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Nike, Inc. and the AthleticFootwear IndustryStrategy and CompetitionAnalysis

Prof. Ben Gomez Casseres

By:

Polina Petkova, MBA 2011Sudarsan Pattabiraman, MBA 20115/19/2010

1

Firm Overview

Nike, Inc. is the biggest manufacturer worldwide of both athletic footwear and apparelin terms of sales. It specializes in the production and sale of athletic footwear, apparel andequipment. For the fiscal year 2009 it announces revenues of about $19.2 billion.

1

It is aglobal company that besides in the US, which accounts for 34% of its revenue

2

, operates inEurope, Middle East, and Africa. Nike has manufacturing plants and operations throughoutAsia. The global slowdown in both sales and consumption in the retail industry affected Nikeand it recorded a revenue growth of only about 3% in 2009. Net income fell by 21% and wasexpected to continue to fall in 2010.

3

However, net income in the third quarter of 2010 isalmost double in the net income in the same period of the previous year bringing it up to $496million.

4

Nike’s Global Business Strategy

When first founded in

1962

under the name of

Blue Ribbon Sports,

the strategy was“to distribute low-cost, high-quality Japanese athletic shoes to American consumers in anattempt to break Germany’s domination of the domestic industry.”

5

Today Nike offers athletic shoes at every marketable price point to a global market. Nike sustains its leading position through emphasizing quality products, constant innovation,and aggressive marketing. Nike sells its products in more than 180 countries under not onlyits namesake brand but brands such as Cole Haan, Converse, Hurley International, and UmbroInc.

6

It uses distribution channels such as company-owned stores and websites or sportsretailers,