NIKE
The nerd globetrotting elite
The NIKE Corporation website targets a new global movement in mind-body synergy through artificial intelligence, 'thinks for your feet.' In the last twenty years the multi-billion dollar corporation has mobilized its methodology in sales on the wings of a Greek goddess. Since 1988, when NIKE's 'Just Do It' slogan came on the scene, the company has been selling performance and style at a pace exceeding all competitors. The current analysis looks at the connectivity present within NIKE's 'thinks for your feet' as a semiotic marketing pitch intended to redirect the company's strategy toward a large segment of consumer footwear purchasers working in the technological sectors of the global economy, and especially those who otherwise do not use those products for sports -- or at least not the corporeal muscularity that was the brand's association one decade ago.
In 2009, NIKE underwent a brand reorganization initiative in response to a six (6) geography restructuring effort that led to the reduction of a management layer in emergent markets and North America, Western Europe, Eastern/Central Europe, Greater China, and Japan (Datamonitor, 2010). With the original scope of operations and marketing in four (4) regional segments, 1) U.S., 2) Asia Pacific, 3) Americas; and 4) the EMEA (Europe, Middle East and Africa) redesigned to increase core businesses and focus on stronger consumer allegiance to the brand, NIKE advanced its interests in growth areas such as the global sports equipment market.
Projections in this comprehensive segment are 2.1% with a market value of $76, 800 million by 2013. NIKE's total sales revenue for its fiscal year sustained its position as the leader in global sports equipment. To this end, its marketing activities, and including advertising and interactive multi-media shopping and major national market expansion outside North America will be priority.
The market is equally progressive in sales performance in the global footwear segment. NIKE, Inc. will respond to this phenomenon with a variety of strategies to capture an even greater portion of the market, which it currently attributes a significant 52.2% of its total revenues, through sales in its NIKETOWN stores, retailers, and virtual presence in its websites, nikestore.com and Nike.com. Financial statement for the Company in 2010 is cited in Table 1.
Table 1
Company Type
Public - NYSE: NKE
Headquarters
Fiscal Year-End
May
Financial Filings
SEC
2010 Sales (mil.)
$19,014.0
1-Year Sales Growth
(0.8%)
2010 Net Income (mil.)
$1,906.7
1-Year Net Income Growth
28.3%
Table 1. NIKE, Inc. Financial Statement (Hoovers, 2010).
Synonymous with the Brand's slogan, 'thinks for your feet,' NIKE, Inc. is strategizing capitalization on trends in sportswear as 'everyday' work wear, and as contributory force to innovation. Conductive rubber soles ensure safety in environments that require agility and futurist precision. NIKE, Inc. hopes to translate the force of its vision and investment in R+D through product development and marketing that speaks to a new generation of globetrotting elite, the new 'Nerdcore Rising.' Money talks, and NIKE, Inc. listens, from Microsoft employees, to tech geeks on the dance floor, the Company is positioned to take on 'ideas' in this growing market 'in a big way.'
At present, the sporting goods market in the United States is intensely competitive. The Corporation is faced with a downturn in spending in its national online consumer segment. A new strategy will be employed. Competitive landscape to NIKE, Inc. marketing prospectus references portfolio performance of the company in relation to the other top sportswear brands, Adidas, New Balance, and PUMA AG is illustrated in Table 2.
Table 2
KEY: Best of Group. Companies listed are Top Competitors. www.hoovers.com
Key Numbers
NIKE
adidas
New Balance1
PUMA AG
Annual Sales ($ mil.)
19,014.0
14,878.0
1,640.0
3,526.7
Employees
34,400
39,596
4,000
Market Cap ($ mil.)
41,159.2
32,900.7
3,453.0
Profitability
NIKE
adidas
New Balance1
PUMA AG
Industry2
Market3
Gross Profit Margin
46.51%
47.79%
50.86%
48.01%
28.77%
Pre-Tax Profit Margin
13.36%
7.07%
12.31%
9.68%
8.48%
Net Profit Margin
10.07%
5.03%
8.53%
6.75%
5.53%
Return on Equity
20.8%
12.9%
15.0%
16.6%
10.1%
Return on Assets
14.3%
5.7%
9.0%
9.7%
1.5%
Return on Invested Capital
19.6%
12.9%
15.0%
13.3%
4.4%
Valuation
NIKE
adidas
New Balance1
PUMA AG
Industry2
Market3
Price/Sales Ratio
2.19
0.88
1.35
1.49
3.57
Price/Earnings Ratio
21.74
17.42
15.80
22.12
26.18
Price/Book Ratio
4.26
7.31
2.36
3.26
6.92
Price/Cash Flow Ratio
15.92
8.10
16.84
13.02
22.12
Operations
NIKE
adidas
New Balance1
PUMA AG
Industry2
Market3
Days of Sales Outstanding
52.96
68.65
85.99
34.33
34.66
Inventory Turnover
4.6
3.1
2.8
3.8
8.1
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