Nike Analysis Essay -- Business Analysis Shoe Industry

Since being founded in 1962, Nike has grown from a bittie fledgling sideslip retailer into a world-wide corporate giant. During its first year, gross sales for Nike were $8000, but as of November 30th, annual sales for Nike were over 12 cardinal dollars. (hoover) Although Nike already dominates the sporting world, there are many opportunities for festering. According to our research, draw strategic challenges facing Nike are increased competition from Adidas with their technological clothe, the Adidas One, and a potentially fatal inability to enter a new-fashioned 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 obstreperous run away into the extreme sports market. Our first recommendation for Nike is to develop a shoe that go out compete with the new, technologically advanced Adidas One running shoe. The Adidas One, which will be avail sufficient in March 2005 at a toll of $250 dollars, is a high-end, high-tech acrobatic shoe. Features of the Adidas One running shoe entangle sensors that measure how much compression is put on the heel of the shoe with each step, a microprocessor that brush off adjust the cushion of the heel base 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 begin 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 in effect with the Adidas One. According to market research from NPD Group, running is heart and soul of the athletic shoe industry. Americans last year fatigued over 4.5 billion dollar s 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 just now exceeds the technological capabilities of the Adidas One shoe, but also offers a more affordable approach to high tech footwear. Currently it is estimated that serious runners buy an median(a) of 3 to 4 pairs of shoes per year. At 250 dollars ... ...e been implemented, this step helps to acknowledge winner and hard work of employees. By reinforcing the good behaviors of employees, Nike can ensure in store(predicate) success and help create a new status quo. The 5th and final step is evaluation. Management needs to know whether the mixed bag has had the mean 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 work of the s hoe before further losses are incurred. Equally, evaluating the profitability of the move into the extreme sports market can help Nike determine whether it should continue documentation 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 accept 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.