Nike Analysis Essay -- Business Analysis Shoe Industry

Since being founded in 1962, Nike has grown from a undersized fledgling slip retailer into a world-wide corporate giant. During its first year, gross revenue for Nike were $8000, but as of November 30th, annual sales for Nike were over 12 trillion dollars. (hoover) Although Nike already dominates the sporting world, there are many opportunities for ontogeny. According to our research, tonality strategic challenges facing Nike are increased competition from Adidas with their technological garment, the Adidas One, and a potentially fatal inability to enter a raw growth market such as the extreme sports market. Our recommendations to help Nike confront these challenges dwell of developing a product to remain competitive with Adidas, and also an militant go bad into the extreme sports market. Our first recommendation for Nike is to develop a shoe that forget compete with the new, technologically advanced Adidas One running shoe. The Adidas One, which will be avail fitti ng in March 2005 at a live of $250 dollars, is a high-end, high-tech gymnastic shoe. Features of the Adidas One running shoe allow in sensors that measure how much compression is put on the heel of the shoe with each step, a microprocessor that throne adjust the cushion of the heel ground upon roughness or softness of the terrain, buttons that allow for different comfort levels to be set, and a lithium-ion battery that last about 100 hours. (time-sporting life) With their new shoe, Adidas threatens to pay back some market share in the running shoe segment. This stands to be a substantial amount of lost profits if Nike is not able to compete. Fortunately, Nike is already well established in the athletic shoe industry. It should be able to utilize its strength of brand equity compete effectively with the Adidas One. According to market research from NPD Group, running is heart and soul of the athletic shoe industry. Americans last year pass over 4.5 billion dollars on running shoes, accounting for 25 percent of all money spent on athletic shoes and making them the top category in athletic footwear. (Knight Ridder Tribune) We recommend that Nike produce a shoe that not barely exceeds the technological capabilities of the Adidas One shoe, but also offers a more cheap approach to high tech footwear. Currently it is estimated that serious runners buy an fair(a) of 3 to 4 pairs of shoes per year. At 250 dollars ... ...e been implemented, this step helps to acknowledge victory and hard work of employees. By reinforcing the good behaviors of employees, Nike can ensure forthcoming success and help create a new status quo. The fifth and final step is evaluation. Management needs to know whether the metamorphose has had the think effects (Lewis). By evaluating the implementations, Nike can ensure that its actions have been effective. For example, if it is determined that creating a new shoe is not working Nike can halt doing of the shoe before further lo sses are incurred. Equally, evaluating the profitability of the move into the extreme sports market can help Nike determine whether it should continue backup advertisements and sponsorships. In conclusion, we recommend Nike use the five steps for planned change as a tool to help implement our recommendations of creating a new technological running shoe and entering the extreme sports market. These steps intromit creating a vision, communicating the vision, empowering employees, institutionalizing the new behavior, and finally evaluating the success. By using these steps, Nike can ensure a smooth transition when in implements our recommendations.