Conduct a thorough strategic analysis of your organisation’s external environment and critically evaluate how the identified issues might impact on the organisation’s business strategy. Conduct a...

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Report
On
Nike in China
Prepared by
(Student’s Name)
(Course Title)
(Proffesor’s Name)
(Date)
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Executive Summary
The report is a presentation of the international footwear and sports brand Nike Inc. in the
country China. It conducts a thorough strategic analysis of the organization’s external
environment and evaluates how the identified issues impact the organization’s business strategy.
The report initiates with the industry analysis of footwear industry in China, followed up by the external
environmental analysis which consists of opportunities and threats existing in context of political,
economic, social and technology. The opportunities and threats helps the company in formulating and
implementing further strategies and will help in yielding higher revenues on the footwear and other sport
products.
Nike being the prime brand in production of footwear, faces tough competition from Adidas group and
other brands which is clearly indicated in the report with the help of pie diagrams, which shows the
breakdown of the market share of the various international brands in the market of China.
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Table of Content
S.No. Particulars Page No.
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Introduction
in the year 1962 Bill Bowerman and Philip Knight under a partnership established Nike Inc, which was
earlier known as blue ribbon sports. The initial eve of the company was to provide high quality athletic
shoes at low cost to the people in the international and domestic market. They wanted to become the
leading producers of athletics producing the highest quality. By the year 2000, the company became one
of the leading manufacturer and distributor of athletic shoes at a very marketable price point into the
global market and over 40% of the sales of the company was from athletic apparel and sports equipped.
In more than 100 countries, the company is maintaining both traditional and non-traditional channels of
distribution for its targeted primary market regions: China, USA, Europe, Asia-Pacific and the America
(not including the USA). They are utilizing more than 20 000 retailers in the factory stores factory towns
and Internet-based sales. The company is dominating the athletic footwear industry and has a share of
33% in the global market. It tastes due to their high production quality innovative products and excellent
marketing techniques that they have been able to achieve the position of number one.
Products
The company’s prime focus has always been athletic footwear is which are designed for sports and leisure
both. But the company also deals with a number of other products that are also accepted by the consumers
due to their high quality. The products are being sold through wholly-owned subsidiaries to sell additional
sports related merchandise and raw material: cole haan holdings Inc., Nike team sports and other
subsidiaries. The following are the products being offered by the company other than athletic footwear:
 Running
 Basketball
 Cross-Training
 Outdoor Activities
 Tennis
 Golf
 Soccer
 Baseball
 Football
 Bicycling
 Volleyball
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 Wrestling
 Cheerleading
 Aquatic Activities
 Auto Racing
 Other athletic and recreational uses
Nike was a viable suitor for a competitive and industry analysis from its unique standpoint in the footwear
industry. The footwear industry grows on average between 4-5% per year, and is poised for future
growth, recent economic factors included. Nike is the overall leader with 32% market share and continues
to grow each year.
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External Analysis
Industry Competition
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Current Rivalry Opportunities
The firms in the Manufacturing of athletic footwear are the Nike’s major rivals. The major rivals for the
company are Adidas group, new space balance and K-Swiss. Out of these three companies with a 22%
market share, the Adidas group leads as they have sponsored the World Cup therefore they had an
astonishing jump of 26% in comparison to the last quarter last year. New balance has a current share of
11.6% whereas K-swiss is facing a downturn in revenues but still fighting in the market.
As per the analysis, the three companies mentioned above has become big rivals for the Nike, as they are
enjoying the additional market share due to the decrease from the smaller competitors. The Adidas group
purchased Reebok in late 2007, due to which they enjoy an extra market share of 6% which has posed a
new competition and threat to the company and their marketing techniques. The two companies are
Adidas and Nike is the biggest competitors for each other which is visible from the commercial’s as well.
Adidas and Nike are trying to hold larger ad campaigns focusing on intense usage of their products by
displaying them by running, playing football, basketball etc. due to its unique marketing strategies and a
detailed analysis of strategies, Nike have been able to enjoy the prime position in the athletic footwear
market and industry. Similarly, Adidas is being the prime holder of the soccer shoes industry and new
balance has recently entered into the basketball shoe market.
Since the year 2005, the sale of shoes have gone up to 4.6% whereas the increase in the sale of athletic
shoes have been lesser which is contradicting to the sales revenue of Nike company whose overall
revenue has increased by 15% in the year 2009.
Numerous Equally Balanced Competitors: as per the statistics, Nike has been an individual winner of
this industry because the competition has not been able to affect the company’s strategy. But if we
compare the company’s own growth in terms of self competition, then they have fallen from the position
that they use to hold in the year 1998 when the company had a market share of 47% and most recently it
is predicted that in the coming years the company’s share will go down to 32%. Although currently
Adidas group lags behind Nike, but it...