NIKE Inc. principle business activities are the design, development, and worldwide marketing of high quality footwear, apparel, equipment, and accessory products. They sell their products through NIKE owned retail stores and internet sales, and through a mix of independent distributors and licensees worldwide.
Virtually all products are manufactured by independent contractor, with all footwear and apparel manufactured outside the US, while equipment products are mostly manufactured within the US.
Nike has therefore no factories. It does not tie up cash in buildings and manufacturing workers. This makes a very lean organization. Nike is strong at research and development, as is evidenced by its evolving and innovative product range. They manufacture wherever they can produce high quality product at the lowest possible price. If prices rise, and products can be made more cheaply elsewhere, to the same or better specification, Nike will move its production.
NIKE’s athletic footwear products are designed primarily for specific athletic use, although a large percentage of the products are worn for casual or leisure purposes. Running, training, basket ball, soccer, sports inspired urban shoes and children’s shoes are currently their top selling footwear categories which they expect to continue for the foreseeable future, although they do market shoes for other categories.
NIKE also sells sports apparel and accessories that covers and complements most of the range that they cover for their footwear products, in order to market it as a “collection”. They also market apparel with licensed collage and professional teams and league logos. They also sell a branded line of sports equipment and have agreements for licensees to produce and sell branded products.
Nike does have its own retailer in Nike Town. However, most of its income is derived from selling into retailers. Because the retail sector is very price sensitive margins tend to get squeezed as...
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