REI, D series, group 943 Stefanescu Alexandru

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Nike, Inc.
Nike, Inc. is an American multinational corporation that
is engaged in the design, development, manufacturing, and worldwide marketing and sales
of footwear, apparel, equipment, accessories, and services. The company is headquartered
near Beaverton, Oregon, in the Portland metropolitan area. It is the world's largest supplier
of athletic shoes and apparel and a major manufacturer of sports equipment, with revenue
in excess of US$24.1 billion in its fiscal year 2012 (ending May 31, 2012). As of 2012, it
employed more than 44,000 people worldwide. In 2014 the brand alone was valued at $19
billion, making it the most valuable brand among sports businesses. As of 2017, the Nike
brand is valued at $29.6 billion Nike ranked No. 89 in the 2018 Fortune 500 list of the largest
United States corporations by total revenue.
The company was founded on January 25, 1964, as Blue Ribbon Sports, by Bill
Bowerman and Phil Knight, and officially became Nike, Inc. on May 30, 1971. The company
takes its name from Nike, the Greek goddess of victory. Nike markets its products under its
own brand, as well as Nike Golf, Nike Pro, Nike+, Air Jordan, Air Force 1, Air Max, Nike
Skateboarding, Nike CR7, and subsidiaries including Brand Jordan, Hurley International and
Converse. Nike also owned Bauer Hockey (later renamed Nike Bauer) from 1995 to 2008, and
previously owned Cole Haan and Umbro. In addition to manufacturing sportswear and
equipment, the company operates retail stores under the Niketown name. Nike sponsors
many high-profile athletes and sports teams around the world, with the highly recognized
trademarks of "Just Do It" and the Swoosh logo.

Opportunities
 Automation
Since its debut in 2012,
the Flyknit Racer has been
considered a technological
breakthrough. Produced with
a special knitting machine, it
uses less labour and fewer
materials than most running
shoes. But now the same
material has become the basis
for an even more radical
experiment that has the
potential to both upend the
sports and leisurewear
industry and accelerate an
important trend in
globalisation.
 Since 2015, Nike has been working with Flex, the high-tech manufacturing company
better known for producing Fitbit activity trackers and Lenovo servers, to introduce greater
automation into the otherwise labour-intensive process of making a shoe.
For Nike, the shift to greater automation has two huge attractions. By driving down
costs, it could lead to a dramatic improvement in profit margins. It would also allow the
company to deliver new designs more quickly to fickle, fashion-conscious customers at a
premium.
“Together, we are modernising the footwear industry,” Chris Collier, Flex chief financial
officer, said earlier this year about the company’s relationship with Nike. “This is a long-
term, multibillion-dollar relationship for us, and it is not measured in the scope of years but
decades.”

 New Customer Strategies

Nike promotes its products by sponsorship agreements with celebrity athletes,
professional teams and college athletic teams. They work hard at it and invest a lot into
marketing.
No company in the world spends as much money on sports sponsorships as Nike.
Nike invests in marketing and this can be seen in their 2014 fiscal report. "...Nike spent
$3.031 billion on what they call “Demand Creation.” Nike’s a little fuzzy on what that means
(marketing can be anything from a TV ad buy to a collaboration with a niche shop).
According to Matt it's "Nike-speak for 'Advertising.'" That means that Nike spends about
$100 per second on advertising."
Nike spends over $3 Billion in advertising a year
Nike promotes their products with having celebrities, professional and college athletes with
sponsorship agreements. Nike's first athlete to endorse their products was a Romanian
tennis played named Ilie Natase. Nike also invested in marketing early on in their
establishment. Currently, Nike focuses on sponsorships, internet marketing, email
marketing, and utilized multimedia marketing campaigns.
Nike was an early adopter of internet marketing, email management technologies,
and using broadcast and narrowcast communication technologies to create multimedia
marketing campaigns. In 1982, Nike produced their first advertisement. Nike has been given
various awards for their advertisements (Emmy award twice for best commercial, Advertiser
of the Year in 1994 and 2003).
Like most leaders in the market, Nike values the consumer and the importance of
providing a quality product. Nike quality and durability is a critical part of their strategy to be
able to command high prices for their products. Their brand is associated with providing top-
notch product for athletes that help them perform better. One article notes how Nike has
been consistent in their message to consumers that they stress the importance of their
needs and preferences. The message to consumers is that Nike wants to make your life
better at something you are passionate about (whether that is basketball, running, jogging,
etc) and to improve your overall health.
In 2016, it is noted that Nike won the Olympics for the United States athletes who
wore their sneaker brand. See below for the chart comparison of Nike and their competitors
and how one may argue Nike's product helped the athletes perform better.
Taking into consideration the environment, one campaign that Nike began for Earth
Day 2008 was a commercial that featured basketball star Steve Nash wearing Nike's Trash
Talk Shoe, which had been constructed in February 2008 from pieces of leather and
synthetic leather waste from factory floors. The Trash Talk Shoe also featured a sole
composed of ground-up rubber from a shoe recycling program. Nike claims this is the first
performance basketball shoe that has been created from manufacturing waste.
Another project Nike has begun is called Nike's Reuse-A-Shoe program. This program,
started in 1993, is Nike's longest-running program that benefits both the environment and
the community by collecting old athletic shoes of any type in order to process and recycle
them. The material that is produced is then used to help create sports surfaces such as
basketball courts, running tracks, and playgrounds.

 Diversity and inclusion

Supporting cultural difference – Nike’s first Pro Hijab
A key example of its culturally diverse design work and supporting inclusion is Nike’s
first Pro Hijab, which was developed in 2017. This garment responded to the need for
culturally sensitive and inclusive sportswear for women Muslim athletes. Many elite athletes
choosing to exercise in a Hijab reported that it becomes hot and makes hearing difficult. The
Pro Hijab was designed to be soft and light, and to allow the body to cool easily.
Elite women Muslim athletes were involved in the design process, giving feedback on
prototypes that allowed the Nike design team to create an inconspicuous, high-performance
garment. In this way, the product points the way to a more inclusive conception of sport.
Apart from inclusion and cultural differences, Nike also offers a great variety of
products, sustaining diversity in production, such as sports equipment, shoes, accessories,
and having subdivisions for all of those over-all categories, analysing the aim of each
customer into buying what satisfies his needs and wants. In addition, from the financial point
of view, the brand not only that they offer a great variety of affordable products, making it
accessible to any category of clients, but also it provides a premium standard of goods, for
the ones that are hard to be satisfied.

Threats
 Innovation and agility
Nike had some problem in inventory management. company lost around 100 million in
sales due to these issues. May be its difficult to pasteurized that such established
corporation could have a huge production failure but they did. Inventory control can be
difficult for a business of any size. In case of, Nike developed an inventory management
solution to their problems vastly increase and they were overcome their losses. There s what
happened to Nike and how the company reproduce:
Nike started using a new kind of inventory management software. This inventory control
software was imagining to help Nike in future which products they will sell the most. Nike
based how much they made of each type of product on the future of this inventory software.
Predictions of the software made were totally off so Nike did not produce enough of certain
products that consumers were willing to buying. Conversely they over production other skis.
It was a smart business move towards for Nike to try to predict what customers would
buy using inventory tracking software. Many companies use a feature of their inventory
management system called forecasting. However, when first implementing a new system
and before relying on the forecasting information, it’s important to check for software bugs,
imperfections and data entry errors. Software is only as good as the data provided.
Generally, the materials manager will need to input reorder points, material lead times,
minimum inventory levels etc. You can be ultra conservative or run inventory down to
almost nothing before reordering. It depends on your risk profile. Nike’s inventory
management solution was to change the software, remove the bugs, and extremely perfect
how the software in future demands for inventory. It was that simple.

 Simplicity in Complexity
The fake goods market is on the rise. It is estimated that the international trade in
counterfeited products amounts to almost a half a trillion dollars (Kim, 2016). Nike happens
to be one of the most counterfeited brands in the world. The report includes that Nike
"seems to be more intensely targeted by counterfeiters". It also says, fake Nike shoes are
worth between $5 to $200 on the counterfeit market (OECD/EUIPO, 2016).
According to MSN Money, Nike forms a part of the top 10 most counterfeited brands in
2016, based on customs seizures (Lovemoney, 2016). The most counterfeited items are Nike
sneakers followed by the clothes with the Nike’s famous Swoosh Logo (Lumb, 2017).
The reason for this is that there is a narrow difference between the prices of the original
and fake products. This is not the case with other brands that make the list (Rolex, Louis
Vuitton) because they are luxury brands and there is a huge gap between the prices of the
real and the counterfeit product. They might not be as affected as brands like Nike. A report
by Business Insider has shown how Nike is losing as much as 10% of the revenue to
counterfeit products. Apart from this, the damage its faces to its reputation are also huge.
In China, which accounts for more than 62% of knock-off production, and which is a huge
market for Nike, sales are continuously going down due to the prevalence of cheaper fake
sneakers and other Nike merchandise.
The fake products have somewhere diluted the brand image, as in this ever-evolving
industry; consumers have options to switch over to other brands. Although Nike has
maintained a strong brand position over the years, but if the trend continues, the customers
would not mind shifting to the products offered by Nike’s competitors, because of a large
number of fakes available in the market. This is a bigger problem than just the loss of
revenues, because since the fashion trends change so rapidly, and there are end number of
players in this industry, the consumers may not be that loyal to a brand. Sometimes, the
knock-off products are so real that it is extremely difficult to differentiate between the real
and the fake, even for experts. So, knowing this, the consumer would not prefer to purchase
fake products at almost the similar price of the original product.

Bibliography
1. https://en.wikipedia.org/wiki/Nike,_Inc.
2. https://www.ft.com/content/585866fc-a841-11e7-ab55-27219df83c97
3. https://profitworks.ca/blog/marketing-strategy/545-nike-strategy-how-nike-became-
successful-and-the-leader-in-the-sports-product-market.html
4. https://soapboxie.com/economy/The-Rise-of-Counterfeiting-and-Its-Effects-on-Nike
5. https://www.ukessays.com/essays/marketing/nike-issues-and-their-solutions-
marketing-essay.php