International Business: Nike Corporation
International business
Nike Corporation
The purpose of this work is to research Nike Corporation in relation to international business through the conduction of a SWOT analysis of the company, as well as analyzing the industry. Further this paper will examine the top competitors of Nike Corporation as well as the international factors and elements which affect the corporation either positively or negatively.
Nike Corporation states on the Nike.com website that the Nike Foundation is "a reflection of the Nike Culture." The stated mission of the Nike Corporation is reflected in their statement of commitment to "assisting youth to achieve both their personal goals as well as to contribute to the overall betterment of society." The Nike Corporation's stated goals are to:
Assist young people in understanding their power of ignition of positive change and then to provide the youth with tools needed in this action.
Engaging youth in the debate and decisions that impact upon their lives.
Youth empowerment.
Identification of models to convene youth in exploratory settings enabling articulation of concerns, design of solutions and creation of actions.
In the area of sports to create and sustain opportunities for youth to enjoy the positive benefits of individual as well as group sports. Sargent et al. (2005)
Nike owned subsidiaries are Converse, Inc. A designer, marketer and distributor of footwear, apparel, equipment as well as accessories for an array of fitness and sports activities. Bauer NIKE Hockey Inc. is a leader in the design and distribution of hockey equipment; Cole Haan is a leading designer as well as marketer of designer luxury shoes, purses, accessories as well as coats; Hurley International LLC is a designer, marketer and distributors of athletic footwear as well as designing and marketing apparel for the value chain retail.
I. In the Beginning - Nike Corporation:
Nike began in 1960 when Bill Bowerman was in the process of handcrafting track shoes for his team at the University of Oregon and in 1962 a business plan was developed by Phil Knight at Stanford University business school. By 1967 Bowerman had created the first track shoe composed of lightweight and durable nylon which he called Marathon and the same year a student, Carolyn Davidson designed the Nike "swoosh" and charged a fee in the amount of $35.00. In the year of 1974 track star Steven Prefontaine was the first to wear Nike sneakers. By 1976 Nike participated in its Olympic debut and when 1979 rolled in Nike was the number one selling shoe of its type as a new record was set by Joan Benoit, age 21 at the Boston Marathon. By 1998 Nike Corporation made its product available to the open market. Nikes website states that: "Speed comes in many forms: Quickness, agility, precision, instinct. Few sports can't benefit from speed of thought. Few sports reward pure speed at the expense of tactical insight." Further stated is that "Speed. It's a measure of physical and mental capacity, a measure of controlled force, a measure of instinctive genius. A measure of the time it takes to do something well. It's a measure of success. Be first to the finish line, whether the race takes seconds or years, and you've won."
" Simple as that." (Nike Corporation Website)
By 1989 Nike Corporation began export of its product. Stated is that:
"Along the way we grew in form; single product - single market, multiple product - multiple markets, multiple brands - multiple markets."
II. Growth and Expansion
Nike is developing as a golf equipment company. During Tiger's toughest year golf sales broke records. The shoe called "Air Zoom Total 90" became the biggest seller of soccer boots in the largest five European countries in the 4th quarter of 2004. Nike's subsidiary brands of Cole Haan Bauer Nike Hockey, Converse and Hurley are stated to be "now up and over a billion dollars in revenue."
III. Financials:
Nikes Revenue Performance for BY 2000-2004
2004
$12, 253
2003
$19,697
2002
$9,893
2001
$9,489
2000
$8,995
Nike Revenue Distribution for FY 2000 versus 2004:
2000
2004
International 42%
International 50%
US 52%
US 39%
Other 6%
Other 11%
Nike EPS Performance FY 2000-2004
2004
$3.51
2003
$2.77
2002
$2.56
2001 $2.16
2000 $2.07
ROI: Return on Invested...
Differences in international orientation include ethnocentric, polycentric, geocentric, and regiocentric. Each of these has varying levels of recognition of how diverse one culture is relative to another with the ethnocentric mindset being the most biased towards ones' own culture being the best. The one that sees a more accurate view of globalization is polycentric which sees the unique values of each culture on its own merits. Globalization has also seen
Therefore, it is important to use external sources of innovation. In addition to this, companies must take into consideration the fact that some of the best solution can be found in their external environment. The costs associated with the company's activity are significantly affected by its open innovation strategy (OPINET, 2010). This is because this strategy leads to reduced costs of the research and development process. By collaborating with other
This strategy of customization increases sales and profits per pair of shoes produced. Successful Acquisitions and Partnerships Nike acquired Official Starter Properties and Official Starter in later 2004. These two entities were the sole owners and licensors of the Starter, Team Starter and Asphalt brand names as well as master licensee of the Shaq and Dunkman brands (a line of athletic apparel, footwear and accessory products for the value retail channel).
5% of total liabilities. Their retained earnings, on the other hand, total $5.073 billion. The heavy use of retained earnings is partially explained by their view of themselves as a growth company. While they pay a dividend, Nike prefers to re-invest much of its profits back into expansion. They do not feel that the market has matured sufficiently to stop their aggressive growth strategy. Another consideration in their capital structure
The industry must become more transparent, and open to public as well as market scrutiny. The veil of secrecy and silence that these industries have been hiding under must be exposed, and no secrets allowed remaining within the four walls of the sweatshops. One could even create a system whereby workers and communities would be able to speak in the same language, and therefore, communicate better with each other
The case is written in a simple but comprehensive manner, focused on the main highlights of Nike's activity. It is useful for the specialized economists as it presents real and clear facts, but it can also be useful to the novice economist or the simple individual, who wishes to get some insight into the Nike culture and ways. The main purpose of the report is to inform the reader about the
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