Preview

five force model for woodland

Powerful Essays
Open Document
Open Document
1600 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
five force model for woodland
PORTERS FIVE FORCES ANALYSIS

Nike Brief History
Nike has one mission statement: To carry out the legacy of innovative thinking left by the founding members by developing products that enable athletes of all abilities to maximize their potential while beating competition and creating value for shareholders. Nikes headquarters are located in Beaverton, Oregon in Portland and the company operates in more than 160 countries all over the world with more than 30,000 employees across all six continents (Nike 2011).
Nike Today
Nike today is the largest manufacturer of athletic footwear, clothing and equipment globally by sales with 2011 revenues of more than US $23billion ahead of closest rivals Adidas, Puma, K-Swiss and Under Armour which it competes with in the sportswear market. Nike has been steadily increasing its market share of the sportswear market from an initial 3.7% in 2006 to 4.6% in 2011, even though this declined in 2009. Many analysts expect this market share to reach about 6.3% by 2017. The company also expects to make big gains from the London 2012 Olympics for its footwear division (MSN money 2012)
Figure 1: Nike Apparel Market Share

Figure 2: Nike Footwear Market Share

However even though Nike is expected to attain big gains from the London 2012 Olympics, its competitors are not sitting still and letting Nike take any such gains. Adidas, which is one of main rivals of Nike, has invested more than £100million in the Olympics to not only boost its profile, but also close the market share gap with Nike. Adidas has already posted better sales and profit results in 2012 compared to Nike. In fact, Adidas, also the second largest apparel manufacturer in the world after Nike, has been outperforming Nike since 2006 (Torry 2012).
Below, we will do an industry analysis using Porters 5 Forces of Competition Framework to help us understand the various variables influencing competition and profitability for Nike within the sectors in which

You May Also Find These Documents Helpful

  • Good Essays

    Nike Swot Analysis Essay

    • 482 Words
    • 2 Pages

    There are several significant athletic and leisure footwear companies and sports equipment firms that produce similar products. Some of the primary ones are Puma and Adidas are some of the big competitors with Nike. Other large companies have diversified their product lines to include athletic and leisure apparel including Under Armour and lululemon. This type of quick change in technology and customer preferences can result in a risk for Nike. Demand for Nike’s products relies on what the norm in many sports and fitness related activites are, as well as the ever-changing trends, these generally control the financial results of Nike. If competitors have more success attracting customers with more appealing footwear or apparel, this would also hurt business…

    • 482 Words
    • 2 Pages
    Good Essays
  • Good Essays

    Nike Ethics Case Study

    • 735 Words
    • 3 Pages

    The competitor gaining the most ground is Under Armour, though “Nike continues to have a more attractive valuation than Under Armour (Keulen, 2014).” Similar to Nike, the Under Armour Company is aggressively pursuing profitable sponsorship deals, giving them a rising portion of market revenue. Nike makes more than 10 times the revenue of Under Armour, but the brand frequently find themselves squabbling over endorsement deals and sponsorship (Goodkind, 2014). “Under Armour has also grabbed Adidas’ spot as the second-largest sporting brand in the United States with Nike being ranked number one (Goodkind, 2014).” But despite this new rank and a predicted revenue growth of 20% each of the next five years, Under Armour finds its total annual revenue to be the equivalent of Nike’s advertising budget (Goodkind,…

    • 735 Words
    • 3 Pages
    Good Essays
  • Good Essays

    When it comes to athletic apparel, the first company people think of is either Nike or Adidas. Why? Both Nike and Adidas have done an impressive job in marketing their products, with popular spokesperson like Kobe Bryant or Derrick Rose. Nike’s success is attributed to its products contributing to the success of the athletes who purchase them. Nike and Adidas seemed as though they had control on the athletic apparel oligopoly, but recently, Under Armour has become a serious competitor to the two companies. The road to becoming a legitimate competitor has been tough, specifically because of the competitive nature existing between firms in the same market. The market structure, determinants of supply and demand, and future outlook of the company can help us see the state and performance of Under Armour.…

    • 1030 Words
    • 5 Pages
    Good Essays
  • Good Essays

    Since the beginning, Nike has ventured into other countries outside the United States. The Nike Corporation was founded by Bill Bowerman and Philip Knight. The company headquarters is in Beaverton, Oregon and its expansion to other countries is with the aim of reaching the untapped markets around the world in order to increase its…

    • 1081 Words
    • 5 Pages
    Good Essays
  • Powerful Essays

    Nike vs. Under Armour

    • 2958 Words
    • 12 Pages

    Nike who took in a little over $18 billion in revenue in the year 2008 gets nearly 60% of its revenue from footwear. Just in footwear sales alone they took in nearly $10 billion. Followed by footwear sales were apparel sales in which another $5 billion was made. Nike also made another $1 billion in equipment sales and the rest of the revenue came from other products. Nike’s sales are primarily broken up into four divisional regions that include a U.S region, EMEA region, Asia Pacific region and an Americas region. By splitting up their revenues into four distinct regions they can measure what and where they make their best profits. Under Armour which is considered to be the next big company had a fairly good year but nothing compared to Nike. Under Armour took in over $800 million in revenue which is just 5 %…

    • 2958 Words
    • 12 Pages
    Powerful Essays
  • Powerful Essays

    Nike- an Ecnomic Report

    • 3351 Words
    • 14 Pages

    Products: Nike primarily caters to the vast market for athletic footwear and athletic apparel in the world. It is the largest seller of athletic footwear worldwide by sales. Its operations can be divided into three product lines: footwear, apparel and equipment. Footwear is Nike 's largest product category, representing about 52% of the company 's revenue followed by apparel product line (28%) as shown in Exhibit 1.1 (Refer Exhibits). In addition to its namesake Nike brand, the company also develops and markets footwear and apparel products under the Cole Haan, Converse, Hurley International, and Umbro Inc. brand names.…

    • 3351 Words
    • 14 Pages
    Powerful Essays
  • Good Essays

    Philip Knight Nike

    • 1837 Words
    • 8 Pages

    According to reports from www.hoovers.com NIKE is the world 's #1 shoemaker and controls over 20% of the US athletic shoe market. The company designs and sells shoes for a variety of sports, including baseball, cheerleading, golf, volleyball, and wrestling. NIKE also sells Cole Haan dress and casual shoes and a line of athletic apparel and equipment. In addition, it operates NIKETOWN shoe and sportswear stores, NIKE factory outlets, and NIKE women shops. NIKE sells its products throughout the US and in about 200 other countries.…

    • 1837 Words
    • 8 Pages
    Good Essays
  • Satisfactory Essays

    Nike is a well-recognized athletic sporting brand that has a dominant impact on the global market. Nike USA headquarter is located in One Bowerman Drive Beaverton, OR 97005. Nike was founded in Oregon Portland and now it’s globally operating in 120 countries. It has a diverse workplace with over fifty thousand employees with different backgrounds and still assisting customers with top customer satisfaction rating. Nike is a multinational company that has exceeded sales over 10 billion dollars in the recent years. The fortune magazine has ranked Nike the number one apparel company in its class. Also, Nike was chosen by employees the best corporation to work for. Nike was created by Bill Bowerman and Phil Knight by both of them investing 1200…

    • 236 Words
    • 1 Page
    Satisfactory Essays
  • Powerful Essays

    Nike sells to approximately 140 countries around the world and currently boasts an approximate revenue of $8,776,900,000 These revenues are based on product sales of shoes, clothing, and other sports products. Advertising expenditures currently total $223,300,000 and include the following allocations: $64,975,000 for network television, $31,447,000 for consumer magazines, $7,700,000 for spot television, $343,000 for newspapers, $134,000 for outdoor postings, and $36,000 for radio. (Reed Elsevier) Most footwear products are made outside of USA. However apparel products are produced in the USA and abroad. (www.statcan.ca) In this article we will try to explore the interaction between the company Nike and its external business environment, as well as the internal strengths and weaknesses of the company. We will attempt to discover some of the significant changes and events in the external environment that have occurred in the last 5 years and have directly impacted Nike. We will describe how the company adapted and responded to these changes and what the effects of these events were. Also we will identify and describe some of Nike's internal strengths and weaknesses.…

    • 4587 Words
    • 12 Pages
    Powerful Essays
  • Good Essays

    The Travails of Nike

    • 1404 Words
    • 5 Pages

    Nike’s key competitors Reebok and Adidas merged in 2005 giving the newly enlarged company about 30% share of the athletic footwear market, compared to Nike’s 37%. Seeing Nike’s biggest competitors’ products are not entirely different from theirs, the company should perform a competitor analysis on both companies to compare their comparative…

    • 1404 Words
    • 5 Pages
    Good Essays
  • Good Essays

    Nike is a worldwide leader in the design, marketing and distribution of athletic and sports-inspired footwear, apparel, equipment and accessories. Wholly-owned NIKE subsidiaries include Cole Haan, Converse Inc., Hurley International LLC, Umbro International Limited. NIKE is the largest seller of athletic footwear and athletic apparel in the world. Nike is committed to amplifying their innovation agenda and driving growth at the category, brand and country level. Nike acknowledges the fluctuating state of the economy and…

    • 867 Words
    • 4 Pages
    Good Essays
  • Good Essays

    Sneaker War

    • 507 Words
    • 3 Pages

    of $3.77 billion. Nike has been manufacturing throughout the Asian region for over twenty-five years, and there are over 500,000 people today directly engaged in the production of their products. They utilize an outsourcing strategy, using only subcontractors throughout the globe. Their majority of their output today is produced in factories in China, Indonesia, and Vietnam, but they also have factories in Italy, the Philippines, Taiwan, and South Korea. These factories are 100% owned by subcontractors, with the majority of their output consisting solely of Nike products. However, Nike does employ teams of four expatriates per each of the big three countries (China, Indonesia, Vietnam), that focus on both quality of product and quality of working conditions, visiting the factories weekly. They also developed their code of conduct in 1992 and have implemented it across the globe, as its goal is to set the standard for subcontractors to follow if they wish to do business with Nike. However, due to a manufacturing network of this magnitude, they have faced numerous violations involving factory conditions and human rights issues, which have been widely publicized. They have responded to these issues through the Andrew Young report, the Dartmouth Study, and Ernst & Young's continual monitoring, but are still approximately two years away from completely addressing these problems throughout the globe.…

    • 507 Words
    • 3 Pages
    Good Essays
  • Powerful Essays

    With 2010 annual revenue of $19,014,000,000, Nike’s revenue was substantially greater than the identified competitors. Due to the revenue difference and the lack of athletic footwear company in the list, I expanded the analysis to include the German company Adidas. Adidas is listed under SIC 5139 – Footwear. Despite the SIC differences, Adidas and Nike are the most direct competition for the athletic market. In addition, Adidas’ 2010 revenue converted to USD is $ 16,047,083,997.…

    • 1453 Words
    • 6 Pages
    Powerful Essays
  • Powerful Essays

    As you can see, Nike is a large brand when it comes to shoes, apparel and its various other sources of income.…

    • 1554 Words
    • 7 Pages
    Powerful Essays
  • Satisfactory Essays

    Pestle Nike

    • 500 Words
    • 2 Pages

    Nike's growth is not just affected by the local economy but also in the international economy. A weak Euro and an Asian recession could mean weak sales for Nike. The overall results in the sales generated by Nike in athletic footwear, however, remained stable. The global market makes up for the variances in sales particularly between peak and lean…

    • 500 Words
    • 2 Pages
    Satisfactory Essays