Founded 1962 Bowerman & Knight Blue Ribbon > Nike > Nike Simply Number ONE!

Presence in 120 Countries

Key Internal Factor Strengths Most dominant player in global market (50% market share),in footwear >$84. Jordan (2nd Largest), 10.8% of US shoe market. 75% for Basketball, 86.5% for >$100. Revenue Increase 2.9% in 2009. 25,000 Retail Accounts in USA and more than 27000 outside US. Internet based customization through web site www.nikebiz. Nike has five wholly owned subsidiaries. Weaknesses Net Income Reduce 21% in 2009 Allmost 99% Manufacturing Outsourced out side USA Sales are heavily concentrated in the youth and young adult market 12 to 24 year old age bracket. Totals

Weight 0.12 0.12 0.07 0.07 0.11 0.1 0.07 0.1 0.12 0.12 1

Rating 3 4 3 3 4 4 3 1 1 2

WS 0.36 0.48 0.21 0.21 0.44 0.4 0.21 0.1 0.12 0.24 2.77

Key External Factor Opportunity Making shoes for 35+ and under 12 age braket Younger consumers are less price sensitive. Growing Market WTO (Outsourcing, Other Markets) Internet, Altering Sales Model (18% growth expected by 2012) Threat Foreign exchange rate fluctuations. After age 40 consumers do not pay more than $35 to $40. Strong Competition Addidass strong in (Europe & China) Beijing 2008 games. Global Recession Totals

Weight 0.1 0.1 0.11 0.1 0.1

Rating 1 4 3 3 3

WS 0.1 0.4 0.33 0.3 0.3

0.08 0.09 0.12 0.07 0.13 1

2 2 3 2 2

0.16 0.18 0.36 0.14 0.26 2.53

Competitive Profile Matrix (CPM)

Nike
Critical Success Factors Weight Rating score

Adidas
Rating score Rating

Puma
score

Advertising Product Quality Price competitiveness Management Financial Position Customer Loyalty Global Expansion Market Share Technology

0.14 0.14 0.11 0.08 0.07 0.12 0.07 0.13 0.14

1.00

4 3 3 4 4 4 4 4 3

0.56 0.42 0.33 0.32 0.28 0.48 0.28 0.52 0.42

3.61

4 3 3 2 2 3 3 3 2

0.56 0.42 0.33 0.16 0.14 0.36 0.21 0.39 0.28

2.85

3 2 2 2 2 2 3 2 2

0.42 0.28 0.22 0.16 0.14 0.24 0.21 0.26 0.28

2.21

Total

Matching Stage

Strength

Weakness

Opportunity

Threats

1. Most dominant player in global market (50% market share),in footwear >$84. StrengthLargest), 10.8% of US shoe 2. Jordan (2nd 10.8% of US shoe market. market. 3. 75% for Basketball, 86.5% for >$100. 4. Revenue Increase 2.9% ease 2.9% in Incrin 2009. 5. 2009 Retail Accounts in USA and more 25,000 than 27000 outside USA. 6. Internet based customization through web site www.nikebiz.com. 7. Nike has five wholly owned subsidiaries.

Weakness

1. Net Income Reduce 21% in 2009. 2. Allmost 99% Manufacturing Outsourced out side USA. Weakness 3. sales are heavily concentrated in the youth and young adult market 12 to 24 year old age bracket.

Opportunity

1. Making shoes for 35+ and under 12 age bracket. 2. Younger consumers are less price sensitive. 3. Growing Market. 4. WTO (Outsourcing, Other Market). 5. Internet, Altering Sales Model (18% growth expected by 2012).

Opportunity

Threats

1. Foreign exchange rate fluctuations. 2. After age 40 consumers do not pay more than $35 to $40. 3. Strong Competition.

4.

strong in (Europe & China) Beijing 2008 games. 5. Global Recession.

Threats

1. S7,O5 increase marketing and sales through internet.

2. W3,O1 make specific products for children and older people.

3. S1,S3,W3,W4 develop low price quality products.

4. W1,W2,T1 the USA shodown to almost almost 50% sales USA which will exchange risk.

outsourcing out side uld be cut 50% because comes from reduce foreign

Internal Strategic Position

Sr. No. 1 2 Financial Position (FP) Rating

External Strategic Position

Sr. No.

Return on Investment declined by 26% Stronge Leverage Position i.e. 3% Liquidity ratio increased by 11% Working Capital ratio is 71% of total assets Inventory was Turned over by 8 times only Earnings Per Share declined by 19 % Price to Earning Ratio showing increase of 24% Cash Flow from operations decreased by 10.3%
Competitive Position (CP) Rating

Stability Position (SP) Technological Changes: e.g. If Nike has Shox, Adidas has Adidas 1 and Reebok has 1 Pump 2 created by NASA
2

Rating

-4

7 6 6 5 4
6 4
42
Sr. No.

Avg Rate of Inflation: 2007: 2.8%, 2008: 3.8%, 2009: -0.4% Demand Variability: a surging demand was witnessed for performance athletic 3 apparels and footwear due to the increasing number of athletes and the growing health awareness
4

-3 -2 -3 -3 -3
-2 -2
-22
Rating

Price Range of Competing Products

Barriers To Entry Into Market: Threat of new entrants based on first-mover advantage is minimal:

6 7 8

6 7 8

Competitive Pressure: Highly saturated and challenging industry:

Ease of Exit From Market

Risk Involved In Business

Industry Position (IP)

Sr. No.

1 Nike

is enjoying more than 50% market share

-1

Growth Potential : Global sports footwear: 1 * 46.8% volume growth from 05-10 and 2.1% from 09-10 * 46.7% value growth from 05-10 and 3.3% from 09-10
2

manufacture wherever they can produce high quality product at the lowest possible price. If prices rise, and products can be made more 2 cheaply elsewhere (to the same or better specification), Nike will move production. In the apparel marketplace, Nike is a pioneer in product lifecycle management 3 (PLM). The company traces much of its PLM success to a major focus on process reengineering.
4 Customer

-2

Profit Potential: Sports Footwear and apperal industry is highly profitable industry

-3

Financial Stability: Players are financialy stronge Extent Leveraged: use of financial leverage is high in others. i.e adidas debt ratio 50% Resource Utilization Productivity, Capacity Utilization

Loyalty

-2 -3 -1

4 3 3

Capacity Utilization: outsourced all production operations like Nike does and hence have the flexibility of increasing or decreasing capacity at will. Technological Know How: e.g. Nike + iPod Sport Kit, Many Nike shoes use 6 a cushioning technology called "AIR.", Nike Shox technology, Hyperfuse construction delivers Superior breathability Control Over Suppliers: NIKE can better plan with its material vendors; control excessive overtime. Hold lean manufacturing 7 processes to ensure cost control and improve labor standards required materials delivered on-time during the production process;
5

-2
-14

25

(Book Illustration for better understanding)

Selection Stage

1 2 3 4 5

Key Factors Opportunities Making shoes for 35+ and under 12 age braket. Younger consumers are less price sensitive. Growing Market WTO (Outsourcing, Other Market). Internet, Altering Sales Model (18% growth expected by 2012) Threats Foreign exchange rate fluctuations. After age 40 consumers do not pay more than $35 to $40 Strong Competition. Adidas strong in (Europe & China) Beijing 2008 games. Global Recession. Strengths Most dominant player in global market (50% market share),in footwear >$84. Jordan (2nd Largest), 10.8% of US shoe market. 75% for Basketball, 86.5% for >$100. Revenue Increase 2.9% in 2009. 25,000 Retail Accounts in USA and more than 27000 outside USA. Internet based customization through web site www.nikebiz.com. Nike has five wholly owned subsidiaries. Weaknesses Net Income Reduce 21% in 2009. Allmost 99% Manufacturing Outsourced out side USA. sales are heavily concentrated in the youth and young adult market 12 to 24 year old age bracket.

weight 0.1 0.1 0.11 0.1 0.1

S7,O5 increase marketing and sales through internet. AS 4 4

TAS

S1,S3,W3,W 4 develope low price quality products. AS -

TAS

W3,O1 make specific products for children and older peaple. AS 2 2

TAS

0.4 0.4

3 3

0.3 0.3

0.2 0.2

1 2 3 4 5

0.08 0.09 0.12 0.07 0.13 1

3 3 3 0.27 0.36 0.39 4 4 4

0.36 0.48 0.52

2 2 2

0.18 0.24 0.26

1 2 3 4 5 6 7

0.12 0.12 0.07 0.07 0.11 0.1 0.07

4 4 4 4 4 -

0.48 0.48 0.28

1 1 1 2 3 -

0.12 0.12 0.07

1 2 2 3 2 -

0.12 0.24 0.14

0.44 0.4

0.22 0.3

0.33 0.2

1 2 3

0.1 0.12 0.12 1

1 1 1

0.1 0.12 0.12 4.24

4 4 1

0.4 0.48 0.12 3.79

3 1 4

0.3 0.12 0.48 3.01

Conclusion

FP Average

5.25

IP Average

3.571

CP Average

-2

SP Average

-2.75

Directional Vector Co ordinates: X axis: Y axis: 1.571 2.5