Introduction to the Company The company was founded on January 25, 1964 as Blue Ribbon Sports by Bill Bowerman

and Philip Knight, and officially became Nike, Inc. in 1978. The company initially operated as a distributor for Japanese shoe maker Onitsuka Tiger, making most sales at track meets out of Knight's automobile.The company takes its name from Nike the Greek goddess of victory. The company is headquartered near Beaverton, Oregon. It is the world's leading supplier of athletic shoes and apparel and a major manufacturer of sports equipment with revenue in excess of $18.6 billion USD in its fiscal year 2008 (ending May 31, 2008). In addition to manufacturing sportswear and equipment, the company operates retail stores under the Niketown name. Nike sponsors many high profile athletes and sports teams around the world, with the highly recognized trademarks of "Just do it" and the Swoosh logo.

STRATEGIC THINKING

PURPOSE: is to carry on his legacy of innovative thinking, to develop products that help athletes of every level of ability reach their potential, and to create business opportunities that set Nike apart from the competition.

MISSION: To bring inspiration and innovation to every athlete in the world

VISION: Innovate for better world Unleashing potential through sport. In the last two years, Nike has invested $100 million worldwide in community-based sports initiatives. By 2011, NIKE is expected to invest another $315 million. These investments will be used to give excluded youth around the world the chance to play because as access to sport can enhance their lives. Nike will provide products, resurface playing fields, support community-based programs, and help young people create their own communities.

VALUE: Three core values of the company are honesty, competitiveness, and teamwork. Despite its size, Nike operates with a minimum of hierarchy. As a result, there is a lot of collaboration and consensus decision-making. Commonly held values are imperative in such a matrix organization.

PORTER'S FIVE FORCES

Porter's five forces is a framework for the industry analysis and business strategy development. To derive five forces that determines the competitive intensity and therefore attractiveness of a market. Attractiveness in this context refers to the overall industry profitability. An "unattractive" industry is one in which the combination of these five forces acts to drive down overall profitability. A very unattractive industry would be one approaching "pure competition", in which

available profits for all firms are driven down to zero. Following are the five forces for Nike:

BARGAINING POWER OF BUYERS LOW

* Competitive products all compete on differentiation. * Low switching costs.

BARGAINING POWER OF SUPPLIERS - LOW

* Subcontracting to more than 500 small scale factories. * Low bargaining power due to Nikes big volume.

BARRIERS TO ENTRY - LOW (NEW ENTRANTS)

* Competing shoes and new companies coming in.

RIVALRY AMONG EXISTING COMPETITORS - HIGH

* Competitors are doing the same thing. Low production cost / High marketing. * High competitive in an oligopoly( other leading firms include ADIDAS, PUMA, FILA,NEW BALANCE) * Strong brand identity and product differentiation.

THREATS OF SUBSTITUTES LOW

* Non- existent. PEST ANALYSIS PEST analysis stands for "Political, Economic, Social, and Technological analysis" and describes a framework of macro-environmental factors used in the environmental scanning component of strategic management.

POLITICAL FORCES

* World is entering global trade climate with NAFTA and GATT

* There is anti-dumping regulation existed in EU and developing countries like India.

ECONOMIC FORCES

* EU has changed into one currency.

* USA economic growth is in slow growth because of WTC.

* Contract manufacturing is chosen by many athletic shoes company.

SOCIAL FORCES

* Since 70-s, customer is more brand-minded.

* Sports Consumer preferences are changing into more fashion-oriented.

* Young consumer is believed much in advertising promotion and use internet as the primary sources of information.

* Buying motives of young consumer is dominated for leisure activity.

* Since 90-s, womans consumer dominated the athletic shoe market because of the changing lifestyle.

TECHNOLOGY FORCES

* Nike has integrated technology system to develop their product.

* Nike always adopted latest technology for their product and matched with their vision

SWOT Analysis

SWOT analysis summarises the key issues from the business environment and strategic capability of an organization that are most likely to impact on strategy development.

Strengths

1. Brand Name 2. Financially Strong 3. Strong Competitive Position 4. Sells variety of models 5. Effective Research and Development Department 6. Effective promotional Activities 7. Successful experience being competitive 8. International Marketing Efforts 9. First mover advantage in e-commerce. 10. Innovative designs in footwear enabling consumers to design their own shoes online.

Weaknesses 1. Use of Contract manufacturers makes it difficult to control quality of production 2. Use of sports stars who fail to perform, retire or become injured could adversely affect Nike image and consequently sales. Ex -Tiger Woods 3. Heavy dependency on footwear sales 4. Use of contract manufacturing in foreign countries has the potential to create financial problems due to foreign currency fluctuations and interest rate changes. 5. The direct sale to consumers is creating conflicts with its own resellers

Opportunities 1. Nike must focus on Growing e-commerce, it will have positive effect

2. Can grow in new and emerging markets 3. Women demand for athletic footwear and clothing is increasing significantly 4. Customer use of companys products change from athletic purpose to a fashion item 5. Increasing demand in the industry for products available online 6. E-commerce will reduce the cost of goods sold thus improving the "bottom line". 7. New technology and innovation to stay on top of market needs.

Threats 1. Strong Competitors 2. Consumer Preferences 3. Currency Fluctuation 4. Piracy of footwear and apparel designs could decrease sales and adversely impact image. 5. Political unrest in the suppliers countries 6. Economic downturn in America and Asian Countries. 7. Continuing challenges in import/export duties.

Recommendations

* Should develop product lines in both fashion wear and sportswear. * Keep expanding into current and future foreign markets by being aggressive and the worldwide leader of the footwear industry. * Should continue to focus on technology * Research in international market to find out what are the new trends related with women and kids products. * Should enhance Nike online Market * Should develop better methods to control quality of contract manufacturers.