Nike Strategic Management

STRATEGIC MANAGEMENT(SMG 605)

PREPARED BY:

MOHD ELYIAS BIN HAMDAN

MUHAMMAD HANIS NAQIUDDIN BIN MOHD PAUZI

MOHAMMAD IQRAM BIN ZULKORNAIN

MUHAMMAD HARRIS BIN SHARUDDIN

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The become world’s leading innovator in athletic

footwear, apparel, equipment and accessories.

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"To bring inspiration and innovation to every

athlete* in the world"

*If you have a body, you are an athlete.

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1. Customers2. Products or services3. Markets4. Technology. 5. Concern for survival, growth, and profitability6. Philosophy7. Self-concept8. Concern for public image 9. Concern for employees

• As the largest seller of athletic footwear and athletic apparel in the world (2,

3),we create products for consumers and athletics (1) who enjoy having quality

products that are high performance and reliable such as shoes, apparel, and

technologically advanced equipment (4). Our dedicated employees

(9)continuously work on developing new products, price, and product identity

through marketing and promotion (7). The company aims to lead in corporate

citizenship (8) through proactive programs that reflect caring for the world

family of Nike (6) and by ensuring continuous growth and profitability to our

investors and stakeholders (5).

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1. Growing segment of the female athletes. (The New York

Times, 2010)

2. International expansion into emerging markets – e.g. India

(Business Standard, 2013)

3. Additional marketing of existing products to appeal to new

demographic groups.

4. Develop new alliances with companies that are respected

regarding social responsibility. (Bloomberg BusinessWeek

Technology, 2006)

5. Brand reorganization by market regions6

1. High competitive industry

2. Production of counterfeit goods, and generic products. (The

Economic Times, 2002)

3. Negative public perception created by environmental, child

labor, contracted manufacturing issues, and sponsored

athletes. (The Boca Raton Tribune, 2012)

4. International currency changes could decrease profits.

5. Federal Trade regulations in dealing with foreign

manufactures. (Global Issues, 2006)

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External Opportunities  Weight Rating Weight Score

3.      Growing segment of the female athletes. 0.12 4 0.48

4.      International expansion into emerging markets – e.g. India 0.12 4 0.48

5.      Additional marketing of existing products to appeal to new demographic groups. 0.07 2 0.14

6.      Develop new alliances with companies that are respected regarding social

responsibility. 0.08 2 0.16

7.      Brand reorganization by market regions 0.08 2 0.16

External Threats      

1.      High competitive industry 0.14 4 0.56

3.      Production of counterfeit goods, and generic products. 0.10 3 0.30

4.      Negative public perception created by environmental, child labor, contracted

manufacturing issues, and sponsored athletes. 0.10 3 0.30

5.      International currency changes could decrease profits. 0.12 3 0.36

6.      Federal Trade regulations in dealing with foreign manufactures. 0.07 2 0.14

Totals 1.00   3.08

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1. Recognized brand name – ‘Swoosh’ is ubiquitous

2. Strong in research and development – innovative product

development (Wikinvest, 2013)

3. Strong marketing campaign - sponsors top athletes and

teams. (The New York Times, 2013)

4. Diverse portfolio

5. Customer loyalty. (Reuters, 2013)

6. Strong financial position. (The Associated Press, 2013)

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1. Production costs are highly priced based on manufacturing

countries. (Bloomberg News, 2011)

2. Revenues are still mostly dependent upon footwear sales.

3. History for violations of minimum wages, child labor and over

times in its manufacturing countries. (Reuters, 2013)

4. Little control over quality of products from 3rd party

contractors.

5. Price sensitivity of products. (Trefis, 2010)

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Internal Strengths  Weight Rating Weight Score

Recognized brand name – Swoosh is ubiquitous 0.14 4 0.56

Strong in research and development – innovative product

development 0.10 3 0.30

Strong marketing campaign - sponsors top athletes and teams. 0.09 4 0.36

Diverse portfolio 0.08 3 0.24

Customer loyalty 0.10 3 0.30

Strong financial position 0.10 4 0.40

Internal Weaknesses      

Production costs are highly priced based on manufacturing

countries. 0.09 2 0.18

Revenues are still mostly dependent upon footwear sales 0.07 2 0.14

History for violations of minimum wages, child labor and over

times in its manufacturing countries. 0.08 2 0.16

Little control over quality of products from 3rd party contractors 0.09 1 0.09

Price sensitivity of products 0.06 2 0.12

Totals 1.00   2.85

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OPPORTUNITIES THREATS

STRENGTHS WEAKNESSES

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SWOT Matrix.docx

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Financial Position rating is 1 (worst) to 6 (best) Ratings1 Liquidity 6.02 Leverage 6.03 Working capital 6.04 Return on assets 4.05 Return on equity 4.06 Price per earnings 6.07 Earnings per share 5.0

Industry Position   rating is 1 (worst) to 6 (best) FP Total 37.01 Profit potential 6.02 Extent Leveraged 5.03 Economies of scale 5.04 Growth potential 5.05 Financial stability 6.06 Resource utilization 5.07 Diverse Portfolio 5.0

Stability Position rating is -1 (best) to -6 (worst) IP Total 37.01 Price range of competing products -2.02 Competitive pressure -2.03 Ease of exit from market -1.04 Successful and recognized advertising -1.05 Endorsement agreements -1.06 Price elasticity of demand -1.07 Risk involved in business -1.0

Competitive Position rating is -1 (best) to -6 (worst) SP Total -9.01 Market share -1.02 Global presence -1.03 Strong investor reputation -1.04 Technological innovation -1.05 Product life cycle -2.06 Customer loyalty -1.07 Control over suppliers and distributors -3.0

CP total -10.0

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SP average -1.29CP average -1.43IP average 5.29FP average 5.29

X Coordinate 3.86Y Coordinate 4.00

Strategy ->>>> Aggressive

FP

SP

IPCP

(3.86, 4.00)

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Rapid Market Growth

Slow Market Growth

Weak Competitive Market

Strong Competitive Market

Quadrant II

Quadrant III

Quadrant I

Quadrant IVo Market Developmento Market Penetrationo Product Developmento Forward Integrationo Backward Integrationo Horizontal Integrationo Related Diversification

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