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TURGAY ARIKAN
HATİCE AKAN
ELÇİN KARABULUT
FATMA MERVE GÜVEN

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CONTENTS
1. EXECUTIVE SUMMARY…………….……………………………………………...…….…6
2. NIKE OVERVIEW………………………..…………………………………………………...8
2.1. HISTORY………………………………..………………………………………………….....8
2.2. ORIGIN OF THE NAME AND THE SWOOSH………………………………………....…18
2.3. ORGANIZATION CHART OF NIKE ……………………..…………………………...…...19
2.4. MISION AND VISION STATEMENTS OF NIKE……………….…………………...…....22
2.4.1. NIKE's VISSION...…………………………………………………….………………..….22
2.4.2. NIKE‘s MISSION....…………………………………………………..…………………...23
2.5. PRODUCTS OF NIKE ……………..……………………….………………………….…....24
2.5.1. FOR MEN AND WOMEN.................…..……………………………….………………...25
2.5.2. WIND RUNNER AND SHELLS..................…………………………………………....…26
2.5.3. THISRT...................……………………………….………………………………….…....26
2.5.4. GEAR PACKBAGES AND BAGES.…………...………………………….……………...26
2.6.NIKE PORTFOLIO OF BRAND..........…………….……………………..……….……....27
2.6.1.CONVERSE…..……………………………………….…………………….……….…..…28
2.6.2.HARLEY.......……………..………………………….…………………….…….………....28
2.6.3.JORDAN..…………………………………………….…………………….……………....28
2.6.4.COLLEHAN………………………………………….…………………….………….….29
2.6.5.BAUER………………………………..……………….…………………….……………...29
3. EXTERNAL ANALYSIS……………………………………………………..………………29
3.1. POLITICAL FORCES……………………………………………………………………….29
3.2. ECONOMIC FORCES……………………………….…………………..……...………......30
3.3.SOCIAL CULTURAL FORCES………………………………………………….……….....30
3.4. TECHNOLOGICAL FORCES…..……………………………………………..…………....30
3.5. ENVIRONMENTAL FORCES…..……………………………………………..…………...31
3.6. LEGAL FORCES…..…………………………………………………………..………….....31
3.7. GEOPAPRICAL FORCES……….……………………………………………..…………....31
3.8. INTERNATIONAL FORCES….…….………………………………………..………….....32
3.9. EFE MATRIX……………………….…………………………………………...…………..32
4. PORTERS FIVE FORCES MODEL……………………………………………….…….…33
4.1. POTENTIAL ENTRANTS……………..………………………………………………..…..34
4.2. BUYERS…………………………………………………………………………………….34
4.3. SUBSTITUTES……………………………...………………………………………...…....35
4.4. SUPLIERS…..……………………………...………………………………………...…....…35
4.5. COMPETITIVE RIVARLY………………...………………………………………...……...36
4.6. COMPETITIVE PROFILE MATRIX…………..……………………………………………36
4.6.1. MAJOR COMPETITIORS………..…………..……………………………………………36
4.6.2.COMMENT ABOUT CHART….…………..………………………………………..…….38
5. INTERNAL ANALYSIS…………………………………………………………..…………41
5.1. NIKE MANAGEMENT STRUCTURE…………..…………………………………..……41
5.2. MARKETING………………………………………...……………………………..……….42

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5.3. R&D …………………………………………………...…..………………………….……...45
5.4..PRODUCTION SYSTEM.......……………………...…..………………………….…....…...47
5.5.OPERATION MANAGENT OF NIKE....…………...…..…...……………………….…….48
5.6. FINANCE…………………………………………………….………………………..…..…48
5.7. IFE MATRIX…………………………………………………………………..………….…57
6.STRATEGY ANALYSIS (CREATE ALTERNATIVE STRATEGY)……………………59
6.1. SWOT ANALYSIS…………………………...………………….…………………………59
6.2. SPACE MATRIX……………………………….…………………..………………………63
6.3. BCG MATRIX…………………………………………………….…………………………65
6.4. INTERNAL - EXTERNAL ANLYSIS………………………………………………………68
6.5. GRAND STRATEGY MARTIX………………………………………….…………………69
7. STRATEGY SELECTION (CHOICE) AND RECOMMENDATIONS …………..……..70
7.1. QUANTITY STRATEGIC POSITION MATRIX...…………………………………..……70
7.2. FIRST RECOMMENDATION……………………………………………………..………72
7.3. SECOND RECOMMENDATION……………………...………………….………………73
7.4. THIRD RECOMMENDATION……………………………………....……………………73
8. STRATEGY IMPLEMENTATION……………………………..……….…………………74
8.1. MANAGEMENT AND OPERATIONS…………………………….……..………………74
8.2. MARKETING……………………………………………………….………..…………….75
8.3. FINANCE…………………………………………………….........…………….…………76
8.4. RESEACH AND DEVELOPMENT.………………………………..…………….…………77
9. STRATEGY EVALUATION AND CONTROL…………………………….………….…77
9.1. Evaluation………………………………….…………………………………….…………79
9.2. Balance score Card of Nike………………….………………………………….…………80
10. CONCLUSION…………………………………...………………………..………………81
BIBLIOGRAPHIC……………………………………………..………………………………82

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ABSTRACT
We analyze Blue Rıbbon Sports and NIKE Company that under of its successful group
and Nıke Company’s products, market position, competitors, brand power , financial growth,
partnerships, organization structure , suppliers and vision & mission in this project. Also we
made up matrixes according to the general data of NIKE Company and defined our strategies.
Finally, we proposed in order to be effectively about the profitability and productivity of the
company in market.
NIKE'S EXECUTIVES
This report is an extensive research on the marketing strategies of NIKE. It covers an
extensive matrix and depicts all graphs, fact and figures of NIKE. Orıgınally known as Blue
Rıbbon Sports (BRS) was founded by Unıversıty of Oregon track athlete Phılıp knıght and hıs
coach Bill Bowerman ın January 1964.The company is headquartered near Beaverton
,Oregon, in the Portland metropolitan area, and is one of only two Fortune 500 companies
headquartered in Oregon. It is one of the world's largest suppliers of athletic shoes and
apparel[3] 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. The brand alone is valued at $10.7 billion, making it the most
valuable brand among sports businesses. In 1976, the company hired John Brown and
Partners, based in Seattle, as its first advertising agency. The following year, the agency
created the first "brand ad" for Nike, called "There is no finish line", in which no Nike
product was shown. By 1980, Nike had attained a 50% market share in the U.S. athletic shoe
market, and the company went public in December of that year.
We analyze Nike’s management,financial position,marketing activity,production and
operation facility, economomic forces,research and development activity,environmental
factors.According these results,we offer to the company strategy.The External Factor
Evaluation (EFE) Matrix analysed which the company develops which opportunities in the
market the company can get and which threats the company should be avoided in the market
area. Porter’s 5 forces model has analysed to see how environmental forces effect the business
for doing job. and Company’s competitors has been anaysed and reported in Competitive
Profile Matrix. The internal Factor Evaluation ( İFE ) Matrix briefly explained that the strong
sides of internal factors that company is good and weakness sides of the company that the
company should improve internally. In formulating strategy, we formulated some strategies
by evaluating SWOT, SPACE, INTERNAL-EXTERNAL,GRAND strategy, we found out
suitable strategies to implement in QSPM for selecting and recommend main strategy.
Fınally, we analyze effectiveness of our strategy with Balance scorecard and evaluation stage.
As a result, we summarize all our stages in our Project.

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NIKE OVERWIEW
NIKE HISTORY
Founded as an importer of Japanese shoes, NIKE, Inc. (Nike) has grown to be the world's
largest marketer of athletic footwear and apparel. In the United States, Nike products are sold
through about 20,000 retail accounts; worldwide, the company's products are sold in about
110 countries. Both domestically and overseas Nike operates retail stores, including
NikeTowns and factory outlets. Nearly all of the items are manufactured by independent
contractors, primarily located overseas, with Nike involved in the design, development, and
marketing. In addition to its wide range of core athletic shoes and apparel, the company also
sells Nike and Bauer brand athletic equipment, Cole Haan brand dress and casual footwear,
and the Sports Specialties line of headwear featuring licensing team logos. The company has
relied on consistent innovation in the design of its products and heavy promotion to fuel its
growth in both U.S. and foreign markets. The ubiquitous presence of the Nike brand and its
Swoosh trademark led to a backlash against the company by the late 20th century, particularly
in relation to allegations of low wages and poor working conditions at the company's Asian
contract manufacturers.
BRS Beginnings
Nike's precursor originated in 1962, a product of the imagination of Philip H. Knight, a
Stanford University business graduate who had been a member of the track team as an
undergraduate at the University of Oregon. Traveling in Japan after finishing up business
school, Knight got in touch with a Japanese firm that made athletic shoes, the Onitsuka Tiger
Co., and arranged to import some of its products to the United States on a small scale. Knight
was convinced that Japanese running shoes could become significant competitors for the
German products that then dominated the American market. In the course of setting up his
agreement with Onitsuka Tiger, Knight invented Blue Ribbon Sports to satisfy his Japanese
partner's expectations that he represented an actual company, and this hypothetical firm
eventually grew to become Nike, Inc.
At the end of 1963, Knight's arrangements in Japan came to fruition when he took
delivery of 200 pairs of Tiger athletic shoes, which he stored in his father's basement and
peddled at various track meets in the area. Knight's one-man venture became a partnership in
the following year, when his former track coach, William Bowerman, chipped in $500 to
equal Knight's investment. Bowerman had long been experimenting with modified running
shoes for his team, and he worked with runners to improve the designs of prototype Blue
Ribbon Sports (BRS) shoes. Innovation in running shoe design eventually would become a
cornerstone of the company's continued expansion and success. Bowerman's efforts first paid
off in 1968, when a shoe known as the Cortez, which he had designed, became a big seller.

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BRS sold 1,300 pairs of Japanese running shoes in 1964, its first year, to gross $8,000.
By 1965 the fledgling company had acquired a full-time employee and sales had reached
$20,000. The following year, the company rented its first retail space, next to a beauty salon
in Santa Monica, California, so that its few employees could stop selling shoes out of their
cars. In 1967 with fast-growing sales, BRS expanded operations to the East Coast, opening a
distribution office in Wellesley, Massachusetts.Bowerman's innovations in running shoe
technology continued throughout this time. A shoe with the upper portion made of nylon went
into development in 1967, and the following year Bowerman and another employee came up
with the Boston shoe, which incorporated the first cushioned mid-sole throughout the entire
length of an athletic shoe.
Emergence of Nike in 1970s
By the end of the decade, Knight's venture had expanded to include several stores and
20 employees and sales were nearing $300,000. The company was poised for greater growth,
but Knight was frustrated by a lack of capital to pay for expansion. In 1971 using financing
from the Japanese trading company Nissho Iwai Corporation, BRS was able to manufacture
its own line of products overseas, through independent contractors, for import to the United
States. At this time, the company introduced its Swoosh trademark and the brand name Nike,
the Greek goddess of victory. These new symbols were initially affixed to a soccer shoe, the
first Nike product to be sold.
A year later, BRS broke with its old Japanese partner, Onitsuka Tiger, after a
disagreement over distribution, and kicked off promotion of its own products at the 1972 U.S.
Olympic Trials, the first of many marketing campaigns that would seek to attach Nike's name
and fortunes to the careers of well-known athletes. Nike shoes were geared to the serious
athlete, and their high performance carried with it a high price.
In their first year of distribution, the company's new products grossed $1.96 million and the
corporate staff swelled to 45. In addition, operations were expanded to Canada, the company's
first foreign market, which would be followed by Australia, in 1974.Bowerman continued his
innovations in running-shoe design with the introduction of the Moon shoe in 1972, which
had a waffle-like sole that had first been formed by molding rubber on a household waffle
iron. This sole increased the traction of the shoe without adding weight.
In 1974 BRS opened its first U.S. plant, in Exeter, New Hampshire. The company's
payroll swelled to 250, and worldwide sales neared $5 million by the end of 1974. This
growth was fueled in part by aggressive promotion of the Nike brand name. The company
sought to expand its visibility by having its shoes worn by prominent athletes, including
tennis players Ilie Nastase and Jimmy Connors. At the 1976 Olympic Trials these efforts
began to pay off as Nike shoes were worn by rising athletic stars.The company's growth had
truly begun to take off by this time, riding the boom in popularity of jogging that took place in
the United States in the late 1970s. BRS revenues tripled in two years to $14 million in 1976,
and then doubled in just one year to $28 million in 1977. To keep up with demand, the

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company opened new factories, adding a stitching plant in Maine and additional overseas
production facilities in Taiwan and Korea. International sales were expanded when markets in
Asia were opened in 1977 and in South America the following year. European
distributorships were lined up in 1978.
Nike continued its promotional activities with the opening of Athletics West, a training
club for Olympic hopefuls in track and field, and by signing tennis player John McEnroe to an
endorsement contract. In 1978 the company changed its name to Nike, Inc. The company
expanded its line of products that year, adding athletic shoes for children.By 1979 Nike sold
almost half the running shoes bought in the United States, and the company moved into a new
world headquarters building in Beaverton, Oregon. In addition to its shoe business, the
company began to make and market a line of sports clothing, and the Nike Air shoe
cushioning device was introduced.
1980s Growth through International Expansion and Aggressive Marketing
By the start of the 1980s, Nike's combination of groundbreaking design and savvy and
aggressive marketing had allowed it to surpass the German athletic shoe company Adidas
AG, formerly the leader in U.S. sales. In December 1980, Nike went public, offering two
million shares of stock. With the revenues generated by the stock sale, the company planned
continued expansion, particularly in the European market. In the United States, plans for a
new headquarters on a large, rural campus were inaugurated, and an East Coast distribution
center in Greenland, New Hampshire, was brought on line. In addition, the company bought a
large plant in Exeter, New Hampshire, to house the Nike Sport Research and Development
Lab and also to provide for more domestic manufacturing capacity. The company had shifted
its overseas production away from Japan at this point, manufacturing nearly four-fifths of its
shoes in South Korea and Taiwan. It established factories in mainland China in 1981.
By the following year, when the jogging craze in the United States had started to
wane, half of the running shoes bought in the United States bore the Nike trademark. The
company was well insulated from the effects of a stagnating demand for running shoes,
however, since it gained a substantial share of its sales from other types of athletic shoes,
notably basketball shoes and tennis shoes. In addition, Nike benefited from strong sales of its
other product lines, which included apparel, work and leisure shoes, and children's shoes.
Given the slowing of growth in the U.S. market, however, the company turned its
attention to growth in foreign markets, inaugurating Nike International, Ltd. in 1981 to
spearhead the company's push into Europe and Japan, as well as into Asia, Latin America, and
Africa. In Europe, Nike faced stiff competition from Adidas and Puma, which had a strong
hold on the soccer market, Europe's largest athletic shoe category.
The company opened a factory in Ireland to enable it to distribute its shoes without
paying high import tariffs, and in 1981 bought out its distributors in England and Austria, to
strengthen its control over marketing and distribution of its products. In 1982 the company

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outfitted Aston Villa, the winning team in the English and European Cup soccer
championships, giving a boost to promotion of its new soccer shoe. In Japan, Nike allied itself
with Nissho Iwai, the sixth largest Japanese trading company, to form Nike-Japan
Corporation. Because Nike already held a part of the low-priced athletic shoe market, the
company set its sights on the high-priced end of the scale in Japan.
By 1982 the company's line of products included more than 200 different kinds of shoes,
including the Air Force I, a basketball shoe, and its companion shoe for racquet sports, the Air
Ace, the latest models in the long line of innovative shoe designs that had pushed Nike's
earnings to an average annual increase of almost 100 percent. In addition, the company
marketed more than 200 different items of clothing. By 1983--when the company posted its
first-ever quarterly drop in earnings as the running boom peaked and went into a decline--
Nike's leaders were looking to the apparel division, as well as overseas markets, for further
expansion. In foreign sales, the company had mixed results. Its operations in Japan were
almost immediately profitable, and the company quickly jumped to second place in the
Japanese market, but in Europe, Nike fared less well, losing money on its five European
subsidiaries.
Faced with an 11.5 percent drop in domestic sales of its shoes in the 1984 fiscal year,
Nike moved away from its traditional marketing strategy of support for sporting events and
athlete endorsements to a wider-reaching approach, investing more than $10 million in its first
national television and magazine advertising campaign. This followed the 'Cities Campaign,'
which used billboards and murals in nine American cities to publicize Nike products in the
period before the 1984 Olympics. Despite the strong showing of athletes wearing Nike shoes
in the 1984 Los Angeles Olympic games, Nike profits were down almost 30 percent for the
fiscal year ending in May 1984, although international sales were robust and overall sales rose
slightly. This decline was a result of aggressive price discounting on Nike products and the
increased costs associated with the company's push into foreign markets and attempts to build
up its sales of apparel.
Earnings continued to fall in the next three quarters as the company lost market share,
posting profits of only $7.8 million at the end of August 1984, a loss of $2.2 million three
months later, and another loss of $2.1 million at the end of February 1985. In response, Nike
adopted a series of measures to change its sliding course. The company cut back on the
number of shoes it had sitting in warehouses and also attempted to fine-tune its corporate
mission by cutting back on the number of products it marketed. It made plans to reduce the
line of Nike shoes by 30 percent within a year and a half. In addition, leadership at the top of
the company was streamlined, as founder Knight resumed the post of president--which he had
relinquished in 1983--in addition to his duties as chairman and chief executive officer. Overall
administrative costs were also reduced. As part of this effort, Nike also consolidated its
research and marketing branches, closing its facility in Exeter, New Hampshire, and cutting
75 of the plant's 125 employees. Overall, the company laid off about 400 workers during
1984.

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Faced with shifting consumer interests (i.e., the U.S. market move from jogging to aerobics),
the company created a new products division in 1985 to help keep pace. In addition, Nike
purchased Pro-form, a small maker of weightlifting equipment, as part of its plan to profit
from all aspects of the fitness movement.
The company was restructured further at the end of 1985 when its last two U.S. factories
were closed and its previous divisions of apparel and athletic shoes were rearranged by sport.
In a move that would prove to be the key to the company's recovery, in 1985 the company
signed basketball player Michael Jordan to endorse a new version of its Air shoe, introduced
four years earlier. The new basketball shoes bore the name 'Air Jordan.'
In early 1986 Nike announced expansion into a number of new lines, including casual
apparel for women, a less expensive line of athletic shoes called Street Socks, golf shoes, and
tennis gear marketed under the name 'Wimbledon.' By mid-1986 Nike was reporting that its
earnings had begun to increase again, with sales topping $1 billion for the first time. At that
point, the company sold its 51 percent stake in Nike-Japan to its Japanese partner; six months
later, Nike laid off ten percent of its U.S. employees at all levels in a major cost-cutting
strategy.
Following these moves, Nike announced a drop in revenues and earnings in 1987, and
another round of restructuring and budget cuts ensued, as the company attempted to come to
grips with the continuing evolution of the U.S. fitness market. Only Nike's innovative Air
athletic shoes provided a bright spot in the company's otherwise erratic progress, allowing the
company to regain market share from rival Reebok International Ltd. in several areas,
including basketball and cross-training.
The following year, Nike branched out from athletic shoes, purchasing Cole Haan, a
maker of casual and dress shoes, for $80 million. Advertising heavily, the company took a
commanding lead in sales to young people to claim 23 percent of the overall athletic shoe
market. Profits rebounded to reach $100 million in 1988, as sales rose 37 percent to $1.2
billion. Later that year, Nike launched a $10 million television campaign around the theme
'Just Do It' and announced that its 1989 advertising budget would reach $45 million.
In 1989 Nike marketed several new lines of shoes and led its market with $1.7 billion in
sales, yielding profits of $167 million. The company's product innovation continued,
including the introduction of a basketball shoe with an inflatable collar around the ankle, sold
under the brand name Air Pressure. In addition, Nike continued its aggressive marketing,
using ads featuring Michael Jordan and actor-director Spike Lee, the ongoing 'Just Do It'
campaign, and the 'Bo Knows' television spots featuring athlete Bo Jackson. At the end of
1989, the company began relocation to its newly constructed headquarters campus in
Beaverton, Oregon.
Market Dominance in the Early to Mid-1990s

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In 1990 the company sued two competitors for copying the patented designs of its shoes and
found itself engaged in a dispute with the U.S. Customs Service over import duties on its Air
Jordan basketball shoes. In 1990 the company's revenues hit $2 billion. The company
acquired Tetra Plastics Inc., producers of plastic film for shoe soles. That year, the company
opened NikeTown, a prototype store selling the full range of Nike products, in Portland,
Oregon.
By 1991 Nike's Visible Air shoes had enabled it to surpass its rival Reebok in the U.S.
market. In the fiscal year ending May 31, 1991, Nike sales surpassed the $3 billion mark,
fueled by record sales of 41 million pairs of Nike Air shoes and a booming international
market. Its efforts to conquer Europe had begun to bear fruit; business there grew by 100
percent that year, producing more than $1 billion in sales and gaining the second place market
share behind Adidas. Nike's U.S. shoe market had, in large part, matured, slowing to five
percent annual growth, down from 15 percent annual growth from 1980 and 1988. The
company began eyeing overseas markets and predicted ample room to grow in Europe. Nike's
U.S. rival Reebok, however, also saw potential for growth in Europe, and by 1992 European
MTV was glutted with athletic shoe advertisements as the battle for the youth market heated
up between Nike, Reebok, and their European competitors, Adidas and Puma.Nike also saw
growth potential in its women's shoe and sports apparel division. In February 1992 Nike
began a $13 million print and television advertising pitch for its women's segment, built upon
its 'Dialogue' print campaign, which had been slowly wooing 18- to 34-year-old women since
1990. Sales of Nike women's apparel lines Fitness Essentials, Elite Aerobics, Physical
Elements, and All Condition Gear increased by 25 percent in both 1990 and 1991 and jumped
by 68 percent in 1992. In July 1992 Nike opened its second NikeTown retail store in Chicago,
Illinois. Like its predecessor in Portland, the Chicago NikeTown was designed to 'combine
the fun and excitement of FAO Schwartz, the Smithsonian Institute and Disneyland in a space
that will entertain sports and fitness fans from around the world' as well as provide a high-
profile retail outlet for Nike's rapidly expanding lines of footwear and clothing.
Nike celebrated its 20th anniversary in 1992, virtually debt free and with company
revenues of $3.4 billion. Gross profits jumped $100 million in that year, fueled by soaring
sales in its retail division, which expanded to include 30 Nike-owned discount outlets and the
two NikeTowns. To celebrate its anniversary, Nike brought out its old slogan 'There is no
finish line.' As if to underscore that sentiment, Nike Chairman Philip Knight announced
massive plans to remake the company with the goal of being 'the best sports and fitness
company in the world.' To fulfill that goal, the company set the ground plans for a
complicated yet innovative marketing structure seeking to make the Nike brand into a
worldwide megabrand along the lines of Coca-Cola, Pepsi, Sony, and Disney. Nike continued
expansion of its high-profile NikeTown chain, opening outlets in Atlanta, Georgia, in the
spring of 1993 and Costa Mesa, California, later that year. Also in 1993, as part of its long-
term marketing strategy, Nike began an ambitious venture with Mike Ovitz's Creative Artists
Agency to organize and package sports events under the Nike name--a move that potentially

14. 14
led the company into competition with sports management giants such as ProServ, IMG, and
Advantage International.
Nike also began a more controversial venture into the arena of sports agents,
negotiating contracts for basketball's Scottie Pippin, Alonzo Mourning, and others in addition
to retaining athletes such as Michael Jordan and Charles Barkley as company spokespersons.
Nike's influence in the world of sports grew to such a degree that in 1993 Sporting News
dubbed Knight the most powerful man in sports.Critics contended that Nike's influence ran
too deep, having its hand in negotiating everything in an athlete's life from investments to the
choice of an apartment. But Nike's marketing executives saw it as part of a campaign to create
an image of Nike not just as a product line but as a lifestyle, a 'Nike attitude.’Nearly everyone
agreed, however, that Nike was the dominant force in athletic footwear in the early to mid-
1990s. The company held about 30 percent of the U.S. market by 1995, far outdistancing the
20 percent of its nearest rival, Reebok. Overseas revenues continued their steady rise,
reaching nearly $2 billion by 1995, about 40 percent of the overall total. Not content with its
leading position in athletic shoes and its growing sales of athletic apparel--which accounted
for more than 30 percent of revenues in 1996--Nike branched out into sports equipment in the
mid-1990s. In 1994 the company acquired Canstar Sports Inc., the leading maker of skates
and hockey equipment in the world, for $400 million. Canstar was renamed Bauer Nike
Hockey Inc., Bauer being
Canstar's brand name for its equipment. Two years later Bauer Nike became part of the
newly formed Nike equipment division, which aimed to extend the company into the
marketing of sport balls, protective gear, eyewear, and watches. Also during this period, Nike
signed up its next superstar spokesperson, Tiger Woods. In 1995, at the age of 20, Woods
agreed to a 20-year, $40 million endorsement contract. The golf phenom went on to win an
inordinate number of tournaments, often shattering course records, and to become only the
second golfer in history to win three 'majors' within a single year, more than validating the
blockbuster contract.
Late 1990s Slippage
For the fiscal year ending in May 1997, Nike earned a record $795.8 million on record
revenues of $9.19 billion. Overseas sales played a large role in the 42 percent increase in
revenues from 1996 to 1997. Sales in Asia increased by more than $500 million (to $1.24
billion), while European sales surged ahead by $450 million. Back home, Nike's share of the
U.S. athletic shoe market neared 50 percent. The picture at Nike soon turned sour, however,
as the Asian financial crisis that erupted in the summer of 1997 sent sneaker sales in that
region plunging. By fiscal 1999, sales in Asia had dropped to $844.5 million. Compounding
the company's troubles was a concurrent stagnation of sales in its domestic market, where the
fickle tastes of teenagers began turning away from athletic shoes to hiking boots and other
casual 'brown shoes.' As a result, overall sales for 1999 fell to $8.78 billion. Profits were
falling as well--including a net loss of $67.7 million for the fourth quarter of fiscal 1998, the
company's first reported loss in more than 13 years. The decline in net income led to a cost-

15. 15
cutting drive that included the layoff of five percent of the workforce, or 1,200 people, in
1998, and the slashing of its budget for sports star endorsements by $100 million that same
year.
Nike was also dogged throughout the late 1990s by protests and boycotts over
allegations regarding the treatment of workers at the contract factories in Asia that employed
nearly 400,000 people and that made the bulk of Nike shoes and much of its apparel. Charges
included abuse of workers, poor working conditions, low wages, and use of child labor. Nike's
initial reaction--which was highlighted by Knight's insistence that the company had little
control over its suppliers--resulted in waves of negative publicity. Protesters included church
groups, students at universities that had apparel and footwear contracts with Nike, and
socially conscious investment funds. Nike finally announced in mid-1998 a series of changes
affecting its contract workforce in Asia, including an increase in the minimum age, a
tightening of air quality standards, and a pledge to allow independent inspections of factories.
Nike nonetheless remained under pressure from activists into the 21st century. Nike, along
with McDonald's Corporation, the Coca-Cola Company, and Starbucks Corporation, among
others, also became an object of protest from those who were attacking multinational
companies that pushed global brands. This undercurrent of hostility burst into the spotlight in
late 1999 when some of the more aggressive protesters against a World Trade Organization
meeting in Seattle attempted to storm a NikeTown outlet.
Seeking to recapture the growth of the early to mid-1990s, Nike pursued a number of
new initiatives in the late 1990s. Having initially missed out on the trend toward extreme
sports (such as skateboarding, mountain biking, and snowboarding), Nike attempted to rectify
this miscue by establishing a unit called ACG&mdash⁄ort for 'all-conditions gear'--in 1998.
Two years later, the company created a new division called Techlab to market a line of sports-
technology accessories, such as a digital audio player, a high-altitude wrist compass, and a
portable heart-rate monitor. Both of these initiatives were aimed at capturingsales from the
emerging Generation Y demographic group. In early 1999 Nike began selling its shoes and
other products directly to consumers via the company web site. Nike announced in September
of that year that it would buy about ten percent of Fogdog Inc., which ran a sporting goods e-
commerce site, in exchange for granting Fogdog the exclusive online rights to sell the full
Nike line. The company finally earned some good publicity in 1999 when it sponsored the
U.S. national women's soccer team that won the Women's World Cup. With its record of
innovative product design and savvy promotion and an aggressive approach to containing
costs and revitalizing sales, Nike appeared likely to stage an impressive comeback in the early
21st century.
Nike History Timeline Info
1950's
• Phil Knight and Bill Bowerman meet

16. 16
1960's
• Blue Ribbon Sports (BRS) was made and founded by Phil Knight
• The popular Cortez aka "Dope Mans" are made in Japan
1970's
• The Swoosh logo is created by Carolyn Davidson for $35.00
• The first Nike model shoe to hit the retail market is a soccer/football shoe
• A Promo Nike Tee becomes the first apparel item
• The famous Waffle Trainer is introduced, which becomes the best selling shoe in the
US
• Nike’s racing and training spiked shoe is made called the "Elite"
• Factories for manufacturing are set up in Korea and Taiwan
• For the first time Nike shoes are sold in Asia
• Blue Ribbon Sports changes their company name to Nike Inc.
• The first Nike running shoe with a air sole system to come out is the "Tailwind"
• World Headquarters are opened in Beaverton, Oregon
1980's
• Nike talks with the P.R. of China so they can produce shoes there
• Nike shoes become Canada’s top seller
• Nike shoes are now produced in 11 countries
• The famous "NIKE AIR" Air Force 1 and Air Ace make their introduction
• Over 200 shoes are now in Nike’s footwear line
• The first high performance kid’s running shoe is called the "Destiny"
• The Air Jordan makes it’s way to Nike footwear line up
• The Sock Racer comes out and is part of the Dynamic-Fit technology
• The first Air Max
• The first Cross Trainer

17. 17
• The famous "Just Do It" slogan comes to life
• The first model to combine the footbridge device and Air Sole is the Air Stab
• Spike Lee’s "Mars Blackmon" character helps promote the third style of Air Jordan
• Bo Jackson’s "Bo Knows" commercials include the "Just Do It" slogan
• Nike moves to a new World Campus in Beaverton
1990's
• The new World Campus sits on 74 acres with 570,000 square feet.
• In Portland, Oregon the first Nike Town opens
• The intro of the Air Huarache running shoe
• The intro of the Air Mowabb
• Nike Town opens in Chicago
• Charles Barkley first signature shoe is introduced
• The intro of the Run Walk shoe
• Nike Town opens in Atlanta and Orange County
• The intro of dual pressure cushioning in the Air Max
• Nike gets distribution rights in Korea and Japan
• The intro of Zoom Air technology
• Nike Town New York opens
• The Air Penny comes to life
2000's
• 2000: The National Football League declines to renew its exclusive
• apparel licensing arrangement with Nike.
• 2001: Nike opens its first Nike Goddess store, a unit targeting women, in Newport
Beach, CA.
• 2003: Nike purchases Converse Inc. for $ 305 million.
• 2008 :Nike acquired sports apparel supplier Umbro,

18. 18
• 2009: Air Jordan Shoe
• 2010: Nike Future Sole Design Competition.
Origin of the Name and the Swoosh
•is the Ancient Greek goddess of victoryNike
“It is one of the most recognized symbols in the world – The Swoosh. Simple. Fluid.
Fast.”
Evolution of the Swoosh Logo

19. 19
BOARD OF DIRECTORS
Philip H. Knight:Chairman of the Board of Directors
Mr. Knight, 71, a director since 1968, is Chairman of the Board of
Directors of NIKE. Mr. Knight is a co-founder of the Company and,
except for the period from June 1983 through September 1984, served
as its President from 1968 to 1990, and from June 2000 to 2004. Prior
to 1968, Mr. Knight was a certified public accountant with Price
Waterhouse and Coopers & Lybrand and was an Assistant Professor of
Business Administration at Portland State University.

20. 20
MARK PARK:President & Chief Executive Officer, NIKE,
Inc.
Mr. Parker has been President and Chief Executive Officer
and a director since 2006. He has been employed by NIKE since
1979 with primary responsibilities in product research, design
and development, marketing, and brand management. Mr.
Parker was appointed divisional Vice President in charge of
development in 1987, corporate Vice President in 1989, General
Manager in 1993, Vice President of Global Footwear in 1998,
and President of the NIKE Brand in 2001. In addition to helping
lead the continued growth of the Nike brand, Parker is
responsible for the growth of NIKE, Inc.'s global business
portfolio, which includes Converse Inc., and Hurley
International LL
David J. Ayre :Vice President, Global Human Resources
Mr. Ayre, 50, joined NIKE as Vice President, Global Human
Resources in July 2007.Prior to joining NIKE, he held a
number of senior human resource positions with PepsiCo,
Inc. since 1990, most recently as head of Talent and
Performance Rewards.
Donald W. Blair :Vice President and Chief Financial Officer
Mr. Blair, 52, joined NIKE in November 1999. Prior to joining
NIKE, he held a number of financial management positions with
PepsiCo, Inc., including Vice President, Finance of Pepsi−Cola
Asia, Vice President, Planning of PepsiCo’s Pizza Hut Division,
and Senior Vice President, Finance of The Pepsi Bottling Group,
Inc. Prior to joining PepsiCo, Mr. Blair was a certified public
accountant with Deloitte, Haskins, and Sells

21. 21
Charles D. Denson:President of the NIKE Brand
Mr. Denson, 54, has been employed by NIKE since 1979.
Mr. Denson held several management positions within the
Company, including his appointments as Director of USA
Apparel Sales in 1994, divisional Vice President, U.S.
Sales in 1994,divisional Vice President European Sales in
1997, divisional Vice President and General Manager,
NIKE Europe in 1998, Vice President and General
Manager of NIKE USA in 2000, and President of the
NIKE Brand in 2001.
Gary M. DeStefano :President, Global Operations
Mr. DeStefano, 53, has been employed by NIKE since 1982,
with primary responsibilities in sales and regional
administration. Mr. DeStefano was appointed Director of
Domestic Sales in 1990, divisional Vice President in charge of
domestic sales in 1992, Vice President of Global Sales in 1996,
Vice President and General Manager of Asia Pacific in 1997,
President of USA Operations in 2001, and President of Global
Operations in 2006.
TREVOR EDWARD: As President of the NIKE Brand
Edwards is responsible for leading all category and
geographic business units, the Jordan Brand and Action
Sports, which includes Hurley International LLC, Digital
Sport and brand management throughout the world as well
as leading NIKE's wholesale, retail and e-commerce
operations.Edwards was previously Global Brand &
Category Management Executive Vice President, where he
was responsible for helping to drive the NIKE Brand growth
strategy by leading its category business units globally.

22. 22
Mission Statement
Nike aims to lead in corporate citizenship through proactive programs that reflect caring
for the world family of Nike, our teammates, our consumers, and those who provide services
to Nike.Nike is the "largest seller of athletic footwear and athletic apparel in the world.
Performance and reliability of shoes, apparel, and equipment, new product development,
price, product identity through marketing and promotion, and customer support and service
are important aspects of competition in the athletic footwear,
apparel, and equipment industry. We believe we are competitive in all of these areas."
Jeanne P. Jackson :President, Direct to Consumer
Ms. Jackson, 58, served as a member of the NIKE, Inc. Board of
Directors from 2001 through March 2009, when she resigned
from our Board and was appointed President, Direct to Consumer.
She is founder and CEO of MSP Capital, a private investment
company. Ms. Jackson was CEO of Walmart.com from March
2000 to January 2002. She was with Gap, Inc., as President and
CEO of Banana Republic from 1995 to 2000, also serving as CEO
of Gap, Inc. Direct from 1998 to 2000. Since 1978, she has held
various retail management positions with Victoria’s Secret, The
Walt Disney Company, Saks Fifth Avenue, and Federated
Department Stores. Ms. Jackson is the past President of the
United States Ski and Snowboard Foundation Board of Trustees,
and is a director of McDonald’s Corporation. She is a former
director of Nordstrom, Inc., and Harrah’s Entertainment, Inc.

23. 23
PROPOSED MISSION
The company aims to " lead in corporate citizenship through proactive programs that
reflect caring for the world family of Nike, our teammates, our consumers, and those who
provide services to Nike." To continue to offer quality products with increasing growth in the
industry and expanding globally. Our mission has always been to provide a competitive edge
by developing the most technological products. Keeping in mind fair labor practices in all our
suppliers’ factories, while maintaining a competitive advantage, with the shareholders
interests, and company profits in mind. We also believe our employees are one of our most
important assets. To increase the responsibility towards the environment by evaluating the
impact of day to day operation and attempts to change operations that have a negative impact.
Vision Statement
“To bring inspiration and innovation to every athlete in the world.” To equip every athlete
with products that combine performance, quality, and fashion.
PROPOSED VISION
Continue to bring inspiration to present and future athletes, while maintaining the
company's standard of quality for its products.

24. 24
Nike future plan
During its investor meeting in New York, the Company announced a revenue target of
$27 billion by the end of fiscal 2018 based on growth expectations across its portfolio, which
includes the NIKE Brand, Cole Haan, Converse, Hurley, Jordan Brand, NIKE Golf and
Umbro. Additionally, the Company believes it can generate over $12 billion of cumulative
free cash flow from operations through 2018. Both goals extend NIKE, Inc.’s long-term
financial model of high single-digit revenue growth, mid-teens earnings per share growth, and
expanding returns on capital.
Nike expects to Increase its future orders for delivery.Nike will continue to focus their
resources on those investments that drive sustainable and profitable growth. Nike anticipate
its gross margins in fiscal 2011 may be negatively impacted by macroeconomic factors
including changes in currency exchange rates and rising costs for product input costs. Nike
expect demand creation will increase at a slightly slower rate than revenues, with spending
weighted toward the first quarter driven by key events including the 2010 World Cup. The
company anticipate operating overhead will grow at a mid single−digit rate, with faster
growth in the first half of the fiscal year, driven by increased investments in NIKE−owned
retail business.
PRODUCTS
Nike produces a wide range of sports equipment. Their first products were track running
shoes. They currently also make shoes, jerseys, shorts, base layers etc. for a wide range of
sports including track & field, baseball, ice hockey, tennis, Association football, lacrosse,
basketball and cricket. The most recent additions to their line are the Nike 6.0 and Nike SB
shoes, designed for skateboarding. Nike has recently introduced cricket shoes, called Air
Zoom Yorker, designed to be 30% lighter than their competitors'. In 2008, Nike introduced
the Air Jordan XX3, a high performance basketball shoe designed with the environment in
mind.Nike positions its products in such a way as to try to appeal to a "youthful....materialistic
crowd". It is positioned as a premium performance brand. However, it also engineers shoes
and apparel for discount stores like Wal-Mart under the Starter brand. Nike sells an
assortment of products, including shoes and a pararel for sports activities like association
football, basketball, running, combat sports, tennis, American football, athletics, golf and
cross training for men, women, and children. Nike also sells shoes for outdoor activities such
as tennis, golf, skateboarding, association football, baseball, American football, cycling,
volleyball, wrestling, cheerleading, aquatic activities, auto racing and other athletic and
recreational uses. Nike is well known and popular in Youth culture, Chav Culture and Hip
hop culture as they supply urban fashion clothing. Nike recently teamed up with Apple Inc. to
produce the Nike+ product which monitors a runner's performance radio device in the shoe
which links to the iPod nano. While the product generates useful statistics, it has been
criticized by researchers who were able to identify users'R F I D devices from 60 feet (18 m)
away using small, concealable intelligence motes in a wireless sensor network.

25. 25
In 2004, they launched the SPARQ Training Program/Division. It is currently the premier
training program in the U.S. In the video game Gran Turismo 4 there is a car by Nike called
the NikeOne 2022, designed by Phil Frank.
For Men and Women: Shoes
The Nike Air Force, now known as the Air
Force 1 (or AF1 or AF-1) athletic shoe is a
product of Nike, Inc. created by designer
Bruce Kilgore. This was the first basketball
shoe to use the Nike Air technology. This
shoe is offered in low, mid and high top.
Nike Max is a line of shoes first released by
Nike in 1987. The shoe was originally
designed by Tinker Hatfield, who started out
working for Nike as an architect designing
shops and offices; he also designed the Air
Jordan shoe
The shoe is given a simple outer design that
consists of the Nike Swoosh symbol across
the sides of the shoe and a streak across the
lower portion of the outer sole. Leather was
the first material used to construction the
shoe
Nike designers began a mission to re-craft iconic
sports apparel in the most technical materials they
could find. The ubiquitous American varsity jacket was
an obvious choice for the experiment that would
become Nike Sportswear. Raiding the All Conditions
Gear (ACG) innovation cache, they found fabrics,
laminates, and bonding methods that could brave nasty
weather but still look fresh.

26. 26
Wind runners and shells
t-shirt:
Gear – Backpacks, bags
The Nike Checkered Flash Men's Running Jacket offers
ultra-lightweight weather protection and reflectivity for
comfort and visibility on cool, low-light runs. The Nike
Checkered Flash Men's Running Jacket offers ultra-
lightweight weather protection and reflectivity for
comfort and visibility on cool, low-light runs.
 The Nike Checkered Flash Men's Running
Jacket offers ultra-lightweight weather
protection and reflectivity for comfort and
visibility on cool, low-light runs. Rib crew neck
with interior taping for durability and comfort.
Screen print at front for style. Regular fit that's
not too slim, not too loose.



With a cushioned shoulder strap and water-
resistant bottom, the Nike Team Training Max
Air (Medium) Duffel Bag provides lightweight
shock absorption and keeps gear dry in wet
conditions. Adjustable shoulder strap with Max
Air unit for shock absorption and custom
cushioning. Dual-zip main compartment for
secure, spacious storage. Ventilated shoe
compartment for versatile storage. The Nike
Team Training Gym Sack helps you organize
your gear with an interior divider and bonded zip
pocket. Water-resistant fabric with a PU-coated
bottom keeps your essentials dry and secure.




27. 27
NIKE PORTFOLIO OF BRANDS

28. 28
Converse Inc., established in 1908 and based in North Andover, Massachusetts, has
built a reputation as “America’s Original Sports Company”™ and has been associated with a
rich heritage of legendary shoes such as the Chuck Taylor® All Star® shoe, the Jack Purcell®
shoe and the One Star® shoe. Today, Converse offers a diverse portfolio including premium
lifestyle men's and women's footwear and apparel. Converse product is sold globally by
retailers in over 160 countries and through more than 79 company-owned retail locations in
the U.S.
Headquartered in Costa Mesa, California, Hurley International LLC designs and distributes a
line of action sports apparel for surfing, skateboarding and youth lifestyle apparel and
footwear under the Hurley brand name. For more information on Hurley and the company's
latest collections, please visit Hurley.com.
A division of NIKE, Inc., Jordan Brand is a premium brand of footwear, apparel and
accessories inspired by the dynamic legacy, vision and direct involvement of Michael Jordan.

29. 29
The Jordan Brand made its debut in 1997 and has grown into a complete collection of
performance and lifestyle products.
Cole Haan, based in Maine, sells dress and casual footwear and accessories for men and
women under the brand names of Cole Haan, g Series, and Bragano.
Nike Bauer Hockey, based in New Hampshire, manufactures and distributes hockey ice
skates, apparel and equipment, as well as equipment for in-line skating, and street and roller
hockey.
EXTERNAL ANALYSIS
POLITICAL FORCES:
 Striking dock workers
 Political unrest in the production countries
 Terrorism in the home country
The government must create economic policies that will foster the growth of
businesses. Nike, fortunately, has been helped by the US policies which enable it to
advance its products. The support accorded to Nike by the US government, particularly in
the general macroeconomic stability, low interest rates, stable currency conditions and the
international competitiveness of the tax system, form the foundation critical to Nike’s
growth.

30. 30
ECONOMIC FORCES:
 Slow down in the economy
 Reduction in consumer confidence
 Barriers of entry to the EU
 Contract manufacturing
In economy, the biggest threat for Nike would be economic recession. During
recession, Nike’s growth will be adversely affected. The US economy is experiencing
a downturn right now. Consumer purchases are slowing down. Currently, Nike's
feeling the pinch of the economic recession. The Asian economic crisis also affects
Nike since its goods are manufactured in Asia. The labor costs and material prices are
going up. Nike's growth is not just affected by the local economy but also in the
international economy. A weak Euro and an Asian recession could mean weak sales
for Nike.
SOCIAL CULTURAL FORCES:
 Brand conscious consumers
 Change in buying habits in younger people
 Generation Y prefers other types of footwear
 Increase in the female share of the market
 Corporate social responsibility
People are more health conscious nowadays. Diet and health are getting more prominence.
Consequently, more and more people are joining fitness clubs. There is an accompanying
demand for fitness products particularly exercise apparel, shoes and equipment. Nike is at the
forefront of this surge in demand as people are looking for sports shoes, apparel and
equipment.Nike, however, failed to foresee problems brought about by a sweatshop expose
pertaining to labor and factory conditions at production locations in Asia. This caused bad
publicity and declining sales as society and consumers demand more socially responsible
companies.
TECHNOLOGICAL FORCES:
 Speed of change of product
 Design Ability
 Speed of News reporting
Nike uses IT in its marketing information systems very effectively. Nike applies
marketing information systems to the economics of innovation, segmentation and
differentiation for most of its businesses. Nike’s leadership status owes in large part to the
use of extremely valuable Information Technology, and applying it to every aspect of the
product from development to distribution. Nike introduced Nike Shox, which
revolutionized the cushioning foam used in shoes Nike also collaborated with Apple and
is launching new apparel and footwear that will easily carry the consumer’s iPod .Product
innovation is an ongoing process and is vital to stay ahead of competition Companies in

31. 31
this industry invest money in R&D to keep up with the new demands of today’s athletes.
Nike employs many specialists including engineers, athletes, biomechanics, and industrial
designers to work together in the design process.
ENVIRONMENTAL FORCES:
 Re use a shoe
 Sustainability philosophy
 Climate impact
Environmental consciousness has a strong presence in Western Europe and Japan, as well as
in the United States. Currently, Nike has been “… pursuing product sustainability for more
than a decade. From increasing the use of water-based solvents in footwear manufacturing
and working to keep greenhouse gas emissions in check, to supporting organic cotton and
turning old shoes into new sports surfaces, Nike’s commitment to sustainability is part of our
Considered ethos” (“What led us to Nike Considered”). It can be said then that Nike does not
suffer environmental issues.
LEGAL FORCES:
 Threaten action by underage workforce
 Poor employment record
 Corporate social responsibility
 Contract manufacturing and copying of product (intellectual property)
 Trade agreements
Without proper management leading and planning in the Nike Corporation, the company
would have suffered from the child labor issue. Nike has made a true bounce-back from the
negative media attention, and continues to be successful due to their strong business ethic
philosophy.
GEOPAPHICAL FORCES:
- Production is outsourced to plants in Asia, Latin America, and Africa
- This reduces costs because labor is cheaper
-Puts sources of production closer to where they will be sold
Firms who outsource lose the ability to closely monitor product quality and working
conditions .Although some people find this unethical, firms cannot afford to keep production
close to home and still compete on profit margins.Plants are also located in many different
countries, rather than being concentrated in one area .

32. 32
INTERNATIONAL FORCES:
The demographic environment tells marketers who can be potential customer in terms of
size, density, location, age, sex, race, occupation, and other statistics. Changes can result in
significant opportunities and threats presenting themselves to the organization and major
trends for marketers include worldwide explosive population growth (Kotler and Armstrong).
All of these can provide Nike with the tools and assets it needs to promote its products in
different areas of the world and gain a bigger share of the market globally. The industry has
realized the influence of women’s sport players and is preparing to accommodate such an
increase and as women increase their consumption the younger generation is decreasing
because of the popularity of other footwear.
EFE MATRIX
External Opportunities Weight Rating Weight
Score
3. Growing segment of the female athletes. 0.12 4 0.48
4. International expansion into emerging markets – e.g.
India
0.12 4 0.48
5. Additional marketing of existing products to appeal to
new demographic groups.
0.07 2 0.14
6. Develop new alliances with companies that are
respected regarding social responsibility.
0.08 2 0.16
7. Brand reorganization by market regions 0.08 2 0.16
External Threats
1. High competitive industry 0.14 4 0.56
3. Production of counterfeit goods, and generic products. 0.10 3 0.30

33. 33
4. Negative public perception created by environmental,
child labor, contracted manufacturing issues, and sponsored
athletes.
0.10 3 0.30
5. International currency changes could decrease profits. 0.12 3 0.36
6. Federal Trade regulations in dealing with foreign
manufactures.
0.07 2 0.14
Totals 1.00 3.08
PORTER’S FIVE FORCES MODEL:

34. 34
POTENTIAL ENTRANTS:
 Other sportswear manufacturers expanding their portfolio
 Cheap copies from the Far East
 Threats of New Entrants: (Low)
Barriers to entry in the athletic footwear industry are high due to several factors.
It is as very capital intensive industry. Even though it would not be difficult for a new
company to obtain the raw materials and the labor needed to produce shoes, there is
almost no chance for them to gain popularity in such a mature industry with some of
the strongest brand names in the world. Brand loyalty is extremely strong and it would
be very hard for a new entrant to “steal” loyal customers from the already existent
players. Economies of scale play a huge role as well and the bigger players have an
advantage of producing the products at a lower price than compared with newer
entrants. As the output is bigger and the fixed costs of factories, machinery, marketing
and R&D will be decreased per unit. Both marketing and R&D constitute high costs
and since new entrants will not be able to take advantage of the economies of scale
they will be less competitive.
The industry itself is in a consolidation phase and only the big ones will survive.
The large companies are strategically and constantly acquiring smaller companies.
Some of the most popular acquisitions include Reebok by Adidas, Converse by Nike,
Saucony by Stride Rite, etc. Small companies are bought before they become a threat
to the bigger ones and before they have a chance to gain market share. In other words,
it is impossible to grow in this industry because someone will take over your
company.
BUYERS:
 The buyers of sports footwear have changed in the past decade.
 There has been and increase in women purchasing the shoes,
 Generation Y has a different tastes and purchasing methods
 Customers more affected by price
 Buyer Power: (Very High)
 The buyers for this industry are retailers and end users.
The footwear retailers, i.e. Footlocker, Wal-Mart, range in sizes. However, the top
25 retailers account for two-thirds of the sales of athletic footwear- approximately
$15 billion in value. New retailers are entering the market, such as “big box stores”
and vendors that open their own stores. The lack of concentration among buyers
brings down the margins and gives the power to the vendors. Retailers also have no
power in determining the design of the product. Therefore the big footwear
manufacturers generally dictate the price of their shoes.

35. 35
In order to gain more power buyer companies have started merging- Footlocker –Foot
Action, Sport Authority- Gart. This consolidation will transfer some of the power
from the big players because in order to be industry leaders they will need these well-
recognized retailers as well. Growing margins suggest that buyer power has been
increasing.The end user of the industry is also considered a buyer and he has
unlimited power.Every company is fighting for the loyalty of the end user through
constant innovations and brand management. However, if the user is dissatisfied, he
can easily switch the brand to another one.
SUBSTITUTES:
 Substitutes for athletic shoes are shoes in another category.
 When required for professional use there is no substitute goods, but as a fashion item
there are many other goods that could be purchased.
 Substitutes: (Low)
 Lifestyle athletic shoes sales, for instance are growing at the fastest annual
rate and Puma is undoubtedly the leader in this segment- with more than 50%
sales growth.
First, in the sports industry, other types of apparel could also be seen as a substitute,
in terms of building image and style.Second, in the same product category, other
types of shoes are also substitutes, such as slippers, heels, boots, flip-flops, etc.
Even though sneakers are still the most popular type of footwear in the
world. Companies such as Steve Madden and Sketchers are also seen as threats.
Steve Madden’s “thick high heeled shoes”19 are very popular and since thick heels
are considered a more comfortable version among women they could be a substitute
for sneakers. Sketchers introduced non-athletic heel-less shoes also called “sneaker
mules”20 These shoes, first gained popularity in Europe but now are also becoming
popular in the United States.
SUPLIERS:
-Using production facilities in the Far East has give Nike economies of scale. Although there
are now problems arising from these factories, they are switching to making there own goods,
labour and political unrest causes delays in manufacturing and shipping of the goods,
-Supplier Power: (Low)
-The suppliers do not have the power to bargain the price of their product, since there are
numerous suppliers.
There has been some standardization of production in the industry due to growing
concerns of labor practices of the suppliers and manufacturers. These practices have
been damaging the image of some companies including Nike.Therefore, the big
companies prefer to work only with approved manufacturers and suppliers that are
known to follow these labor standards. Both Adidas and Nike have created a system to

36. 36
ensure that all the high quality of the product, the working conditions, and the
distribution are at high standards.
COMPETITIVE RIVARLY:
 Reebok, offering more choice of shoe, introducing endorsement by
sports personalities, sponsoring sporting leagues
 Adidas have recovered from the problems that plagued them, and have
a good product mix, covering a wide range of sports.
In order to stay competitive and have presence in all sectors, many mergers and
acquisitions, i.e. Adidas and Reebok, are taking place and the market is going towards
consolidation. As a result, maintaining a single brand image for companies like Nike
becomes really a tough ask.In general, with three out of five forces being high,
emerging market does not look like a favorable environment. However, on continuous
marketing an educating effort, this market might be transferred into a growth region
for all companies.
COMPETITIVE PROFILE MATRIX
MAJOR COMPETITORS:
ADIDAS:
Adidas was founded in 1924 in Germany by two bothers Adi and Rudolf Dassler. The
company was first named Dassler shoes and later became Adidas. By the Dassler shoes being
seen in the Olympics this really helped the company get it’s name known. However, in 1948
Rudolf Dassler leaves to start his own company which is now known as Puma. Once Rudolf
left his brother came up with the famous three stripes logo and changed the name to
Adidas.The 3 stripes were created to keep the foot stable, but ended up being the logo.
Throughout the years Adidas was seen in the Olympics, and it was the leading brand making
their shoes highly sought after by Olympic athletes. In 1978, Adi Dassler passed at age 78 and
his wife Kathe ran the company. Six years later Kathe passed and the company was left for
their son Horst Dassler to run, and three years later Horst passed at age 51. After Horst’s
death Adidas ran into some major financial problems, and later Bernard Tapie comes to make
an attempt to save the company. Well to be HONEST, later down the road a hip-hop group
named Run-DMC came and put Adidas on another level just like Jordan did for Nike, and the
rest is HISTORY! They even made a song called "My Adidas", and it was a hit all around the
world. After Run-DMC came to Adidas they even had their own signature line. Run DMC is
still making Adidas money today just like Jordan is still making Nike tons of money......these
guys are true legends to the "Shoe Game".Adidas has worked with many famous people and
has a signature shoe line for Stan Smith, Kevin Garnett, Tracy McGrady aka TMAC, Missy
Elliot, and many others.
REEBOK:
In 1958 one the owners grandsons started a companion company to what they were doing,

37. 37
he decided to call it Reebok after the African Gazelle. After a number of years the company
produced a trainers under the Reebok name and presented it at an international trade show. At
the show which is 1979, a American sports distributor picked up the trainer and took it back
to the US to be sold. He took it back and got the licence to sell it, which at the time became
the most expensive trainer on the market at $60 for a pair. The 1980’s saw the introduction of
women’s athletic trainers for aerobic dance, the trainer was released and called freestyle. The
end of the 80’s also saw the introduction of Reeboks design innovation with the Pump trainer,
which is still available today. The 90’s saw the transition of Reebok going over to focusing
on sports and fitness, trying to get involved in the major sports around the world, from
football, track and field, baseball and other sports.The new millennium saw an exclusive
partnership deal struck between Reebok and the NFL to produce, sell and market licensed
NFL products. The following year then saw a similar agreement signed between Reebok and
the NBA which increased the market value of Reebok. Over the next decade Reebok
collaborated with Jay-Z and 50 Cent in the production of their successful branded products,
but also branch out further to sports like the NHL to go along with the already signed deals
with the NFL and NBA.In 2006, Reebok was acquired by Adidas which saw two big sporting
goods manufactures to merge to create a giant. The merger has seen the Reebok brand more
easily available in other countries but also helps to produce the same quality of goods.
NIKE ADIDAS REEBOOK
CRITICAL SUCCESS
FACTORS
WEIGH
TS
RATIN
G
W.SCO
RES
RATING W.SCO
RES
RATING W.SCOR
ES
Domestic factor
positioning
0.1 4 0.4 2 0.2 3 0.3
Internatıonal
market
positioning
0.1 4 0.4 3 0.3 3 0.3
Consumer loyalty 0.08 3 0.24 3 0.24 3 0.24
Brand recognition 0.1 4 0.4 4 0.4 4 0.4

38. 38
Price
competiveness
0.09 3 0.27 3 0.27 4 0.36
Product Quality 0.07 4 0.28 4 0.28 3 0.21
Relationship with
supliers and
manufactures
0.07 3 0.21 4 0.28 3 0.21
Product R&D 0.1 4 0.4 3 0.3 3 0.3
Product diversty 0.1 4 0.4 3 0.3 2 0.2
Financial
positioning
0.07 3 0.21 3 0.21 2 0.14
Marketing
organitational
0.08 4 0.32 4 0.32 3 0.24
Organitational
structure
0.04 3 0.12 3 0.12 3 0.12
TOTAL 1 2.85 2.72 2.42
COMMENT ABOUT CHARTS
Nike is widely recognized as the market leader in the sports apparel industry by virtue of its
market share, profitability and global reach.Its exceptional knowledge of its customers and
their motivations, marketing, design and development of new products and its supply chain
management have blended together into a unique strategic knowledge which constitutes its
core competencies and its ;
 Technology in Products

39. 39
ž Nike has historically had some of the most cutting-edge products on the market.For
example, Nike teamed up with Apple and launched the “Nike + iPod” line of products.This
technology allows consumers to connect their iPod devices to sensors inside the shoes to
record time, distance, pace, and calories burned.
 Manufacturing Skills
ž Due to cheap labor in foreign countries, Nike outsources virtually all production to other
areas of the world.This behavior has become an industry standard, with all major competitors
also outsourcing production.Consequently, no competitor has a major advantage in
manufacturing.
 Strength of Patents
ž One of Nike’s most revolutionary technologies comes through its footwear
cushioning.The cushioning systems in a shoe serve to distribute pressure evenly among the
foot, absorb shock, and deliver comfort to the user.
ž Nike has patents on four cushioning technologies:
 Nike Air: Nike Air Max is a line of shoes first released by Nike, Inc. in 1987. The
shoe was originally designed by Tinker Hatfield, who started out working for Nike as
an architect designing shops and offices; he also designed the Air Jordan shoe
.
 Nike Zoom: Nike Zoom cushioning is part of the Nike Air family, and—like its
siblings—it’s lightweight and durable. Because Nike Zoom cushioning is incredibly
thin, it brings the foot closer to the ground and enhances stability, especially during
quick cuts and multi-directional movements.After impact, the tightly stretched fibers
inside the pressurized air unit quickly bounce back into shape, providing a super-
responsive feel and improved awareness of the surface you’re playing on.

40. 40
 Nike Air Max: Max Air is part of the Nike Air family and designed to provide
maximum impact protection during repetitive landings.Shoes with Max Air feature
less midsole material and larger-volume airbags for lighter weight and maximum
cushioning you can see.
 Nike Shox : Nike Shox technology is a revolution in cushioning and impact
protection. Nike Shox technology provides an optimal environment for cushioning, a
slower rate of impact loading (helping reduce the risk of impact-related injuries) and a
uniquely responsive feel.The highly resilient foam in Nike Shox columns is made of
energy-efficient material that enhances durability and spring.

41. 41
ž Although some of Nike’s earlier patents are beginning to expire, they still hold patents
on the newer technologies.In the past, competitors have tried to match rival Nike’s cushioning
systems, but none have matched their success.
 Economies of Scale
ž Nike is the single largest producer of athletic footwear and apparel, allowing them
large cost advantages over competition.Larger companies tend to have major economies of
scale over smaller companies in areas such as distribution and marketing.Nike is so large that
many of the company’s suppliers depend on Nike to remain in business.
 ž Application of Information Technology
ž Being such a large corporation, Nike relies heavily on IT in order to manage its supply
chains.Nike admits that it is at serious risk if a breakdown were to happen in these systems,
resulting in bad effects on their business and financial condition This puts them at a
disadvantage against some of their smaller competitors, who do not rely so heavily on IT .The
very fact that they are such a large company makes them more likely to have these problem.
INTERNAL ANALYSIS
NIKE MANAGEMENT STRUCTURE
Nike management structure is composed of a matrix organizational structure commonly
known as a flat organizational structure. Nike is one of the few companies that has been able
to apply this model effectively.The Compensation Committee is responsible for overseeing
the performance evaluation of the CEO. The Compensation Committee considers (1)
achievement against approved financial performance measures and targets (such as revenue,
net income, and earnings per share), and (2) other factors such as leadership, achievement of
strategic goals, market position, and brand strength, which are signals of Company success.
The Compensation Committee endeavors to reflect the CEO’s performance in the CEO’s
compensation. The Board plans for succession of the CEO and certain other senior
management positions in order to assure the orderly functioning and transition of the
management of the Company, in the event of emergency or retirement of the CEO. As part of
this process, the Chairs of the Nominating and Corporate Governance Committee and the
Compensation Committee, in consultation with the CEO, assess management needs and
abilities in the event a transition becomes necessary.A strategic plan is something that a
company needs in order to succeed at anything. Nike needs to develop this plan and move
forward from this fiscal year in 2010. The manager of Nike needs to set goals and determine
the best way to achieve them.Core values upon the crew at Nike and ask the question: What
does this organization stand for? A revamp of all of this is need if Nike is to make sales
revenue increase in 2010. A core value that can be put into the Nike Company is telling the
employers that they need to be winners, as opposed to heroes. A SWOT analysis could be

42. 42
created for Nike by a manager and the employees will read it and will see an assessment of
how the company is doing in terms of strengths, weaknesses, opportunities, and threats. These
will keep the companies employees on its toes.Functional organization is something that Nike
might want to take into consideration when thinking about a change in their organization.
They can cluster groups together who are alike and who can compatibly plan and keep the
company in its prime.Directing is providing focus and direction to others within the Nike
Company and the managerial can take directing and use it to their advantage.With Nike’s
board being an extremely experienced and thoughtful board they can take a lot of ideas from
each other. Even the other employees such as middle managers and low level managers can
give input into the companies managerial such as marketing in other companies and making
sure the quality of Nike’s product is better than its competitors. Phil Knight can set high, yet
achievable goals for his employees to look forward to. He could improve his company by
using the principle of leverage. Phil Knight could use new technologies in sneakers, apparel,
and sports equipment to successfully manage his company. He can use networking by
socializing with companies he could cooperate with such as he has done with Apple in the
past to increase revenue.
MARKETING
Significant role for the competition of market share in the footwear industry plays marketing
in order to strengthen the brand image, develop product identity and expand customer loyalty.
Competition between players is n o n - p r I c e but rather based on differentiation in brand
image and product innovations. Therefore, substantial investments in marketing campaigns
are required. Nike invests annually between 11% and 13% of revenue in marketing. Nike
focuses all of their attention on the Athlete, but delivers much more than shoes; they deliver
all the surrounding products that the Athlete needs for experience. It is part and parcel of what
makes Nike such a great consumer-focused brand.

43. 43
Marketing Mix
1. Product:
Nike offers a wide range of shoe, apparel and equipment products, all of which are currently
its top-selling product categories. Nike started selling sports apparel, athletic bags and
accessory items in 1979. Their brand Cole Haan carries a line of dress and casual footwear
and accessories for men, women and children. They also market head gear under the brand
name Sports Specialties, through NikeTeam manufactures and distributes ice skates, skate
blades, in-roller skates, protective gear, hockey sticks and hockey jerseys and accessories.
2. Price:
Nike’s pricing is designed to be competitive to the other fashion Shoe retailer. The pricing is
based on the basis of premium segment as target customers. Nike as a brand commands high
premiums. Nike’s pricing strategy makes use of vertical integration in pricing wherein they
own participants at differing channel levels or take part in more than one channel level
operations. This can control costs and influence product pricing.
3. Place:
Nike shoes are carried by multi-brand stores and the exclusive Nike stores across the globe.
Nike sells its product to about 20,000 retail accounts in the U.S. and in almost 200 countries
around the world. In the international markets, Nike sells its products through independent
distributors, licensees and subsidiaries. The company has production facilities in Asia and
customer service and other operational units worldwide.

44. 44
4. Promotion:
Promotion is largely dependent on finding accessible store locations. It also avails of targeted
advertising in the newspaper and creating strategic alliances. Nike has a number of famous
athletes that serve as brand ambassadors such as the Brazilian Soccer Team (especially
Ronaldo, Renaldo, and Roberto Carlos), Lebron James and Jermane O’Neal for basketball,
Lance Armstrong for cycling, and Tiger Woods for Golf. Nike also sponsors events such as
Hoop It Up and The Golden West Invitational. Nike’s brand images, the Nike name and the
trademark swoosh; make it one of the most recognizable brands in the world. Nike’s brand
power is one reason for its high revenues. Nike’s quality products, loyal customer base and its
great marketing techniques all contribute to make the shoe empire a huge success.
Market Share
Nike was the clear market leader, with 31% of the global athletic footwear market in 2007.
Looking at the market in the United States, Europe, or Asia reveals a similar picture: Nike's
market share in these regions hovers around 36%, followed by Adidas at 20%, with Puma and
New Balance as distant third and fourth.

45. 45
The market for athletic apparel is both larger--$49.5 billion in 2005--and more diffuse; the top
five firms control only 27% of the market. Nike is, however, also the global leader in apparel,
with a 7% market share in 2007.
NIKE RESEARCH AND DEVELOPMENT
Product Research and Development
Nike believe our research and development efforts are a key factor in our past and future
success. Technical innovation in the design of footwear, apparel, and athletic equipment
receive continued emphasis as NIKE strives to produce products that help to reduce injury,
enhance athletic performance and maximize comfort.
In addition to NIKE’s own staff of specialists in the areas of biomechanics, chemistry,
exercise physiology, engineering, industrial design and related fields, we also utilize research
committees and advisory boards made up of athletes, coaches, trainers, equipment managers,
orthopedists, podiatrists and other experts who consult with us and review designs, materials
and concepts for product improvement. Employee athletes, athletes engaged under sports
marketing contracts and other athletes wear-test and evaluate products during the design and
development process. The Nike Sports Research Laboratory (NSRL) is located on the Nike
campus in Portland, Oregon in the United States of America. The research and development
(R&D) centre's role is to identify the physiological needs of athletes. The NSRL works
directly with Nike's design teams and has established partnerships with major universities
throughout Asia, Europe and North America.

46. 46
Nike’s Research Program
Nike has been in the Research & Development in the market for quite a long time. The
research that it has been carrying out relates to the earlier STP analysis which allows Nike to
create a market for its products. Also Nike has a history of constantly innovating new
products and attain the first-in-the-market advantage and charge a premium price. Nike
spends a lot out of its revenue into R & D of new products and designs to constantly stay
ahead of the competition. Nike conducts both qualitative and quantitative research
forgathering vital information for its products and new launches. The qualitative research
refers to the consumer purchasing behavior like why, how, what do they decide on the basis
of Nike’s image as well as products. The quantitative research deals with what are the results
of the company i.e. revenue against cost and other financial analysis .Nike indulges into
research analysis of consumer markets as well as competitor’s analysis and thus
understanding the consumer behavior and their buying pattern. Nike does extensive research
in the attitudes and tastes and preferences and their changing pattern by having questionnaires
filled up by its customers online as well as personally. It also indulges into personal
interviews with its valued-customers to make some necessary changes that they might require.
This is how the company came to be recognized as a high valued by its customers and thus
attain maximum loyalty. Also the company came up with the idea of customization of their
products online through this type of research itself which has yielded high results. Nike
products undergo a rigorous testing process that covers a huge variety of testing surfaces
(regular basketball hard wood, soccer turf, a running track, and endless outdoor testing on
various terrain), and takes into account four major factors, geography, gender, age, and skill
level as well as profession. All of this combined with the results of about a dozen other tests
are use to develop new, user-friendly products like the Nike Shox, Nike Air, and other Nike
basketball and running shoes. This is mainly because Nike needs to constantly be aware of the
changes in the consumer buying behavior which can only be done through various researches.
Nike has an underground research lab full of evil geniuses toiling to create the newest and
most advanced designs and technology in the sneaker business. It’s true that Nike’s research
lab has grown up considerably from its early days with Bill Bowerman and a waffle iron to
create the Nike Waffle Racer. Today, it commands approximately 13,000 square feet
containing some state-of-the-art research equipment.
Research is primarily divided into three parts:
Biomechanics
How the body moves.
Physiology
How the body works, especially under stress.

47. 47
Sensory/Perception
The evaluation of how a product works, feels, and wears; how a person feels when wearing
the shoes.
The Nike Sports Research Laboratory is located on the Nike campus in Portland, Oregon in
the United States of America. Nike’s research team has spent more than 16 years dreaming,
researching, developing and testing the possibility of attaching springs to the bottom of an
athlete’s foot. Nike Shox, the most acclaimed technological development makes the dream a
reality (“Nike”). Therefore, by advancing in technology, Nike holds a competitive edge in the
market.
PRODUCTION SYSTEM
Location of Facilities
Nike’s facilities are located throughout Asia and South America. The locations are
geographically dispersed which works well in our mission to be a truly global company. The
production facilities are located close to raw materials and cheap labor sources. They have
been strategically placed in their locations for just this purpose. In general, the facilities are
located further from most customers, resulting in higher distribution costs. However, the cost
savings due to the placement of our production facilities allows for cheaper production of our
products despite the higher costs of transporting our products. As Nike continues to expand in
the global economy and increase its market throughout the world, these dispersed facilities
will prove to be beneficial.
Newness of Facilities
Our facilities abroad have attracted bad publicity in recent years. Though our facilities
comply with local labor standards, generally, they have not met U.S. standards. We want to be
a leader and set a responsible corporate example for other businesses to follow. As part of
Nike’s new labor initiative, we commit to:
o Expanding our current independent monitoring programs to include non-
governmental organizations, foundations and educational institutions. We want
to make summaries of their findings public;
o Adopting U.S. Occupational Safety and Health Administration (OSHA) indoor
air quality standards for all footwear factories;
o Funding university research and open forums to explore issues related to global
manufacturing and responsible business practices such as independent
monitoring and air quality standards.
While establishing these policies is a step in the right direction for Nike, the difficult task at
hand will be the implementation of the aforementioned goals to ensure the success of the
program.

48. 48
OPERATION MANAGEMENT OF NIKE
Nike's Operations management concerned about forecasting, controlling, designing,
operating, and scheduling business operations in the production of Nike foot ware. Its
excellent management that has been developed and ameliorated during the long term
operation has enabled that business operations to be efficient and at the same time using as
few resources as required. It is also effective in terms of satisfying customer demands, and
thus it has become one of the key issue that Nike develop prosperously despite the fierce
competitions with other foot ware giants such as Adidas, Reebok, Puma, etc. The operation
management system includes manufacturing and production systems, equipment maintenance
management, production control, industrial labor relations and skilled trades supervision,
strategic manufacturing policy, systems analysis, productivity analysis and cost control, and
materials planning.
Nike started with dispersed production strategy as it is too small to construct its own
production line and cannot support to recruit a large number of staff as well, especially in
USA.. Every thing has both sides, and such strategy become its superiority in later time. It
invited European designers to design for Nike sport shoes, then produce them through Asian
manufacturers. It was its utmost objective to minimize its cost at that time in order to survive.
The management strategy had been successful, and has greatly reduced the production cost.
Nike had no more than 48 staff in 1972, compared with 3000 in Adidas at that time. However,
the sales volume has increased nearly 1000 times during 12 years based on such operation
management, from 1 million to 10 milliard dollar. The forward-looking operation
management strategy had been an effective support for the brand to become the biggest foot
ware company in USA.
FINANCIAL STATEMENTS
NIKE, Inc.
CONSOLIDATED STATEMENTS OF INCOME
For the period ended May 31, 2013
THREE MONTHS ENDED % TWELVE MONTHS ENDED %
(Dollars in
millions, except
per share data)
5/31/20
13
5/31/201
2
Chang
e
5/31/20
13
5/31/201
2
Chang
e
Income from
continuing

49. 49
operations:
Revenues $ 6,697 $ 6,236 7 % $ 25,313 $ 23,331 8 %
Cost of sales 3,757 3,567 5 % 14,279 13,183 8 %
Gross profit 2,940 2,669 10 % 11,034 10,148 9 %
Gross magrin 43.9 % 42.8 % 43.6 % 43.5 %
Demand
creation expense
642 735
-
13
% 2,745 2,607 5 %
Operating
overhead
expense
1,380 1,161 19 % 5,035 4,458 13 %
Total selling and
administrative
expense
2,022 1,896 7 % 7,780 7,065 10 %
% of revenue 30.2 % 30.4 % 30.7 % 30.3 %
Interest expense
(income), net
3 1 - (3 ) 4 -
Other expense
(income), net
13 37
-
65
% (15 ) 54 -
Income before
income taxes
902 735 23 % 3,272 3,025 8 %
Income taxes 206 176 17 % 808 756 7 %
Effective tax
rate
22.8 % 23.9 % 24.7 % 25.0 %
NET INCOME
FROM
CONTINUING
OPERATIONS
696 559 25 % 2,464 2,269 9 %
NET (LOSS)
INCOME
FROM
DISCONTINU
ED
OPERATIONS
(28 ) (10 ) - 21 (46 ) -
NET INCOME $ 668 $ 549
2
2
% $ 2,485 $ 2,223
1
2
%
Earnings per
share from
continuing
operations:
Basic earnings
per common
share
$ 0.78 $ 0.61 28 % $ 2.75 $ 2.47 11 %
Diluted earnings
per common
share
$ 0.76 $ 0.60 27 % $ 2.69 $ 2.42 11 %

50. 50
Earnings per
share from
discontinued
operations:
Basic earnings
per common
share
$ (0.03 ) $ (0.01 ) - $ 0.02 $ (0.05 ) -
Diluted earnings
per common
share
$ (0.03 ) $ (0.01 ) - $ 0.02 $ (0.05 ) -
Weighted
Average
Common Shares
Outstanding:
Basic 892.6 916.3 897.3 920.0
Diluted 913.4 936.3 916.4 939.6
Dividends
declared per
common share
$ 0.21 $ 0.18 $ 0.81 $ 0.70
NIKE, Inc.
CONSOLIDATED BALANCE SHEETS
As of May 31, 2013
May 31, May 31,
(Dollars in millions) 2013 2012 % Change
ASSETS
Current assets:
Cash and equivalents $ 3,337 $ 2,317 44 %
Short-term investments 2,628 1,440 83 %
Accounts receivable, net 3,117 3,132 0 %
Inventories 3,434 3,222 7 %
Deferred income taxes 308 262 18 %
Prepaid expenses and other current assets 802 857 -6 %
Assets of discontinued operations - 615 -100 %
Total current assets 13,626 11,845 15 %
Property, plant and equipment 5,500 5,057 9 %
Less accumulated depreciation 3,048 2,848 7 %
Property, plant and equipment, net 2,452 2,209 11 %
Identifiable intangible assets, net 382 370 3 %
Goodwill 131 131 0 %
Deferred income taxes and other assets 993 910 9 %
TOTAL ASSETS $ 17,584 $ 15,465 14 %

51. 51
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 57 $ 49 16 %
Notes payable 121 108 12 %
Accounts payable 1,646 1,549 6 %
Accrued liabilities 1,986 1,941 2 %
Income taxes payable 98 65 51 %
Liabilities of discontinued operations 18 170 -89 %
Total current liabilities 3,926 3,882 1 %
Long-term debt 1,210 228 431 %
Deferred income taxes and other liabilities 1,292 974 33 %
Redeemable preferred stock - - -
Shareholders' equity 11,156 10,381 7 %
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 17,584 $ 15,465 14 %
NIKE, Inc.
DIVISIONAL REVENUES1
For the period ended May 31, 2013
%
Chang
e
%
Chang
e
Exclud
ing
Exclud
ing
THREE MONTHS ENDED %
Curren
cy
TWELVE MONTHS ENDED %
Curren
cy
(Dollar
s in
million
s)
5/31/
2013
5/31/
2012
Chan
ge
Chang
es 2
5/31/
2013
5/31/
2012
Chan
ge
Chang
es 2
North
Ameri
ca
Footwe
ar
$ 1,793 $ 1,668 7 % 8 % $ 6,687 $ 5,887
1
4
% 14 %
Apparel 748 616
2
1
% 22 % 3,028 2,482
2
2
% 22 %
Equip
ment
173 140
2
4
% 24 % 672 470
4
3
% 43 %
Total 2,714 2,424
1
2
% 12 % 10,387 8,839
1
8
% 18 %
Weste
rn
Europ
e
Footwe
ar
695 651 7 % 8 % 2,646 2,526 5 % 10 %

52. 52
Apparel 280 332
-
1
6
%
-
15
% 1,261 1,377
-
8
% -4 %
Equip
ment
49 56
-
1
3
%
-
10
% 221 241
-
8
% -3 %
Total 1,024 1,039 -1 % 0 % 4,128 4,144 0 % 5 %
Centra
l &
Easter
n
Europ
e
Footwe
ar
223 195
1
4
% 15 % 714 671 6 % 11 %
Apparel 113 111 2 % 3 % 483 441
1
0
% 14 %
Equip
ment
25 24 4 % 8 % 90 88 2 % 9 %
Total 361 330 9 % 11 % 1,287 1,200 7 % 12 %
Greate
r
China
Footwe
ar
403 402 0 % -1 % 1,493 1,518
-
2
% -3 %
Apparel 231 230 0 % -1 % 829 896
-
7
% -9 %
Equip
ment
35 35 0 % -2 % 131 125 5 % 3 %
Total 669 667 0 % -1 % 2,453 2,539
-
3
% -5 %
Japan
Footwe
ar
120 128
-
6
% 10 % 429 439
-
2
% 5 %
Apparel 77 91
-
1
5
% 0 % 301 325
-
7
% -1 %
Equip
ment
17 22
-
2
3
% -9 % 61 71
-
1
4
% -9 %
Total 214 241
-
11
% 4 % 791 835
-
5
% 1 %
Emerg
ing
Marke
ts
Footwe
ar
658 607 8 % 14 % 2,570 2,387 8 % 15 %
Apparel 239 213
1
2
% 18 % 918 815
1
3
% 19 %
Equip
ment
63 50
2
6
% 32 % 230 209
1
0
% 17 %
Total 960 870 1 % 16 % 3,718 3,411 9 % 16 %

53. 53
0
Global
Brand
Divisi
ons3
33 27
2
2
% 16 % 117 111 5 % 8 %
Total
NIKE
Brand
5,975 5,598 7 % 8 % 22,881 21,079 9 % 11 %
Other
Busines
ses4
732 663
1
0
% 11 % 2,500 2,298 9 % 9 %
Corpor
ate5
(10 ) (25 ) - - (68 ) (46 ) - -
Total
NIKE,
Inc.
Reven
ues
From
Contin
uing
Opera
tions
$ 6,697 $ 6,236 7 % 9 % $ 25,313 $ 23,331 8 % 11 %
Total
NIKE
Brand
Footwe
ar
$ 3,892 $ 3,651 7 % 8 % $ 14,539 $ 13,428 8 % 11 %
Apparel 1,688 1,593 6 % 8 % 6,820 6,336 8 % 10 %
Equip
ment
362 327 11 % 13 % 1,405 1,204
1
7
% 20 %
Global
Brand
Divisio
ns3
33 27
2
2
% 16 % 117 111 5 % 8 %
NIKE, Inc.
FISCAL YEAR ENDED
% Change
Excluding
Currency
SUPPLEMENTAL NIKE BRAND REVENUE DETAILS1 5/31/2013 5/31/2012 % Change Changes 2
(Dollars in millions)
NIKE Brand Revenues by:
Sales to Wholesale Customers $ 18,438 $ 17,438 6 % 8 %
Sales Direct to Consumers 4,326 3,530 23 % 24 %
Global Brand Divisions 117 111 5 % 8 %
Total NIKE Brand Revenues as Reported $ 22,881 $ 21,079 9 % 11 %

54. 54
NIKE Brand Revenues on a Wholesale Equivalent Basis:3
Sales to Wholesale Customers $ 18,438 $ 17,438 6 % 8 %
Sales from our Wholesale Operations to Direct to Consumer Operations 2,450 1,986 23 % 25 %
NIKE Brand Wholesale Equivalent Revenues $ 20,888 $ 19,424 8 % 10 %
NIKE Brand Wholesale Equivalent Revenues by Category:3
Running $ 4,274 $ 3,696 16 % 18 %
Basketball 2,627 2,169 21 % 22 %
Football (Soccer) 1,931 1,862 4 % 9 %
Men’s Training 2,380 2,064 15 % 17 %
Women’s Training 1,067 1,011 6 % 8 %
Action Sports 495 497 0 % 2 %
Sportswear 5,637 5,741 -2 % 1 %
Others4 2,477 2,384 4 % 6 %
Total NIKE Brand Wholesale Equivalent Revenues $ 20,888 $ 19,424 8 % 10 %
NIKE, Inc.
FISCAL YEAR ENDED
% Change
Excluding
Currency
SUPPLEMENTAL OTHER BUSINESSES REVENUE DETAILS 5/31/2013 5/31/2012 % Change Changes 1
(Dollars in millions)
Other Businesses:
Converse $ 1,449 $ 1,324 9 % 9 %
NIKE Golf 791 726 9 % 10 %
Hurley 260 248 5 % 5 %
Total Revenues for Other Businesses $ 2,500 $ 2,298 9 % 9 %
NIKE, Inc.
EARNINGS BEFORE INTEREST AND TAXES1,2
For the period ended May 31, 2013
THREE MONTHS ENDED % TWELVE MONTHS ENDED %
(Dollars in
millions)
5/31/201
3
5/31/201
2
Chang
e
5/31/201
3
5/31/201
2
Chang
e
North
America
$ 723 $ 562 29 % $ 2,534 $ 2,030 25 %
Western
Europe
135 133 2 % 640 597 7 %

55. 55
Central &
Eastern
Europe
84 71 18 % 259 234 11 %
Greater
China
242 247 -2 % 809 911 -11 %
Japan 42 43 -2 % 133 136 -2 %
Emerging
Markets
262 201 30 % 1,011 853 19 %
Global
Brand
Divisions3
(373 ) (354 ) -5 % (1,396 ) (1,200 ) -16 %
TOTAL
NIKE
BRAND
1,115 903 23 % 3,990 3,561 12 %
Other
Businesses4
127 105 21 % 456 385 18 %
Corporate5 (337 ) (272 )
-
24
% (1,177 ) (917 )
-
28
%
TOTAL
EARNING
S BEFORE
INTEREST
AND
TAXES
$ 905 $ 736 23 % $ 3,269 $ 3,029 8 %
NIKE, Inc.
NIKE BRAND REPORTED FUTURES GROWTH BY GEOGRAPHY1
As of May 31, 2013
Reported Futures Orders Excluding Currency Changes 2
North America 12 % 12 %
Western Europe 2 % 0 %
Central & Eastern Europe 14 % 12 %
Greater China 3 % 0 %
Japan -17 % 6 %
Emerging Markets 12 % 12 %
Total NIKE Brand Reported Futures 8 % 8 %
FINANCIAL RATIOS
Price Ratios Company Industry S&P 500
Current P/E Ratio 21.6 20.5 21.3
P/E Ratio 5-Year High NA 13.2 12.5

56. 56
P/E Ratio 5-Year Low NA 1.7 2.2
Price/Sales Ratio 2.11 2.59 2.14
Price/Book Value 4.24 5.46 3.54
Price/Cash Flow Ratio 17.90 17.20 12.90
The company high PE ratio shows that investors are expecting higher earnings growth in the future <
1.1%>
Profit Margins % Company Industry S&P 500
Gross Margin 46.5 51.8 39.5
Pre-Tax Margin 13.4 18.2 16.8
Net Profit Margin 10.1 12.6 12.2
5Yr Gross Margin (5-Year Avg.) 44.9 51.6 38.3
5Yr PreTax Margin (5-Year Avg.) 12.8 18.0 15.8
5Yr Net Profit Margin (5-Year Avg.) 9.3 12.1 11.2
Also compared to the industry Nike has lower gross margin <5.3%> and lower net profit margin.
Financial Condition Company Industry S&P 500
Debt/Equity Ratio 0.06 0.06 1.07
Current Ratio 3.4 3.2 1.4
Quick Ratio 2.6 2.3 0.9
Interest Coverage 648.7 441.4 37.8
Leverage Ratio 1.5 1.5 3.1
Book Value/Share 20.21 14.97 23.78
Nike has slightly higher current ratio than industry <0.2%>, it means that the company has liquidity
than can cover the debts.
Also, higher quick ratio refers Nike higher ability to meet its short term obligations.
Nike have the same leverage ratio compared to industry, it means that Nike have normal ability to
cover its debts throw assets.
Investment Returns % Company Industry S&P 500
Return On Equity 20.8 26.3 25.4
Return On Assets 14.3 17.4 8.0
Return On Capital 18.4 22.2 10.5
Return On Equity (5-Year Avg.) 21.7 24.7 16.4
Return On Assets (5-Year Avg.) 14.1 16.8 7.8
Return On Capital (5-Year Avg.) 18.8 21.5 10.5
Lower ROA<3.1%> reflects that managers don’t use its assets efficient.

57. 57
Lower ROE<5.5%> indicates that company don’t generate its profit throw the equity.
Management Efficiency Company Industry S&P 500
Income/Employee 56,765 108,278 102,166
Revenue/Employee 563,677 696,031 926,601
Receivable Turnover 6.9 13.2 17.0
Inventory Turnover 4.6 3.9 10.8
Asset Turnover 1.4 1.4 0.8
Nike low R turnover reflects how ineffective receivables are collected.
Also low I turnover shows how ineffective the company inventory sold during the period.
NIKE and competitors ratios
Direct Competitor Comparison
NKE ADDYY.PK PVT1 PVT2 Industry
Market Cap: 41.07B 13.71B N/A N/A 380.26M
Employees: 34,400 42,659 4,0001 9,5031 1.21K
Qtrly Rev Growth (yoy): 7.80% 20.10% N/A N/A 9.20%
Revenue (ttm): 19.39B 15.75B 1.64B1 3.53B2 486.15M
Gross Margin (ttm): 46.51% 47.79% N/A N/A 40.15%
EBITDA (ttm): 2.94B 1.61B N/A N/A 46.45M
Operating Margin (ttm): 13.23% 8.01% N/A N/A 9.94%
Net Income (ttm): 1.95B 791.64M N/A 180.40M2 N/A
EPS (ttm): 3.96 1.89 N/A N/A 1.38
P/E (ttm): 21.70 17.32 N/A N/A 16.35
PEG (5 yr expected): 1.80 3.14 N/A N/A 1.00
P/S (ttm): 2.11 0.88 N/A N/A 0.79
INTERNAL FACTOR EVALUATION

58. 58
STRENGTHS:
• Strong brand recognition
• Internet sales
• Growing international presence
• Superior research and development department
• Strong financial returns
• Strong sense of culture in the working environment
• Great celebrity spokespersons
• Automatic replenishment system
• Successful experience being competitive
• Nike doesn’t own any factories
• Successful marketing campaigns
WEAKNESSES:
• Lack of stores catering to the active females
• Poor employment practices at their international manufacturing sites giving a bad
reputation
• Heavy dependency on footwear sales
• Issues with Footlocker