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Samta Khinda searched a presentaion on Nike Industry and want to share with all here. For more info visit: http://www.samtakhinda.com/

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  • Sports Footwear and Apparel Industry Analysis Group 4: Josh Fernino Brent Hare Victor Hemmati Lance Hollister Chris Kerschen Ty Parasiliti Vincent Ukwu Nike Corporation
  • Defining The Industry
  • Industry Defined
    • 20,000 retail accounts throughout the U. S. using independent distributors and also has contracts with 110 other countries
    • Also has agreements with Internet companies and subsidiaries
    • Operates within the sports footwear and apparel market.
    • Originally designing and producing running shoes, their portfolio has broadened to include a wide range of sports and leisure wear. This is all endorsed by top sporting personalities
  • NAICS Codes
    • North American Industry Classification System
    • The standard used by Federal statistical agencies in classifying business establishments for the purpose of collecting, analyzing, and publishing statistical data related to the U.S. business economy
    • The first two digits of code designate the sector, the third designates the subsector, the fourth digit designates the industry group, the fifth digit designates the NAICS industry, and sixth digit designates the U.S. detail industry
  • NAICS Codes Example NAICS Codes Name Classification Level 31-33 Manufacturing Sector 316 Leather and Allied Product Manufacturing Subsector 3162 Footwear Manufacturing Industry Group 31621 Footwear Manufacturing Industry 316211 Rubber and Plastics Footwear Manufacturing U.S. Detail Industry
  • Nike Products
    • They design, develop, and market high quality active sports apparel, equipment, and accessory products
    • Nike distributes one new shoe style every single day
    • Nikes critical factors for success are maintaining current standards, closer working relationships, and retaining customer loyalty by guaranteed standard of product
  • Nike Products
    • Their products are made for men, women, and children of all ages.
    • The company presently sells roughly 300 models of athletic shoes in 900 styles for 25 different sports.
    • Nike's target market for their shoes is males and females between 18 and 35 years old.
  • Nike Products
    • They not only see competition from Adidas and Reebok, but also with Old Navy and Abercrombie and Fitch
    • Continuous marketing research is the key in assessing the market
  • Nike Expansion
    • Nike has success as a result of collaborating with other companies within the sports and fitness industry
    • But at other times, Nike expanded into markets for which it is not strategically suited
    • Nike has realized to initiate more aggressive programs to review product partnerships that are outside of its core basis of products
  • Nikes Biggest Competitor
    • Consist of 3 companies:
      • Adidas
      • Reebok
      • TaylorMade
    • Adidas Purpose:
      • The production and distribution of apparel, footwear and equipment for sports and leisure as well as of products of adjoining fields, furthermore the commercialization of the registered trademark Adidas.
    • Adidas Mission:
      • To be the leading sports brand in the world.
    • The Adidas brand attitude Impossible is nothing drives all of their brand communication initiatives and it helps them strengthen the Adidas brands bond with the consumer.
    • Reeboks Mission:
      • Always challenge and lead through creativity.
    • At the core of the Reebok brand is the affirmation of the uniqueness of all people.
    • Reebok Strategic Focus:
      • to become a consumer-driven brand that reflects the emphasis on individuality.
    • Athletes Endorsed by Reebok:
      • Sidney Crosby
      • Alexander Ovechkin
      • Allen Iverson
      • Yao Ming
      • Thierry Henry
    • Reebok Partnerships:
      • NFL
      • NHL
      • MLB
    • TaylorMades Mission:
      • To have the leading performance golf brands in the world.
    • TaylorMade changed the game of golf by bringing the metalwood to the public 27 years ago, and today is the market leader in the metalwood category.
    • Strive to continually extend their brands positions as leaders in the development and implementation of advanced performance technologies in all of their products including clubs, balls, footwear and apparel.
    • Just to give you an idea of how well TaylorMade is doing, they currently endorse 55 professional golfers, one of which is Sergio Garcia, and as of February 17, 2009 he is ranked number two in world.
  • Adidas Group Financials Net Sales in millions Nine Months 2008 Nine Months 2007 Change Adidas 6,004 5,465 9.9% Reebok 1,587 1,765 (10.1)% TaylorMade 614 609 0.8%
  • Industry Structure
  • Growth in Recent Decades
    • Nike and Reebok set the standard
    • Nike gained popularity
    • Lurking competitors
      • Adidas Group
      • Under Armour
  • Industry Weakening
    • Internet skyrocketed sales in late 90s
    • Upcoming companies took advantage of new technologies
    • Sales have slumped tremendously in past year
    • Nike making 4% cut
    • Under Armour stated that analysts estimates are far below earlier predictions
  • Threat of New Entrants
    • Highly saturated and challenging industry
    • Depend in large part on first mover advantage and scale economies
    • Areas to focus: Technologies, pricing, and costs of production
  • Innovator
    • Sports Apparel and Footwear industry relies mainly on innovations and creativity
    • Innovative Ideas=Key success factor
    • Company could have an advantage
    • Without proper funding and resources a firm could be at a severe disadvantage
    • Threat of new entrants based on first-mover advantage is minimal
  • Economies of Scale
    • Difficult to compete with large economies of scale
    • Hard to handle all levels, more experienced firms are able to disperse
    • New entrants suffer a severe cost disadvantage
    • Significant amount of assets needed
  • Bargaining Power of Buyers and Suppliers
    • Power of buyers can be determined by supply vs. demand and number of buyers
    • Price sensitivity effects demand
    • Customers more affected by price
    • Suppliers are more powerful when the ratio to buyers is more
    • The vast range of products in the Athletic Apparel industry leads to a dissimilar amount of bargaining power for the supplier
  • Substitute products and services
    • The threat of substitute products The existence of close substitute products increases the propensity of customers to switch to alternatives in response to price increases
  • Substitute products and services
    • Substitutes are a threat because: 1) They are an attractive alternative product or service, which customers can easily shift to if there are low switching costs. 2) The availability of substitutes invites customers to make price, quality and performance comparisons 3) Competitively priced substitutes impose a maximum value on prices relevant industry can charge for its products or services
  • Substitute products and services 1) They are an attractive alternative product or service, which customers can easily shift to if there are low switching costs OR
  • Substitute products and services 2) The availability of substitutes invites customers to make price, quality and performance comparisons IS IT CHEAPER? CAN I JUMP HIGHER? CAN I RUN FASTER?
  • Substitute products and services
    • 3) Competitively priced substitutes impose a maximum value on prices relevant industry can charge for its products or services