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NIKE PRODUCTION COMPANY

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Nike Production Company

Nike Production Company

Ayanna Marshall

Institutional affiliation

Introduction:

The Nike entrepreneurial activity is the design, development and worldwide selling and marketing of athletic sport’s wear which comprises of apparels, shoes, socks, equipment, accessories, and services (Brohi, et. al 2016). Nike, therefore, is the largest company selling athletic footwear as well as apparel in the whole world. Nike company market and sells their products to retailers through their own retail shops and wholesales, as well as through the internet websites. The quantity of investment in good governance and high respect level initiated by Nike for human rights and sustainable practices in the supply chain. Thus, for Nike, this is not about trading off against the other. It’s all about recognizing the future routine to future profitability is sustainability, therefore a sustainable economy or business model must lead to an equitable supply chain: In case the needs of the environment or profits are attended to without a supply chain, then there will be no success at all.

Production cost.

The Average production cost for Nike products

The table above shows how overheads increased drastically in the year 2014 leading to a high decrease in profit due to the high advertisement levels, promotions, and expansion of market activities. One of the major reasons for the increase in cost is the considerable investment in offshoring and unit’s development in the east of Asia.

The Firm’s Market:

The firm being a great store in the USA, it is currently a well-known international brand of accessories and footwear products. The total revenue accounted for by the USA sales was about 54%, as compared to that of 2013 which was about 55%. The firms sell their products through a mix of independent distributors, through their sales representatives and licensees worldwide. They as well sell their products to thousands of ship products and retail accounts from the 45 distribution centers outside the United States, in addition to Nike and the converse owned e-commerce websites in over 25 countries in the world.

Retain Stores Number for Non-U.S.

Brand factory stores for NIKE 512

Brand in-line stores, including employees-only stores 73

Converse stores 7

Entry barriers are often very low in the footwear industry where there are several competitors and the most significant being Adidas (Ramaswamy, et. al 2016). The production model is an open one, the entry of Korea, and Japan into the footwear industry has led to a decrease in the barrier and made away with the stiff competition. Nike, therefore, has managed to stay in the lead as it is a well-known brand worldwide (Childs, et. al 2018). Nike being the sports giant in the whole world had recorded another strong quarter in Q42015, with an increased revenue of 5% yearly and up to about $7.8 billion, lifted by geographies and continued growth of all product types. The gross margin increased by 60 basis points yearly. Thus in constant currency term, the organization or company reported an increment of about 13%.

Recommendation:

Significantly Nike has improved its market share in East Asia and has identified the ways in which sponsorships of sports events or sportspersons can bring in the necessary income or revenue in terms of sales and new product development (Larson, et. al 2017).

References

Childs, M., & Jin, B. (2018). Nike: An Innovation Journey. In Product Innovation in the Global Fashion Industry (pp. 79-111). Palgrave Pivot, New York.

Brohi, H., Prithiani, J., Abbas, Z., Bhutto, A. H., & Chawla, S. K. (2016). Strategic Marketing Plan of Nike.

Ramaswamy, V., & Ozcan, K. (2016). Brand value co-creation in a digitalized world: An integrative framework and research implications. International Journal of Research in Marketing, 33(1), 93-106.

Larson, A., & York, J. (2017). Nike: Moving Down the Sustainability Track through Chemical Substitution and Waste Reduction. Darden Business Publishing Cases, 1-4.

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