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Executive Summary

Collin J. Myers BUS-458 Spring 2013


Collin J. Myers

Nike Executive Summary NIKE, Inc. is the world’s leading designer, marketer and distributer of athletic footwear, apparel, equipment and accessories for a wide variety of sports and fitness activities. NIKE, Inc. sells, distributes and licensees its products in approximately 200 countries around the world. NIKE focuses its products in seven key categories: Running, Basketball, Football (Soccer), Men’s Training, Women’s Training, NIKE Sportswear and Action Sports. NIKE sells products through its NIKE Brand and Affiliate Brands (Converse Inc., Hurley International LLC, Jordan Brand and Nike Golf). Operating segments for the NIKE Brand are: North America, Western Europe, Central & Eastern Europe, Greater China, Japan, and Emerging Markets. NIKE is a consumer products company who specializes in the fast paced industry of athletic footwear, apparel, and equipment. This industry is keenly competitive which exposes NIKE to the risk of falling behind or not meeting the innovation standards of customers. To stay on top of customer demand, NIKE must continue to innovate and anticipate consumer preferences. Companies in this industry rely on a strong reputation and brand image for worldwide recognition. If the NIKE Brand were to attract any negative press, it could substantially affect their revenues and growth. NIKE’s strategy is to achieve long-term revenue growth by creating innovative. “must have” products, building deep personal consumer connections with our brands, and delivering compelling consumer experiences at retail and online (DTC Businesses). As a global leader in sportswear, NIKE is no stranger to the increasingly complex and volatile environment of the global economy experienced in recent years. NIKE products are all subject to the risks associated with overseas sourcing, manufacturing, II


Collin J. Myers

and financing (virtually all NIKE footwear and apparel products are produced outside the United States). The decline of global capital and credit market conditions threaten NIKE’s business, operating results, and financial condition. During these times, NIKE stands to remain focused squarely on business to expand profitable long-term growth for its stakeholders. Nike plans to do this by continuing to innovate across all segments of the company. Innovation at NIKE is about leveraging new ideas, expanding into new spaces, driving through new channels and divesting to invest. Despite the ongoing challenges in the economy, NIKE delivered record revenue in fiscal 2012, out performing the past five fiscal years [Figure 1]. NIKE revenues grew 16% to $24.1 billion and net income increased 4% to $2.2 billion in fiscal 2012 [Figure 2]. Over the past four fiscal years, NIKE, Inc. has delivered a positive return on net income despite being subject to ever changing tax and currency rates [Figure 3]. NIKE Brand footwear continues to be the cornerstone of revenues, alone generating $13.4 billion [Figure 4]. In fiscal 2012, NIKE revenues were increased across all operating segments [Figure 5]. North America contributed approximately 7 percentage points ($8.8B) [Figure 6], while the Emerging Markets and Greater China geographies contributed 4 ($3.4B) and 2 ($2.5B) percentage points to the NIKE Brand revenue growth [Figure 7 & 8]. NIKE continually invests in strategies they believe will deliver continued growth. As a result, in 2012 NIKE reached agreements to sell two of its affiliate brands: Umbro and Cole Haan. This will allow NIKE to focus on the highest-potential opportunities to drive sustainable, profitable growth for shareholders.

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Figure 3

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Figure 4

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Figure 5

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Figure 7

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NIKE, Inc. Executive Summary  

This executive summary highlights the main points discussed in NIKE Memo's #1-4.

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