“On January 25, 1964 Nike, formerly known as Blue Ribbon Sports was founded by Bill Bowerman and Phillip Knight. It officially became Nike Incorporated on May 30, 1978”(Nike Business). During the late 70s to early 80s Nike’s initial focus was Track and Field but later expanded into various sports such as : soccer, golf, hockey and basketball just to name a few. ” In 1980, Nike entered the decade on the success of its Nike Air technology, and at the end of that year Nike completed its initial public offering (IPO) and became a publicly traded company on the New York Stock Exchange.
The reason for going public was typically viewed as a means of raising addition capital without having to borrow, and also increase the company’s profile by having the public be more aware of their company. Also by that time Nike had acquired 50 % market share in the US sports shoe market, which was more than double its closest competitor Adidas”(Nike Business). Other major competitors in the shoe market included Rebook, Converse and Fila, but in 2003 Nike acquired Converse which earned them a greater share of the market.
Nike is now the leading apparel company in the world since its expansion into the clothing market. They have a wide range of target audiences but the main focus is on people who are active and enjoy high quality athletic goods, especially footwear. “Nike also believes in the ‘big ad, big athlete’ philosophy to help market their product, and this had proven to be very successful over the years”(Nike Business). Consumers synthesize the Nike brand name with success because of the athletes who typically endorse the product are very successful.
Nike intends to grow its business from $19. 2 billion to $27 billion by 2015. Nike plans to target the emerging global middle class, leverage digital media (including e-commerce and NikeID customization programs) and create more retail experiences, both with partners and in its own stores. Nike also plans to grow its Nike affiliate brands such as Converse and Umbro, by buying back its overseas licensees and expanding aggressively overseas. Apparel will be a big part of Nike’s overall focus as they believe they can be on par with their footwear department.
Footwear will also receive some attention as Nike wants to improve their range in that department”(Nike Business). “Nike Inc. has 12 members on the Board of Director; this includes Phillip Knight who is the co founder and chairman of the board, and Mark Parker who is the CEO. The CEO is evaluated typical by the Compensation Committee. This committee considers (1) achievement against approved financial performance measures and company targets such as revenue, net income and earnings per share.
They also consider other factors such as leadership, market position, and brand strength, which are signals of company success. The CEO’s performance is then reflected in the amount of compensation he receives”(Nike Business). Nike Inc. has no major ongoing litigation During the 2011 fiscal year, Nike seemed to have a down year compared to 2010.
There was a significant increase in cash flows from their operating activities. The main reason for this was because changes in inventory increased positively by $836,000,000. This was the key factor in allowing the cash and cash equivalents to return a positive amount. Although Nike’s cash flow recorded a negative balance, they still maintained a reasonable return on investments.
