Proposed Strategy

Marcial, Jelane R.
Mercado, Mary Rose D.
Pascual, Mark Vincent C.
Paulino, Janine Mae H.
Sabater, Liezel E.
Velante, Adrian M.
I. Company Background/History

Nike, originally known as Blue Ribbon Sports (BRS), was founded by University of
Oregon track athlete Phil Knight and his coach, Bill Bowerman, on January 25, 1964.
The company initially operated in Eugene as a distributor for Japanese shoe
maker Onitsuka Tiger, making most sales at track meets out of Knight's automobile. The
company was renamed Nike, Inc., in 1978 and went public two years later. By the early
21st century, Nike had retail outlets and distributors in more than 170 countries, and its
logo, a curved check mark called the “swoosh” was recognized throughout the world.
From the late 1980s Nike steadily expanded its business and diversified its product line
through numerous acquisitions, including the shoe companies Cole Haan (1988; sold in
2012) and Converse, Inc. (2003), the sports-equipment producer Canstar Sports, Inc.
(1994; later called Bauer and sold in 2008), and the athletic apparel and equipment
company Umbro (2008; sold in 2012). In 1996 the company created Nike ACG (“all-
conditions gear”), which markets products for extreme sports such as snowboarding and
mountain biking. In the early 21st century Nike began selling sports-technology
accessories, including portable heart-rate monitors and high-altitude wrist compasses.
Nike expanded its product line to encompass many sports and regions throughout the
world. In 1990, Nike moved into its eight-building World Headquarters campus in
Beaverton, Oregon. The first Nike retail store, dubbed Niketown, opened in downtown
Portland in November of that year. Part of Nike’s success is owed to endorsements by
such athletes as Michael Jordan, Mia Hamm, Roger Federer, and Tiger Woods. The
NikeTown chain stores, the first of which opened in 1990, pay tribute to these and other
company spokespersons while offering consumers a full range of Nike products. In the
1990s the company’s image briefly suffered from revelations about poor working
conditions in its overseas factories. Phil Knight announced in mid-2015 that he would
step down as chairman of Nike in 2016. He officially stepped down from all duties with
the company on June 30, 2016.
In a company public announcement on March 15, 2018, Parker said Trevor Edwards, a
top Nike executive who was seen as a potential successor to the chief executive, was
relinquishing his position as Nike's brand president and would retire in August
In addition to its wide range of core athletic shoes and apparel marketed under the
flagship Nike brand, the company also sells footwear under the Converse, Chuck Taylor,
All Star, and Jack Purcell brands through wholly owned subsidiary Converse Inc. and
sells under the brands Starter, Shaq, and Asphalt in the discount retailer channel through
another subsidiary, Exeter Brands Group LLC. The firm also sells Nike and Bauer brand
athletic equipment; Hurley surfing, skateboarding, and snowboarding apparel and
footwear; and Cole Haan brand dress and casual footwear. Nike has relied on consistent
innovation in the design of its products and heavy promotion to fuel its growth in both
U.S. and foreign markets. The ubiquitous presence of the Nike brand and its Swoosh
trademark led to a backlash against the company by the late 20th century, particularly in
relation to allegations of low wages and poor working conditions at the company's Asian
contract manufacturers.

Nike, Inc. (NYSE: NKE), headquartered in Beaverton, Oregon, is the largest and most
successful brand of shoes, sports equipment, clothing, and controlling more than 60% of
the market and becoming a pop culture icon. One might say that the Greek Goddess of
Victory for which Nike was named is actually the Goddess of Shoes. Nike may be one of
the youngest of the major brands, but it is the dominant brand around the world. In 1963-
1964 when University of Portland track coach, Bill Bowerman, and Phil Knight, a mid-
distance runner joined forces to import and provide low-cost, high tech running shoes
from Japan in order to provide alternatives to the German-dominated athletic shoe
market.
II. Environmental Scanning

A. SWOT Analysis

 Strengths
a. Brand Recognition
b. High Product Quality
c. Effective Marketing
d. Capacity of Innovation
e. Strong Distribution Chain
f. Strong R&D
g. Strong Customer Satisfaction or Relationship

 Weaknesses
a. Overseas Manufacturing Dependency
b. Decreasing US Market Place
c. High Product Price Compare to the Competitors
d. Currency Exposure
e. Medium Retail Presence

 Opportunities
a. Expansion into Merging Markets
b. Increased demand in Product Innovation
c. Growing Segment of Women Athletes
d. Increase in the number of Sports Event like Olympic, FIFA
e. Women fitness Market is Growing Geometrically

 Threats
a. Fierce Industry Competition
b. Revenue Relies on Consumers Discretionary Income
c. Economic Situation (Recession)
d. Fluctuation in the Currency
B. PESTEL Analysis

 Political Analysis
a. Must consider the taxation and manufacturing rules of each country
b. Must follow import and export laws well

 Economic Analysis
a. Must target customers with good purchasing power
b. Developing countries may be good opportunity for Nike

 Social Analysis
a. Need to target health conscious people
b. Shoes and apparel must be for health-conscious people along with sporty
people

 Technical Analysis
a. Nike uses finest technology
b. Constant changes in the technology as well as opportunity as well as threat

 Environmental Analysis
a. Need to come up with environment-friendly products

 Legal Analysis
a. Must consider the copyrights and designs of shoes and apparel it produces.
b. Must obey health and safety rules
III. Strategies Used/Utilized by the Firm over the years

 Pricing Strategy

Since Nike focused on the users who embrace product understanding and
closeness and thus heed less regarding the product. This allows the Company to
set quite higher cost that its rivalry. This is a marketing strategy of Nike which
calls for superior pricing points in order to push the supposed value of the
product.

Another significant thing that business must consider if you want to follow the
success of the company is that, the truth that Company utilizes the vertical
combination pricing technique in that they take participants ownerships at channel
levels which differ and the Nike company also engage in diverse channel level
functions in a propose to control prices as a result affect pricing function.

 Distribution Strategy

The marketing strategy of Nike embraced by many organizations can either

provide them a market frame or make them insulate the market frontrunner. The
more reliable the distribution of the product is improves the sales and in
consequence more profits.

Product delivery at the required time to the users not just effect usefulness
however also results to high level of customer’s satisfaction as well as loyalty.

Nike Company distributes its items base on the level or number. The high costs
premium items are given to particular distributors while leaving products with
low priced to be trade at discounted price at various retail stores including Wal-
Mart whereas other company such as Reebok who embraced a restricted
distribution technique Nike Company ventured more into a world market
capitalization.

 Communication and Promotional Marketing Strategy of Nike

Aside from trading quality products that have result to a high number of user
loyalty, the promotional and communication utilize by the company are simply
outstanding.

Nike has hired many professional and well-known celebrity sportsmen that have
managed to make a considerable interest to their items.
Most of the athletes contracted by Nike include soccer superstar Roberto Carlos,
Ronaldo and Ronaldinho, basketball legends and superstars such as Lebron
James, Jermaine O’ Neal and triathlete superstar Lance Armstrong as well as
Tiger Woods a big name in the world of golf.

This has developed a fairly high level of Nikes items awareness. Aside from
dealing or contracting of celebrity athletes to endorse their products, Nike also
used a best deal of ad by means of mass media. The company uses a selective
demand ad targets on the higher costs’ shoes utilized for typical sports.

All the marketing strategy by Nike show a competitive marketing management

which can hoist company top turn out to be market leaders and making the market
leaders company retain their competitive frame market by means of adherence to
marketing principles, marketing plans and carefully planned marketing strategies.
IV. Proposed Strategies

A. Specific Action Plan

With a lot of female athletes rising into prominence, the demand for sports
apparel marketed to women is steadily increasing. For a highly recognized brand
such as Nike, it would be foolish not to take advantage of such rise in demand. It
would be easy for a company like Nike to market a new product line of sports
apparel targeted for female athletes, especially with their effective marketing
campaigns and their status as a giant in the sports wear industry. Their high
quality and innovative products can also be considered as an assurance for the
success of this venture, should Nike take advantage of these oppurtunities.

B. Resources Required

 Land/Natural Resources: The natural wealth of a country, consisting of land,

forests, water, etc., to make goods and services

- The natural resources Nike uses is cotton for the fabric, water to grow the
cotton, and oil to run the machines.
- Oil for the trucks to run, latex (grown from plants) to make rubber, sand to
make glass.

 Labor/Human Resources: The work that is put into making a good or service.

- In order to make Nike apparel, they have to have many materials and
fabrics. Without these resources, there would be nothing to produce. They
plan their new ideas first by having designers think of logos and new
designs for products. Then they gather their materials and have sewers and
factories to make the product, which is labor.
- truck drivers, people who load and unload trucks, people who assign what
store gets what

 Capital Resources: goods made and used to produce other goods and services.

- The manmade items used in production is fabric, sewing machines, and

computers.
- trucks, scanners, stores

 Entrepreneurship: the development of taking an idea and turning it into a

profitable business.
C. Basis for the Strategies Proposed

Nike's investments in skateboarding and other action sports, which began in

earnest a decade ago, have already begun to pay off. Last year, the company
announced that its action sports division — Nike 6.0 and Nike SB — was the
fastest-growing category within Nike Brand. The company expects to double its
current estimated business from that division of $390 million by 2015. Nike
declined to make any of its executives available for this story.

The company's success has been driven by its footwear lines. Since 2007, Nike's
action sports footwear sales have increased 120 percent and its share of the action
sports footwear segment has increased from 15.5 percent to 27.6 percent. Nike's
success has changed the landscape of action sports and will play a heavy hand in
writing the future of the industry.