Business Model of Nike Essay

IntroductionNike Inc. was founded in 1962 by Bill Bower cosmos and Phil gymnastic horse as a dampennership under the name, grubby Ribbon Sports. Nikes main products argon sports seat, sports transgress, sports goods. In this paper, we ordain guggle abtaboo The Ch anyenge of Entrepreneurship warring business enterprise Model Solid strategic Plan Feasibility Analysis and Business Plan. All of these topics argon very outcomeant when we study the EOE and SBM, and in each topic gain much than bingle point. We got The Benefits of Entrepreneurship Competition of The Ch whollyenge of Entrepreneurship Core Competencies Innovations Sustainable Competitive favour Key Success Factor of CBM Vision and Mission Objectives and Goals machinate Competitor Business strategy of Solid Strategic Plan effort and Market Feasibility Product or Service Feasibility pecuniary Feasibility and 5Forces Model of Feasibility Analysis. Now, we atomic number 18 going to render you the lucubrate.Th e Challenge of EntrepreneurshipThe Benefits of EntrepreneurshipSurveys show that avowers of small businesses believe they work harder, earn more than m maviny, and are more satisfied than if they worked for someone else. (Via Dr. Jos A. Torres Essentials of Entrepreneurship and Small Business firearmagement Powerpoint) luck to Create Your Own Destiny. Nike, originally known as good-for-nothing Ribbon Sports (BRS), was founded by University of Oregon slash athletic supporter Philip Knight and his train Bill Bowerman in January 1964. The company initially operated as a electrical distri furtheror for Japanese shoe set aboutr Onitsuka tiger(now ASICS), making most sales at track meets out of Knights automobile. According to Otis Davis, a student athlete whom Bower man coached at the University of Oregon, who later went on to win two gold medals at the 1960 Summer Olympics, Bower man do the initiative agree of Nike situation for him, contradicting a claim that they were m ade for Phil Knight. Says Davis, I told Tom Brokaw that I was the first. I arrogatet conduct what all the billionaires say. Bill Bower man made the first pair of garb for me. People dont believe me. In fact, I didnt the a wish(p)s of the foc development they felt on my feet. on that point was no support and they were too tight. But I saw Bower man makethem from the waffle iron, and they were mine. (Via HTTP//en.Wikipedia.org/wiki/Nike,_Inc.)Opportunity to Make a Difference. In 1979, Nike zephyr moderate engine room Air, by the inventor of the m. Frank Rudy patented, first applied on the Tailwind running play lieu, the gas film in running shoes soles for the protection of the soften. And Nike has created galore(postnominal) print and television advertisements with Wieden+ Kennedy, Wieden+ Kennedy remains Nikes primary ad agency. It was agency co-founder Dan Wieden who coined the now-famous slogan Just Do It for a 1988 Nike ad campaign, which was chosen by Advertising Ag e as one of the top five ad slogans of the 20th century and enshrined in the Smithsonian Institution. Walt smokestack was featured in Nikes first Just Do It advertisement, which desolelyed on July 1, 1988. Wieden credits the rapture for the slogan to Lets do it, the experience words spoken by Gary Gilmore before he was executed. Throughout the 1980s, Nike spread out its product line to encompass more sports and regions by core ofout the serviceman.16 In 1990, Nike locomote into its eight-building World Headquarters campus in Beaverton, Oregon. (Via HTTP//en.Wikipedia.org/wiki/Nike,_Inc.)Opportunity to Real Improve loot. In 2005, Nike Air Jordan 20 generations. Nike Free series, oerly in protecting the find fault, like barefoot training is provided for the wearer. Nike as of May 31, total annual profits had 13.7 billion dollars, a 12% growth in the past fiscal year. On December 19, 2013, Nike Incs quarterly profit rose as a result of global orders for merchandise for deli very by April change magnitude 13 percent. Future orders of shoes or clothes for delivery betwixt December and April, rose to $10.4 billion. Nike partings (NKE) rose 0.6 percent to $78.75 in extended trading. (Via HTTP//en.Wikipedia.org/wiki/Nike,_Inc.)Opportunity to Contribute to Society and Be Recognized for Your Efforts. NIKE Charity fundamental law, is a Non-Governmental Organization Headquartered in PORT HARCOURT RIVERS STATE, NIGERIA. It is autonomous and submissive to the laws of the Federal Republic of Nigeria. They are determined to achieve our dreams and purpose of great(p) hope to the less al first-class honours degree and to discharge our duties as members of non-profit organization in accordance to our inwardness determine at National, State and Local Government levels. We are prepared to harness, fix and efficiently direct our efforts as much as we are out to join hands with another(prenominal) organizations, and individuals in the fight against the Girl kid Abuse. (Via HTTP//saccharinity.com/about_us.php)CompetitionNIKE is a consumer products company and the relative familiarity of various sports and fitness activities and changing design trends affect the demand for our products. The athletic footwear, apparel, and equipment industry is risquely agonistic in the United States and on a worldwide basis. We make out internationally with a signifi stoolt number of athletic and leisure footwear companies, athletic and leisure apparel companies, sports equipment companies, and large companies having modify lines of athletic and leisure footwear, apparel, and equipment. We overly compete with other companies for the ware capacity of independent manufacturers that produce our products and for import quota capacity.Our competitors product offerings, technologies, tradeing expenditures (including expenditures for advertising and endorsements), pricing, appeals of production, and customer service are areas of intense competition. This , in addition to rapid changes in technology and consumer preferences in the markets for athletic and leisure footwear and apparel, and athletic equipment, constitute significant luck factors in our operations. If we do not adequately and timely anticipate and serve to our competitors, our monetary values may increase or the consumer demand for our products may stock significantly. (Via Nike-2013-form-10K)Designing a Competitive Business ModelCore CompetenciesNikes bore , technology and defacement is famous . Nikes Air cushion technology is almost using in each basketball shoes ,its good for athletes foot . the Nike having its own core competency due to organizations own skills and core competence it has taken a competitive advantage and now is taking a large market share. The core competence of Nike is to specialize in athletes foot wear and other sports items. As we know every organization has its R & D subdivision .The R &D department of Nike is playing a vital routine be cause of its regenerations in foot wear how theconsumers can feel comfort by wearing their shoes and the timberland thats the most primal factor to be given in shoes and they have antithetical categories of shoes which is running shoes break off shocks, Jordan, and other types that is tar issue forthing incompatible type of consumers having different perceptions.But most important thing of Nike is they dont make shoes they design and accordingly give their design to the production companies in Korea and china or Vietnam. collect to which they are more specialized in their innovation and in this way they have made their core competence in making modernistic design of athlete shoes.InnovationsNike believe his enquiry and development efforts are a key factor in nis success .NIKE strives to produce products that help to castrate injury , enhance athletic performance and maximize comfort success . (Via Nike 2013 annual Report) Nike also respect many expert in chemistry, phy sical exertion physiology, engineering, industrial design, sustainability and related fields ask they advices to fixed Nikes shoes and clothing . Nikes air cushion shock absorption technology is famous in the basketball shoes area .Nikes grass shoes like LBJ , Kobe and KD has many color and types .Sustainable Competitive AdvantageExternal Analysis Nikes tag awareness is famous all over the world ,everyone buying shoes first chose is Nike . Nike sponsored the top athletes and gained worth(predicate) coverage. , like Jordan , LeBron James , .From the Nikes 2013 annual report will find that Nike growing up every years . Nike has many competitors , like Adidas , jaguar , Reebok and so on , but Nikes market share is more than any other . Internal Analysis As we know ,Nikes product is quality , Nikes has own R&D center field to originative youthful technology ,like air cushion shock absorber technology ,environmental technology and so on .Its basic technology to Nikes product .Nike forever and a day find many creative thing to commit in Nikes product ,like knitting technology in his shoes .Thats awesome . Nike has employed creative trade and advertisement platforms in building denounce awareness and equity of its diversified products. For instance, the company uses Tiger Woods a skilled player to build its line of golf products.It further employs professionals in various departments that include distribution, marketing, finance,product management, research and design, tuition technology, and product development so as to sensitize the market of its diversified products Nike also operates an internship program every summer lasting for three months giving students an insight on the diverse brands. Other avenues Nike accomplishes diversification strategy is through mergers, joint ventures, takeovers, and acquisitions. The company also has an R&D unit called the innovation kitchen located in the main parent company in Oregon, to alter it to continue produci ng alone(p) products such as the cushioning system in shoes.Key Success FactorJordan Brand Jordan brand is a unsound part of the Nike. Jordans shoes is popular in all over the world .Jordan shoes occupy the USA 10.8% market share in 2009 .Jordan shoes sales almost two times of Adidas . (Via http//sports.sina.com.cn/k/2009-09-12/16084584096.shtml)So Jordan brand is a key success factors of Nike .) Jordan brand is popular in youngish mountain , every young people want a Jordans shoes its beautiful and at rest .Especially Jordans air cushion technology , using in every basketball shoes . technology In addition to Nikes own staff of specialists in the areas of biomechanics ,chemistry , fare physiology, engineering , industrial design, sustainability ,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 survey designs , Mat erials , concepts for product and manufacturing process improvements and compliance with product safety regulations around the world . (Nike yearly Report ) Advertisement Advertisements play a significant role in the athletic apparel industry, as consumers rely on catalogues and online advertisements .Nike has many endorsers ,like Jordan ,James ,Durant and so on. These guys bring many customers .Nike has online store ,you can buy many things in this store ,before new product star sales ,youll fixate an e-mail about this product .Nikes advertisement not altogether online but also in everywhere .Its very tremendous Adidas Adidas is a very famous company ,its very popular in world too .But in these years, Adidass market in decrease very fast .Because Adidass endorsers did not famous than Nikes endorses .Adidass endorses including Yao Ming ,A.I ,D.Rose and so on .But they hurt or retied .Adidassquality and technology is also healthful known .But Adidas lost because the endorses . current match New Balance (I will call New Balance as NB for short ) is known as a most comfortable shoes .They has many new technology ,such as BIOSHIELD ,ABZORB EX ,REVAX ,ENCAP ,and so on .And NB is popular in young people ,you will find many young people wear NB in the street .ITs a huge market to NB.Building a Solid Strategic PlanIts a significant part of a successful business. It keeps the company to where they oriented, to meet their mission, goals and objectives, and lead it on the ripe way. A Strategy plan is to build a competitive advantage. It convolute Vision and Mission Statement, also Objectives and Goals, SWOT Analysis, Competition Analysis and fabricate Strategies. We are going to find out what does Nike different from others, why it is unique, and what it has that others dont. I am about to use Five Forces Model to hit the books the competitive advantages for Nike.Vision, Mission, Goal and ObjectiveNikes vision is To bring inspiration and innovation to every a thlete in the world. The legendary University of Oregon track and field coach, and Nike co-founder, Bill Bowerman said, If you have a body, you are an athlete.. Its their mission. (Via http//help-en-us.nike.com/app/answers/detail/a_id/113/p/3897) Their goal is to become and keep the number one sportswear brand all over the world. Their objective is keep down the manufacturing cost and keep their price down then they can occupied the market in some less developed countries who can become the economically dependent in the industry. (Via http//wiki.answers.com/Q/What_are_the_objectives_of_Nike_company)SWOT Analysis.Strengths As one of the Fortune euchre company, Nike has numerous strengths. It is positioned at being the number one sportswear brand globally, it Offers their products worldwide, it has a very strong marketing campaign that increases brand familiarity, and it has no factories, it uses OEM (Original Equipment Manufacturer) to get the work done. It has contracts with highe r up 700 shops globally in about 45 different countries. it also has offices in these different countries. It has chains of retail stores likeNiketown so that it can sell there. Its famous Swoosh is instantly recognizable, and Phil Knight even has it tattooed on his ankle. Weaknesses The organization does have a diversified seethe of sports products. However, the income of the business is still heavily dependent upon its share of the footwear market. This may leave it vulnerable if for any reason its market share erodes. The retail sector is very price sensitive. Nike does have its own retailer in Nike Town. However, most of its income is derived from merchandising into retailers. Retailers tend to offer a very interchangeable experience to the consumer. Can you tell one sports retailer from another? So margins tend to get squeezed as retailers try to pass some of the low price competition pressure onto Nike.Opportunities Product development offers Nike many opportunities. The bra nd is fiercely defended by its owners whom truly believe that Nike is not a appearance brand. However, like it or not, consumers that wear Nike product do not always buy it to participate in sport. Some would argue that in young person finishing especially, Nike is a fashion brand. This creates its own opportunities, since product could become stick-in-the-mud(predicate) before it wears out i.e. consumers need to replace shoes. There is also the chance to develop products such as sport wear, sunglasses and jewelry. such risque value items do tend to have associated with them, high profits. The business could also be developed internationally, building upon its strong global brand recognition. There are many markets that have the disposable income to spend on high value sports goods. For example, emerging markets such as China and India have a new richer generation of consumers.There are also global marketing events that can be utilized to support the brand such as the World C up ( association football) and The Olympics. Threats Nike is exposed to the international nature of trade. It buys and sells in different currencies and so cost and margins are not stable over languish periods of time. Such an exposure could mean that Nike may be manufacturing and/or selling at a loss. This is an issue that faces all global brands. The market for sports shoes and garments is very competitive. The model developed by Phil Knight in his Stamford Business School days (high value branded product manufactured at a low cost) is now comm all used and to an extent is no longer a basis for sustainable competitive advantage.Competitors are developing alternative brands to take away Nikes market share. As discussed above in weaknesses, the retail sector is becoming price competitive. Thisultimately means that consumers are shopping around for a better deal. So if one store charges a price for a pair of sports shoes, the consumer could go to the store along the street to compa re prices for the exactly the same item, and buy the cheaper of the two. Such consumer price sensitivity is a potential external threat to Nike. (Via Nike 2013 Annual Report,http//www.quality-assurance-solutions.com/swot-analysis-nike.html, http//www.ukessays.com/essays/marketing/account-management-provides-special-treatment-in-marketing-administration-marketing-essay.php http//www.marketingteacher.com/swot/nike-swot.html)Analyze the Competition. Nike has some competitive Direct competitors- Adidas, New Balance and Li Ning. They offer the product that Nike does, and all of these companies have different key success factors. Adidas, is the most competitor od Nike with do doubt, they compete with Nike for No.1 sportswear branding for over 40 years But in these years, Adidass market in decrease very fast .Because Adidass endorsers did not famous than Nikes endorses .Adidass endorses including Yao Ming ,A.I ,Derrick Rose and so on .But they hurt or retied .Adidass quality and technology is also well known .But Adidas lost because the endorses New Balance is known as a most comfortable shoes .They has many new technology ,such as BIOSHIELD ,ABZORB EX ,REVAX ,ENCAP ,and so on .And New Balance is popular in young people ,you will find many young people wear New Balance in the street .ITs a huge market to New Balance Some Significant competitors like Under Armour and Skechers, they offer similar products like apparel or footwear, they compete with Nike in some fields. Some Indirect competitors like The northerly Face or Columbia, both of them are the most of the famous exterior brand, they offer windbreaker or accessories that Nike does. They have impacts to Nike in some unwashed markets. Conclusion Nike does perfectly in quality and endorsement, they almost signed all significant players and squads all over the world. Adidas has no most strength but all factors are averaged. New Balance does best in technology, it can makes sneakers more comfortable. (New Balance has never signed any endorsers since it founded, so its crisscross is little bit cast down)Cost leadership.Nike uses Business Simulation Strategy. It has no factories, it uses OEM (Original Equipment Manufacturer) to get the work done, and it doesnt has stores mostly. It offers products to Franchised retailers, and let them sell the products. It saved money from factories and rent, so its overhead is low. No shop, no labors,. quantity of materials, low too. If a supplier increases costs, Nike can easily change a new one with lower cost, Nike can do this because of its ability. Nike definitely has low cost access to factors of production. The enormity of Nike in respect to their suppliers gives them a huge advantage in production negotiations. Due to their high volumes for products, the cut-throat low cost nature of selecting a manufacturer, and mate with the fact that Nikes suppliers depend so heavily on them for their own success that they have little to no bargaining room to ward training prices, allows Nike to continuously enjoy low costs of production.Nikes hardware and packet technology implementations of using the not only using the best materials but creating them in a vertical fashion and housing an innovation culture from the top down, allow Nike a first move advantage into cost savings. However most of these advances only bring definite savings for a short time due to competitive parity within the industry, their creative nature definitely does benefit over the long run. Nike reduced costs by cutting some of its endorsements. Company research suggested the endorsement by the Italian soccer team, was not achieving the desired result. Michael Jordan, LeBron James, Kobe Bryant and a few other endorsers were retained while some other like Italian soccer team, were eliminated, to saving over $100 million. Nike does incredible in cost control. (Nike 2013 Annual Report)Differentiation.Differentiation strategy by Nike is used to gain market share adva ntage in the broad foot ware market. Aside from foot wear, the company boasts of products such as clothing, equipment, and even accessories. The strategy is achieved by producing consumer goods and service that customers perceive to be of high quality or have added unique features. This has been achieved by the company innovating state of the art athletic shoes that are publicized through dramatic guerrilla marketing. Marketing of the different products is intentional to coerce customers that Nikes shoes are not only passkey but also a high fashion statement which is a necessary part of a lifestyle basedon athletic or sporting interests.The company has also differentiated itself by using highflyers that are best used in distinguishing sporting disciplines hence alter the company reach its target market, for instance, the Brazilian national soccer team or even Michael Jordan. Also, Nike is different from others in their Ads. They show not only their technology but also leading end orsers like Michael Jordan, LeBron James, Kobe Bryant and Cristiano Ronaldo in their Ads of new products. At the same time, their Ads are also very creative and with imagination, make people who watched them unforgettable. (Via Nike 2013 Annual Report) Focus.