...Karina Bezerra BusMgt 799 Prof. Brian Saxton May 15, 2012 Nike Case Analysis Nike is a sneaker company based in Beaverton, Oregon. It has a great aptitude to influence customers with its fashion trends and to astonishingly increase its profits. It was founded by the athlete Philip Knight (Nike’s CEO) and his coach Bill Bowerman in January 1964 from the University of Oregon. By 1970 Nike had pushed its revenue drastically from $60,000 to staggering $49 million. Few years after that, the company went Public what accounted for an unstoppable growth. By 1998 Nike had over 40% of the U.S. athletic footwear market. Knight’s main strategy for differentiate themselves over their competitors was based on a simple formula: to outsource its production over cheaper contractors and the capital saved is invested back into the business for marketing purposes. Knight also believes that the firm should invest in celebrity endorsements, so to make the company identity strong as well as to serve as the company image. In order to follow its strategy of outsourcing for cheap producing, Nike shifted its manufacturing to firms in South Korea and Taiwan. However, as these two countries developed it became pricey to leave operations in these locations. Rapidly manufacturers moved their facility to cheaper countries such as, Indonesia and China. Though Nike was experiencing the excitement moment of its existence with incredible growth and brand image, it found itself trapped in a wave of labor conflict...
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...chain for consumers is important when promoting products to different market segments of consumers who use the same products in different ways. The consumer who is using the product for athletic activity will be focused on attributes of the product that enhance or improve performance. On the other hand, the consumer who is using the product for casual wear will be focused on the color, style, and overall look of the product. With that being said, the needs of these consumers are different. A marketer has to promote the various needs and benefits of the same product in such a way that different consumers will find the same product attractive. Recently, Nike has been trying to lower its environmental impact by reducing waste and use toxic materials. In your opinion, what are Nike’s ethical responsibilities in this situation? Nike has an ethical...
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...statement of Nike is “For serious athletes, Nike gives confidence that provides the perfect shoe for every sport”. In today’s competitive environment, Nike, one of the global leaders in sporting goods industry, has established a strong position for enhancing athletic life style. It’s the number one sports manufacturer in the world design by Nolan Breitbarth in the 1970s with Phil knight founder of Nike Inc. It is the leading sporting goods Company in the United States and hundred and ten countries. However, it has become the passion for everyone to use its brand products that create the Nike Just Do It feeling for the competition. The consumer’s perception of brand influences their buying decision in sports industry, so Nike always has been able to position to customer’s expectation and athletic fantasy that is endorsed by real athletes. Its Products offer a wide range of choices for the individuals; from sports equipment, athletic shoes, to clothes. But this paper focuses on Nike athletic shoes- how it has created a distinct impression in consumers’ mind and differentiated its products from its competitors. Promotionally, it has continuously tried to target the world’s youth population through basketball most popular game around the world. Nike partnered with Michael Jordan to have his name Jordan shoes for basketball and designed Jordan I, Jordan II and followed by many more. Nike's marketing strategy is accepted to be an important component of the company's success. Nike is positioned...
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...comparing the strategies of two companies from the same industry. The strategies of Nike and Adidas have been compared from the textile industry. Nike and Adidas both specialize in footwear, apparel and accessories and their competition is intense as Nike is the market leader and Adidas is the market challenger. The topics in this assignment cover critical incidents of both Nike and Adidas that occurred in the past and the comparison between both their strategies as well their future plans. This assignment shows us the influence the strategy has on the success or failure of companies and how companies craft sustainable strategies that help them to retain their position in the market. Table of Contents Page 1.0 Introduction 1 2.0 Literature review 1 3.0 Backgrounds of Nike and Adidas 2 3.1 Company overview of Nike 2 3.2 Company overview of Adidas 2 4.0 Critical Incidents that occurred in the past 3 4.1 Critical incidents that affected Nike 3 4.2 Critical incidents that affected Adidas 5 5.0 Comparison of the strategies of the companies 8 5.1 Strategies of Nike 8 5.2 Strategies of Adidas 9 5.3 Comparison of the strategies of Nike and Adidas 11 6.0 Future plans of Nike and Adidas 13 7.0 Conclusion 14 8...
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...SEPTEMBER 6, 2002 DEBORA L. SPAR Hitting the Wall: Nike and International Labor Practices Moore: Twelve year olds working in [Indonesian] factories? That’s O.K. with you? Knight: They’re not 12-year-olds working in factories... the minimum age is 14. Moore: How about 14 then? Does that bother you? Knight: No. — Phil Knight, Nike CEO, talking to Director Michael Moore in a scene from documentary film The Big One, 1997. Nike is raising the minimum age of footwear factory workers to 18… Nike has zero tolerance for underage workers. 1 — Phil Knight, 1998 In 1997, Nguyen Thi Thu Phuong died while making sneakers. As she was trimming synthetic soles in a Nike contracting factory, a co-worker’s machine broke, spraying metal parts across the factory floor and into Phuong’s heart. The 23 year-old Vietnamese woman died instantly.2 Although it may have been the most dramatic, Phuong’s death was hardly the first misfortune to hit Nike’s far-flung manufacturing empire. Indeed, in the 1980s and 1990s, the corporation had been plagued by a series of labor incidents and public relations nightmares: underage workers in Indonesian plants, allegations of coerced overtime in China, dangerous working conditions in Vietnam. For a while, the stories had been largely confined to labor circles and activist publications. By the time of Phuong’s death, however, labor conditions at Nike had hit the mainstream. Stories of reported abuse at Nike plants had been carried in publications such as Time...
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...Nike Case Analysis 1 Nike Case Analysis Contents I. Introduction............................................................................................................................................................3 II. Conclusions of Nike Core Marketing Strategy .......................................................................................................3 2.1. Pros: ............................................................................................................................................................3 2.2. Cons: ...........................................................................................................................................................3 2.3. Risks: ...........................................................................................................................................................3 III. Nike Core Marketing Strategy ...........................................................................................................................4 3.1. IV. Core marketing strategies .........................................................................................................................4 SWOT analysis .................................................................................................................................................6 4.1. 4.2. Weakness ..................................................................
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...Nike, Inc: Cost of Capital CASE SUMMARY In this case, Kimi Ford, a portfolio manager at NorthPoint Group, a mutual fund company, manages the NorthPoint Large-Cap Fund. This fund invests mostly in Fortune 500 companies with an emphasis on value investing. Some of the top holdings of the NorthPoint Large-Cap Fund include; ExxonMobil, McDonalds and GM, these stocks are generally old-economy stocks. Over 2000 and the first half of 2001, the NorthPoint Large-Cap Fund performed very well, earning a 20.7% return in 2000; over the same time, the S7P 500 fell 10.1%. The current time is July 2001 and just a year prior, there was an analyst meeting at Nike to review fiscal year 2001 performance. During this meeting, Nike revealed a plan for revitalizing the company. The company was in need of a kick start as sales were stuck at $9 billion and there was a drop in net income from $800 million to $580 million. To re-energize sales, Nike was going to produce more mid-priced athletic shoes, an area where Nike was weak in previous years. Nike also announced that it was going to push its apparel line which has been growing extremely well. With this new information, Kimi Ford is now considering purchasing Nike shares for the NorthPoint Large-Cap Fund. She reviewed numerous analysts’ reports but felt that there was no clear guidance on whether or not to buy the stock. To make a better decision, she decided to perform her own analysis. In this case, we will provide Kimi Ford with a...
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...consumer purchase decision has been studied. The different approaches of influencing market positioning of the company and product through promotion have been discussed herein. The methodology incorporated includes both primary and secondary research data, pertaining to directly and exclusively collected information and views from Dove users and employees and results or analysis from credible magazines, online portals, discussion forums, journals etc. respectively. The data sampling has been thereon used to ascertain outcomes and derive results and presenting a better view of the entire branding-promotion-consumer cycle. Keywords: Branding, consumer buying behavior, brand management, Nike CHAPTER ONE - INTRODUCTION Chapter One introduction mainly concern with the background study of the project focusing to the study of the case. The concern also given to the research aims and objectives of the research as well as research question which comply with the dissertation. The focus also given to the research methodology which determines the ways of deriving the data collection and its methods for analysis where primary and secondary research being taken under consideration. The parallel focus given to the significance of the study being taken under consideration and finally ends with conclusion of the chapter one. 1.1. BACKGROUND “People get consciousness all the...
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...Case Analysis of Nike, Inc.: Cost of Capital (CON) Cost of Equity The cost of equity is comprised the cost of preferred stock and common stock. In this case, I am willing to focus on the cost of common stock because Nike did not pay any dividend after June 30, 2001(see Exhibit 4). The cost of common stock is the return needed on the stock by shareholders in which investors discount the expected dividends of the firm to ascertain its share price. To perceive this definition, let me bring you an example: Assume you want to invest on the stock of Nike, Inc. Your expected return is 12% for one year. The current share price is $42. Your benefit of the investment to purchase one share will be $5.04. If the company pay the dividend of $2.04 per share annually, the share value should increase to $45 in the next year to secure your benefit ($5.04). Therefore, the cost of equity is to cope with the risk of share price’s changes and the dividends paid by the company. There are two techniques to obtain the cost of equity as follows: 1) Capital Asset Pricing Model (CAPM) As you know, the Capital Asset Pricing Model (CAMP) establishes a rational relationship between Non-Diversifiable risk and return of all assets due to all companies can eliminate or decrease Diversifiable risk by playing on the type and return of assets. Here is the formula of CAPM: Rs = Rf + [ b * (Rm – Rf)] Where: Rs: Cost of equity Rf: Risk – free rate of return (commonly measured by the return...
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...ACCOUNTANCY FIRST SEMESTER 2014/2015 BKAF 3123 FINANCIAL STATEMENT ANALYSIS CLASS GROUP: B TUTORIAL 1: TOPIC 1 (GROUP NO. 8) Date: 23 Sept. 2014 PREPARED FOR: PROF. MADYA DR AZHAR ABDUL RAHMAN PREPARED BY: CHOY HUI NI 213209 PUN KAH MAN 213305 NURUL ‘AIN AMIRAH BINTI ROSLI 216423 1-15. Identify and discuss at least two areas of financial analysis. Financial analysis is a process to evaluate financial position and performance using financial statements. It consists of three broad areas which are profitability analysis, risk analysis, and analysis of cash flows. The common tools of financial analysis are ratio analysis and cash flow analysis. Profitability analysis is the evaluation of a company’s return on investment. It focuses on a company’s sources and levels of profits and involves identifying and measuring the impact of various profitability drivers. Profitability analysis also evaluates two major sources of profitability that are margins and turnover. Profitability analysis also focuses on reasons for changes in profitability and the sustainability of earnings. Risk analysis is the evaluation of a company’s ability to meet its commitments. Risk analysis involves assessing the solvency and liquidity of a company along with its earnings variability. Analysis of cash flows is the evaluation of how a company is obtaining and deploying its funds. This analysis provides insights into a company’s future financing implications...
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...Date: Financial Statement Analysis for Nike Nike Corporation released its financial statement for the year ended May 2014. Nike Inc. is a sports apparel manufacturing firm with diverse interests all over the world. The financial statements suggest a strong company whose stocks are not undervalued, but with the potential of exploding higher having shown sustained strengths when the Europe, American, and Chinese economies were at the brink of disaster. Despite sustaining fluctuations from the weakening of the strong economies, the company continued to register an increase in revenues in the financial period 2012-2013 and 2013-2014. It also registered an increase in its net income in the same financial periods. A firm’s income statement is a financial statement presenting the firm’s financial operations over a given period. It communicates the amount of revenues that a firm generates during the time, and the cost incurred to generate the revenue. For the case of Nike, revenues were realized during the last financial period from insurance premiums, goods sold and services rendered among other activities. In cases involving financial institutions interest and investment income, trading gains and sales were also included. Nikes revenues rose in the financial period 2013/2014. Its operating income, income before taxes, income from continuing operations increased. Consequently, its net income for the year 2013/2014 increased by about seven percent (Nike Inc.: Businessweek.com). A...
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...Up Case Study Analysis on Nike Corporation sachin bakshi Uploaded by Sachin Bakshi top 0.5% 5,126 Download DOCX Case Study Analysis on Nike Corporation 1. Introduction History Nike is a major US footwear, clothing and sportswear supplier based in Beaverton, Oregon. The company operates in more than 160 countries and employs over 44000 people across six continents. Nike’s revenue total of $20.862 billion in 2011 with total equity of $9.843 billion. Today Nike is considered the world’s leading supplier of athletic shoes and apparel and one of the world’s most famous and strongest brands. The company was founded in 1964 as a footwear distributor Blue Ribbon Sports by Bill Bowerman and Phil Knight (middle-distance runner from Portland). Initially, the company operated as a distributor for Onitsuka Tiger, the Japanese shoe maker. Most of the sales were made out of Knight ’s automobile. In 1967 the first retail store was opened. In 1972 the jump was made to manufacturing company’s own brand of athletic shoes and the “Swoosh” brand mark was created. The first self- manufactured company’s shoes used Bowerman’s “waffle” design. They became extremely popular among the runners: they had special waffle-type nubs for traction and at the same time they were lighter than traditional athletic shoes. In 1979 Nike Air technology was successfully launched and by 1980 the company already attained 50% of national athletic shoe market. In 1982 Nike started...
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...Global Executive MBA – FGV (2015) Assignment # C3 Nike, INC.: Cost of Capital Jul 31st, 2014 Case Approach As required in the instructions, the group will answer each of the questions regarding the case, along with its justifications. In addition, a spreadsheet will be attached with all the calculations regarding this case. Q1. What is the WACC and why is it important to estimate a firm’s cost of capital? Do you agree with Joanna Cohen’s WACC calculation? Why or why not? WACC is defined as the weighted average cost of capital, which is the minimum rate of return the project (or the firm) must generate in order to attend the suppliers of capital´s expectations. The implications behind WACC definition is straight simple. The cost of capital of any firm depends on the composition of the equity and debt in its funding. By composition, we mean the percentage and the costs related to each of its components, as it can be summarized in the formula below: WACC = [Cost of debt x D/D+E] + [Cost of equity x E/E+D] In this sense, to obtain a WACC of any firm (or project) we must have the cost of debt, the percentage of the debt in the firms’ funding following by the cost of equity and its percentage. Taking a look at Joanna Cohen´s WACC calculation, there are some important things missing in her analysis: * Capital Sources: Mrs. Cohen used the book values to calculate the total capital employed by Nike. However, the correct approach would be to obtain these values...
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...Situational Analysis Background to the case • In 1964 Nike Company was started. The company started importing Tiger shoes from Japan • In 1970, the demand for Nike shoes increased and the company decided to develop its own shoe manufacture. • In 1975, Nike shifted its operations from Japan to Korean and Taiwan were production costs were very low • In 1980, the company become profitable and at the same time faced a stiff competition from Reebok. The company’s market share dropped as a result of the competition. • In late 1980s, the Nike invested heavily in research and development to bring back the glory of the company. • In 1990s the company embarked on aggressive advertising, promotion and sponsorship and thus diversified into wide range of products to meet the international demands. • By 2007, Nike was the biggest sports fitness company in the world with a truly global spread of sales. Question 1 What knowledge has Nike acquired over the years? Use the definition of knowledge to move beyond the obvious This section is focused on knowledge acquisition and knowledge development has acquired over the years since its inception. According lynch (2006), knowledge is a fluid of mix of framed experience, values, contextual information and expert insight that provides a framework for evaluating and incorporating new experiences and information. It originates and is applied in the minds of knowers. In organisations like Nike, it often...
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...NIKE CASE STUDY This post is a based on a case study of Nike. The article will be discussing legal and ethical analysis and how the impact the operational/ ethical issues of the organization, the paper shall also be discussing the contribution factors and how the company’s corporate culture may have helped to minimize the unethical behavior or actually contributed to/caused the unethical behavior. The paper is also going to provide ethical decision factors, which are going to address or going to be considered in resolving the legal/ethical issues identified within this case. And finally the paper is going to provide an action plan for each of the legal/ethical issues along with recommendations that company can take to help prevent these issues in the future. Nike is one of the famous franchises in the world that sells sportswear for all ages. But is mostly famous for their athlete shoes and apparel and Nike is also one of the major manufacturers of sport equipment as well. The slogan for Nike is “Just Do It”. Nike was founded in January 1962 in Oregon, United States by Philip Knight and Bill Bowerman. Nike has somewhere around 700 or more retail outlets spread all over the world, and has approximately 45 offices only outside the United States. And it employs 30,000 people all over the world. Nike had a revenue excess of $16 billion in 2007. Nike’s factories are mostly located in Asian countries like Pakistan, India, Malaysia, China, Indonesia, Philippines, Taiwan, Vietnam...
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