NIKE 1 Nike has always been a top choice for athletes, and it initially started with athletic footwear over 30 years ago. Nowadays, its products are popular not just among athletes but also with golfers and other sports enthusiasts. Moreover, Nike shoes and accessories have become fashionable items loved by teenagers. Therefore, Nike products are associated with fashion, elegance, and success. The beginnings of Nike were marked by these qualities.
Phil Knight, the creator of Nike, began by selling his athletic shoe designs from his car’s trunk. It is astonishing to contemplate that a brand now recognized as iconic started so modestly. However, Knight’s perseverance and commitment have yielded results. The Swoosh emblem, which has become synonymous with Nike, draws inspiration from the Greek goddess Nike.
The Swoosh, which is thought to represent the wing of the Goddess, was selected by Caroline Davidson, a student studying advertising at the university where Knight taught as an accounts professor. In 1972, this emblem was integrated into Nike shoes and has since become integral to both athletes and fashion-forward individuals. As a trailblazing brand with over 35 years of history, Nike remains globally renowned for its diverse product line including baseball cleats, sports apparel, sports bags, and other top-notch offerings.
Nike, a golf manufacturer, has made rapid advancements in its product offerings. It now provides a diverse range of items such as Nike golf drivers, shoes, bags, and more. This brand’s success story is an inspiring example of how it has transformed into a trusted and thriving name in the industry. When you choose to invest in Nike’s products, you can expect exceptional comfort, top-notch quality, stylish designs, and attractive returns on your investment. Notably founded in 1972 by Phil Knight and Coach Bill Bowerman with the aim of creating superior athletic footwear.
According to runners’ mythology, Bowerman had a strong passion for running and running shoes, and his significant contribution was the creation of lightweight running shoes with the now-iconic waffle outsole. As a result, they became the leading sports brand globally, largely due to the influence of Mr. Michael Jordan, famously known as his Airness, and their consistent marketing of innovative products. Interestingly, their success has not primarily been driven by the technical superiority of their products, except possibly in the basketball category. Nike is typically not preferred by “serious” athletes in almost every sport.
If you are a dedicated basketball player or American football player, it is probable that you wear Nike shoes. However, committed runners usually opt for footwear that suits their running style, such as New Balance, Saucony, Mizuno, or Asics (which may not have the highest sales figures). Similarly, serious cyclists tend to ride with Shimano, Sidi, or Carnac. For passionate backpackers and hikers, Asolo or other specialized brands are the preferred choice. Until recently (with the Joga initiative and its predecessors), Nike played a secondary role to adidas in the realm of soccer. Although baseball is not my area of expertise, I have observed a wide range of logos on the mound, indicating that Nike’s presence in this sport is not particularly strong.
Nike achieved great success by partnering with Agassi and luring Sampras from Sergio Tacchini. However, despite their ownership of the legendary Tiger, in the eyes of many serious Tennis players, other specialty brands remained superior. Similarly, in Golf, Footjoy and other brands were considered leaders in terms of quality and suitability, overshadowing Nike. Therefore, it appears that Nike’s success stems from their ability to attract casual athletes and offer stylish designs that can be worn beyond sports.
In my middle-school and early high-school days, it was common to see kids wearing Nike or Nike-inspired Payless knockoff athletic shoes for basketball or running. The success of NIKE relies on various crucial factors. One such factor is the establishment of brand awareness, which gives the company a significant edge in capturing consumers’ attention and market share. In today’s fast-paced society, where shoppers have limited time for comparing options, brand awareness plays a vital role.
If a well-known brand name effectively communicates the messages of quality and reliability, consumers will instinctively choose that brand, relying on the established image when they lack time to search for alternatives. Businesses are continuously trying to achieve manufacturing efficiency. Athletic shoe manufacturers must consider various factors, including labor expenses, raw material costs, shipping expenses, import tariffs, and technological advancements, in order to maintain balance. To reduce costs, the industry has started seeking overseas sources. This approach minimizes the revenue loss a manufacturer may encounter if one region experiences issues.
Favorable legislation regarding foreign manufacturing has led to a significant rise in foreign sourcing, which has benefited the footwear industry by lowering material and labor costs. However, it is crucial for footwear companies to carefully select their distribution channels in order to maintain their brand image and achieve their goals. Since retailers account for the largest portion of sales, manufacturers need to handle their relationships with them cautiously. Additionally, technological advances are increasingly shaping the footwear industry.
Companies have been able to shorten their design to distribution cycle significantly using computer-aided design (CAD), reducing it to just a few months. New technology, known as electronic data interchange (EDI), has enabled the development of quick-response programs that connect retailers with manufacturers. This allows retailers to maintain the correct inventory at the right time. After a sale, electronic point of sale scanners promptly gather transaction information such as price, product, and size.
Nike faces threats from competition in the athletic shoe industry, which is gradually becoming a global oligopoly.
Numerous obstacles exist for new entrants aiming to gain a significant market share. Nike utilizes economies of scale, providing them with cost benefits over potential competitors. Modern athletic shoes require advanced technology, requiring new firms to make substantial capital investments in shoe factories and research and design for popular athletic footwear creation. Nike’s corporate strategy incorporates forward vertical integration by establishing discount factory outlet stores in rural regions and retail stores in urban shopping hubs.
Monolithic athletic manufacturing companies leverage economies of scale by investing large sums of money in product endorsements and advertising, spreading the high cost across their entire annual sales. As a result, their aggressive marketing campaigns establish their products as well-known household names, making it difficult for new companies to compete. Athletic shoe manufacturers make strong efforts to distinguish their products from others on the market. For instance, Nike promotes their shoes aggressively by highlighting the visible air chamber in the sole. The substantial capital requirements serve as a significant obstacle for new firms entering the industry.
An established manufacturer of dress shoes can easily transition into the athletic shoe industry by reconfiguring their manufacturing plant. However, gaining access to distribution channels for athletic shoes can be moderately challenging. The level of difficulty largely depends on the status of the entering firm. For startup companies, securing shelf space at major shoe retailers is extremely difficult. Conversely, if a firm is already operating in the dress shoe industry and is venturing into the athletic shoe market, they can leverage their existing connections to conveniently access athletic shoe distribution channels.
Switching costs in the athletic shoe industry are minimal due to the frequent replacement and relatively low cost of shoes. While moderate cost disadvantages exist regardless of scale, many customers exhibit brand loyalty and are hesitant to try new athletic shoes. Aggressive marketing campaigns have not only increased brand and product name recognition, but government policies regarding factory safety laws also serve as low entry barriers for all manufacturers. Furthermore, the threat of retaliation is a factor to consider.
The athletic shoe industry faces a significant risk of retaliation. When a new and smaller competitor tries to increase its market share by offering their products at very low prices, larger computer firms have the advantage of being able to handle the losses incurred by eliminating the new competitor. Although the profit potential for athletic shoe manufacturers is protected from new entrants by imposing high entry barriers, existing manufacturers must still be cautious of other shoe companies seeking to enter the athletic shoe industry. This creates intense rivalry among current firms.
In the athletic shoe industry, corporations depend on each other. When one firm makes a competitive move, it affects competitors directly, leading to retaliation or counterfeits. A prime example is Reebok expanding its women’s walking shoe line, which inspired other firms to do the same. The number of competitors remains constant due to high entry barriers, contributing to intense competition between existing firms. Manufacturers closely monitor each other and respond accordingly to match a competitor’s action. While the industry’s growth rate remains steady, the pursuit of global market dominance looms large.
Nike and Reebok have less global dominance compared to the U.S, resulting in increased global competition. Market share is influenced by the characteristics of the products. The recognition of the brand itself is enough to sell athletic shoes. Higher market shares provide greater advertising opportunities, leading to increased brand recognition. Athletic shoe manufacturers consistently strive to reduce fixed costs. To achieve cost reduction, many shoe manufacturers assemble their athletic shoes in countries with cheaper labor and minimal tax laws. As a result, manufacturing savings are passed on to the consumer, further intensifying competition.
Capacity has a minimal effect on rivalry as most firms have the ability to produce the required quantity of athletic shoes. This capability to meet demand leads to a saturated market as many firms produce in excess and lower the selling price. Profit potential is not greatly affected by low exit barriers and diversity among competitors. If the athletic shoe industry becomes unprofitable, firms can shift to other shoe markets. Moreover, there is little diversity among firms as they all imitate each other. The competition among existing firms is intense, with weaker firms being easily acquired by aggressive competitors.
The profitability of the company may be significantly impacted due to limited bargaining power of suppliers in the athletic shoes industry. This is because the materials used, such as rubber, leather, and nylon, are considered commodities whose value increases during manufacturing. Consequently, suppliers have minimal influence on profit potential. Moreover, athletic shoes are designed to enhance comfort and personal safety during physical activity, making them distinct from substitute products or services. Such substitutes could include different types of footwear or even choosing not to wear any shoes at all.
The athletic shoe industry has a significant number of consumers who specifically choose to wear athletic shoes for their comfort. These individuals find that comfortable dress shoes or sandals offer the same level of comfort with minimal effort required to switch between them. However, when it comes to using athletic shoes for sports, there are fewer alternatives available. Therefore, the threat of substitute products is moderate and can have a moderate to high impact on the industry’s profit potential. In terms of other stakeholders’ relative power, the U.S. government has limited influence over the athletic shoe industry as many manufacturers operate outside the United States where U.S. laws do not apply.
In order to decrease the influence of other stakeholders, corporations strategically position their plants globally. The profit potential is mainly influenced by market demand. Hence, the impact of other stakeholders on profit potential is relatively moderate or low. Overall, the athletic shoe manufacturers’ profit potential is protected by high barriers to entry for new competitors, although existing manufacturers need to remain vigilant of potential new entrants in the industry.
The competition among current companies is intense, as aggressive competitors can easily take over weaker firms. This can significantly affect the potential for making profits. The influence of buyers’ ability to negotiate on profit potential is moderate. Suppliers have limited ability to negotiate and their impact on profit potential is minimal. The threat of alternative products is moderate and can have a moderate to high impact on profit potential. The relative power of other stakeholders to influence profit potential ranges from moderate to low.
The overall profitability in the industry is relatively low to moderate and has the potential to increase through future consolidation. This is mainly because of significant competition, the availability of many substitute products, and limited bargaining power for buyers.
Regarding labor practices, Nike has become a symbol of labor exploitation due to activists and student organizations. These groups hold Nike responsible for the poor working conditions in its factories in developing countries, as well as for underpaying workers, employing child labor, and disregarding workers’ basic rights. Nike frequently faces conflicts with labor unions, including a recent dispute with a union representing factory workers in Mexico. Consequently, the public associates Nike with sweatshop labor and accuses the company of prioritizing profit over human rights.
When it comes to advertising, Nike allocated over $1 billion in 1999 for advertising, sports marketing, and promotions. Although Nike’s advertisements were popular, some of their strategies were considered controversial. Feminist groups criticized Nike commercials that emphasized winning at any cost and portrayed women in submissive roles, accusing the company of degrading women.
While Nike’s commercials are typically innovative and imaginative, they can also be seen as a drawback to the company’s reputation. One concern is the high cost to consumers, as Nike has been accused of excessively increasing prices on their products to compensate for advertising and sponsorship expenses. The public believes that Nike overcharges its customers and should reduce prices. Despite this, Nike remains a global leader in the athletic footwear and apparel sector, with a concise yet impactful mission statement that reflects their success.
Nike presents their company to the world, showcasing their “inspiration and innovation” and their dedication to serving everyone. Nike strives to be at the forefront of technology and innovation, making them the clear market leader. By offering a wide range of products, Nike has a strong competitive advantage. They excel in market share, brand image and recognition, and research and development.
I have determined that Nike has opportunities to grow its market share through intuition and analysis. To achieve this, I suggest implementing strategies such as horizontal integration, global expansion, European concentration, and segmented marketing to target different generational demographics. The main objective is to utilize segmentation techniques to develop specific markets and increase market share. Nike, Inc. is a renowned marketer of sports apparel and athletic shoes. This American manufacturer has transformed into a multinational enterprise due to its effective marketing strategy and positive brand image.
In order to maintain its brand image, Nike invests heavily in advertising and brand promotion, as well as product sponsorship with professional athletic teams, celebrity athletes, and college teams. Its distinctive logo and slogan, “Just do it,” are key elements of the brand. Nike competes with various sports fashion brands and produces goods for a wide range of sports.
Due to the absence of any significant competitor brand, except for Adidas, Nike has gained global popularity in the fields of sport and sports fashion. Although Nike is the industry leader in athletic footwear at both national and global levels, its performance has been mediocre in the last two years (Hoover’s, Inc. 1). The company needs to address three main concerns in order to refine its marketing strategy and improve its performance. These concerns include the dispute with Foot Locker, a prominent athletic shoe retailer; the strategies for dealing with outlets such as Nike Town stores, retail Web outlet, and discount outlet retailers; and the overall retail strategy focusing on product and target market issues. The resolution of these concerns requires the development of strategic responses by the company.
Thus, each of the three areas establishes an objective in Nike’s marketing strategy plan. This research has developed two marketing strategy options for each objective for the company to consider including in its marketing strategy plan. Capture 2 1 i think passion is for the key of Walt Disney Walt Disney was a visionary. He had ambitious dreams and turned them into reality. Walt Disney himself is evidence that dreams can be realized. His example demonstrates that fulfilling dreams requires more than mere wishes.
Walt Disney’s “star” was Mickey Mouse, and through his vision, planning, and hard work, Walt transformed countless dreams into reality. While many perceive Walt Disney as an animator and the creator of Mickey Mouse, he should be more accurately acknowledged as an entertainer. This does not imply that he sought to be the focal point of attention, but rather that he aspired to invent something that would captivate an audience and evoke laughter. Walt possessed talent and honed a sharp business acumen, becoming attuned to the public’s interests and desires.
The combination of his $40 and a few drawing tools enabled him to transform into a film studio that produces popular cartoons, feature length animated features, and live action movies. Walt Disney’s insistence on creating an amusement park that surpasses all others led to the creation of Disneyland, Walt Disney World, and eventually other Disney theme parks globally. This dream originated from his childhood in Kansas City, where he watched Fairmont Park from behind the fence, yearning to join but lacking the necessary funds for entry.
A parent in the 1930’s, Walt would take his children to amusement parks. However, he was not entertained and believed he could improve upon them. By 1937, while attending the premiere of Snow White, Walt shared his dream with Wilfred Jackson that one day he would create “a park for kids, a place designed specifically for children.” In 1940, he presented a plan to exhibit Disney characters in their imaginative environments at a park located opposite the Disney studio in Burbank. The concept of an amusement park expanded in Walt’s imagination as he toured various attractions across the United States and Europe.
He visited various types of amusement venues such as county fairs, state fairs, circuses, carnivals, and parks. He was unhappy with poorly maintained operations and unfriendly ride operators. However, he had a great experience at Tivoli Gardens in Copenhagen, which he found to be clean, lively, and staffed with friendly employees. This inspired him to believe that a successful amusement park in the United States would need to offer a pleasant experience for families, with good entertainment, cleanliness, and amiable staff.
In 1948, he shared his concept for a modest amusement park with close friends. The park would include a central village with a town hall, small park, movie theater, railroad station, and small stores. Additionally, there would be outer areas featuring a carnival section and a western village. Over time, he expanded the concept to include rides such as spaceships and submarines, a steamboat, and exhibition halls.
By 1952, he settled on naming the park “Disneyland” and established Disneyland, Inc. as the company responsible for its development. Despite opposition from his brother Roy and skepticism from bankers and amusement experts who predicted failure, Walt decided to pursue the idea independently of his studio’s organization.
Eventually, Roy agreed to assist and the Disney studio joined the initiative. In 1953, Walt intelligently devised a plan to merge television production with park development. The Disneyland television program on ABC served a dual purpose. It not only marketed the new park through a weekly program but also formed a partnership with the network, which invested half a million dollars and provided significant loan guarantees in exchange for a 35% ownership stake in Disneyland Park. Simultaneously, Walt enlisted the Stanford Research Institute to evaluate the economic potential of Disneyland (which was determined to be profitable) and identify the optimal location (Anaheim).
They began construction in July, 1954, and exactly one year later, on July 17, 1955, Disneyland was inaugurated. Within a span of 7 weeks, a million individuals had already visited Disneyland, leading it to become one of the largest tourist attractions in the United States. Attendance surpassed predictions by 50 percent and guests were spending 30 percent more than anticipated. Walt combined his talent and understanding of people’s desires with intensive hard work. In present terms, he could be considered a “workaholic.” However, his motivation stemmed from a dream rather than guilt or insecurity. As he revealed to an interviewer in 1955, “Anyone can realize their dreams.”
It takes a dream, faith in it, and hard work. However, this statement does not fully capture the experience because it is so enjoyable that the work feels unnoticed. At a dinner party held at Herb Ryman’s house in 1960, someone remarked that Walt Disney could become President if he desired. Walt’s response was, “Why would I want to be President of the United States? I am the King of Disneyland!” After spending 37 years in Hollywood, Walt Disney had achieved tremendous success and endured numerous challenges. Ultimately, he had created something that exceeded even his own wildest dreams.
Disneyland has brought Walt financial stability, and now Michael D. Eisner, chief of Walt Disney Co., is preparing for a major battle. Eisner faces numerous challenges, including former friends turned enemies, struggling theme parks, low television ratings, and a hostile takeover bid. However, experts and analysts caution against underestimating the resilience and success of Disney’s chairman and CEO, who has proven to be a fierce corporate warrior throughout the years.
After several years of weak corporate profits, it is worth noting that the 61-year-old Eisner recently achieved a remarkable quarter, leading the studio once again to top the industry in domestic box office in 2003. According to Jack Plunkett, president of Plunkett Research LTD, a market research firm based in Houston, despite facing criticism, Eisner should not be underestimated. Plunkett describes Eisner as a determined and forceful leader who consistently achieves his goals. Since Comcast Corp. launched its unexpected $54 billion hostile takeover bid for the empire Eisner has governed for almost two decades, he has publicly maintained an optimistic demeanor. At a recent investor conference at Walt Disney World in Orlando, Fla., he remained business-as-usual and referred the offer to his corporate board for analysis and discussion. When asked by an analyst about potential Disney acquisitions in the future, Eisner jokingly replied, “Acquisitions? We’re buying Comcast.”
With a campaign to vote him off Disney’s board of directors in the upcoming shareholders meeting gaining momentum, Eisner is preparing for what many consider to be the most challenging battle of his corporate career. However, he faces this fight amidst mounting troubles, such as Comcast’s $54 billion all-stock offer that has placed Disney’s performance, particularly its weaknesses like ABC, under intense scrutiny. Roy E. Disney, nephew of company founder Walt Disney, is spearheading the movement to remove Eisner, receiving a significant boost when fund adviser Institutional Shareholder Services recommended shareholders to exclude Eisner from the board. The recent failure to extend its lucrative agreement with Pixar Animation Studios is attributed by some to Eisner’s management style and strained relationship with Steve Jobs, the head of Pixar. Additionally, the Disney-owned ABC broadcast network continues to struggle in ratings against CBS, NBC, and Fox. The network has had limited success with breakout hits in recent years, with reality programs such as “The Bachelor” being exceptions. Furthermore, theme park attendance has negatively impacted Disney’s financial performance since the 9/11 terrorist attacks on the United States in 2001, albeit showing some signs of improvement. Roy Disney expressed his belief that animation, theme parks, and ABC are among the vulnerabilities that have made Disney an attractive target for takeover bids like the one proposed by Comcast.According to media analyst David Joyce from Guzman and Co., the Comcast bid brought attention to the decline in performance in various Disney operations. However, Joyce also noted that there are certain factors, such as terrorism and economic recessions, that Disney has no control over. Disney has already taken steps to defend against takeovers by hiring the law firm Wachtell, Lipton, Rosen & Katz, which specializes in formulating defense strategies. Disney’s first-quarter earnings exceeded Wall Street’s expectations by 10 cents a share and its stock price has reached a two-year high, increasing by 16 percent since the Comcast offer. Any future bids will need to surpass the current one on the table. The main issue lies in the stagnant value of Disney’s stock, which has remained unchanged for more than two years. However, Disney’s movie division has been a major source of success, dominating the industry and grossing over $1 billion in ticket sales in eight out of the past ten years. Popular releases from Disney’s studio include “Finding Nemo,” “Pirates of the Caribbean: The Curse of the Black Pearl,” “Bringing Down the House,” “Freaky Friday,” and “Brother Bear.”The box office successes have resulted in significant profits in the home video sector, which Disney has consistently dominated. This is particularly true during the recent DVD boom in the industry. Overall, first-quarter studio revenues increased by 57 percent to $3 billion, contributing to a total company revenue of $8.55 billion compared to $7.7 billion the previous year. The factors influencing these results include high sunk costs, excessive research and development, constant upgrades, substantial investments, high risk, a limited range of target audience groups, poor management, cultural imperialism, and competition within media networks.
