There are numerous costs of production for Nike Company which can be placed into two categories: fixed costs and variable. Fixed costs are those that remain the same for all production and variable costs change with each project. The organization’s manufacturing process, machinery, research and development costs make up the fixed costs. On the other hand, administration, distribution, labor and raw material are the variable costs. All of these are required in the organizations operation to ensure that it remains profitable. Production cost for each shoe is between $30 and $100 and they are sold at $100 to $300. Therefore, the organization stands a good chance of making a profit (Nike, Inc., 2012). The percentage of sales has been 15.2%, 15.7% …show more content…
Nike’s goal is to remain unique and different from others in terms of the items offered on the market. Arguably, Nike belongs to a monopolistically competitive market as there only a few organizations with the ability to regulate the amount charged for their product which means they cannot make their prices high as this is likely to make customers move on to other available choices (Nike, Inc., 2012). However, Nike can find a balance between the prices to charge for their products and remaining competitive with other companies in the industry. Nike has formed a distinction between the appearance and performance of their footwear and that of their competitors. Although products are differentiated from other companies, they still influence each other because they are items of the same …show more content…
The corporation should invest more money in research and innovation since this is what has helped them to make a product that rivals their competitors. At the same time, it is imperative for them to improve their machinery for cheap labor costs which will help the company increase its production allowing it to meet the demand in the market. By improving production leading to lower costs of making shoes, apparel, and equipment, Nike will achieve higher demand assuming a quality product is maintained in that process. They will stand a better chance of competing in the industry (Hill, 2009). The organization is already in a better position for meeting the demand, customer taste, and needs. The company should improve quality by focusing on developing lightweight products that are more durable compared to those offered by the competitors. Also, Nike can keep up their success by continuing to reinvent and improve their items and continue to meet the current demand by using new technology. It can also use the Internet to communicate with consumers (Hill, 2009). By developing new technology, Nike will allow the customers to suggest and design their shoes online. To achieve this goal, it is fundamental to enhance areas such as their website to make it more user-friendly. Finally, the company should pay attention to small startup organizations that enter the
In conclusion Artemis Sportswear Company has a number of opportunities to improve its existing business condition. There are numerous avenues for cost savings and improved sales. The main point is that Artemis has to welcome positive change, change that will benefit the company. Grow market share and produce better profits. Artemis need make changes that will empower the employees, save energy, save time, and embrace their customer. Artemis Sportswear Company learns to grow though change it will be a healthier company and one that can enjoy competing with the big three Nike, Adidas, and Reebok. Artemis will truly be able to live up to it motto “Provide Performance at an Excellent Price”.
Even though many believe customer is the greatest and customer should have the absolute power, in this case, Nike has absolute power over customer, where customer has low bargaining power. This can be proved by study many cases where Nike make their customer angry and claim that they will refuse to buy Nike product.
In order to boost revenue, management decided to develop more athletic-shoe products in the midpriced segment which are sold for $70-$90 a pair. As for the cost side to be considered, Nike planned to exert more effort on expense control. The company executives forecasted that their long-term revenue-growth targets of 8% to 10% and earnings-growth targets of above 15%.
During our research, we found that Timberland and Nike had both published their complete responsibility reports. This made them simple to compare. However, these reports are the year 2005, so the information is to be used solely as a comparison and not an updated reference.
Nike is a worldwide known business that many people around the globe are attracted to purchase. They make a variety of products ranging from shoes and clothes to sports gear, sports products, and many different accessories. Nike is designed for everyone ranging from infants to elderly. Because of their range of age for products, this makes them a huge competitor. Being able to appeal to all ages and styles of people.
Puma, Nike, Addidas are in the list of top 10 sport brands that have developed a different strategies and getting success in their business. Some of them are corporate level, business level and functional strategy. If these three sets of recommendations fit together in a mutually supportive manner that forms an integrated hierarchy of strategy, in the order given (2).
Over the past 37 years, The Nike Brand has evolved into a successful multi-billion dollar corporation. It has also grown to be the world's largest marketer of athletic footwear and apparel. The company’s products are sold in over 180 countries worldwide and 20,000 retail stores domestically. Nike also operates retail stores overseas such as Nike Towns and factory outlets. Although Nike is involved in the design, development, and marketing of the product; the products are manufactured independently. In addition to its wide range of athletic shoes and apparel, the company also sells Nike and Bauer brand athletic equipment, Cole Haan brand dress and casual footwear, and the Sports Specialties line of headwear.
Throughout the technologies years, Nike Research and Development team has always been researching on the latest technologies and techniques to implement more improvements and develop further on their products –footwear and apparel lines.
Many global companies like Nike, Inc. are seen as role models both in the market place as well as in society in large. That is why they are expected to act responsibly in their dealings with humanity and the natural world. Nike benefits from the global sourcing opportunities, therefore areas such as production and logistics have been outsourced to partner companies in low-wage countries like China, Vietnam, Indonesia and Thailand. As a result the company is limited nowadays to its core competencies of Design and Marketing.
The marketing goals are: Increase customer retention, Increase eCommerce Sales, Increase our Community Involvement. The first goal specifically works towards reaching 60% repeat sales through different promotional strategies like emotional marketing and sponsoring different professional athletes. Customer retention is extremely important to maintain Nike’s market leader position. Increasing eCommerce is a major focus for Nike. Last year we were able to increase our eCommerce sales by a profitable 51%. Our second goal is to continue this trend by increasing online sales by 50% every year for the next four years. It is our belief that doing so will solidify Nike as a leader in the online athletic market. Nike truly believes that sport can change
Nike’s Asian operations had previously continued to soar generating US$300 million in 1994 in revenues to a whopping US$1.2 billion in 1997. However based on the Asian economic crisis, this had adversely affected revenues, while regional layoffs were inevitable. Nike also performed well in the European market generating about US$2 billion in sales and a good growth momentum was expected, however, some parts of Europe were only slowly recovering from an economic downturn. In the Americas (Canada and the U.S.A.), Nike experienced a growth rate for several quarters. The U.S. alone generated approximately US$5 billion in sales. The Latin American market at this point was exposed to economic volatility; however Nike still saw them as a market with “great potential for the future”.
When comparing prices, consumers can find the exact same style Nike boot in Adidas and pay a lower price. Essentially what the consumer is paying extra for is the Nike brand. Looking back at my journal you can see I wore the Adidas boots one time, then went out and bought Nike boots. “Brand loyalty is based on an emotional connection toward the brand and a conscious commitment to find this brand each time the consumer purchases from this category.” 112 Brand Promotion I could have worn the Adidas boots for free but I spent the time and money to go purchase the Nike brand. “brand loyalty and advertising work together to create another important economic effect related to pricing flexibility and profits. When consumers are brand loyal, they are generally less sensitive to price increases for the brand.” 45 Advertising and Integrated Brand Promotion Being able to raise prices but still keep the consumer market is very valuable. This is one of the main reasons brands strive to have brand loyal
Nike is the number one innovator in the world in athletic footwear, apparel, equipment, and accessories. This worldwide company operates in an extremely different organizational structure than other companies, such as Reebok and Adidas. Nike operates tremendous marketing strategies and develops inventive designs to inspire athletes around the world. This company is one of the largest suppliers in the world in athletic footwear and apparel, main producer of sports equipment, and making Nike the most valuable brand among sports companies. The task for Nike is to join diversity and inclusion to encourage ideas and innovation. Around the world, this company is a popular brand.
In order to be a dominant brand in the market, the brand needs to have not only sufficient market share but also needs to have an adequately large amount of budget to defend their position. Brand loyalty is like a tool to build up a strong competitive barrier to entry (Gasca, 2014). By nature, consumers tend to stick with the brand that they used to consumed and feel satisfied with, as most of consumers acted as risk averse (Khoury, 2014). Although framework of brand loyalty is still vague, it is clear that brand loyalty is a key to the competitiveness of a brand. Brand loyalty customers tend to have relatively inelastic demand and are willing to pay more for the products. The brand could also generate a higher market share and higher return (Chaudhuri and Holbrook,
In reviewing the case of New Balance Athletic Shoe, Inc. it is clear that there are a few major problems that the company is facing. First of all, New Balance falls behind its other major competitors, Nike, Adidas and Reebok, in the area of marketing. Unlike its competitors, New Balance does not undertake celebrity endorsements. This puts them at a disadvantage when it comes to brand building. This also causes the company to lose out somewhat on gaining awareness on a global scale as it lacks endorsements in major sporting events. Most global brand names generate strong brand recognition through celebrity endorsements in sporting events that would give them the needed momentum to carry their brand name further into the global market.