Case 2: Nike, Inc. 2009 Case Notes Prepared by: Dr.

Mernoush Banton Case Author: Randy Harris

A.

Case Abstract

Nike, Inc. (www.nike.com) is a comprehensive strategic management case that includes the companys fiscal May 31st, 2009 financial statements, competitor information and more. The case time setting is the year 2009. Sufficient internal and external data are provided to enable students to evaluate current strategies and recommend a three-year strategic plan for the company. Headquartered in Beaverton in the U.S. state of Oregon, Nike is traded on the New York Stock Exchange under ticker symbol NKE.

B.

Vision Statement (Actual)

Bring inspiration and innovation to every athlete in the world.

C.

Mission Statement (Actual)

To be the leading sports brand in the world.

Mission Statement (Proposed)

As the largest seller of athletic footwear and athletic apparel in the world (2, 3), we create products for consumers and athletes (1) who enjoy having quality products that are high performance and reliable, such as shoes, apparel, and technologically advanced equipment) (4). Our dedicated employees (9) continuously work on developing new products, price, and product identity through marketing and promotion (7). The company aims to lead in corporate citizenship (8) through proactive programs that reflect caring for the world family of Nike (6) and by ensuring continuous growth and profitability to our investors and stakeholders (5). 1. 2. 3. 4. 5. 6. 7. 8. 9. Customer Products or services Markets Technology Concern for survival, profitability, growth Philosophy Self-concept Concern for public image Concern for employees

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D.

External Audit

CPM Competitive Profile Matrix

Critical Success Factors Price competitiveness Global Expansion Organizational Structure Technology Product Safety Customer Loyalty Market Share Advertising Product Quality Product Image Financial Position Total

Weight 0.10 0.07 0.04 0.09 0.15 0.09 0.09 0.12 0.12 0.07 0.06 1.00

Nike Weighte Rating d Score 3 4 3 3 2 4 4 4 3 4 4 0.30 0.28 0.12 0.27 0.30 0.36 0.36 0.48 0.36 0.28 0.24 3.35

Adidas Weighte Rating d Score 2 3 1 1 3 3 3 3 2 3 3 0.20 0.21 0.04 0.09 0.45 0.27 0.27 0.36 0.24 0.21 0.18 2.52

Puma Weighted Rating Score 1 2 1 2 4 2 2 2 1 2 2 0.10 0.14 0.04 0.18 0.60 0.18 0.18 0.24 0.12 0.14 0.12 2.04

Opportunities 1. Younger consumers are less price sensitive and generally spend more on casual and athletic footwear than older consumers 2. Most footwear companies have outsourced their production abroad in order to maintain lower cost and R&D expenses 3. U.S. footwear imports totaled 2.36 billion pairs in 2007, or roughly 7.9 pairs per capita which was up 0.4 percent from 2006 4. North American Free Trade Agreement (NAFTA) and the World Trade Organization (WTO), both helped eliminate quotas and tariff barriers for foreign footwear manufacturers to ship their goods 5. The Internet allows footwear companies to pursue a direct to consumer sales channel 6. Sales of apparel, accessories, and footwear on the Internet has been growing at a double digit pace, considerably faster than more traditional sales models such as retail stores 7. Internet sales of apparel, accessories, and footwear could reach 18 percent of category sales by 2012 8. Companies that added a web-based sales strategy are able to customize footwear and other merchandise directly to the customers needs and taste, are able to achieve considerably better pricing, as well as deepening the emotional bond consumers have with the brand

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Threats 1. After the age of 40, the typical consumer is not willing to pay more than US$35 to $40 per pair for athletic footwear 2. Competition is strong among athletic footwear and apparel from off brand companies 3. Fluctuation of foreign currency impacts the cost of importing goods to the U.S. 4. Increase in unemployment has impacted the household income which may result in spending less on brand name 5. Barrier to entry is low 6. Level of inventory is increasing in many retail stores due to weak economy

External Factor Evaluation (EFE) Matrix Key External Factors Opportunities 1. Younger consumers are less price sensitive and generally spend more on casual and athletic footwear than older consumers 2. Most footwear companies have outsourced their production abroad in order to maintain lower cost and R&D expenses 3. U.S. footwear imports totaled 2.36 billion pairs in 2007, or roughly 7.9 pairs per capita which was up 0.4 percent from 2006 4. North American Free Trade Agreement (NAFTA) and the World Trade Organization (WTO), both helped eliminate quotas and tariff barriers for foreign footwear manufacturers to ship their goods 5. The Internet allows footwear companies to pursue a direct to consumer sales channel 6. Sales of apparel, accessories, and footwear on the Internet has been growing at a double digit pace, considerably faster than more traditional sales models such as retail stores 7. Internet sales of apparel, accessories, and footwear could reach 18 percent of category sales by 2012 8. Companies that added a web-based sales strategy are able to customize footwear and other merchandise directly to the customer's needs and taste, are able to achieve considerably better pricing, as well as "deepening" the emotional bond consumers have with the brand 0.08 0.07 0.07 0.06 3 4 3 4 0.24 0.28 0.21 0.24 Weight Rating Weighted Score

0.07 0.08

4 3

0.28 0.24

0.07 0.06

4 3

0.28 0.18

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Threats 1. After the age of 40, the typical consumer is not willing to pay more than US$35 to $40 per pair for athletic footwear 2. Competition is strong among athletic footwear and apparel from off brand companies 3. Fluctuation of foreign currency impacts the cost of importing goods to the U.S. 4. Increase in unemployment has impacted the household income which may result in spending less on brand name 5. Barrier to entry is low 6. Level of inventory is increasing in many retail stores due weak economy Total 0.07 0.08 0.06 0.09 0.06 0.08 1.00 3 2 2 3 2 2 0.21 0.16 0.12 0.27 0.12 0.16 2.99

Positioning Map

Customer Loyalty (High)

Nike

Adidas Puma
Price (low) Price (High)

Customer Loyalty (Low)

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E.

Internal Audit
Strengths 1. Nike is the dominant competitor for athletic footwear priced above US$60 per pair, holding better than a 50 percent market share for athletic footwear priced $85 per pair or higher 2. Nike characterizes its organization as a collaborative matrix organization 3. The Jordan brand has a 10.8 percent share of the overall U.S. shoe market, which makes it the second biggest brand in the country and more than twice the size of Adidas share 4. Three out of every four pairs of basketball shoes sold in the United States are Jordan, while 86.5 percent of all basketball shoes sold over US$100 are Jordan 5. Nikes 2009 revenues increased 2.9 percent to US$19.1 billion 6. Inside the United States, Nike has three significant distribution and customer service facilities 7. Nike estimates that they sell products to more than 25,000 retail accounts in the United States and more than 27,000 retail accounts, including Nikeowned stores and a mix of independent distributors and licensees outside the United States 8. The companys website, www.nikebiz.com, allows customers to design and purchase Nike products directly from the company 9. Nike has five wholly-owned subsidiaries: Cole Haan, Converse, Hurley International, NIKE Golf, and Umbro Ltd Weaknesses 1. Nikes 2009 net income decreased 21 percent to US$1.48 billion 2. Almost all of Nikes footwear is manufactured outside the United States by independent contractors 3. In fiscal 2008, contract manufacturers in China, Vietnam, Indonesia, and Thailand manufactured 99 percent of Nikes footwear worldwide 4. Because Nike competes primarily in athletic footwear, apparel and related sporting equipment, its sales are heavily concentrated in the youth and young adult market 5. Accounts payable has increased by almost US$1.0 billion in 2009 6. Negative publicity and boycotting of the Nike products due to outsourcing jobs overseas and the use of child labor in such factories

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Financial Ratio Analysis (December 2009) Growth Rates % Sales (Qtr vs year ago qtr) Net Income (YTD vs YTD) Net Income (Qtr vs year ago qtr) Sales (5-Year Annual Avg.) Net Income (5-Year Annual Avg.) Dividends (5-Year Annual Avg.) Price Ratios Current P/E Ratio P/E Ratio 5-Year High P/E Ratio 5-Year Low Price/Sales Ratio Price/Book Value Price/Cash Flow Ratio Profit Margins % Gross Margin Pre-Tax Margin Net Profit Margin 5Yr Gross Margin (5-Year Avg.) 5Yr PreTax Margin (5-Year Avg.) 5Yr Net Profit Margin (5-Year Avg.) Financial Condition Debt/Equity Ratio Current Ratio Quick Ratio Interest Coverage Leverage Ratio Book Value/Share Adapted from www.moneycentral.msn.com Nike -4.00 -1.50 -4.00 9.37 9.47 21.51 Nike 22.0 23.5 10.7 1.75 3.49 17.50 Nike 44.5 10.3 8.0 44.5 12.9 9.0 Nike 0.06 3.5 2.7 223.8 1.4 18.94 Industry -2.10 -2.00 -1.60 14.53 11.78 14.72 Industry 25.7 0.9 0.2 2.10 3.96 17.70 Industry 49.2 14.4 10.1 51.7 18.2 12.1 Industry 0.06 3.5 2.6 139.0 1.4 15.21 S&P 500 -4.80 -6.00 26.80 12.99 12.69 11.83 S&P 500 26.7 16.6 2.6 2.25 3.48 13.70 S&P 500 38.9 10.3 7.1 38.6 16.6 11.5 S&P 500 1.09 1.5 1.3 23.7 3.4 21.63

Avg P/E 05/09 05/08 17.80 16.40

Price/ Sales 1.46 1.85

Price/ Book 3.19 4.29

Net Profit Margin (%) 7.8 10.1

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05/07 05/06 05/05 05/04 05/03 05/02 05/01 05/00

16.10 16.00 18.00 18.40 17.20 21.30 20.10 23.00 Book Value/ Debt/ Share Equity

1.77 1.42 1.62 1.57 1.40 1.48 1.18 1.33 Return on Equity (%) 17.1 24.1 21.2 22.1 21.5 19.8 18.5 17.4 16.9

4.05 3.27 3.80 3.91 3.70 3.73 3.16 3.69 Return on Assets (%) 11.2 15.1 14.0 14.1 13.8 12.0 10.9 10.4 10.1 9.9

9.1 9.3 8.8 7.7 6.9 6.8 6.2 6.4 Interest Coverage NA NA NA NA NA 36.6 26.8 22.1 15.7 20.4

05/09 05/08 05/07 05/06 05/05 05/04 05/03 05/02 05/01

$17.91 $15.93 $14.00 $12.28 $10.81 $9.09 $7.57 $7.21 $6.51

0.09 0.08 0.08 0.11 0.14 0.17 0.21 0.29 0.37

05/00 $5.82 0.46 18.5 Adapted from www.moneycentral.msn.com Internal Factor Evaluation (IFE) Matrix Key Internal Factors Strengths 1. Nike is the dominant competitor for athletic footwear priced above US$60 per pair, holding better than a 50 percent market share for athletic footwear priced $85 per pair or higher 2. Nike characterizes its organization as a collaborative matrix organization 3. The Jordan brand has a 10.8 percent share of the overall U.S. shoe market, which makes it the second biggest brand in the country and more than twice the size of Adidas' share 4. Three out of every four pairs of basketball shoes sold in the United States are Jordan, while 86.5 percent of all basketball shoes sold over US$100 are Jordan 5. Nike's 2009 revenues increased 2.9 percent to US$19.1 billion

Weight

Rating

Weighted Score 0.32

0.08

0.02 0.06

3 4

0.06 0.24

0.08

0.32

0.09

0.36

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6. Inside the United States, Nike has three significant distribution and customer service facilities 7. Nike estimates that they sell products to more than 25,000 retail accounts in the United States and more than 27,000 retail accounts, including Nike-owned stores and a mix of independent distributors and licensees outside the United States 8. The company's website, www.nikebiz.com, allows customers to design and purchase Nike products directly from the company 9. Nike has five wholly-owned subsidiaries: Cole Haan, Converse, Hurley International, NIKE Golf, and Umbro Ltd Weaknesses 1. Nike's 2009 net income decreased 21 percent to US$1.48 billion 2. Almost all of Nike's footwear is manufactured outside the United States by independent contractors 3. In fiscal 2008, contract manufacturers in China, Vietnam, Indonesia, and Thailand manufactured 99 percent of Nike's footwear worldwide 4. Because Nike competes primarily in athletic footwear, apparel and related sporting equipment, its sales are heavily concentrated in the youth and young adult market 5. Accounts payable has increased by almost US$1.0 billion in 2009 6. Negative publicity and boycotting of the Nike products due to outsourcing jobs overseas and the use of child labor in such factories Total

0.05 0.04

3 3

0.15 0.12

0.07 0.07

4 3

0.28 0.21

0.07 0.08 0.06

2 1 1

0.14 0.08 0.06

0.08

0.08

0.08 0.07 1.00

2 1

0.16 0.07 2.65

F.

SWOT Strategies
Strengths 1. Nike is the dominant competitor for athletic footwear priced above US$60 per pair, holding better than a 50 percent market share for athletic Weaknesses 1. Nikes 2009 net income decreased 21 percent to US$1.48 billion 2. Almost all of Nikes footwear is manufactured outside the United States by

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2.

3.

4.

5. 6.

7.

8.

9.

footwear priced $85 per pair or higher Nike characterizes its organization as a collaborative matrix organization The Jordan brand has a 10.8 percent share of the overall U.S. shoe market, which makes it the second biggest brand in the country and more than twice the size of Adidas share Three out of every four pairs of basketball shoes sold in the United States are Jordan, while 86.5 percent of all basketball shoes sold over US$100 are Jordan Nikes 2009 revenues increased 2.9 percent to US$19.1 billion Inside the United States, Nike has three significant distribution and customer service facilities Nike estimates that they sell products to more than 25,000 retail accounts in the United States and more than 27,000 retail accounts, including Nike-owned stores and a mix of independent distributors and licensees outside the United States The companys website, www.nikebiz.com, allows customers to design and purchase Nike products directly from the company Nike has five wholly-

3.

4.

5. 6.

independent contractors In fiscal 2008, contract manufacturers in China, Vietnam, Indonesia, and Thailand manufactured 99 percent of Nikes footwear worldwide Because Nike competes primarily in athletic footwear, apparel and related sporting equipment, its sales are heavily concentrated in the youth and young adult market Accounts payable has increased by almost US$1.0 billion in 2009 Negative publicity and boycotting of the Nike products due to outsourcing jobs overseas and the use of child labor in such factories

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owned subsidiaries: Cole Haan, Converse, Hurley International, NIKE Golf, and Umbro Ltd S-O Strategies 1. Expand into international market more where the economy is stronger (S1, S3, S4, S7, O1) 2. Increase advertising and promotion through social networking such as Twitter and Facebook (S8, O1, O5, O7)

Opportunities 1. Younger consumers are less price sensitive and generally spend more on casual and athletic footwear than older consumers 2. Most footwear companies have outsourced their production abroad in order to maintain lower cost and R&D expenses 3. U.S. footwear imports totaled 2.36 billion pairs in 2007, or roughly 7.9 pairs per capita which was up 0.4 percent from 2006 4. North American Free Trade Agreement (NAFTA) and the World Trade Organization (WTO), both helped eliminate quotas and tariff barriers for foreign footwear manufacturers to ship their goods 5. The Internet allows footwear companies to pursue a direct to consumer sales channel 6. Sales of apparel, accessories, and footwear on the Internet has been growing at a double digit pace, considerably faster than more traditional sales models such as retail stores 7. Internet sales of

W-O Strategies 1. Develop new products for small kids based on cartoon characters (W4, O1, O3) 2. Sponsor more athletics programs, mostly for young generation (W1, W4, W6, O1, O2, O3)

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apparel, accessories, and footwear could reach 18 percent of category sales by 2012 8. Companies that added a web-based sales strategy are able to customize footwear and other merchandise directly to the customers needs and taste, are able to achieve considerably better pricing, as well as deepening the emotional bond consumers have with the brand Threats 1. After the age of 40, the typical consumer is not willing to pay more than US$35 to $40 per pair for athletic footwear 2. Competition is strong among athletic footwear and apparel from off brand companies 3. Fluctuation of foreign currency impacts the cost of importing goods to the U.S. 4. Increase in unemployment has impacted household incomes which may result in spending less on brand name 5. Barrier to entry is low 6. Level of inventory increasing in many retail stores due to weak economy S-T Strategies 1. Develop a new moderately priced product line (S1, S2, S3, S4, T2, T4, T6) 2. Expand distribution by selling to stores other than their own retailers (S7, T2) W-T Strategies 1. Make low priced footwear made in the U.S. and promote it as Made in America (W2, W6, T2, T3, T4, T6) 2. Acquire a less expensive brand of accessories and sportswear and promote them as an off brand of Nike (W4, W6, T1, T4, T6)

G.

SPACE Matrix

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FS
Conservative
7 6 5 4 3 2 1

Aggressive

CS

IS
-7 -6 -5 -4 -3 -2 -1 -1 -2 -3 -4 -5 -6 1 2 3 4 5 6 7

Defensive

-7

Competitive

ES

Financial Stability (FS) Return on Investment Leverage Liquidity Working Capital Cash Flow 4 5 3 3 4

Environmental Stability (ES) Unemployment Technological Changes Price Elasticity of Demand Competitive Pressure Barriers to Entry

-4 -4 -5 -5 -5

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Financial Stability (FS) Average

3.8

Environmental Stability (ES) Average

-4.6

Competitive Stability (CS) Market Share Product Quality Customer Loyalty Competitions Capacity Utilization Technological Know-How Competitive Stability (CS) Average

-1 -2 -3 -1 -4 -2.2

Industry Stability (IS) Growth Potential Financial Stability Ease of Market Entry Resource Utilization Profit Potential Industry Stability (IS) Average

5 4 1 3 4 3.4

Y-axis: FS + ES = 3.8 + (-4.6) = - 0.8 X-axis: CS + IS = (-2.2) + (3.4) = 1.2

H.

Grand Strategy Matrix

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Rapid Market Growth Quadrant II Quadrant I

Weak Competitive Position

Strong Competitive Position

Quadrant III

Slow Market Growth

Quadrant IV

1. 2. 3. 4. 5. 6. 7.

Market development Market penetration Product development Forward integration Backward integration Horizontal integration Related diversification

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I.

The Internal-External (IE) Matrix

The IFE Total Weighted Score Strong 3.0 to 4.0 I Average 2.0 to 2.99 II Weak 1.0 to 1.99 III

High 3.0 to 3.99

IV

IV Nike, Inc.

VI

The EFE Total Weighted Score

Medium 2.0 to 2.99

VII

VIII

IX

Low 1.0 to 1.99

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J.

QSPM
Increase advertising and promotion through social networking such as Twitter and Facebook AS TAS 1 0.08 Acquire a less expensive brand of accessories and sportswear and promote them as an off brand of Nike AS TAS 4 0.32

Key Factors Opportunities 1. Younger consumers are less price sensitive and generally spend more on casual and athletic footwear than older consumers 2. Most footwear companies have outsourced their production abroad in order to maintain lower cost and R&D expenses 3. U.S. footwear imports totaled 2.36 billion pairs in 2007, or roughly 7.9 pairs per capita which is was up 0.4 percent from 2006 4. North American Free Trade Agreement (NAFTA) and the World Trade Organization (WTO), both helped eliminate quotas and tariff barriers for foreign footwear manufacturers to ship their goods 5. The Internet allows footwear companies to pursue a direct to consumer sales channel 6. Sales of apparel, accessories, and footwear on the Internet has been growing at a double digit pace, considerably faster than more traditional sales models such as retail stores 7. Internet sales of apparel, accessories, and footwear could reach 18 percent of category sales by 2012 8. Companies that added a web-based sales strategy are able to customize footwear and other merchandise directly to the customer's needs and taste, are able to achieve considerably better pricing, as well as "deepening" the emotional bond consumers have with the brand

Weight 0.08

0.07

---

---

---

---

0.07

---

---

---

---

0.06

0.12

0.18

0.07 0.08

--2

--0.16

--4

--0.32

0.07 0.06

4 4

0.28 0.24

1 1

0.07 0.06

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Threats 1. After the age of 40, the typical consumer is not willing to pay more than US$35 to $40 per pair for athletic footwear 2. Competition is strong among athletic footwear and apparel from off brand companies 3. Fluctuation of foreign currency impacts the cost of importing goods to the U.S. 4. Increase in unemployment has impacted the household income which may result in spending less on brand name 5. Barrier to entry is low 6. Level of inventory is increasing in many retail stores due to weak economy TOTAL Strengths 1. Nike is the dominant competitor for athletic footwear priced above US$60 per pair, holding better than a 50 percent market share for athletic footwear priced $85 per pair or higher 2. Nike characterizes its organization as a collaborative matrix organization 3. The Jordan brand has a 10.8 percent share of the overall U.S. shoe market, which makes it the second biggest brand in the country and more than twice the size of Adidas' share 4. Three out of every four pairs of basketball shoes sold in the United States are Jordan, while 86.5 percent of all basketball shoes sold over US$100 are Jordan 5. Nike's 2009 revenues increased 2.9 percent to US$19.1 billion 6. Inside the United States, Nike has three significant distribution and customer service facilities 7. Nike estimates that they sell products to more than 25,000 retail accounts in the United States and more than 27,000 retail accounts, including Nike-owned stores and a mix of independent distributors and licensees outside the United States 8. The company's website www.nikebiz.com allows customers to design and purchase Nike products directly from the company 9. Nike has five wholly-owned subsidiaries: Cole Haan, Converse, Hurley International, NIKE Golf, and Umbro Ltd

0.07 0.08 0.06 0.09 0.06 0.08 1.00 0.08

1 ----1 --4

0.07 ----0.09 --0.32 1.36

4 ----3 --2

0.28 ----0.27 --0.16 1.66

---

---

---

---

0.02 0.06

--3

--0.18

--1

--0.06

0.08

0.24

0.08

0.09 0.05 0.04

----3

----0.12

----4

----0.16

0.07 0.07

4 1

0.28 0.07

1 3

0.07 0.21

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Weaknesses 1. Nike's 2009 net income decreased 21 percent to US$1.48 billion 2. Almost all of Nike's footwear is manufactured outside the United States by independent contractors 3. In fiscal 2008, contract manufacturers in China, Vietnam, Indonesia, and Thailand manufactured 99 percent of Nike's footwear worldwide 4. Because Nike competes primarily in athletic footwear, apparel and related sporting equipment, its sales are heavily concentrated in the youth and young adult market 5. Accounts payable has increased by almost US$1.0 billion in 2009 6. Negative publicity and boycotting of the Nike products due to outsourcing jobs overseas and the use of child labor in such factories SUBTOTAL SUM TOTAL ATTRACTIVENESS SCORE

0.07 0.08 0.06

1 -----

0.07 -----

3 -----

0.21 -----

0.08

0.08

0.24

0.08 0.07

-----

-----

-----

-----

1.00

1.04 2.4

1.03 2.69

K.

Recommendations

Acquire a company who manufactures and sells less expensive products than Nike. The company should have established distribution and retail shelf space with noncompeting product lines. It would be ideal if the company is a U.S.-based corporation with domestic manufacturing facilities.

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L.

EPS/EBIT Analysis

US$ Amount Needed: $350 million Stock Price: US$65.65 Tax Rate: 24% Interest Rate: 4.75% (Estimated) # Shares Outstanding: 487 Million Common Stock Recession $1,800,000,00 0 0 1,800,000,000 432,000,000 1,368,000,000 492,331,302 2.78 Financing Normal $2,500,000,00 0 0 2,500,000,000 600,000,000 1,900,000,000 492,331,302 3.86 Debt Financing Recession $1,800,000,00 0 16,625,000 1,783,375,000 428,010,000 1,355,365,000 487,000,000 2.78

EBIT Interest EBT Taxes EAT # Shares EPS

Boom $3,500,000,00 0 0 3,500,000,000 840,000,000 2,660,000,000 492,331,302 5.40

Normal $2,500,000,00 0 16,625,000 2,483,375,000 596,010,000 1,887,365,000 487,000,000 3.88

Boom $3,500,000,000 16,625,000 3,483,375,000 836,010,000 2,647,365,000 487,000,000 5.44

EBIT Interest EBT Taxes EAT # Shares EPS

70 Percent Stock - 30 Percent Debt Recession Normal Boom $1,800,000,00 $2,500,000,00 $3,500,000,00 0 0 0 13,300,000 13,300,000 13,300,000 1,786,700,000 2,486,700,000 3,486,700,000 428,808,000 596,808,000 836,808,000 1,357,892,000 1,889,892,000 2,649,892,000 490,731,912 2.77 490,731,912 3.85 490,731,912 5.40

70 Percent Debt - 30 Percent Stock Recession Normal Boom $1,800,000,00 $2,500,000,00 0 0 $3,500,000,000 3,325,000 3,325,000 3,325,000 1,796,675,000 2,496,675,000 3,496,675,000 431,202,000 599,202,000 839,202,000 1,365,473,000 1,897,473,000 2,657,473,000 488,599,391 2.79 488,599,391 3.88 488,599,391 5.44

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M.

Epilogue

Analysts expect that Nike will be able to boast of its strong earnings, growing gross margins, lean inventories and all-important futures orders. The company has booming international business, especially its China expansion plans, as well as the 2010 World Cup, where Nike is sponsoring nine teams. And investors may find out what management has planned for that US$7 a share in net cash on the balance sheets. (www.CNBC.com) Nike unveiled its supercharged Nike Elite Series football boots providing new levels of performance. Nikes Mercurial Vapor SuperFly II, CTR360 Maestri, Total90 Laser III and Tiempo Legend III all feature new performance uppers to improve on-field visibility and a reengineered outsole to deliver lightweight performance for every style of player. Nike designers have reduced the weight of each boot so players can perform at their best. Lightweight construction, intricate engineering, carbonenforced strength and high contrast colors distinguish the boots. The high contrast colors (Metallic Mach Purple and Total Orange) are engineered together for enhanced visibility. For a footballer this unique combination is designed to increase visual performance enabling them to quickly spot their teammates and execute a gamechanging pass. (www.finance.yahoo.com)

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