Analysis On Nike

Nike, originally known as Blue Ribbon Sports, was founded by University of Oregon track athlete Phil Knight and his coach Bill Bowerman in 1962. The company initially operated as a distributor for Japanese shoe maker Onitsuka Tiger, making most sales at track meets out of Knight's car. Many top Oregon runners began wearing shoes, and the shoe's popularity grew quickly.

The company's first self-designed product was based on Bowerman's "waffle" design in which the sole of the shoe was molded by a waffles iron. A 1965 Warner Brothers cartoon featured the coyote trying to catch up the road runner in Nike (rather than the usual Acme), perhaps an inspiration for the later use of the name.

The company's profits grew quickly, and in 1966, its first retail store was opened. In 1978, Blue Ribbon Sports renamed itself to "Nike" after the Greek goddess and sponsored runner Steve Prefontaine. The sponsorship of athletes became a key marketing tool for the rapidly growing company.

By 1980, Nike had reached a 50% market share in the United States athletic shoe market. Its growth was due largely to word of mouth advertisement, rather than television or print adverts, which knight and others in the industry found distasteful. Nike's first television commercial ran in 1987. Throughout the 1980s Nike expanded its product line to include many other sports and regions throughout the world.

Nike has more than 20,000 retailers around the world and offices located in 45 countries outside the United States. In Singapore, there are several major franchisers such as Berca International Retail Distributor, Elush Retail, Wing Tai Asia Private Limited and Royal Sporting House.

Strengths:

Ð'* Nike is a global brand. It is the number one sports brand in the World. Its famous 'Swoosh' is instantly recognizable.

Ð'* Nike has been the youngest sports brand in the industry as it started in year 1972.

Ð'* The Nike name and associated trademarks have appeared everywhere from players' shirts, pants, and hats to stadium banners and walls. Aggressive advertising campaigns, celebrity and athlete endorsements, and also quality products enhance the brand. Nike allows the celebrities and athletes to create a series of apparel based on their specialties.

Ð'* Nike has always come up with ways to maintain the relationship between the customers and Nike. For example Nike provides VIP card and Royalty card to customers who patronize them often to keep the customers. Whenever there is a new campaign launching, Nike will inform the customers via email as the customers leave their email address.

Ð'* Fashion shows will be conducted when a new apparel line is being launched and Nike will always invite celebrities or well-known athletes to advertise their new product.

Ð'* Nike will have seasonal rebates and discounts to thank the customers for supporting them and also to follow the sales period (e.g. The Great Singapore Sales).

Ð'* Nike uses innovation to produce top quality athletic footwear and apparel.

Ð'* Nike has taken the lead in e-commerce by being the first to market with its e-commerce web-site. Innovative designs in footwear enabling consumers to design their own shoes online.

Ð'* Nike has a product mix also known as product assortment. Nike has the ability to capture market for different attitudes/values across cultures with product variety. Nike provides products in a wide range which cater to all gender and all age group.

Ð'* Nike applies technology in their product. For example the Nike Sphere Macro React apparel which helps to accelerate the cooling system for optimum performance.

Ð'* Nike is the only sports brand which allows athletes to run on air. The Nike Air technology was brought to Nike by inventor, Frank Rudy in 1979. He had attempted several times to sell his invention to footwear manufacturers. Then he pitched his idea to Phil Knight. Together, Nike and Frank Rudy designed and patented the first Air-Sole unit and the world was introduced to a completely new cushioning system. The Tailwind, introduced in 1979, was the first shoe to have Nike Air technology. Originally Air-Sole units were presented as inserts in shoes, and then Nike developed a way to have the unit embedded into the mid-sole.

Ð'* Nike's facilities are located throughout Asia and South America. The production facilities are located close to raw materials and cheap labor sources.

Weakness:

Ð'* Nike has many strong competitors (e.g. Asics, Adidas, Puma, New Balance and etc).

Ð'* The lack of motivation in the employees due to less incentive for the employees and also the cost reduction took place in 1998. It caused reduction in the number of employees. Nike should provide better incentive to the employees for them to perform better or send their employees for training to upgrade their skills to have better product knowledge and provide better service to the customers.

Ð'* Nike do not a regular spokesperson for them unlike Adidas has David Beckham as their spokesperson since then till now.

Ð'* Nike's products are considered to be of higher quality and as a result have higher prices relative to our competitors.

Ð'* The e-commerce is limited to USA, however, has planned to expand to Canada and international in the near future.

Ð'* Negative image portrayed by poor labor policies in its overseas factories. Most of the shoe makers in Asia are teenagers and unmarried woman aged 17 to 30. They are required to work long hour everyday and paid low. Many Nike shoe makers are forced to work overtime. A quota is set for each worker, and if they don't reach it, they have to work unpaid overtime hours to make up their slow work.

Opportunities:

Ð'* Nike tested data-driven ads from the MSN network of internet services. The data-driven ads provide for a series of headlines that scroll vertically along the web page, with each headline linked to a different URL. This unique ad format enabled Nike to promote a combination of sales and branding messages in one unified presentation.

Ð'* Recently people's health conscience has become stronger due to the aging population and the increase in death rate. Athletic shoes and apparel has become a basic in wardrobes worldwide. Therefore Nike can come up with more products to cater to the customers' needs.