Economics Analysis of Nike

Abstract

Nike leads the market of athletic footwear and apparel. The company also offers other products such as sports equipment and accessories. This paper covers an economic analysis of Nike, and analyzes different economic aspects of the firm. The analysis reveals that Nike is highly impacted by demand and supply conditions, mainly their strategies are shaped in line with market demands. The price elasticity of Nike's products is high due to the high number of substitutes available in the market such as Reebok-Adidas, Puma, and so on. Nike leads the market due to several business aspects that provides it a competitive advantage, including innovation, brand recognition, diversity, sustainability, quality, new and creative marketing campaigns, customized footwear, and continual improvement of the technology. The company captures a greatest market share in athletic footwear and apparel. The best market structure that describes Nike position in the market is oligopoly. The company is expected to keep flourishing in future periods.

Introduction1

What Does Nike Do1

Impact of Supply & Demand on Nike in Recent Years2

Price Elasticity of Demand for the Product Nike Sells5

Primary Competitive Advantage of Nike6

Entry Barriers for Nike in the Industry7

Available Substitutes8

Market Share of Nike8

Market Structure of Nike8

Advice & Prediction9

Conclusion9

References11

Economics Analysis of Nike

Introduction

Economics play a significant role in positioning a company in the market. Economics analysis of a company helps in identifying the impact of economic factors on the business. In addition, it supports in understanding the company's position within the market (Quiry et al., 2011). Thus, conducting an economic analysis of a company helps a lot in understanding the positioning and performance of a firm with respect to economic variables. This essay provides an economics analysis of Nike; covering various economic factors, including price elasticity of demand, competitive advantage, supply and demand, substitute, market share, and market structure.

What Does Nike Do

Nike, Inc. was founded on September 8, 1969, as a business engaged in the design, development, and global marketing as well as selling of apparel, footwear, accessories, equipment, and services. The company sells athletic apparel and athletic footwear across the globe. Nike sells its products to retail accounts, via their personally owned retail stores as well as online sales and using a blend of independent licensees and distributors. It sells its product in around 190 countries across the globe. The firm focuses its product offerings in 7 major categories: Basketball, Running, Men's Training, Football (Soccer), Nike Sportswear, Women's Training, and Action Sports. In addition, Nike also markets the products designed for children and for other recreational and athletic uses, for example cricket, baseball, football, cricket, golf, lacrosse, tennis, volleyball, outdoor activities, wrestling and walking (Nike - Company Portfolio, 2013; Reuters, 2013).

Nike designs athletic footwear products mainly for particular athletic use. The firm sells sports accessories as well as apparels, and athletic accessory items and bags. Nike also markets apparel with licensed college and professional teams. Besides, company also sells performance equipments such as timepiece, devices, eyewear, sports balls, and several others. Nike sells its products directly to customers via ...