NIKE

-STUDY CASE1. Vision, mission and strategic goals The Nikes vision bring inspiration and innovation to every athlete in the world states that the company is thinking in a worldwide manner and wants to approach every athlete and offer him good and new products. By wearing Nikes shoes and clothes athletes can be inspired by these products and they can win each competition. The mission of Nike continues the aspirations and promises of Nikes founder. This is a good thing taking into consideration that most firms create different missions throughout their existence and sometimes clients might get confused at times. The mission is the catalyst that drives the organization. The stakeholders have power to influence the process of accomplishing the mission, vision, values, and goals. However the stakeholders groups have varying ideas, goals, objectives, and expectations on how to accomplish the mission. The mission must be clear and concise with a solitary purpose that represents the firm's goal. The goal of Nike is increasing their revenues constantly. The firm doesnt accept any other goal because the company wants to grow every year and not to decrease. Nikes biggest advantage is its marketing. By acquiring Michael Jordan, Tiger Woods and LeBron James, big names in the sports in which they compete, have been a huge success in the promotion of Nikes shoes and equipment. The revenue from selling Jordan shoes made Nike a notorious and prestigious brand worldwide. 2. Footwear production is outsourced STRENGTHS Less expenses from Nike; Higher revenues from selling. WEAKNESSES Increasing in of the cost of the products; Delay in the ability of the company to import its products or it has taken longer than usual in Brazil and Argentina. THREATS Possible revaluation of currencies; Export and import duties, antidumping measures, quotas, safeguard; Measures, trade restrictions, restrictions on the transfer of funds; In certain parts of the world, political instability and terrorism;
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OPPORTUNITIES Elimination of quotas and tariff barriers for foreign footwear manufacturers to ship their goods into U.S.; Observing competition laws; Redraw of the restrictions put by EU to China and Vietnam.

 The global economic recession; Trade protectionist challenges; The anti-dumping measures stated by EU and Brazil for China and Vietnam; The legal policies in Turkey. 3. Risk factors a. The companys products face intense competition Every year the clients requests increase and there a diversified range of needs that are continually in growth. Because of these issues, Nike should innovate constantly and create new products according to what consumers demand. Also, there many competitors that began to offer the same products that Nike did. Furthermore, the company faces the new technology that have appeared on the market and thats why it needs to be aware of the appearance in the industry of the latest equipment. b. Failure to maintain Nikes reputation and brand image could negatively impact their business Nike wants to maintain the good image of its brand and its worldwide reputation. Maintaining, promoting and growing the companys brands will depend on the design and marketing efforts, including advertising and consumer campaigns, as well as product innovation. If Nike fails to do so then the brand image will suffer greatly. Also, Nike should always adapt to the new marketing channels like social media and online advertising campaigns. The company is interested of the comments that its products receive online. Mostly, Nike pays attention to the negative posts and comments that could damage the brands image. c. If Nike is unable to anticipate consumer preferences and develop new products, it may not be able to maintain or increase the net revenues and profits Nike needs to predict the future changes of consumer preferences and needs and to bring new products on the market. If Nike doesnt do so, the company is supposed to lose the position that it have gained in the eyes of its clients. d. The company relies on technical innovation and high quality products to compete in the market for its products Nike has to innovate in a constant way to offer good products to its clients and the quality of the products is an important field in which the company pays more attention. If the company fails to innovate then its clients would migrate to competitors and the less quality products may incur substantial expense to remedy the problems. e. Failure to continue to obtain high quality endorsers of products could harm the business
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The company establishes relationships with professional athletes, sports teams and leagues to evaluate, promote and establish product authenticity with consumers. If one of these promoters fails to accomplish what they promised the company might suffer and sales revenues would decrease on the long run. f. Failure of the contractors or the licensees contractors to comply with Nikes code of conduct, local laws, and other standards could harm the business g. Global capital and credit market conditions, and resulting declines in consumer confidence and spending, could have a material adverse effect on business, operating results and financial condition There is some uncertainty for the economic state worldwide. For example, in the EU there is the concern of some debt from some countries and also there is instability of Euro currency. These things and others may affect Nike and its sales. h. Business is affected by seasonality, which could result in fluctuations in operating results and stock price There is a seasonal fluctuation in matter of sales that depend on some factors like general economic conditions, changes in consumer preferences, weather conditions, availability of import quotas and currency exchange rate fluctuations. All these can cause smaller revenues is some months of the year. But Nike needs to adapt and to predict future changes so that the company wouldnt suffer. i. Futures orders may not be an accurate indication of the future revenues Retailers have the possibility to order 6 months in advance with the commitment that their orders will be delivered within a set period of time at a fixed price. But this commitment may be influenced by some factors like: foreign currency exchange rate fluctuations, order cancellations, shipping timing, returns, and discounts. The future orders may not guarantee a certain and secure revenue. j. The futures ordering program does not prevent excess inventories or inventory shortages, which could result in decreased operating margins and harm to our business k. Nike may be adversely affected by the financial health of its retailers Retailers are passing through a hard time financially and because of this they may cancel future orders. In order to attract new clients retailers must have a high quality merchandising and an appealing store, but when they face economic challenges these investments are put on hold. These things may endanger the sales of N ikes products and revenues.

l. Consolidation of retailers or concentration of retail market share among a few retailers may increase and concentrate credit risk, and impair the ability to sell their products m. Failure to adequately protect the intellectual property rights could adversely affect the business Nike has registered every distinctive mark that it has on the products in 150 jurisdictions. This is important because customers can easily identify Nikes products and clients can buy these products for their association with the brand. But on the market are fake products with Nikes emblem that may bring prejudice to the firm revenues. n. Nike is subject to periodic litigation and other regulatory proceedings, which could result in unexpected expense of time and resources From time to time the firm is called upon to defend against lawsuits and regulatory actions relating to the business. Due to the inherent uncertainties of litigation and regulatory proceedings, they cannot accurately predict the ultimate outcome of any such proceedings. An unfavorable outcome could have an adverse impact on the business, financial condition and results of operations. In addition, any significant litigation in the future, regardless of its merits, could divert managements attention from their operations and result in substantial legal fees. o. Nikes international operations involve inherent risks which could result in harm to the business Because Nike has operations worldwide it is submitted to some risk factors which include: foreign laws and regulations, varying consumer preferences across geographic regions, political unrest, disruptions or delays in cross-border shipments and changes in economic conditions in countries in which Nike manufactures or sells products. p. Changes in tax laws and unanticipated tax liabilities could adversely affect the effective income tax rate and profitability q. Currency exchange rate fluctuations could result in lower revenues, higher costs and decreased margins and earnings r. Nikes products are subject to risks associated with overseas sourcing, manufacturing and financing In every country in which Nike manufactures their products exist suppliers of every raw material in order to create them. If these suppliers can no longer provides these materials then Nike might face a serious situation in which it would be hard for the company to close deals at good prices with suppliers that offer quality materials.

s. Natural disasters could negatively impact their operating results and financial condition t. Nikes success depends on its global distribution facilities Nikes distribution facilities could be interrupted by information technology problems and disasters such as earthquakes or fires. Any significant failure in their distribution facilities could result in an adverse effect on the business. The company maintains business interruption insurance, but it may not adequately protect them from adverse effects that could be caused by significant disruptions in their distribution facilities. u. The company relies significantly on information technology to operate its business, including the supply chain and retail operations, and any failure, inadequacy, breach, interruption or security failure of that technology or any misappropriation of any data could harm Nikes reputation or its ability to effectively operate its business v. Nikes financial results may be adversely affected if substantial investments in businesses and operations fail to produce expected returns w. Nike depends on key personnel, the loss of whom would harm the business x. The sale of a large number of shares held by the Chairman could depress the market price of the companys common stock y. Anti-takeover provisions may impair an acquisition of the Company or reduce the price of the common stock z. Nike may fail to meet analyst expectations, which could cause the price of the stock to decline 4. Global issues: US & international markets In the United States there is the possibility for retailers to order six months in advance through the futures order program. But this program might have some bad consequences for Nike. For example, if a retailer quits an order this may induce serious loss of money to Nike. Also, another threat is the changing needs and demands from the consumers. The technology used is being developed each year and Nike must know the new developments in the area in order to innovate and to create quality products. In the international markets, Nike faces other issues like: fluctuation of the currencies, economical state of the countries, terrorism, hazardous events like earthquakes, tsunami, flood, different laws and policies in the countries, financial status of the retailers, shipment time, the preferences of the consumers, diversity of the clients because of their geographical location and other reasons. All these things have influences on the present and future revenues of the company, on the potential consumers and on the demands of the retailers.
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