Business Plan on Nike

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Nike Case Analysis
Group Project
LAUREN STUTTS, DARRYL TODD, ANDREW VAUGHT

TABLE OF CONTENTS
SUMMARY REPORT…………………………………………………………………………… 1.0 INDUSTRY ANALYSIS…………………………………………………………………… 2.0 COMPETITOR ANALYSIS………………………………………………………………… 3.0 CLIENT ANALYSIS………………………………………………………………………… 4.0 ISSUE RECOGNITION……………………………………………………………………… 5.0 STRATEGIC RECOMMENDATIONS…………………………………………………….

SUMMARY REPORT

1.0 INDUSTRY ANALYSIS
The performance sportswear and apparel industry can be defined as garments that physically help athletes and active people stay cool, comfortable, and fit. Performance apparel is sold to both individuals as sportswear at retail prices and to businesses at wholesale prices, swiftly becoming one of the fastest growing sectors of the global textile industry. This growth currently exists because of most people’s lifestyle changes, customarily due to the rapid increase in technology, which in turn is leading to a prompt change in people’s preference choices of both fashion and style. Although more than one-third, precisely “35.7 %,” of the United States adult population is obese, a larger part of the United States adult population, approximately “46.9%” does strongly believe in being active, therefore, progressively purchasing performance sportswear goods and apparel, increasing sales for companies like Nike, Adidas, Reebok and Under Armor. Both men and women who participate in sports like football, baseball, basketball, tennis, volleyball, swimming, running and cycling make up the majority of this performance sportswear industry. With the general United States adult population becoming more and more active, the sports and fitness industry is strong, steady, and evolving, with “United States wholesale sales of sporting goods equipment, sports apparel, licensed merchandise, athletic footwear, and fitness equipment [totaling] $77.3 billion [in 2011], a 4.2% increase over 2010, when sales were $74.2 billion.” These statistics from the Sporting Goods Manufacturers Association’s (SGMA) State of the Industry Report (2012) demonstrate that the sporting goods and fitness industry has shown signs that it is ‘on the comeback trail,’ for it’s the “first time since 2007 that the industry’s wholesale sales reached $77 billion.” Since the 1950’s, Adidas, Puma and Reebok have been several of the bigger brands in the industry, with Nike slowly tagging along and “officially becoming Nike, Inc. on May 30, 1978,” but not really making its mark till the 1980’s. With the help of athletes like Michael Jordan, Bo Jackson and Wayne Gretzkey, in addition to “mass customization where manufacturers are producing customized, quick-turnaround gear for the consumer,” Nike is now the “world’s leading supplier in athletic shoes and [performance] apparel.” With 44,000 employees worldwide, “Nike produces around 50,000 product styles a year and sells in 160 countries.” 2.0 COMPETITOR ANALYSIS

Nike’s biggest competition today is Reebok, Adidas, Under Armor and Puma with arguably Adidas representing their largest competition. Adidas is the biggest sponsor of soccer worldwide and has been that way for many decades. Adidas’s crowing moment was when Germany, the Adidas sponsored team won the 1974 World Cup. The company continued to grow from that point on until 1996 when they equipped 6,000 athletes from 33 countries. Adidas sponsored athletes went on to win 220 medals, and 70 gold. With this kind of advertising, their sales went up by 50%. With the success from the Olympics Adidas acquired new brands of Salomon, TaylorMade, Mavic and Bonfire in December of 1997. Following that purchase of the Salomon Group, they Purchased Reebok in 2006. This was a clearly a great purchase because they rivaled Reebok and Nike as one of the dominant companies in the industry. Not only are they the world’s largest sponsor for soccer teams, they also announced an 11 year deal in 2006 to sponsor all NBA teams. Another one of their strengths would be their brand...
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