Nike - Financial Performance

Nike - Financial Performance

Introduction

Nike is an American manufacturer and marketer of sports and athletic shoes. The marketing efforts of NIKE rest on its strong brand image. NIKE brand has been evolved successfully over many years. The distinctive features of NIKE include its log and slogan. The company has long endeavored to develop and maintain its market position and market share. NIKE has made huge investments in advertising and Just Do It campaign.

Industry Structure

Bargaining power of suppliers

Suppliers of raw material for sports equipment manufacturing have a reduced because of industry concentration and the effect of the increasing demand. They realize, indeed, many commands and eligible for preferential tariffs or put pressure on suppliers in terms of quality, deadlines, innovation. In these crunching times, other potential players have tended to "sell out" products. This non-compliance of the tariff policy of the company can result in a drastic selection among its distributor firms, keeping only the most serious of them.

Bargaining power of customers

The main customers are distributor groups of sports equipments, apparels and end consumers through distribution systems. It may be noted that retailers such as department stores or large chain of retail stores have bargaining power increasingly significant as they represent a showcase for the brands (advertising at point of sale, events). Distributors can take advantage of their power to obtain more favorable margins. End consumers, who cannot exercise real power against the manufacturers of sports equipment. Nike makes their choice based on new products and marketing initiatives and communication launched by brands and retailers.

Rivalries between direct competitors

The rivalry is very strong since the market for sports equipment manufacturing is promising and the major players like Nike, Adidas, and others have anticipated high growth rate in forthcoming years. On the one hand, large companies engaged in this particular business have marked their territory on the market by buying other small sports equipment companies or entering into a joint venture. On the other hand, manufacturers are faced with many producers who did not increase.

Threat of new entrants

New firms engaged in production and marketing of sports goods are playing their cards wisely. The boom has created strong competition between manufacturers such as Nike, who must constantly strengthen its efforts to differentiate themselves from others and capitalize on their competitive advantages.

Threat from substitute products

The sports are synonyms of well-being, relationship to oneself, health, youth and ...