THE MARKET ENVIRONMENT in Nikes Geographic

Nike's geographic market includes major market segments throughout the globe. Until 2009 Nike's geographical markets contains USA, Asia-Pacific, Americas and an area comprising of European countries, Midsection East and Africa. However in March 2009, Nike released its plan to reorganize its global business in order to bring goods closer to the market segments and in turn consumers as well concerning reduce management overlap. Third, plan Nike then decided to develop its market talk about in North America, Western European countries, Eastern/Central Europe, Greater China, Japan and Emerging Marketplaces.

Main Business

Nike Inc. focuses primarily on footwear, clothes, equipment and accessories products for men, women and children. The business offers boots for football, basketball, soccer, baseball, playing golf, golfing, walking, sport-inspired casual shoes, kids' shoes and other athletic and recreational purposes. Along with footwear the company also markets sports activities outfits and accessories, along with sports inspired outfits and athletic handbags. Along with these Nike offers performance equipments which include carriers, socks, sport balls, eyewear, electronic devices, bats, gloves, clubs, and other equipments designed for sports activities under the brand NIKE. Products are mostly sold through its retail stores, independent marketers, franchisees, licensees and also through e-commerce.

PEST-G Analysis

Political

The administration of any country must enforce monetary plans that will advantage the expansion of market sectors and businesses in that particular country. THE UNITED STATES policies have luckily permits NIKE to develop and market its products. The support accorded to Nike by the government, particularly in the general macroeconomic balance, low-interest rates, stable currency conditions and the international competitiveness of the duty system, form the building blocks critical to Nike's expansion.

Nike's main development faculties rest in the Asian countries where politics unrest prevails. The climb and land of government authorities' brings about change in insurance policies associated with tariff on import and export, overseas immediate investment, etc. This political unrest in the creation countries may have an impact on Nike.

There is also the case of using under aged workforce in the factories situated in the Asian countries.

Economic

The biggest hazard for Nike is the monetary downturn which will result in the slowdown in acquisitions. This in turn will have an impact on the expansion of Nike. Combined with the decelerated sales labor cost and recycleables prices are increasing, which in turn will impact the profit margin of the business.

Nike is subjected to the international aspect of trade. It purchases and sells in several currencies and therefore, costs and margins are not stable over extended periods of time due to changing exchange rates.

Social

People today tend to be brand conscious where they prefer to buy products which have brand value associated with them. However, this is no issue for Nike as it is the number one sports activities brand in the world. Its famous 'SWOOSH' is instantly recognizable.

Preferences of young individuals are changing. They now want fashion-oriented products for leisure activity instead of athletics.

Nike also encounters a problem with the labor and factory conditions in the factories positioned in the Parts of asia. This triggered bad promotion which resulted in decline in sales as people and world demand more socially liable firm.

There are also an increasing number of women consumers on the market due to changing lifestyle and tendencies.

Technological

Nike has integrated technology to develop its products fast. Since Nike is a fashion brand and fashions keep changing. The product could become unfashionable before it wears out, i. e. , consumers need to replace shoes.

Nike always adopts latest technology for its product making and development.

Environment/Green

Nike makes every try to reduce the impact of each of its products on the environment throughout its Product Life Routine from design to creation, and ultimate removal.

Nike shoes produce sound waste. The most significant of these by weight is healed rubber used in shoes soling. Nike employees designed an innovative way to keep it out of landfills and convert it into more outsoles, called REGRIND, and are available to general public.

THE COMPETITION

Main Competitors

Nike's main competition comes from Adidas and Reebok along numerous small companies such as New Balance, K-Swiss, etc. Due to Nike's huge brand understanding, its competition have to put in more effort to sell their products and also new entrants in the industry should have huge amount of capital to invest in advertising to create brand awareness and to turn into a significant if not really a major player. This restricts the quantity of entrants in the market.

SWOT Analysis

Strengths

Nike is a global brand with strong brand reputation. Its famous company logo 'SWOOSH' can be recognized instantly by anyone. Also having a huge product portfolio offers Nike an edge since customers can choose from a wide variety of products.

Another durability of Nike is its extensive circulation lines. Nike has around 48, 000 retail outlets which around 18, 000 are in the U. S. together. Nike also manages a 'futures' option wherein the store can order up to 6 months in advance. They also sell their products through indie distributors all around the world. Apart from that the consumers also have a choice to create their own shoes on the official Nike website where they can pick the look, color, features, etc. for their shoe.

Research and Development has always been Nike's strong point as is seen from its ever before evolving and impressive product range. Since Nike outsources its developing to other manufacturers, it generally does not have any capital tied up in machinery or equipment, which results in fewer bills.

Weakness

Although Nike has a huge product collection, its income is still profoundly dependent on its share of footwear market. This may leave it prone if the marketplace share for sneakers erodes.

Due to the varied product range, Nike struggles to concentrate on one main product. This ends in divided attention on each product line. Also the amount of time and resources in keeping each of its products is very high.

Another weakness of Nike is the negative image portrayed by reduced working conditions in the abroad factories. This might lead to bad promotion of the company all together and may impact the sales as people nowadays want companies that are socially reliable.

Opportunities

One of the opportunities for Nike is its ability to penetrate a new market. Currently Nike is focusing more on Technology Y market and women. Nike received Converse to provide for the increasing demand from Era Y for vintage and classical shoes or boots. Also Nike has began competitive marketing towards women by creating Nike Goddess stored and adding women's pilates shoes in an attempt to appeal health conscious women.

Product development is within its own an opportunity for Nike. Although owners may deny that Nike is a fashion brand but many people think in any other case. This creates opportunities as people may think the merchandise could become unfashionable before it wears out, i. e. , consumer may feel that they have to replace it.

Nowadays people are more brand conscious. This gives Nike an advantage over its competition as its name and company logo is recognized internationally.

Threats

Nike outsources its developing to produces that are in several countries. Nike doesn't have any control over the political and legal environment for the reason that country. Hence, this poses a hazard to Nike.

High level of competition with Adidas and Reebok is also a menace to Nike as these companies have almost the same product range and goal markets. This is the reason why Nike aims to be different from its competition.

Changing Exchange Rates also pose a hazard to Nike as it discounts internationally, i. e. , it will buy and sells in various currencies. For this reason cost and income are not steady over very long periods.

NIKE'S MARKETING STRATEGY

Segmentation & Targeting

There a many different aspects to consider when deciding on how to market a product and who to advertise something to. Nike's target market because of its shoes, clothes and other accessories are males and females between the age group of 13 and 35 years. Nike sections its markets on the basis of years, gender, geographic locations, psychographic, benefits searched for, and usage.

On the foundation of age, Nike targets a number of age groups from young adolescent to middle-aged individuals. Nike has different adverts for men and women of every race and nationality independently. Nike now is focusing on concentrating on more on women and Era Y. Also teams of any sport, any size, and anywhere in the world are targeted by Nike.

Nike's goal is to press its products in countries that connect with certain sports, that are popular for the reason that particular country. For instance, Products associated with Rugby are promoted more often in Europe in comparison with U. S. , as Rugby is popular in Europe than in U. S.

Nike promotes a positive and confidant frame of mind and focuses on people who want to attain that frame of mind. In addition, it is targeted towards customers who are enthusiastic about athletics.

On the basis of benefits searched for, Nike provides shoes, attire and equipment for an intensive variety of athletics all around the globe. In addition, it offers products to many different people who've different tastes, hobbies and needs. This can be seen from the fact that Nike has an online site where consumers can design their shoes according to their requirements and preferences. Based on usage, Nike is trying to maintain the constancy of buys being made. There is a theory known as the '80/20 concept' (Czinkota et al. , 2000, pg 200). This means that a business derives 80 percent of its sales from 20 percent of its consumers who always choose the product of this particular company or brand. Nike is wanting to keep these customers who are brand devoted towards Nike by constantly bringing about product development.

Positioning

Nike promotes products that ooze with style, attitude and self-confidence. This subject matter is clear in Nike's tagline 'Just Do It' or 'If you have a body, you are an athlete' which is shown in many advertisements of Nike. The former meaning of Nike has been used since 1989, when it was first released and the latter was developed by Monthly bill Bowerman when Nike first started. This message plainly defines Nike's image which is a positive and self-confident nature.

Porter's Universal Strategy (Differentiation/Low Cost Authority/Focus)

Since consumers in the footwear industry are price conscious and the marketplace is highly competitive, companies are trying to supply the best possible offers to the consumers. This means that companies are trying to cut down costs from every point of view. Since Nike outsources its creation to other countries, it doesn't have any capital tied up in equipment, equipment or factories. This implies it generally does not have any expenses that may arise out of maintenance of any of the above. Since bills are low, Nike is able to enjoy earnings.

Nike also lays heavy focus on Differentiation. Nike continually strives to innovate and develop its products. The launch of Nike+iPod sports activities kit in the year 2008. This activities kit premiered by Nike and Apple Inc. and allows athletes to log and screen their runs via iTunes and the Nike+ website.

Growth Strategy

On May 5th, 2010 Nike discovered its Global Progress Strategy to achieve ecological, long-term progress across its global portfolio of brands and businesses. Which has a revenue target of $27 billion by the entire year 2015, Nike layed out every single category of their product line - from Nike SB to Women's Training - and hoped to reach that goal through the consumer-focused strategy. This was based on expansion prospects across its collection, which include NIKE Brand, Cole Haan, Converse, Hurley, Jordan Brand, NIKE Golf, and Umbro. The business also expects to create over $12 billion of cumulative free cash flow from procedures through 2015. Both goals stretch NIKE Inc. 's permanent financial model of high single-digit revenue growth, mid-teens cash flow per share growth and expanding returns on capital.

According to Symbol Parker, Nike Inc. President and CEO, Nike has competitive advantages in its profile with innovative, engaging products that are unique and relevant to consumers. The NIKE Brand is the most powerful property in the Nike Inc. profile which accounts for about 85 percent of total revenue. Other brands of Nike Inc. also continue to increase their contribution to the business's overall development strategy. "With our acquisition of Umbro, NIKE has long its position as the biggest football Company in the world, " Parker said. "Hurley continues to outperform everyone in its market; Cole Haan has incredible opportunity for development; and Converse, practically a $1 billion business, is rolling out strategies to double its earnings by 2015. "- (Symbol Parker, Leader and CEO of Nike Inc. )

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