Nike Report

Topics: Athletic shoe, Shoe, Nike, Inc. Pages: 8 (2984 words) Published: January 3, 2009
Nike is famous known as an athletic shoe producer. It has the biggest market share in America and a global reputation for sports equipment. For Nike, buyers never worry about the quality because it’s professional. It was born in 1972 and bought Converse in 2003. Nike commits itself to the mission statement: “if you have a body, you are an athlete”. According to the website of Nike, their goal is to help athletes on every level to reach their potential and make benefit for shareholders as well. In US, Nike owns 36% of the US market while Adidas owns 22%, they are the two top players of the industry. (G. Facro, 2007) General Environment:

Demographic is the most important factor when marketing. Because benefits draw from customers, plans to enter a new market must be customer-based. It is not wise to open an Armani in a agricultural-based town, the potential target customers can not have the taste for Armani, neither their consumption power. Moreover, demographic is not only about income of people in a certain area, but also concerned about many more factors such as the size of the population for the number or location of Nike’s stores, ethnicity and education level for choosing the right or best-selling goods to customers. Economic environment is especially important for MNEs such Nike. Although Nike is not an investment bank, it has to deal with data of a country’s GDP, CPI, etc. (G. Facro, 2007) Economic environment has impact on exchange rates, interest rates and taxation. Those rates tightly related with a MNEs’ financial performance. A global player in any industry would not neglect any economical change because different region has different situation, therefore, different plans are needed for the future development of a certain market. Furthermore, how the country’s economy is will have great impact on the confidence of customers.(B. Ashley, 2008) For example, during World War II, economy was so depressed because of expenditure of weapons are extremely high, women were tend to wear conservatively, they seldom or never wear skirts due to they did not have spare time to think about fashion. Therefore, the industry of fashion clothes would be in depression. While, decades after the war, when economy warmed up, the world had become more peaceful, women are inclined to wear shorter and purchase fashion. Consequently, the fashion clothes industry came to alive. Political factor is also important for MNEs. Due to MNEs operates on the land of another country, and the country is ruled by a certain party, moreover, the party’s economic policy would affect on the FDI directly. More open policy of foreign investor would make Nike more flexible when making decisions. Political factor would also have deal with laws. Getting involved with lawsuit would threat the reputation of Nike. Actually, Nike has got into trouble in Asia. Nike decided to treat its employees in factory the cheapest way. In some factories in Vietnam, a Nike subcontractor paid workers under 14 cents an hour. A CBS 48 hours report on the physical abuse of Vienamese workers, which supervisor beating employees with shoe parts when production problem arose. (A. Houston, 2007)In other places of Asian, bad treatment to local employee in foreign investment company is common. However, Nike is a big world famous company that in the 20 fortune companies, it badly needs a good reputation for building a good brand in the future. Socioculture is the essence of our beliefs, values and norms. With the development of globalization, people from different regions have more and more communications now. The communication among different cultures make socioculture change, the change may mix up elements from east and west. As a result, social tastes or standard of valuation change. Therefore, Nikes could produce sports outfits for people in a certain kind of region. Just like KFC in China, every season, KFC would have something new created from the R&D department...
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