Nike's Marketing Plan Essay

2034 words - 8 pages

NIKE is the world's #1 shoemaker in the world. Basketball players still want to be like Mike, but shoe companies want to be like NIKE. NIKE currently dominates the U.S. footwear market with about 45% of the total market. NIKE controls more than 20% of the US athletic shoe market. The company designs and sells shoes for a variety of sports, including baseball, basketball, cheerleading, golf, volleyball, hiking, tennis, and football. NIKE also sells Cole Haan dress and casual shoes and a line of athletic apparel and equipment. In addition, it operates NIKETOWN shoe and sportswear stores, NIKE factory outlets, and NIKE Women shops. NIKE sells its products throughout the US and in about 160 other countries.In fiscal 2005, NIKE met their financial goals. The revenues grew 12% to 13.7billion, net income grew 28% to 1.2 billion and NIKE delivered diluted earnings per share of $4.48, a 28% increase versus fiscal 2004. The gross margin percentage increase 44.5%. The return on invested capital has improved and free cash flow from operations has increased. They continue to return cash to shareholders through dividends and share repurchases. Cash provided by operations was $1.6 billion in 2005 compared to $1.5 billion in 2004. There has been an improvement in cash management of accounts receivables and timing of inventory receipts and vendor payments.NIKE's business model is to market high end consumer products that are manufactured in low cost supply chains. In the 1990's, NIKE has faced many bumpy roads regarding managerial practices. NIKE was scrutinized against sweatshop conditions at its overseas suppliers. Accounting firms have found many unsafe working conditions in their overseas factories. Many employees were exposed to carcinogens and 77 percent suffered respiratory problems. Also, they were forced to work 65 hours a week, far more than the law allows, for a low pay. They were faced with unexpected criticism that considered them irresponsible and greedy. This was reported at the time when NIKE was spending millions of dollars at athletes to endorse their product. At the managerial stage, a plan was carried out. The company realizes that it's facing a long-term problem that cannot be solved through public relations. The company had to give managers responsibility to analyze the problem and come up with a solution. The company had slashed overtime, improved safety and ventilation and reduced the use of toxic chemicals. Nike understands that complying with labor standards in the global supply chains is very difficult but they made many changes to correct them. Like many American apparel makers, NIKE uses many subcontractors in Asia, with some 150 factories employing more than 450,000 workers. It's very hard to impose American style business practices on factories all over the world. They are now doing a better job with managing inventory and sales forecasting. NIKE has ended up on top and continues to grow in every aspect although there may still be...

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