YOU CLASS AS NIKE MAIN COMPETATIORS?

Q6. DO YOU THINK NIKE IS OFEERING CUSTOMIZED FOOTWEAR?

Q7. IF YOU ARE GOING TO BUY PAIR OF CUSTOMIZED PRODUCTS WHICH BRAND WILL YOU CHOOSE?

Q8. WHAT ARE THE MAIN FACTORS IF YOU SWITCH TO BUY THE FOOTWAER OF ANOTHER BRAND?

CHAPTER7- CONCLUSIONS& FINDINGS

CONCULSION

SWOTAnalysis

 Strengths.

Nike  is a global  brand. It  is the number one sports  brand in the World. Its famous 'Swoosh' is instantly recognisable along with its trademark "Just Do It"Nike  has  recently  tried  hard to change  the ‘unethical  views' which previously dented their  images. Nike  is on the right  track with  joint  ventures such as with  Apple's Ipod, continued innovation.  Strong control over its own distribution channelStrong financial position with minimal long term debts

Innovative designs in footwear enabling consumers to design their  own shoes online.

Nike are a very  competitive organisation. Nike has a healthy dislike of is competitors. They have a strong management team and good corporate strategy in all markets. Nike  has  no factories.  It  does not tie  up cash in  buildings  and manufacturing workers. This makes Nike  very  efficient. Nike  are strong  at research and development,  as  is  evidenced by   its evolving and innovative product range. They then manufacture wherever they can produce high quality  product at the lowest possible price. If prices rise,  and products can be made more cheaply elsewhere, Nike will move production.

 Weaknesses.

The   organisation   does  have  a  diversified   range  of   sports products. However,  the income of  the  business is  still  heavily dependent  upon its  share of  the footwear  market.  This  may leave it vulnerable if for any reason its market share decreases or Nike fail to keep up with new trends.  Market is becoming saturated and consumers may become sick of Nike brand and move to other smaller, more individual brands. Negative image portrayed by poor working conditions in its overseas factories

 Opportunities.

Product development offers Nike many opportunities. The brand is fiercely defended by  its owners whom truly believe that Nike is not a fashion brand. However, like it or not, consumers that wear Nike  product do not always buy it to participate in sport. Some would argue that in  youth culture especially, Nike  is a fashion brand. This  creates its  own opportunities,  since  product could become unfashionable  before it wears  out i.e. consumers need to replace shoes. There  is also  the opportunity  to develop products  such as  sport

wear, sunglasses and jewellery. Such high value items do tend  to have associated with them, high profits. The  business could  also  be developed  internationally,  building

upon  its   strong   global   brand  recognition.   There   are  many markets  that have the disposable  income  to spend  on high value  sports  goods.  For  example,  emerging  markets  such  as China and India  have a new richer generation  of  consumers. There are also global marketing events that can be utilised to support the brand such as the World Cup and The Olympics.  Nike   could   look   to  develop   in  the  more traditional   outdoor

pursuits such as Walking and Climbing as they have not yet been attempted  successfully  by   Nike   and  brand could  be strong enough to compete  with   the small  specialist  shops,  however further  research would  have to be conducted to see if this  is viable.   Increased female participation in athletics New technology and innovation to stay on top of market needs

 Threats.

Nike  is exposed to the international  nature of  trade. It buys and sells  in  different  currencies and  so  costs  and margins  are not stable over long periods of  time. Such an exposure could mean that Nike may be manufacturing and/or selling at a loss. This is an issue that faces all global brands.The market for sports shoes and garments is very  competitive. The

traditional   view  of  Nike   of   a  high value   branded  product manufactured at a low  cost is now commonly  used and to an extent   is   no   longer  a  basis  for   sustainable  competitive advantage.  Competitors  are developing alternative  brands  to take away Nike's market share.  Nike  will  always  face  threats  from  pressure groups and human rights  campaigners over fair  trade and wages in the third  world can potentially damage brand and customer loyalty. Negative image due to "sweatshops" Economic downturn in North America and Asian  Countries Strong  competition   from   some  of  its  major  challengers  in  all branches of the business. Continuing challenges in import/export duties  Negative image created by the sponsored athletes Increase in the Price of Raw materials Change in options on Sportswear due to certain unpopular groups wearing it, such as what the ‘Chavs' did for Burberry.

CHAPTER8- Recommendations

After ananalysisofthecurrentpositionoftheNikebrandandpotential opportunities in the external operating environment,a number  of recommendationscan be made toensurethefuturesuccessand continued developmentofthebrand:

Nikes currentpolicyofconstantlywideningtherangeofsportswhich theyproducecouldbecontinuedandfurtherexpanded.TheMintel reportwhichI investigatedshowedhighlevelsofdemandintheUKfor outdoorpursuits;Nikecouldlookinto thismarket,forexampleFishing, WalkingandHiking. Thesemarketscontainfewbarrierstoentryand Nikeinterventionisjustthethingtochangepersonalopinions,likeNike andTigerWoodsdidtoGolf.

Therearefurtheropportunitiesavailablenotonlywithin theSportsand Clothing industries;  Nike could attemptjoint venturesor acquisitions with   companiestoexpand their  productportfolio. The takeover of Converseproved  successful, howeverfirms in emergingeconomies couldbetargetedasagrowthstrategyforNike, iftheycouldlookfor new,upand comingbrands totake over,theycould benefit  from economiesofscale,whilststillbeingadifferentalternativetoNike.

IreallylikewhatNikehavedoneoverthejointventurewithAppleand their  Ipod, I   recommend Nike  should  think  about other popular products,and examplecouldbewith  acomputergame,likePro EvolutionSoccer,this  wouldbeinnovativeandcouldbegoodPRas Nike couldbeseen asattemptingtogetchildrenfrom simplysitting downplayingcomputergamesbutmorephysicalinteraction.

AsI havementionedcounterfeitproductionIsatahigh levelandis damagingtheeconomy,Nikecouldstartacampaignagainstthistype ofactivityandwhilethiscouldhelpincreaseNikesprofits, itwouldalso begoodPR,justwhatNikeneedstobecomemore‘Ethical'.

Communication  campaigns  really  create excitement   around  the brandanditis importantthatNikefind sportsstarswhoarecomingup inthegameandNikecontinuetoactthisway.

CHAPTER 9- ANNEXURE

QUESTIONNAIR ON NIKE FOOTWARE

NAME-

AGE

o 15-20

o 20-25

o 25-30

GENDER

o MALE

o FEMALE

Q1.ARE YOU BRAND CONCIOUS OF FOOTWARE?

o YES

o NO

Q2.IF YOU ARE GOING TO BUY A PAIR OF SPORTS SHPES, WHICH BRAND YOU WOULD YOU LIKE TO PREFER?

o NIKE

o ADIDAS

o PUMA

o REEBOK

o OTHER

Q3.WHAT DO YOU THINK NIKE IS OF SUCCESFULL?

o RANGE OF THE PRODUCT OFFER

o MARKETING

o VALUE STYLE

o BRAND

o PRICE

o OTHER

Q4.WHY WOULD YOU CLASS AS NIKE MAIN COMPETITORS?

o CONVERSE

o ADIDAS

o PUMA

o REEBOK

o K SWISS

o OTHER

Q5.WHY WOULD YOU CLASS AS NIKE MAIN COMPETITORS?

o YES

o NO

Q6.IF YOU ARE GOING TO BUY PAIR OF CUSTOMIZED PRODUCTS WHICH BRAND WILL YOU CHOOSE?

o NIKE

o ADIDAS

o PUMA

o REEBOK

o OTHER

Q7.DO YOU THINK NIKE IS OFEERING CUSTOMIZED FOOTWEAR?

o YES

o NO

Q8. WHAT ARE THE MAIN FACTORS IF YOU SWITCH TO BUY THE FOOTWAER OF ANOTHER BRAND?

o QUALITY

o PRICE

o INNOVATION

o ADVERTISTMENT

o OTHER

CHAPTER 10- BIBLOGRAPHY

Websites

Nike'scorporate/investorwebsitehttp://www.nike.com/nikebiz/nikebiz.jhtml?page=0

NikeTownNike'sFullRangeofProducts. http://www.nike.com/index.jhtml?l=nikestore#l=nikestore

NikeNewsandInfo

http://www.nike.com/index.jhtml?l=nikestore#l=nikestore

TheNikeWatchCampaign-http://www.oxfam.org.au/campaigns/labour/index.html

FairLabor.organnualreporthttp://www.fairlabor.org/all/transparency/reports.html#charts

InformationonKaskyv.Nike

BoycottNikeHomepage-http://www.saigon.com/nike/

www.bbc.co.uk/health-obesityinformation

Wikipedia–InformationonNikesbrands

NikeSwot Analysis- http://www.marketingteacher.com/SWOT/nike_swot.htm

...(download the rest of the essay above)

About this essay:

This essay was submitted to us by a student in order to help you with your studies.

If you use part of this page in your own work, you need to provide a citation, as follows:

Essay Sauce, . Available from:< https://www.essaysauce.com/essays/marketing/2017-10-30-1509358599.php > [Accessed 18.10.19].