Tech Management

7/29/2019 Tech Management

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Technology Management in Manufacturing and Incrementalmarketing changes

Ravindu Phade C 34



Major publicly traded clothing, footwear,sportswear, and equipment supplier based inthe United States

Headquartered near Beaverton, Oregon, inthe Portland metropolitan areaRevenue in excess of US$25 billion in its

fiscal year 2012Employs more than 34,400 people worldwideas of May 2013

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ShoesRunningBasketball

Soccer Sport-inspired urbanshoesChildren‟s shoes

MiscellaneousBagsSocks

Sports ballsEyewear Timepieces

ApparelsBatsGlovesProtective equipments

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Originally known as Blue Ribbon Sports (BRS)

Founded by University of Oregon track athlete Philip

Knight and his coach Bill Bowerman in January 1964Initially operated as a distributor for Japanese shoemaker Onitsuka Tiger (now ASICS)

Launched its own line of shoes branded as Nike in1971

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Marketing – Nike is a marketing company

Research & Development – Nike‟s R & D labevaluated as “far & away the best” in the industry.Large number of patents testimony to itscommitment to R & D.

Extensive SCM capabilities – has attained

competency in leveraging low cost countries likeChina & Vietnam as its manufacturing hub.Sources its products from 900 factories spreadacross 50 countries.

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Nike‟s distinctive competency lies in the area of marketing, particularity in the area of consumer brandawareness and brand power.

While the reasons that Nike is successful inmarketing products are numerous, this key distinctivecompetency towers over its competitors.

As a result, Nike‟s market share is number-one inthe athletic footwear industry. Catch phrases like, "JustDo It," and symbols like the Nike "Swoosh," couplewith sports icons to serve as instant reminders of theNike Empire.

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Nike brand is the most valuable among sportsbusinessesOf the company's $18.4 billion in revenues in 2009,90% was attributable to merchandise emblazoned witheither the Nike or Nike Golf logos.Nike‟s brand value is US$ 18.6 billion in 2012,comprising more than 52% of its enterprise value*

30 th most powerful brand in the world, and the number one in its industry. Its nearest rival Adidas is ranked atdistant 135, while Reebok is ranked at 408.

* source: Brand directory, 2012.

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Quality Products

Constant Innovation

Aggressive Marketing

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180 Countries

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34.1

28.7

17.3

6.7

TotalRevenue

USEuropeMiddle East

Africa



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Barriers to Imitation

• Economies of scale

Shared distribution channels and efficient production reducescosts

• Patents & copyrights

Nike has around 3775 patents in the sports shoes, apparels andthe equipments domaine.g. Nike AIR technology, self lacing shoes, etc.

• InnovationStrong emphasis on R&D and product development throughnew designs(more than 300 designs a year)e.g. recycled polyester for jerseys

• Brand reputation and Image

Celebrity endorsements & sponsorships of sports events 15



Responses to substitution• Customization of footwear

Online customization of footwear

• Aggressive advertising„Just Do It‟ campaign

• Mergers and AcquisitionUmbro, Converse, etc.

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Responses to Holdup• Multiple sourcing and Contracting

Contract suppliers in China, Vietnam, Indonesia and Thailand; Argentina,Brazil, India, and Mexico

• Building relationships with complementorsTie up with Apple for the „Nike + iPod‟ sports kit

• Increase Bargaining power

„Just Do It‟ advertising campaign

• Forward Vertical IntegrationOpened Discount stores in rural areas and flagship stores in urban areas

• Building TrustImproving working conditions through various programs

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Responses to Slack• Performance based incentives• Pay dividends to the shareholders• Nike encourages outsiders to become part of

board, in order to avoid bias

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Transparency enables collaboration andcollaboration is essential to build asustainable company – NIKE, INC.

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Thankyou

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Tech Management