.... Case 3: Nike MaxSight Contact lenses: Seeing a Need 1. To identify different markets and products for MaxSight, Nike has used an analysis of consumer needs bases on the present products in the market. In fact, there were some kinds of contact lens but none of them reach consumer needs, which is a contact lens can protect the eyes as a pair of sunglasses. Nike has given MaxSight to take full advantage of visual acuity and is suitable for ones need or don’t need prescription. Athletes and sports participants are likely to be the largest segments, but individuals who have active lifestyle also play an important role to adopt product. 2. Elements of the marketing mix for Nike MaxSight currently are 4P : a. Product: two tints including grey-green and amber-tinted contacts. b. Price: $60 for a two-month supply c. Promotion: customers are able to purchase products only when they get examination and fitting. d. Place: MaxSight contact lens came out at the time other products cannot satisfy customer’s need and the public way Nike gives information. According to 4P analysis, Nike has a very good product with lots of advantages which addresses customers’ satisfaction. They also get on time promotion, when there was no such contact lens exit. So, base on marketing mix Nike has already undertaken, I think Nike should reduce the price just a little bit. $50 is more affordable than $60. Because the lowest price is $25 and the most expensive...
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...NIKE‘s CSR Challenge 1-In referring the opening profile and the closing case for this chapter, discuss the challenges regarding corporate social responsibility that companies in the apparel industry face in its supply chains around the world? 2005 Nike reports the followings social and environmental problems in their factories located in Asia: -Abuse treatment to their employees for example: they prohibited their employees to use the toilet and drink water. -denied days off. -Force to work more than sixty hours a week and those who refused accomplish this were punished. - 25% of the employees of the factories were paid less than minimum wage. 2-Discuss the meaning and implications of the statement by a NIKE representative that “consumers are not rewarding us for investments in improve social performance in supply chains.” One of the most important changes Nike should make in their working conditions should be based on “The responsibility of one is to work toward the accountability of all.” all business should respect the rights of their workers such as paid time off, paid overtime, time for lunch, and also breaks ; When the working conditions are good and the rights of the employees are respected this will increase productivity. 3-What does it means to have an industry open-system approach to social responsibility? What parties are involved? Who are the stakeholders? The fact that business organizations are open systems means that although businesses must make a...
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...Case Nike Nike is indisputably a giant in the athletics industry. But the Portland, Oregon, company has grown large precisely because it knows how to stay small. By focusing on its core competencies—and outsourcing all others—Nike has managed to become a sharply focused industry leader. But can it stay in front? What Do You Call a Company of Thinkers? It's not a joke or a Buddhist riddle. Rather, it's a conundrum about one of the most successful companies in the United States—a company known worldwide for its products, none of which it actually makes. This begs two questions: If you don't make anything, what do you actually do? If you outsource everything, what's left? A whole lot of brand recognition, for starters. Nike, famous for its trademark Swoosh™, is still among the most recognized brands in the world and is an industry leader in the $74.2 billion U.S. sports footwear and apparel market. And its 33% market share dominates the global athletic shoe market. Since captivating the shoe-buying public in the early 1980s with legendary spokesperson Michael Jordan, Nike continues to outpace the athletic shoe competition while spreading its brand through an ever-widening universe of sports equipment, apparel, and paraphernalia. The ever-present Swoosh graces everything from bumper stickers to sunglasses to high school sports uniforms. Not long after Nike's introduction of Air Jordans, the first strains of the “Just Do It” ad campaign sealed the company's reputation as a megabrand...
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...What ethical issues faced by MNC's in their treatment of foreign workers could bring allegations of misconduct in their operation? Answer: The ethical issues faced by MNC's in their treatment of foreign workers are given below: a. Employing child labor b. Using workers overtime c. Paying unfair salaries d. Treating inhumanly with workers e. Providing poor working condition for the employees f. Women discrimination g. Unfair business with minorities such as older worker, religious minorities h. Unlawful business practice Would the use of the third party independent contractors insulate MNC's from being attacked? Would that practice offer MNC's a good defensive shield against charges of abuse of “their employees”? Answer: Human rights issues is one of the most important issues in this globalization era. There are no universal or International Standard of what is right or wrong because of the cultural differences among the countries. For example, some country appreciate child labor but some country has a strict law of child labor. So when a business organization conducts business in another country, they are trying to take advantage of that country. The reason for an organization to do business beyond the border is to maximize their profit. Sometimes some MNC does offshore or outsourcing to get the job done. So some MNC goes to the third world country to gain economies of scale. For example Apple Inc. Products are produced by a third party independent manufacturer...
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...Nike Case Questions 1. In the United States, what is Nike’s: a) Brand image, and b) sources of brand equity? a) In the United States, Nike’s brand image is built on being a high-performance, innovative and aggressive brand. The company associates the brand with top athletes through sponsorships. Since inception, Nike has placed performance as a top priority for the brand. Through designing high performance shoes and apparel, as well as sponsoring high-profile athletes and teams the brand has developed a reputation as being high-quality. Nike’s high tech products have allowed the brand to be perceived as innovative in the minds of consumers. Nike is continually introducing new products to the sports market as a way to improve performance. Through high performance and innovation, Nike has been branded as arrogant as the company has a high regard for the spirit of competition and portraying a rebellious spirit. b) Source of Brand Equity Description Logo Nike’s logo is a check mark. It is commonly referred to as the “swoosh.” As of 2000, 97 percent of American citizens recognize the brand logo. Nike has been seen as aggressive in the overabundance use of the “swoosh” with the symbol being placed on shoes, jerseys, hats, billboards and soccer balls across the globe. This ubiquity has been criticized as diluted the “swoosh”. Advertising Advertising has allowed Nike to portray its rebellious spirit and “nasty boy” image. However, this approach in advertisement has...
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...Nike Inc. Case 1. What is the WACC and why is it important to estimate a firm’s cost of capital? WACC is weighted average cost of capital, which is the expected rate of return on average from all the company’s existing debts and securities. It takes into account all different types of financing in the company’s capital structure. The reason it is important to estimate WACC is because it measures what it costs the firm to take on a project based on its current Debt and Equity mix. When the firm decides to take on a project it needs to discount the future cash flows of the project by the company’s WACC to determine whether or not to take the project on. High WACC generally indicates more risk since the company pays more for its capital. It is generally used by managers to decide if a new investment project is worthwhile. All developing firms require more capital to accommodate more demand. As a result, the firm needs more capital. Capital is raised through debt, preferred stock and common equity. Debt is acquired either through bonds or through borrowing from banks. The common equity form of the capital can be raised through either retaining the earnings and reinvest in the future company development or it can be raised through issuing common stock. The preferred stock is the least favorite method to raise capital. While interest payments provide the earnings for holders of debt, the cost of equity is the opportunity cost demanded by investors for making the funds available...
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...NIKE INC. CASE 14 Philip Chen, Choco Huang, Ariel Chou, Matt Krieger In this report we analyzed Cohen’s approach in calculating WACC. After observing how Cohen derived his figures we came up with our own WACC, terminal value, and EPS. Cohen broke down his calculations into five parts 1) Single or Multiple Costs of Capital 2) Proportion of capital from debt and equity 3) Cost of Debt 4) Cost of Equity 5) WACC In part one; we disagreed with Cohen where he decided to value the company as a whole instead of valuing each division separately. Since Nike is a multidivisional firm Cohen should of aggregated the values of the individual divisions and calculate a different cost of capital for each one. Since the exhibit 1 and 3 provide a consolidated income statement and balance sheet it is difficult to segregate the divisions. Therefore when we did our own calculations we used Cohen’s assumption of a single cost of capital. In part two Cohen allocated the weight of debt and equity based on book value. This method is incorrect because the allocation should be based on market value. The table below is our calculation of capital allocation. Table 1.1 | Price: Exhibit 4 | shares outstanding | Total | % of Capital | Debt | 95.60 | 271.50 | 25,955.40 | 69.43% | | | | | | | Price: Exhibit 2 | shares outstanding | Total | % of Capital | Equity | 42.09 | 271.50 | 11,427.44 | 30.57% | | | | 37,382.84 | 100.00% | Part 3 is the cost...
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...have been aware the risks of doing global business. Lessons and experience have been learned from the past and multinational companies are more cautious to keep a good corporate citizenship image. This essay will introduce the international process of Nike, In., one of the biggest multinational corporations in footwear and apparel industry, and steps the company has been adopted to become a not only successful but also responsible international corporation. II. About Nike, Inc. Nike, Inc. is an American multinational organization that is engaged in designing, developing and selling footwear, apparel, and other services. It is one of the biggest suppliers of athletic shoes and apparel and a major manufacturer of sports equipment in the world. The company was founded in 1964 by Phil Knight and Bill Bowerman as an importer and distributor of Japanese specialty running shoes, which were cheap and high quality. Different with other companies, who manufactured their own shoes in high-cost countries such as United States and Germany, Knight’s company (called Blue Ribbon Sports-BLS) achieved initial success very quickly. In the early 1970s, the company partnered with Onitsuka and started to design and subcontract its own shoes. Nike, Inc. was officially established in 1978. The mission of Nike’s international business is to market and sell high quality footwear, apparel, equipment and accessory products to the world. As of fiscal 2011, Nike’s...
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...Solutions for End-of-Chapter Questions and Problems: Chapter Two 1. What are the differences between community banks, regional banks, and money-center banks? Contrast the business activities, location, and markets of each of these bank groups. Community banks typically have assets under $1 billion and serve consumer and small business customers in local markets. In 2006, 93.4 percent of the banks in the United States were classified as community banks. However, these banks held only 12.4 percent of the assets of the banking industry. In comparison with regional and money-center banks, community banks typically hold a larger percentage of assets in consumer and real estate loans and a smaller percentage of assets in commercial and industrial loans. These banks also rely more heavily on local deposits and less heavily on borrowed and international funds. Regional banks range in size from several billion dollars to several hundred billion dollars in assets. The banks normally are headquartered in larger regional cities and often have offices and branches in locations throughout large portions of the United States. Although these banks provide lending products to large corporate customers, many of the regional banks have developed sophisticated electronic and branching services to consumer and residential customers. Regional banks utilize retail deposit bases for funding, but also develop relationships with large corporate customers and international money centers. ...
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...CASO: NIKE 1. ¿Cuáles han sido los factores de éxito de Nike? Podemos distinguir los siguientes factores: * El diseño de calzado es innovador para atletas profesionales y muy orientados a la moda. * El hecho de realizar compañas publicitarias con grandes deportistas impacta a la gente detectando así pirámides de influencia en la elección de la marca siendo eficaz y eficiente para la empresa. * Utilizan el deporte como una estrategia de potenciar la capacidad física, mental y psicológica de la marca, motivando e incentivando a las personas a hacer cosas que quizás no harían pero que con sus productos si lo podrían ya que están abalados por los deportistas más destacados. * Un precio muy competitivo, en relación a su calidad. * Nike ha intentado crear productos destinados a las diferentes modalidades del deporte como puede ser fútbol, baloncesto, atletismo, etc, donde tiene un alto porcentaje de mercado. * Nike adaptó sus campañas a las exigencias del mercado europeo considerando a deportes característicos como el fútbol. 2. ¿En qué sentido es vulnerable esta empresa? ¿A que debería prestar atención? La empresa Nike es vulnerable al expandirse en cualquier lugar del mundo, debido a que no se percata que las culturas y costumbres son diferentes, que la percepción de los productos hacia el consumidor puede variar. Otra característica de vulnerabilidad es la planificación y creación de estrategias las cuales pueden ser repetidas por...
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...Hitting the Wall: Nike and International Labor Practices CEO Phil Knight took a different approach than competitors when it came to his original strategy for Nike. One of the noticeable differences was the outsourcing of all manufacturing; no in-house production or dedicated manufacturing lines. None of the products or manufacturing would be done within the United States, meaning there were no physical assets. The plan to outsource specifically targeted low cost parts of the world. With the amount of money saved by outsourcing they could pour it all into marketing the brand. Celebrity endorsements were used, but in a different fashion because they only used high profile athletes as a representation for Nike. While this strategy was unique and worked well for a while, in the 1990’s problems began to surface. Jeff Ballinger’s main concern was the large gap in wage rates between developed and developing countries. As part of his research he interviewed workers and noted their dissatisfaction with the conditions they worked under. Ballinger believed Nike was more focused on competitive pricing that it led to mistreating workers and expecting unrealistic production. He was concerned Nike employees were not being paid enough in order to fulfill everyday necessities. Ballinger’s work went fairly unnoticed until Indonesia had a sweep of strikes that matched up with his arguments of the company. Nike’s response to the criticism and negative publicity was the contract factories were...
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...Nike, Inc: Cost of Capital 1. What is the WACC and why is it important to estimate a firm’s cost of capital? * WACC stands for Weighted Average Cost of Capital, it is the weighted average of the costs of debt, preferred stock, and common equity a company has. Using the weights of each of its components, and the component costs, WACC intends to find out whether an investment will be profitable to the company. It’s important to estimate the firm’s cost of capital in order to know if an investment or merger will benefit the company. WACC helps one understand how to balance between debt, stock, or retained earnings, so that a company makes the most profit, while at the same time maintaining the most convenient amount of risk. Do you agree with Joanna Cohen’s WACC calculation? Why or why not? * I do not agree with Joanna Cohen’s WACC calculation because first of all, she should have used the market value, not the book value for the calculations. The book value is not an accurate representation of the company’s value and does not include the risk involved within the company’s transactions. * To calculate the market value of equity, * Stock price x number of shares outstanding 42.09 x 271.5 = $11,427.44 Secondly, Cohen should have discounted the value of long-term debt on the balance sheet. To do this, one first modifies the coupon rate according to the months that have passed. Since it is paid semi-annually, and its payments are done on the 15th...
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...DIRECCIÓN DE OPERACIONES CASO NIKE FTS http://www.brandemia.org/nike-la-historia-del-logo-mas-famoso-del-mundo 1. ¿Cómo definiríais la estrategia de negocio de Nike? ¿Cuáles son sus elementos clave? Nike es una reconocida firma de una empresa multinacional estadounidense dedicada al diseño, desarrollo, fabricación y comercialización de equipamiento deportivo: ropa, calzado, accesorios, etc. La multinacional es conocida por la producción a través de contratistas y teniendo como instalaciones propias únicamente situadas en Estados Unidos y china. La mayoría de las fábricas están situadas en Asia, incluyendo Indonesia, China, Taiwán, India, Tailandia, Vietnam, Pakistán, Filipinas, Malasia, y la República de Corea. Las principales de donde proceden la gran mayoría de la producción son China, Vietnam e indonesia. Nike cuenta con varías líneas de negocio, entre ellas Footb all Team Sports (FTS) con la que puedo percibir una factible oportunidad de incremento de ventas si cumplia el objetivo de disminuir el tiempo empleado por los clientes en efectuar pedidos. Nike es una firma de ropa, calzado y complementos deportivos con varias líneas de negocio. Football Team Sports (FTS) es una de ellas, donde la compañía detectó una oportunidad de aumento de ventas si lograba disminuir el tiempo que los clientes empleaban en realizar sus pedidos. Nike producía la mayoría de su ropa y calzado en más de 50 países a través de contratistas, contando solo con instalaciones propias...
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...Nike has a long-term key marketing strategy which focuses on basketball, football, running, women’s fitness, men’s training, and sport culture. In order to achieve this goal, Nike did a number of divided marketing strategy as below: In 1962, Nike was known as Blue Ribbon Sports originally and focused on providing high-quality running shoes designed for athletes. It believed the preferences of a small percentage of top athletes influenced the product and brand choices of others. So it chose the runner Steve Prefontaine and signed up Michael Jordan in 1985 as its spokespersons. In 1988, Nike spent $20 million on its first ads – “Just Do It” which challenged athletes to chase their goals and expressed its attitude of self-empowerment through sports. As Nike expanding to Europe, it just focused on soccer and sponsored youth leagues, local clubs and national teams which brought Nike’s image to Europe. In 2007, Nike acquired a British company who made soccer-related foot wear, apparel, and equipment. This action promoted Nike to the uniform supplier of 100 soccer teams in the world. During 2008, Nike focused on Summer Olympics held in China. It sponsored high-profile players, several teams and athletes that grew its revenue by 15%. Furthermore, Nike invited Tiger Woods, the superstar from golf areas to endorse the company and used him to help build the consumer relationships by using the website Tiger Web Talkback session. Also, Nike has aligned with Maria Sharapova,...
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...Caso 3er Parcial Nike, Inc: Cost of Capital Equipo número 3 Karen Saavedra A01128884 Margarita Menéndez A0112 Ana Karen Jáuregui A0112 Diana Reyes A0112 INTRODUCTION History and Background of NorthPoint Group Founded as an importer of Japanese shoes, Nike has grown to be the world's largest marketer of athletic footwear, holding a global market share of approximately 37 percent. In the United States, Nike products are sold through about 22,000 retail accounts; worldwide, the company's products are sold in more than 160 countries. Both domestically and overseas Nike operates retail stores, including Nike Towns and factory outlets. This is a mutual fund management firm that invests money mostly in Fortune 500 companies. Its top holdings include Exxon mobile, General Motors, McDonalds, 3M and other large-cap. The stock market declined over the last 18 months. NorthPoint large-cap Fund performed extremely well, actually, in 2000, the fund earned a return of 20.7% even as the S&P 500 fell to 10.1%. At the end of June 2001, the fund`s year to date returns stood at 6.4% versus -7.3% for the S&P 500. It was considered the athletic shoe manufacturer. Since 1997, its revenues had landed at around $9 billion dollars. On the other hand, the net income had fallen from almost $800 million to $580 million. The market share in U.S. athletic shoes had fell from 48% in 1997 to 42% in 2000. This was caused by the adverse effect of a strong dollar...
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