57%27%

6.5%2%

6.5%

1%

Revenue in million USD

Footwear Apparel Equipment Global Brand Divisions Converse Corporate

North America

47%

Western Europe

19%

Central & Eastern Europe

6%

Greater China

10%

Japan

3%

Emerging Market

15%

SALES IN DIFFERENT REGION

Analysis

Fundamental Analysis

SWOT Analysis

PORTER’S Five Forces

Analysis

PEST Analysis

RATIO Analysis

Strengths

Brand reputation

Runs offices in 45 countries worldwide

Strong financial position

Sponsorships

Weaknesses

Heavily depend upon footwear market

Labour law violations and child labour

Price sensitive retail stores

Opportunities

Develop variety of products –sunglasses, casual wears

Growth in emerging markets like –India, China

Global brand recognition

Global marketing events

Threats

Aggressive competition

Negative image due to “sweatshops”

Financial crisis

Consumer price sensitivity

Threat of New Entrants

Medium

• Significant capital resources are required for creating a new brand as large investments are needed for marketing and procuring floor space; hence, this restricts the entry of newer players.

• Nike enjoys a great degree of brand recognition and loyalty, and it will be a difficult for a new player to match its level.

Bargaining Power of Customers

Medium

• Nike caters to its customers through both the wholesale and direct-to-consumer channels, which accounted for 80.6% and 18.9% of total Nike brand’s sales respectively, in fiscal 2013.

• Bargaining power of end-customers is low as Nike has a very strong brand image and holds an innovative product portfolio.

Competitive Rivalry within the industry

Medium

• Nike faces rising competition from local players in emerging markets, who are increasingly improving their product quality.

• Rising competition from emerging players such as Under Armour and Lululemon Athletica, which focus on niche market segments such as performance apparel and yoga-focused apparel, also pose a threat to Nike’s share of selected markets.

Threat of Substitute Products

Low

• The worldwide demand for athletic footwear, apparel and equipment is expected to grow in the future as customers cannot substitute these products.

Bargaining Power of Suppliers

Low

• No single footwear factory or apparel factory accounted for more than 6% of total Nike brand footwear production and Nike brand apparel production respectively in fiscal 2013; hence, due to a large base of suppliers, we believe their bargaining power is limited.

• The switching costs in changing suppliers is significant.

Political factors

Favourable foreign nations' relationship

Positive US government policies

Currency exposure risk

Risk of Terrorism in home nation

Economic factors

Increase in the shipping costs of raw materials and company resources

Increase in labour costs and inflation in China

Growth of the performance shoe industry

Under Armour shoe sales relies on a consumers discretionary income

Increase in living standards

Social Factors

Brand Consciousness among customers

Sponsorship

Buying habits and fashion in youths

Increase in participation of women

in athletics

Increase in physically active seniors

Technological factors

Increase in the use of commerce conducted

electronically

Increase in mobile and e-commerce

New technologies emerging that allow

corporations to become more energy

efficient as well as reduce manufacturing

costs

Social Media for marketing

Ratios Nike Adidas Puma

EBITDA Margin 12.75% 8.03% 12.93%

Return on Assets 14.48% 7.30% 31.62%

Return on Equity 24.88% 21.06% 55.80%

Asset Turnover 2.03 1.5 1.86

Current Ratio 1.76 1.8 2.22

Debt to Equity .12 0.53 1.72

P/E 28.85 18.97 16.8