Project report on nike

Project report on nike

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  PROJECT REPORT ONNIKE BY: L.POOJITHA G208 SEC-C Phase-1 Brand HistoryandOverview: EVOLUTIONOF NIKE: Nike,Inc., formerly(1964–78) BlueRibbonSports, American sportswear companyheadquartered in Beaverton, Oregon. Itwas founded in 1964 asBlue-Ribbon Sportsby Bill Bowerman, a track-and-field coach at the University of Oregon, and his former student Phil Knight. They opened their first retail outlet in 1966 and launched the Nike brand shoein 1972. The companywas renamed Nike, Inc., in 1978 and went public two years later. By the early 21st century, Nike had retail outlets and distributorsin more than 170 countries, and its logo—a curved check mark called the “swoosh”—was recognized throughoutthe world. From the late 1980sNike steadily expanded its business and diversified its productline through numerousacquisitions, including the shoe companiesCole Haan (1988; sold in 2012) and Converse, Inc. (2003), thesports-equipment producer Canstar Sports, Inc. (1994; later called Bauer and sold in 2008), and the athletic apparel and equipment companyUmbro (2008; sold in 2012). In 1996 thecompanycreated Nike ACG (“all-conditionsgear”), which markets productsfor extreme sports such as snowboarding and mountain biking. In the early 21st centuryNike began selling sports-technologyaccessories, including portableheart-ratemonitorsand high-altitude wrist compasses.
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  Partof Nike’s successis owed to endorsements by such athletes as Michael Jordan, Mia Hamm, Roger Federer, and Tiger Woods. The Nike Town chain stores, the first of which opened in 1990, paytributeto these and other companyspokespersons while offering consumersa full rangeof Nike products. In the 1990sthecompany’simage briefly suffered from revelations aboutpoor working conditions in its overseas factories. Company: Nike CEO: John Donahoe Founders: PhilKnightand Bill Bowerman Year founded: 1964 Headquarter: Beaverton, Oregon, USA Number of Employees(FY20): 75,400 Type:Public AnnualRevenue(FY20): $ 37.4 Billion Profit| Netincome(FY20):$ 2.54 Billion Nike’sCoreValues: Nike’s key values center around its vision, mission, and purpose. Nike’s Corevalues are: 1. Community 2. Sustainability 3. Diversity 4. Socialresponsibly These values are the core of Nike and continue to move the company forward, even in an unknown global future. These core values shine in the company’s dedication to success in business and society. Products& Services: Athletic wear Leisurefootwear Apparel Accessories
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  Sportsequipment Competitors: Adidas Reebok Puma FILA New Balance Sketcher Allbirds Rothy’s UnderArmour Lululemon V.F CorporationsAnta ASICS SWOTANALYSISOF NIKE:
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  STRENGHTHS: StrongBrandAwareness : Nike isoneof the most recognizable brandsin the world as its name alone is memorable, easy to pronounce, and very unique. Huge Customer base: Nike has millions of customersfrom around the world who loyally follow Nike’s trends, participate in Nike events, and even providecustomer feedback. Dueto its hugecustomer base, Nike’s market cap has grown to $198 billion asof Oct 2020. LowManufacturingCost: Most of Nike’s footwear is manufactured in foreign countries. In the fiscal year 2020, Vietnam produced 50%, China produced 22%, and Indonesia produced 24%of total Nike’s footwear. Other operationsare in Argentina, Brazil, India, Italy, and Mexico. WEAKNESS: Poor LabourConditionsin ForeignCountries: In the last 20 years, Nike has been consistently targeted regarding their poor labour conditions. These issues include forced labour, child labour, lowwages, and horrific working conditionsthat were deemed “unsafe”. RetailersHavea StrongerHold: Nike’s retail sector makes Nike weak due to its sensitivity against pricing. 65%of Nike productsaresold directly to wholesalers or retailers. With retailers serving as their core customers, Nike does notput up a fightagainst their pricing structures whatsoever. Pending Debts: Although Nike’s income statements proveto be prosperous, a quick glance at their balancesheet could painta differentpicture. Nike is still facing financial threats. As of Aug 2020,Nike’stotal long-term debt was $9.54billion OPPURTUNITIES:
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  Emerging Markets: Although Nikealready has a presence in manyforeign countries, there is still plenty of opportunitiesfor Nike. This is because emerging markets like India, China, and Brazil aregraduallyflourishing. InnovativeProducts : Although Nike has produced manyproducts, there is still a lot to innovate. Nike has extended its reach in technology in association with fitness and health. Productslike wearabletechnology thatmonitorsphysical activities, is the first step in building innovative technologyproducts. Cutting tieswithbig retailers: Nike has decided to cut ties with some of the biggest multi-brand retailersand wholesale partners. According to the report, Nike will no longer work with wholesale retailers such as Zapoo’s, Dillard’s, Fred Meyer, Bob’sStores, etc. The step is taken for better productpositioning and greater customer experience. Threats: CounterfeitProducts : Counterfeitproductscan significantly affectthe revenue and reputation of Nike. The company deals globally, and the risk of counterfeitproductshas become higher. A number of merchandisersand retailers offer counterfeitNike productsat lower prices. The low-priced productsare made from low-quality materials but still have the Nike label. Increasedcompetitivepressure : Although, Nike is a dominating the athletic industry, competition, and new emerging brandsare still potential threatsto the company. With higher competition ratio, Nike has to spend more moneyon marketing and advertising. Nike spent $3.5Billion specificallyon marketing and demand generation in fiscal year 2020. Marketing BudgetPressure: Companies like Under Armour and Adidasarespending more on marketing and advertising campaigns, increasing the pressureon Nike.
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  Economic Uncertainty : Regardlessof the industry, all companiesare susceptible to the negative effects of a global recession. Already, Nike has registered a 38%decline in sales in Q2 of 2020 and can drop further in the futureif the recession strikes as hard as predicted by experts. Phase-2 KeyChallengesFacing Brand: Theapparel industryisstruggling: Nike has long been viewed as immune to the struggles of the apparelindustry, but the sector s still ailing and consumers for the most part don't want to spend money on apparel. Women'sathleisureis getting morecrowded bytheday: There are the major competitors - like Lululemon and Under Armour - and then there are moreniche brands, like the ultra-luxeSweaty Betty and Bandier, and Outdoor Voices, pictured above, which pridesitself on branding that focuses on fun, rather than being competitive and the best. In other words, its the anti- Nike, and that could be appealing to girlswho sought an alternative to Nike's "just do it" mentality. Themostpopularproduct mightbegoingoutof style: This is especially a concern since basketball apparelaccounts for 12-14%of Nike's business. In good news, though, UBS says that the trend for Air Jordan sneakers are still "strong." CHALLENGESIN BRANDVALUE: From year2017-18 thebrand valueof Nikedecreased from 31762millionsto 28030million. CHALLENGESIN BRANDARCHITECTURE: High classbrand in themarketwhereconsumerswantto spendless. Counterfeitproductscan significantlyaffect the revenue and reputation of Nike. The companydeals globallyand the risk of counterfeitproductshas become higher. A number of merchandisersand retailers offer counterfeitNike products
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  at lower prices.The low-priced productsaremade from low-qualitymaterials but still have the Nike label. This can tarnish the imageof thebrandasthe customers mightfeel that Nike has started producing lowquality products. Challengersfacedin brand portfolio: Nike has decided to cut ties with some of the biggest multi-brand retailersand wholesale partners. According to the report, Nike will no longer work with wholesale retailers such as Zapoo’s, Dillard’s, Fred Meyer, Bob’sStores, etc. The step is taken for better productpositioning and greater customer experience. It is also said that they are going out of style Challengersfacedin brand extensions: Marketsharewaslostabout20%in 2016dueto largeincreasein competitors. Challengersin brandrevitalization: Nike's brand management, therefore, isbased on continuousrevitalisation through gradualdeliverychanges in the brand'spositioning. This approach is less risky than the intermittent repositioning efforts of other brands. As of Aug 2020,Nike’stotal long-term debt was $9.54billion.Alongwith thisitis spending moremoneyon advertisementsandthisdeliverychargesbecomemore burdenon them. Challengersin positioning: Nike is positioned as a premium brand, selling well-designed and very expensive products. Assame time Nike tries to lure customers with a marketing strategycentering on a brand image which is attained by distinctive logo and the advertising logo: “Just do it” The pandemic has discouraged physical interaction and gathering with sporting events cancelled or postponed. Several sporting teams are on the brinkof collapse. If the crisis discouragessporting events for longer, Nike’s losses can be catastrophic.