FIN 534 Research Assignment
Keila Stinson
Strayer University
Dr. Scott Shaw
June 29, 2015

Financial managers at many levels have to make important investment decisions continuously. When making investment decisions the primary goal of the financial manager is to maximize the wealth of the firm’s shareholders. It is critical that effective investment decisions are made. If a financial manager makes the wrong investment decision an important opportunity is lost forever and the firm will needlessly squander substantial resources. If the decision is effective the firm will reap major strategic and operational advantages. In order to make a successful investment decision, financial managers must understand that it is a process that involves risk management, strategy, and timing. Essentially, the investment must offer a competitive advantage, have long term economic prospects, and most importantly produce an increase in the firms bottom line.
Nike is leading publicly traded company of which a financial managers decision to invest would be highly beneficial. Over the past 5 years, Nike has recorded a growth of 200% in its stock price. Leading the apparel industry, the sporting goods giant stands on competitive advantages that allow the sustainability of market leadership. Nike’s ability to innovate it’s products and effectively sell the concept to consumers has contributed to making the company a stromg world wide brand. Nike’s intense focus on customer satisfaction has also contributed o the company’s competitive advantage. Nike is currently the leading athletic apparel company in the world. In the last quarter of 2014, Nike reported a 17% increase in revenue on a constant currency basis. Nike has over 750 retail stores around the world, with continuous increasing sales in most geographic regions. The company also has joint counts with converse, Jordan, and Hurley, which act as growth drivers for the company.
Nike’s sustainable competitive advantage is highly accredited to its intense focus on customer satisfaction. The company engages with consumers directly through DTC retail stores and ecommerce. The company also uses endorsements of recognized athlete that further solidfy the brand.
When making financial investment decsions, it is important to consider the long term growth of the investment. Nike has positioned itself ahead of several opportunities for ;omg term growth. Recent reports forecast that the global sports apparel market could grow at a CAGR of 4.32% over the 2014 – 2019 period. Due to the large size and the population of it’s region, China has offered Nike considerable growth opportunities over the next few years. Additionally, the fast economic development on emerging markets portrays another trailwind of growth for Nike in future years, as people move from low to middle class.
Nike has a wide economic moat that is able to capitalize on the opportunities of its long term economic growth prospects of its emerging markets. When it comes to maximizing the bottom line, the compsny has continuously

FIN 534 Research Assignment
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References
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