Intro to Business

Business Analysis Paper

Nike Inc.

1-

Overview and history of the company:

Nike Inc. is an American multinational corporation, and one of the leaders in the apparel and
accessories industry. It is responsible for the design, development and manufacturing, along with a
competitive global marketing of selling sportswear, equipment and services.
The company was first founded in 1964 as Blue Ribbon Sports by Bill Bowerman and Phil Knight,
only to become known as Nike, Inc. in 1971. It is headquartered near Beaverton in Oregon, and
employs more than 44,000 people worldwide. It became a publicly traded company in 1980, starting a
period of transition where many of the companys pioneers left after the announcement. As a result,
Nike lost its position as the industry leader, and by neglecting the aerobic boom at that time, it let other
competitors develop their business in that emerging new market. However, Nike quickly reacted by
doing what they do best: marketing. They introduced a new signature shoe in 1985 for a basketball
player named Michael Jordan, which not only boosted their bottom line, but also gave them a global
exposure as they were sponsoring the best basketball player who was wearing Nike shoes. Nike
quickly understood that in order to gain market share and regain the industry lead, they had to release
new products with innovative marketing campaigns that would differentiate them from the other
brands in the market. Thus, in 1987, the company created the first Nike footwear by the name of Air
Max, and released and TV advert with a soundtrack from the Beatles, who were very popular at that
time. In 1989, they released an even more popular ad campaign by the name of Bo Knows which
was one of the reasons that led Nike, Inc to regain its position as the industry leader by the end of the
decade. Since then, the company has continued to improve constantly by launching new products such
as Nike Shox, a new footwear system launched in 2000, and developing their marketing techniques by
multiplying sponsorships worldwide and creating a series of events that would bring them closer to the
consumer in order to create more excitement for Nikes products. Nike mission is to bring inspiration
and innovation to every athlete in the world and if you have a body, you are an athlete. (Nike, Inc)
and develops the vision that everyone who has a body has the potential to be an athlete, and Nike is
here to supply everyone with footwear, sport equipment and apparel. It is striving to innovate in order
to serve the athletes, grow the company, and inspire the world.

2- Industry review
The sport apparel and athletic footwear is an industry that specializes in the manufacturing and
distribution of athletic shoes, equipment, apparel and accessories. The industry is dominated by two
main companies, Nike and Adidas that hold the majority of the market share and other competitors
such as Reebok, Under Armour or Taylor Made. The industry is segmented into several categories,
running shoes being the largest one. Indeed, walking is the most popular exercise activity among
people aged from 15 years old and older in the US. In recent years, of the relatively small group of
people in the United States aged 15 years and older who engaged in sports or exercise activities on an
average day, about 30 percent walked for exercise, making walking the most popular form of exercise
overall. (http://www.bls.gov/spotlight/2008/sports/). Other activities involve basketball, football, or
casual footwear and equipment. The athletic footwear industry operates with a 45% average gross
margin, which is higher than the average 38% gross margin made by the top 10 companies in
Consumer Discretionary and is mainly due to outsourcing, the low price of inputs such as raw
materials, and the premium price of finished goods. However, gross margins can be affected by an
increase in the price of raw materials such as synthetic rubber. Therefore, an increase in the price of
synthetic rubber, which is the primary raw material used to make athletic footwear, can have a
negative impact on gross margins. As an example, the industrys average gross margin declined by
over 1.5 percentage points in 2011, following a 15% increase in the price of synthetic rubber.
(Bidnessetc, Nike Industry Analysis). With these high gross margins, the global sport apparel market
was worth $135 million in 2012 and is expected to grow at a rate of 4% in 2012-2019 to reach $178
million. (Forbes). The reasons behind this expected growth are the steady expansion of fitness
consciousness, the growing popularity of female apparel or the emergence of trends towards athletic
comfortable footwear. Demand for footwear and sport equipment is also affected by seasonality, as it
is remarked that demand is at a highest point during the third quarter, where the weather becomes
cooler and many sport leagues seasons start such as the NFL or the NBA. It also increases before sport
events such as the Soccer World Cup or the Olympics games. Thus, with the increasing popularity of
living a healthy and athletic lifestyle, the sport apparel industry is expected to grow in the future, and
the development of new countries in Asia and Latin America and the sponsorship of major sport events
will help achieve that.

3- SWOT Analysis
As a leader of the athletic apparel market, Nike has a lot of strengths that allows the company to
remain at the top. Indeed, Nike has a very strong brand recognized worldwide by its logo. Its logo is so
powerful and well-known that Nike doesnt have to put the name of the brand with the logo like most
companies do; instead they managed to gather a loyal customer base and associate in the long term
their logo with high quality athletic clothing. Nike has also managed to sign year after year high level

athletes and celebrities like Michael Jordan, Roger Federer or Tiger Woods from different sports who
represent and promote the brand by wearing the companys products from head to toe, and can
influence the customers, reflecting the idea that Nike has helped them to become the best at what they
do, and everyone can achieve greatness through Nike products. Nike is also well-known for their
successful marketing campaigns and throughout sponsorships they signed with sport team all around
the world, which gives the company a global exposure to reach more and more customers. Finally,
Nike has exceled throughout the years in innovation and research development, launching every year
new innovative products such as the FuelBand wrist band which allows the user to connect it to their
smartphone and compete against their friends, making exercising more challenging and fun, or the
Dri-Fit which is a new clothing technology that provides more comfort and flexibility to the customer.
However, every company has weaknesses, and Nike does not make an exception. In fact, even though
Nike diversifies its range of product, their main profits come from the shoe sector, which is a
competitive market with big brands such as Adidas or Reebok. Nikes supply chain is the most
important aspect of their business, and they have to ensure that they are efficient in sourcing raw
materials, manufacturing and delivering the products. This can add some huge costs if the supply chain
is not well developed since most Nike products are manufactured in Asia. In order to cut costs, Nike
offer very low wages to their workers in Asia, with very degrading working conditions, and they often
hire under aged workers in their manufactories, which created a huge polemic about the companys
ethical behavior. Moreover, they can encounter other restrains with retailers for example, who will try
to lower the wholesale price in order to offer affordable price to their customers. Thus, the only way to
avoid this for Nike is to have its own retail stores. However, this requires additional fixed costs such as
wages, rent and utilities that can lower their profit margin in both the short and long term. Having said
that, Nike still has a lot of opportunities to develop their brand and products; indeed, technology is
developing quickly and Nike can rely on it to innovate and launch a new series of products such as
games for Xbox or Playstation or develop more apps for smartphones. This would allow Nike to
diversify its products and reach a wider customer base. Another opportunity for Nike would be to
reduce its prices in third world countries or countries in development in order to increase their market
share. Finally, sustainable development and environment should be one of Nikes concerns and a great
opportunity to demonstrate their engagement in preserving a safe and clean world. Thus, they can start
producing more recyclable products and make efforts on reducing CO2 emission in their
manufactories. Being a market leader has advantages but also disadvantages, and Nike is subject to
different threats. First, Nike is victim of counterfeit products that are being made and sold everywhere
in the world but mostly in third world countries where incomes are low. Thus, it lowers their profit
margin but can also give a negative impact for the company if someone buys unconsciously a
counterfeit Nike shoe which has a mediocre quality compared to an authentic one. Secondly,
customers are looking for better deal and in such a competitive market with other brands that offer the
same products, customers may want to turn to a much cheaper alternative. Thirdly, Nike may face

severe money fines and sanctions if they keep providing poor working conditions to their workers in
Asia with very low wages, which will not only reduce their revenues but also reflect a negative image
of a company which neglects and violates some of the basic workers rights.

4- Supply chain
In order to provide and deliver top quality products to its customers, Nike uses a wide range of raw
materials that not only have great performance but are also eco-friendly, which come from over 900
material vendors worldwide. We use a vast array of materials in Nike products more than 16,000 in
an average year. (As an example, a single pair of shoes, alone, uses an average of 30-plus materials.)
(Nike responsibility). Nike does not source directly with these vendors; they are private companies
which sell the materials needed by Nike to finished-goods manufacturers which are based in Nikes
design specifications. Thus, it allows Nike to control their value chain and focus on what they do best,
which is the design of high performance products that will bring satisfaction to the customers. Nike
also outsources the majority of their manufacturing functions to factories located all around the world.
Indeed, they have 800 factories in more than 50 countries which produce 500 000 SKUs per year.
Nike is the world's largest sportswear brand and its supply chain spans 50 countries, 800 contract
factories and hundreds of textile manufacturers that supply them (Nike moves faster to clean up its
supply chain). However, most of these factories are located in Asian countries such as Thailand, China,
Indonesia or Vietnam as the costs of production there are much lower than in other countries due to the
low wages of their workers. Those products are then shipped to Nikes distribution centers throughout
3PLs companies that are responsible for the shipment of Nikes finished goods. Nike own 4
distribution centers located in each coast, for a total of 14 distribution centers worldwide. This allows
the company to deliver quickly and efficiently their products to the customers. Once the product
arrives to the distribution center, it is then transported to one of Nikes owned retailers to be ready to
be sold to the customers. These owned retailers include retail accounts such as Footlocker, Nike
owned retail outlets such as the Nike factory store, or the Nike website for customers who prefer to
buy their products online. Nike has also made throughout the years, many efforts to develop lean
supply chain operations by focusing on corporate responsibility and sustainable development. Thus,
Nike created in 2006 the Considered Indexes which provide their creation teams with information
about different kind of materials, in order for them to select and use the ones that present a minimal
environment impact and would reduce wastes which resulted in a 19 percent reduction in waste related
to the production of footwear uppers over the past 5 years. (Nike responsibility). Nike has also
demonstrated continuous improvement which is one the basic principles of lean manufacturing by
developing a new considered design including next-generation indexes which will accelerate progress
in product and materials sustainability and encourage their vendors to be more responsible towards the

environment and create sustainable products. However, Nikes supply chain strategy can have some
disadvantages. Indeed, by choosing to focus on the design of their products and outsourcing all their
manufacturing operations to private companies, Nike has lost the control of their inventory. Thus, if a
supplier cannot ensure his part on the supply chain, the production can be slowed down which will
result in tremendous negative impacts. Moreover, by choosing not to own any factory where
manufacturing takes place, Nike can face a rise in distribution costs which can negatively affect their
gross margin.

5- Globalization of the industry

In a time where international trading has seen a steady growth, globalization has become the key for
companies to reach a wider range of customers and increase their profits. As we know, sport is the
most universal aspect of culture, and billions of people either practice or watch sport on a daily basis.
This is the reason why the sportswear industry has decided to take advantage of this opportunity by
going global in order to expand worldwide and break down all the potential barriers in order to
facilitate the interaction between companies and customers. Firstly, the sportswear industry have
outsources most of their manufacturing operations in third world countries, especially in Asia where
costs are much lower than Europe or the U.S. Secondly, stores are opening in a very fast pace all
around the world from companies such as Nike, Adidas or Puma. As a matter of fact, Nike has 800
stores worldwide and more than 50% of them are outside the U.S. This allows the company to develop
a brand image that is recognized not only in the U.S but also all around the world. Thirdly, the
sportswear industry has signed multiple partnerships not only with sport teams worldwide, but also
celebrities such as Tiger Woods, Kobe Bryant or Roger Federer who represent companies from the
sportswear industry, such as Nike or Adidas and give them a global exposure. The global diffusion of
sport and the association with sport events also give the sportswear industry a unique access to the
consumer culture. Finally, the use of commercial media platforms by most companies from the
sportswear industry, as part of their global strategy, has helped to target and open new markets such as
the Chinese market. However, adopting a global strategy also brings a human cost. Indeed, most of the
factories that manufacture sport equipment are located in Asia where human rights are often violated.
These factories often employs under aged workers who are living in very poor conditions and are
being paid minimal wages which cannot even subsist to their needs. It was the case with Nike who
received multiple complaints and critics about the poor working conditions provided to their
employees in third world countries. This not only deteriorate Nikes image but also negatively impact
the whole sportswear industry.

6- Market analysis
Nike is the largest seller of athletic footwear and athletic apparel all around the world. Its product
range include shoes, equipment and accessories for people who want to practice sport in the best
conditions, even though some of their products are worn for casual or leisure purposes. Nikes
products cover seven key areas: Running, Basketball, Soccer, Mens training, Womens training, Nike
sportswear, which is a sports-inspired lifestyle product, and Action sports. Additionally, they also offer
products for other recreational use such as Baseball, Tennis, Football, Walking or Wrestling.
Concerning footwear products, which are Nikes flagship products, their top selling shoes involve four
main categories: Nike sportswear, Running, Basketball, and Soccer. These footwear falls into 4 main
collections: Nike Free, Nike AirMax, Nike RoshRun and Nike Blazer. Nike other products, which
include athletic apparel and accessories also cover the above-mentioned categories, and are sold
throughout the same distribution channels as the footwear products. The company offers, under the
Nike brand name, a large collection of sport clothing for every sport and accessories such as bags,
sport balls, eyewear, socks, golf clubs, and other equipment designed for sport activities. Moreover,
Nike provide a customized service called NikeID, which is an online service, initially launched in
1999, and available in different countries around the world such as the US, France, Spain, Germany, or
China. This service allows the customer to personalize his purchase from Nike. NikeID mainly focus
on footwear products, and offer a large collection of shoes. The customer can then choose a product
from the collection and design it, by changing the color and materials to what he desires. Nike also
owns other subsidiary brands such as Converse, which designs and distributes athletic and casual
footwear and apparel, and Hurley International LLC which also designs and distributes action sports
and youth lifestyle apparel and accessories. This diversity of high quality products has contributed to
the rise of Nike as the leader of the footwear market, with a market share of 47% and revenues of
nearly $7 billion. Among this 47% market share, the Nike brand alone owns 35% whereas Nikes
subsidiary companies own marginal portions of the market with the Jordan Brand having 10% of the
market share, and Converse 2% of the market share. On the other hand, Nikes competitors share the
rest of the footwear industry market, with Adidas having a 6% market share and Reebok 3%. In the US
market, Nikes popularity is even bigger as Nike and Jordan brands account for almost 59% of the
total sales in the footwear market, while Adidas only contributes to 7% of the total sales. (Cramer,
2013). Globally, Nike owns 14.6% of the sportswear market, including shoes, equipment and
accessories, and is closely followed by Adidas with 11.4% of the market share. (Bryan, 2013). In order
to achieve such high profitability and market share, Nike has relied on a very effective marketing mix
consisting of the product, by providing a large selection of shoes and sport equipment to their
customers, with the possibility of customizing their own designs, but also extra features including
warranty and after sale service. Indeed, they offer a one year warranty on their products, and provide
an option for replacement if any defect occurs. Concerning the price, Nike has a high-end consumer

market and they seek to provide value at high cost for a maximum profitability which allows them to
maintain a high gross margin. As a multi-national company, the place is global as Nike owns a large
distribution channel that can support its retail business. They own over 800 retail stores around the
world but they also sell their products to private retailers such as hyper market in metropolitan areas.
Finally, promotion is one of Nikes top concerns, as the company uses advertising, sales promotion,
public relations and publicity along with celebrity endorsement and sponsorship to build awareness
and develop the brand image and the loyalty of their customer base. Nike has been able to develop a
marketing strategy that allows the brand to be recognized worldwide and gather a strong image and
loyalty among its customers. In order to do so, Nike has focus its efforts on advertising and marketing
campaigns such as the Just Do It, or the MakeItCount campaign, which are campaigns that
include commercials showing athletes wearing Nike products, and excelling at the activities they are
performing. They also launched a series of commercials about their NikeFuel products, which show
unknown young talented athletes, on urban background, performing athletic activities, which is really
appealing to the customer who wants to be like them, and understand that understand the wearing a
Nike product is the key to reach that level. Using people who appear to be real Nike consumers instead
of celebrities make the commercial more realistic and reachable to the customers. However, Nike also
endorses a lot of celebrities and athletes to represent the brand worldwide. These athletes usually excel
at what they do and have a solid fan base, which empowers the brand image of Nike, as a company
that support and work towards excellence and achieving high performance. Thus, celebrities like Tiger
Woods, Michael Jordan, or Roger Federer are usually seen with Nike products and often appear in TV
commercials. Nike also sponsors various sport events such as Tour de France or the Soccer World
Cup, but also endorses various teams in all kind of sports and place its products in various shows and
movies using product placement. With these fresh marketing and advertising campaigns, Nike has
been able to keep in touch with their customers and develop the brand image all around the world.
Nike has also made signification efforts in responsibility and sustainability. Within the last decade, it
has improved its recycling program and uses nowadays more eco-friendly materials to reduce CO2
emission. Nike also sponsors many high schools sport events, donates millions of dollars to charity
associations and has established in 2004 the Nike foundation to improve the lives of adolescent girls in
the third world countries. (Nike.com)

7- Finance

According to Nikes income statement from Nasdaq.com, we can clearly see that Nikes total revenue
has increased throughout the year to reach $25 billion in 2013. This is a 25% increase compared to
2010. And even though the cost of revenue has increased too, their gross profit is still increasing in a
regular pace of $1 billion per year, and is attaining $11 billion in 2013. Globally, Nike has been very
profitable with over $2.4 billion of net income and is ranked 24 in the worlds most valuable brands by
Forbes magazine. The companys operating expenses have been increasing from $6.3 billion in 2010
to $7.8 billion in 2013, due to the increase of distribution and manufacturing costs. Nikes long term
debt has been decreasing from $446 million to $228 million from 2010 to 2012, but has reached $1.2
billion in 2013. This is due to the fact that the company has entered the bond market for the first time
in a decade with a $1 billion offering. The athletic-footwear maker sold equal $500 million portions of
2.25 percent, 10-year debt and 30-year securities with a 3.625 percent coupon, the lowest among
similar corporate bonds issued in the U.S. this year, according to data compiled by Bloomberg. (Mead,
2013). This sale will add to the $4 billion in cash Nike already has in hand and will primary new
capital expenditures acquisitions and share buybacks, but also to finance a new headquarter in China
and open more distribution centers. Nike debt is rated A1 by Moodys Investors Service and an

equivalent A+ by Standard & Poors, with less than 1% probability of going bankrupt in the next 2
years. The company also has 701 million total shares outstanding with an 84.41% institutional
ownership which equals to 591 million shares held by 1021 owners. With a share price at $74 in
March 31th, 2014, Nikes market capitalization reaches $49 billion, which is 3 times more than their
peer average. (Nasdaq.com).Concerning the financial indicators, and given the fact that a Nikes share
costs $74 and it has 2.93 earnings per share, the company P/E ratio equals to 25.27, which is above the
industrys P/E ratio of 24.10. Nikes other valuation indicators are a price to sales ratio of 2.18 and a
price to book ratio of 4.94, and they essentially means the numbers of dollars a person has to pay for
$1 of equity. Nikes earnings per share performance has also increased from $1.79 in 2009 to $2.69 in
2013. Concerning the dividends, Nike has a dividend yield of 1.3% compared to 1.8% and a payout
ratio of 31.00. Nikes profitability ratios include a 46.7% gross margin. Nike also benefits from a
strong financial strength, as it has a quick ratio of 2.1% and a current ratio of 3.4%, which clearly
indicates that the company has more short terms assets than short term debts and can meet its short
term financial liabilities. (Daily Finance). Nikes management effectiveness includes a return on assets
of 15% and an increasing return on invested capital as shown in the graph below.

A comparison with Nikes main competitor, Adidas, indicates that Nike leads the market in total
revenue and gross profit. Indeed, Adidas has a total revenue of $20 billion compared to Nikes $25
billion. Adidas also has a gross profit of $9.8 billion and a net income of $1.089 billion which is lower
than Nikes $2.4 billion net income. However, Adidas has a higher EPS of $5.18 but also has a higher
gross margin of approximately 49.5%, compared to Nikes 43.59%, as its direct-to-consumer sales
contribute a higher proportion of total sales (23%, as compared to Nikes 19%). (Cramer, 2014).
3- Organization,

Management, Human resources

Nike is a multi-national company that sells its products all around the world. Therefore, it has
organized itself throughout the years by dividing their operations to two main markets: the US market
and the international market. In the US market, Nike sells their products to thousands of retail
accounts including footwear stores, sport equipment stores, clothing stores as well as tennis and golf
shops and other sports retail stores. They offer an ordering program which allows retailers to
command products from Nike up to 6 months in advance, which will be delivered at a set of time and
a given fixed price. Nike also disposes of sales offices everywhere in the US and has independent sales
representatives responsible for the sale of special products such as equipment for Golf, baseball or
skateboarding. In addition, Nike also offers a direct-to-consumer program through their website
nike.com, which allows the customer to order the products he desires from a large collection of shoes,
equipment and accessories. Additionally, Nike also owns US 303 retails stores where they sell their
products. 171 of them are Nike brand factory stores, 33 are Nike brand in-line stores by the name of
NikeTowns, and the rest is divided between their other subsidiary companies; 72 retail stores for
Converse and 27 Hurley stores. In order to ship their products to retail stores, Nike has five primary
distribution centers, three of which are leased, and located in Tennessee, Memphis, and California
where Hurley and Converse products are also shipped from there. On the other hand, Nike operates in
the international market through its own direct to consumer operations, but also by selling products to
retail accounts and independent distributors. The company also owns 16 distribution centers located all
around the world in countries and regions such as Canada, Asia, Latin America or Europe. It has 388
Nike brand factory stores, 59 Nike brand in-line stores including NikeTowns and employee stores and
3 Converse stores for a total of 450 international retail stores. They also offer a direct-to-consumer
service throughout their website which is available in countries such as France, UK, Germany or Italy.
(NikeInc, 10-K report). This organization, both nationally and internationally offer the possibility for
Nike to effectively offer and deliver its products and services to the consumer no matter where he is
located. Nike also drives its self from 3 main leaders that contributed to the rise of the company as the
leader of the athletic shoes and sportswear industry. Those people are Bill Bowerman, Phil Knight, and
Jeff Johnson. Bill Bowerman and Phil Knight were the two men who created Nike and brought a
revolution to the athletic footwear industry. Bowerman was a track and field coach at Oregon
University, who experimented innovations in running shoes and was always seeking to provide his
runners a competitive advantage. Knight was one of Bowermans students and believed that quality
running shoes can be manufactured in Japan and could compete with German brands. They designed
the first running shoes for Nike, which was named Blue Ribbon Sports at that time. Jeff Johnson was
the first full-time employee of the company in 1965, and was responsible for creating the first product
brochures, printing ads and marketing materials. He did multiple valuable tasks such as establishing a
mail-order system, opening the first BRS retail store in California and managing the shipping and
receiving of shoes. Nowadays, Phil Knight is still part of Nike, and is the chairman of the board of
directors, and served as the president of the company from 1968 to 1990 and from 2000 to 2004.

Knight has his own strategy that believed would help Nike boost its sales and become the leader in the
footwear industry. Instead of relying on advertising, he preferred to sponsor top athletes to endorse his
shoes and give Nike a global exposure. Thus, the first endorsed athlete was the runner and recordholder Prefontaine. Later on, he endorsed the tennis player McEnroe, who started wearing Nike shoes
after he hurt his ankle, which led to the sales explosion of Nike three-quarters shoes. The idea of
enrolling top athletes was a huge factor that helped Nike develops a strong brand image of a company
which sells high quality products. Nike also relies on many other people who constitute the board of
directors and contribute to maintain and develop Nikes business worldwide. Among them is Mark
Parker, who is the president and CEO and a director since 2006. His role is to lead the continual
growth of the Nike brand, and but also Nike Inc.s global business portfolio which includes Converse
and Hurley LLC. The board of directors includes a finance committee, composed of Elizabeth
Comstock, John Connors, and Orin Smith. Its role is to oversee the financial policies and activities of
the company that may have an impact on the operations and financial position, by reviewing the
annual budget of the company or reviewing capital expenditures and capital market transactions. The
other committee is the nominating and corporate governance committee, and is composed of Timothy
Cook, Alan Graf, Douglas Houser, John Thompson, and Phyllis Mise. Its role is to identify individuals
susceptible to be directors, develop governance guideline and chat of ethics and conducts, and
recommend them to the board in order to enhance the integrity of Nikes corporate governance.
(NikeInc.com). Concerning the human resources aspect of the company, Nike employs 48,000
employees worldwide, including retail and part-time employees all around the world. They promote
and develop safety for their employees by providing employee benefit plans and safety training for
employees depending on the risk related with the function they occupy in the company. Nike also
rewards and offers a large range of benefits for their best employees, including health insurance,
disability insurance, paid vacations and holidays, products discounts or onsite fitness centers. This
allows the company to offer a safe and motivating work environment. Thus, Nike has always been
voted one of the most ethical companies in the world, as well as one of the best American companies
for gay, lesbian, bisexual and transgendered employees. (Nikeresponsability.com)

8- Importance of Information Technology

In an industry where supply chain and distribution are the main keys for growth and development,
information technology has become a crucial tool to operate the retail operations and provide the
customer with the right product at the right time. The athletic apparel industry and Nike heavily relies
on information technology for multiple purposes. Firstly, information technology is used, throughout
information systems and third party logistics across the whole supply chain process, from product
design to manufacturing, ordering, distribution, sales and transportation. It allows Nike and the other
companies to effectively manage their inventories and ship their products to their customers on a

timely basis. Deficiency in these information systems would result in a misbalance in inventories,
delays in shipment and would alter retail operations and the financial situation of the company.
Secondly, information technology is also used to collect, analyze and forecast financial data, and to
comply with legal and tax requirements. The data collected are then used to make the internal financial
report of the company. Deficiency in these information systems would result in a loss of revenues and
profits and would damage the reputation of the company. Information technology is also used to
protect companys data and users personal information from any hackers attack. Finally, information
technology also represents a big advantage for Nike and the industry when it comes to digital
marketing and e-commerce. Internet has become so powerful that information technology is an
efficient way to market the companys products quickly and efficiently to the customer. It is also a tool
for electronic communication, between both the companys employees across the world and third
parties such as suppliers, vendors and customers. Nike has been actively engaged in the electronic
market, developing new information technology systems and creating applications on both the
Appstore and Android to keep in touch with the customer and offer a new range of feature and
services. As an example, the NikeRun app allows the customer to gather different information on his
running activity, such as the number of miles run, calories burnt, and the time he spent running. He can
then save the data, and track his progress. Therefore, information technology is an important tool to
develop and manage both operating activities and business processes, and any misuse of personal
information can damage Nikes reputation and negatively impact both revenues and profits. (Nike 10K report).

9- Final analysis
The best way to predict the future is to design it. Nike has managed to develop throughout the years
an effective strategy that places the company as the leader of the footwear and sport apparel industry,
and offers Nike a competitive advantage and a strong positioning for the future. Indeed, the analysis of
Nike reveals that the company has a solid brand image and is recognized worldwide. Nikes products
are associated with high quality performance and are represented by top athletes all around the world.
Its marketing strategy, throughout commercials, athletes endorsement and sponsorships of sport and
cultural events offers Nike to benefits from a global exposure and recognition. It has a solid range of
products, from shoes to sport equipment and accessories covering all different activities, and innovate
daily to create more products that fit with the customers expectations. Nikes supply chain, including
design, production, manufacturing and sales also allows the company to manage their business
operations effectively and delivers their products in a daily time basis to their customers. The financial
analysis reveals that Nike is the most profitable company in the industry and one of the most valuable
brands in the world. With over $4 billion in cash and $25billion in revenues, the company benefits

from a financial security for the future to develop their business and invest in marketing and
innovation to create more products. Nike also has developed a sustainable strategy centered on
innovation to bring new products and services that combine performance, innovation and
sustainability, which will ensure Nike a continuous development in the future. Indeed, Nike
understands that in the future, competition for scarce resources will affect the cost of inputs necessary
to make its products, and will result in an increase in the price of the products themselves. The rise of
energy costs and CO2 emissions will also lead to a pressure on transportation and manufacturing
techniques. Moreover, urbanization and the growing of the middle class will also result in more
demands for products and will create new opportunities to meet them. This is why Nike has decided
to create a portfolio of sustainable materials which will not only improve the environmental impact but
also will keep all the attributes of high quality and performance allowing Nike to decouple materials
from scarce resources. Nike also is working on improving their manufacturing models and using
technology to be more efficient in their value chain but also create new innovative products that will
drive performance and success to the consumers. Finally, the last pillar of their sustainable strategy is
to develop deeper relationships with athletes in the future by creating a digital service revenue based
on the digital realm of fitness, coaching and training services and helping them reach their maximum
potential. Therefore, Nike has successfully positioned itself both in the present and in the future as the
leader of the sport apparel industry, by offering a large range of high quality products, developing a
large effective marketing strategy and always looking to take advantage of the latest technologies to
provide the best products for their customers.