Ch. 4 - The Marketing Environment Nike Inc.

Over the years, Nike Inc. has been known to serve all athletes all over the world, and provide them with the best possible footwear, apparel and other accessories they would be interested in. Nike Inc. naturally targets all athletes, men and women, boys and girls, of all ages, while continuing to successfully be able to offer a multiple amount of products that this athlete would need in their respective field of play. Nike Inc. still successfully applies several of it's marketing strategies while doing this. Their relevancy to both male and female athletes around the world stretches far beyond what most realize, as Nike Inc. successfully is able to obtain and sponsor female athletes along with the male ones they have, including members of the LPGA tour and the USA women's soccer team. CEO Mark Parker said yesterday at their investor conference that the Nike Inc. women's business is now worth $4 billion, and is being projected to be worth $7 billion by 2017. At the same time while being able to successfully use their athletes as a way to apply their strategy in their market environment, Nike Inc. is still able to keep their morals and ethics in place but keep the emphasis on sustainability and keeping themselves environmentally and socially sound. Nike Inc. is able to offer a broad array of products suitable for an athletes lifestyle. Nike Inc. has successfully been able to maintain its powerhouse status in an ever changing market, and adjusting themselves and finding ways to avoid problems and keep themselves the steady and dominant company they have been in the market since its inception by continually catering to and creating and innovating products for the needs of athletes everywhere. Nike by continually finding better ways to improve existing products and making them better, keeps their current markets in tact, and keeps them buying their product.

Nike Inc. World HQ, Based in Beaverton,OR

Nike Inc. is a well known powerhouse in most of the world, but Nike continues to successfully help stimulate innovation and growth in existing markets and audiences such as the ones in North America, Western Europe and Japan. According to current market projections from Nike Inc, Nike Inc. projected their brand to reach over $14 billion in the USA and $6 billion in Western Europe by 2017, as announced at their Investors Conference yesterday, their first in 2 years. As Nike Inc. strives to build on this market in place strength of growth for them, Nike continues to further encourage innovation and growth and expansion of the Nike Brand in newer markets such as China and other parts of Europe.

Statue of Kobe Bryant in Guangzhou, China

Part of this innovation in their new markets was having Basketball superstar Kobe Bryant tour China during the summer to promote Nike Basketball, who faces stiff competition in China from the Li-Ning Company, who have recently launched a new Basketball shoe campaign being headlined by a former Nike Inc. athlete, American basketball superstar Dwyane Wade, and also face competition from the Chinese company Anta, who have just recently announced a new shoe release based on the signature design of American Basketball star Rajon Rondo and had signed superstar Basketball player Kevin Garnett to a 5 year shoe deal this past April. Nike Inc. while continuing to reach abroad to create growth and innovation throughout China have projected for themselves a geographical growth of up to their average double digit rate in China by the year of 2017.

As successful as Nike Inc. is, it did face struggles, like most major powerful companies did during the Recession. According to my research, Nike Inc. stock dropped 40% during the Recession, going from a high of $35.30 to a low of $21.34. While taking a drop like that was very much a hard thing to go through, Nike's stock surprisingly went from "negative to euphoric" as from 2010 on, Nike's stock went up from a high of $46.24(2010) to a high of $60.25(2013). Given the recent rise in success for Nike on the stock market, its no surprise that Nike Inc. is still the leader in the market.

CEO Mark Parker at Nike Inc. Investor's Conference 10/9/13

Yesterday as I had stated previously, Nike had its first Investor's Conference in nearly two years, and discussed their projections for the fiscal years of 2015 and 2017, and presented the media and their investors with very impressive and promising projections and numbers. The projections and numbers that were presented only backup the fact that Nike remains the main powerhouse in the market. Nike projected that the direct to consumer growth would reach $5 billion by 2015 and eclipse over $8 million in 2017, while expecting to deliver $10 billion in incremental revenue by 2017 through women, apparel and e-commerce sales, which alone account for $2 billion in growth alone. Also, they announced that they were expected to have a revenue of $30 billion by 2015, and have a revenue of $36 million by 2017. What makes that projection interesting to me is that in 1983, Nike's revenue was $199 million, and given the projections presented yesterday, Nike Inc. has had an annual growth rate over 35 years of 13.2%, and have seen themselves have 15 consecutive quarters of double digit growth in Running. At the same time, Converse, one of Nike's subsidiaries is projected to be worth $3 billion by 2017. When Nike originally purchased Converse, they paid $300 million for it in 2003, showing how much its grown these past 10 years. A key thing here with these projections is that Nike Inc. long term model of high single digit growth is still in tact and is still very effective. Given this,over the last 3 years, Nike Inc. has grown up to 40% and has seen its website revenue jump up 35%. They've also seen individual businesses, such as the Elite socks grow well, as it is today a reported $100 million business, while their Youth athlete business is worth $3 billion. Nike Inc. truly has mastered and maintained their successful and powerful status on top of their market and their market environment.

Source: nikeinc.com