Nike The Nerd Globetrotting Elite The Nike Essay

Length: 9 pages Sources: 5 Subject: Business - Advertising Type: Essay Paper: #66622395 Related Topics: Adidas, Tiger Woods, Tap Dancing, Golf
Excerpt from Essay :

NIKE

The nerd globetrotting elite

The NIKE Corporation website targets a new global movement in mind-body synergy through artificial intelligence, 'thinks for your feet.' In the last twenty years the multi-billion dollar corporation has mobilized its methodology in sales on the wings of a Greek goddess. Since 1988, when NIKE's 'Just Do It' slogan came on the scene, the company has been selling performance and style at a pace exceeding all competitors. The current analysis looks at the connectivity present within NIKE's 'thinks for your feet' as a semiotic marketing pitch intended to redirect the company's strategy toward a large segment of consumer footwear purchasers working in the technological sectors of the global economy, and especially those who otherwise do not use those products for sports -- or at least not the corporeal muscularity that was the brand's association one decade ago.

In 2009, NIKE underwent a brand reorganization initiative in response to a six (6) geography restructuring effort that led to the reduction of a management layer in emergent markets and North America, Western Europe, Eastern/Central Europe, Greater China, and Japan (Datamonitor, 2010). With the original scope of operations and marketing in four (4) regional segments, 1) U.S., 2) Asia Pacific, 3) Americas; and 4) the EMEA (Europe, Middle East and Africa) redesigned to increase core businesses and focus on stronger consumer allegiance to the brand, NIKE advanced its interests in growth areas such as the global sports equipment market.

Projections in this comprehensive segment are 2.1% with a market value of $76, 800 million by 2013. NIKE's total sales revenue for its fiscal year sustained its position as the leader in global sports equipment. To this end, its marketing activities, and including advertising and interactive multi-media shopping and major national market expansion outside North America will be priority.

The market is equally progressive in sales performance in the global footwear segment. NIKE, Inc. will respond to this phenomenon with a variety of strategies to capture an even greater portion of the market, which it currently attributes a significant 52.2% of its total revenues, through sales in its NIKETOWN stores, retailers, and virtual presence in its websites, nikestore.com and Nike.com. Financial statement for the Company in 2010 is cited in Table 1.

Table 1

Company Type

Public - NYSE: NKE

Headquarters

Fiscal Year-End

May

Financial Filings

SEC

2010 Sales (mil.)

$19,014.0

1-Year Sales Growth

(0.8%)

2010 Net Income (mil.)

$1,906.7

1-Year Net Income Growth

28.3%

Table 1. NIKE, Inc. Financial Statement (Hoovers, 2010).

Synonymous with the Brand's slogan, 'thinks for your feet,' NIKE, Inc. is strategizing capitalization on trends in sportswear as 'everyday' work wear, and as contributory force to innovation. Conductive rubber soles ensure safety in environments that require agility and futurist precision. NIKE, Inc. hopes to translate the force of its vision and investment in R+D through product development and marketing that speaks to a new generation of globetrotting elite, the new 'Nerdcore Rising.' Money talks, and NIKE, Inc. listens, from Microsoft employees, to tech geeks on the dance floor, the Company is positioned to take on 'ideas' in this growing market 'in a big way.'

At present, the sporting goods market in the United States is intensely competitive. The Corporation is faced with a downturn in spending in its national online consumer segment. A new strategy will be employed. Competitive landscape to NIKE, Inc. marketing prospectus references portfolio performance of the company in relation to the other top sportswear brands, Adidas, New Balance, and PUMA AG is illustrated in Table 2.

Table 2

KEY: Best of Group. Companies listed are Top Competitors. www.hoovers.com

Key Numbers

NIKE

adidas

New Balance1

PUMA AG

Annual Sales ($ mil.)

19,014.0

14,878.0

1,640.0

3,526.7

Employees

34,400

39,596

4,000

Market Cap ($ mil.)

41,159.2

32,900.7

3,453.0

Profitability

NIKE

adidas

New Balance1

PUMA AG

Industry2

Market3

Gross Profit Margin

46.51%

47.79%

50.86%

48.01%

28.77%

Pre-Tax Profit Margin

13.36%

7.07%

12.31%

9.68%

8.48%

Net Profit Margin

10.07%

5.03%

8.53%

6.75%

5.53%

Return on Equity

20.8%

12.9%

15.0%

16.6%

10.1%

Return on Assets

14.3%

5.7%

9.0%

9.7%

1.5%

Return on Invested Capital

19.6%

12.9%

15.0%

13.3%

...

Competitive Landscape, NIKE Corporation, 2010 (Hoovers, 2010).

While entirely proscriptive, the remainder of this analysis looks at the potential of NIKE, Inc.'s tertiary, yet sports interested demographic in Australian market, and poses a major change to the direction of advertising as the Company attempts to take on Asia Pacific. As the major, English speaking gateway to the Pacific Rim market outside the U.S., Australia's parallel economic, legal and cultural mileu to the West Coast of North America will serve as a launch site for new media and a new image in globetrotting nerd concept.

NIKE CORPORATION

In spite of NIKE, Inc. lead market position, a modest decline in revenues for fiscal 2010 continued in response to global economic recovery, and U.S. market share reductions to the Company's consumer product segments. In a key position to recapture professional sports brand identification through NFL sponsorship in the forthcoming year, NIKE, Inc. is set to dominate through its strategic televised commercial advertising during games, as well as through banner advertising at the mega events and ticket sale sites online.

Merchandising of NIKE, Inc. product at all NFL at public venues and industry conventions will also boost sales. Mass consumer identification with NFL players, and their celebrity trademark support of the brand through spokesperson spots will inevitably reposition NIKE, Inc. As a true sports brand. Diversification in other professional sports, includes 13% of its sales from the corporation's subsidiary businesses, Cole Haan, Converse, Hurley, NIKE Golf, and Umbro. A balance in youth affiliated brands will enable NIKE, Inc. To continue its conglomerate presence, as Converse (retro apparel and shoes), Umbro and Hurley (skateboarding, snowboarding, and surfing sportswear and shoes) all outperformed at a 4% rate, while the 'affluent' brands NIKE Golf and Cole Haan slipped in sales (Hoovers, 2010).

This bodes well for NIKE, Inc. In consideration of the youth culture minded consumers which comprise the Australian market. In 2008, NIKE acquired UK-based global soccer brand Umbro for approximately $576 million. Soccer interest in the Australian market is intense, and the company is positioned for growth in emerging soccer markets near the sub-continent, such as Indonesia. Candor in advertising may assist to reposition NIKE Golf, and its conundrum over Tiger Woods, whom has been a trademark partner since the early 1990s. Marital infidelity aside, NIKE, Inc. once repositioning efforts abroad will certainly benefit from continuation of this partnership which costs the corporation millions in endorsements presently. After all, Down Under is known for ribald humor and mixing a 'quiet one' with golf. If America can take on the 'nerd economy' then it is very likely that Australia can take on Tiger.

NIKE MARKET, OZ

Six Sigma tools for assessment of market potential of NIKE's presence in the global market, such as the SWOT (Strengths, Weaknesses, Opportunities, Threats) of the Company's offers position offer depth to the media analysis. This is especially the case where desired expansion of NIKE's market in secondary, sports minded major national markets like Australia, that have a still have a high degree of untapped profitability. Advances in the Australian footwear and sportswear markets are first determined according to baseline analysis of the Corporation's global prospectus, seen in Table 3.

Table 3

STRENGTHS

Vertical integration

Diversified revenue streams

Wide product portfolio

WEAKNESSES

High pension liabilities

OPPORTUNITIES

Brand reorganization initiative

Market outlook of global sports equipment

Growth in footwear market

Table 3. SWOT Analysis, Nike Corp. (Datamonitor, 2010).

THREATS

Counterfeit goods

Declining online retail spending in the U.S.

Intense competition

Limited control over contract manufacturers

Vertical integration of NIKE, Inc. operations means that the company retains a relatively high control over the value chain of its products from manufacture to market. Consumers are given guarantee in products through a lexicon of traditionalism, which is not surprisingly the leverage NIKE, Inc. needs to retain its more mature customers. If Cole Haan and NIKE Golf are the segments that are slipping, then cost conscious consumers over forty will be especially finicky to target.

Assurance of the Brand's longevity and persistent quality will be critical in retention of this portion of the market, as those consumers have education in corporate shareholder performance, and have witnessed the bankruptcy of brands occupying the same strata of the market as those subsidiaries of NIKE, Inc., such as Eddie Bauer in the wake of the global economic crisis.

Recuperation of earnings inculcates 'value' in brand consistency so that customers of those product lines feel confident that their self-presentation is 'worth it.' Raised…

Sources Used in Documents:

References

Australia Footwear Market (2010). Datamonitor.

Foot Locker, Inc., Australia (2010). Retrieved from: http:/ / www.footlocker.au

Foot Locker, Inc. (2010). Hoovers. Retrieved from: http://www.hoovers.com

Foot Locker, Inc. (2009). Datamonitor. Retrieved from: http://www.datamonitor.com


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