Nike

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Chapter 1
Industry Definition: Athletic &
Sporting Goods
Nike Inc., is one of the top leaders in the Athletic &
Sporting Goods Manufacturing industry as well as the
Athletic Shoe Store Industry.1 These industries do
everything from manufacturing athletic shoes, apparel
and equipment. These finished products and goods are
then marketed to retailers and wholesalers
throughout the world.2
The desire for the industrys goods is on a rise with the
increase in worldwide sport participation, fitness, and
related physical activities. In a 2016 Physical activity
report is states that physical activity has 56% of the
population ages Six and over participating in at least
one high calorie burning activity in the us.3 With the
increase in athletes, more are buying the shoes,
apparel, and equipment. Aside from the increase in
athletes, the current clothing style trend of
Athleisure, is allowing companies to build within
these industries to develop clothing that is
comfortable and stylish for everyday life.
The Athletic & Sporting Goods Manufacturing industry
has revenues of $9.3 billion, decreasing at an annual
rate of 0.5% (2011-2016). The Athletic Shoe Store
industry has revenues of $14 billion, growing at annual
rate of 4.7%. The industry is very competitive, with
over 2000 companies fighting for market share. Nike
owns a market share of 16.6% of the Shoe Store, and
8.7% of the Athletic & Sporting Goods Industries.4
1
Bender, J. "Topic: Nike." www.statista.com. N.p., Web.
13 Oct. 2016. https://www.statista.com/topics/1243/nike/
2
Petrillo, Nink IBIS World Report Athletic & Sporting
Goods Manufacturing in the US. IBISWorld. 895, 13 Oct.
2016. Web.
http://clients1.ibisworld.com/reports/us/industry/productsa
ndmarkets.aspx?entid=895.
3
"Financial Report." Bulletin of the Detroit Institute of Arts
80.3/4, Annual Report 2006 (2006): 48-60. Web.
http://www.physicalactivitycouncil.com/pdfs/current.pdf
4
Petrillo, Nick IBIS World Report Athletic & Sporting
Goods Manufacturing in the US. IBISWorld. 895, 13 Oct.
2016. Web.
http://clients1.ibisworld.com/reports/us/industry/ataglance.
aspx?entid=895
Demographic Trends in the
Industry
The demographics in the industry are very important
to understand who to target as an audience, and how
to target them. There is five major demographic trends
that affect the athletic and sporting goods industry
they are: (1) The hispanic population is constantly
changing with economic trends, impacting the market.
(2) Millennials are becoming more influential to the
industry through their on the go lifestyle. (3) Aging
baby boomers are following the new and current
trends. (4) Different races are becoming more
prominent in the United States and influencing current
trends. (5) The number of single household parents is
rising.
Hispanic
The Hispanic population has slowed and the amount of
immigrants entering the United States and Utah has
decreased and held steady the last few years.5 This is
due to the great recession of 2008 that had a huge
negative effect on the amount of hispanics in the
United States. This trend happened because the
housing and job market drastically fell, making work
scarce and hard to come by. In the hispanic culture
inside the United States, immigrant women have aged
out of childbearing years and younger hispanics are
experiencing lower fertility rates. This is aiding to the
5
Stepler, Renee, and Mark Hugo Lopez. "U.S. Latino
Population Growth and Dispersion Has Slowed Since
Onset of the Great Recession." Pew Research Center's
Hispanic Trends Project. N.p., 2016. Web.
http://www.pewhispanic.org/2016/09/08/latino-population-
growth-and-dispersion-has-slowed-since-the-onset-of-the-
great-recession/
2
continual decrease of the amount of hispanics in the
country. As the hispanic population continues to level
out and even decrease in some areas of the United
States it will bring threats to the industry because of
the big part that they play as consumer.
As consumers we see that Hispanics have a different
passion in sports than most white people. Hispanics
love the sport of what we call soccer more than any of
the other sports. Big culture events are held to watch
their favorite soccer teams plays. Nike has been trying
to gain a stronger hold on this market and advertise to
this group, but heavy competition from Adidas has
held back Nike from this market.6 This gives Nike an
opportunity to capitalize in their soccer products.
Millennials
Millennials are largely impacting society by their on
the go lifestyle. Because they are always on the go,
the way they dress is much more relaxed than that of
the past. Because we are seeing relaxed dress more
and more, it is being accepted in the workplace.
Athleisure is comfortable to wear and this is why
people are turning to it as part of their everyday
clothing. Millennials dont want athleisure clothing to
just be comfortable, they want it to look nice and
fashionable as well.
Lululemon noticed this trend and were quick to
capitalize on the opportunity by coming out with a line
of clothing that fits the unmet demands of these
customer. Millennials arent just looking for something
to wear, but they are looking for a new lifestyle to
have.7 If a company could figure out how to market
effectively to the diverse and media driven millennial
generation, it would create significant opportunities
for them. In a forbes article it mentions that about
only about 1% of millennials they surveyed said that a
compelling advertisement would make them trust a
brand more.8
6 9
Bershidsky, L. "Why Adidas Beat Nike at the World
Cup." Bloomberg View. N.p., 2014. Web.
http://origin-www.bloombergview.com/articles/2014-07-11/
why-adidas-beat-nike-at-the-world-cup
7 10
"[LIFESTYLE] What Is the Millennial Lifestyle?"
Millennial CEO. N.p., 2015. Web. 13 Oct. 2016.
http://millennialceo.com/millennial-lifestyle/
8
Forbes. Forbes Magazine, n.d. Web.
http://www.forbes.com/sites/danschawbel/2015/01/20/10-
new-
findings-about-the-millennial-consumer/#5a9786f828a8
Millennials are also developing trends of pushing
towards the green way of living. Many recognize the
need to be environmentally friendly and push for
companies to go green as well. As companies follow
these newer trends and figure out how millennials
work and act in their everyday life they can capitalize
on those trends.
Aging Baby Boomers
Baby boomers are starting to reach their 60s and are
starting to get older which means that they will start
to retire from the work force and have more leisure
time.9 Baby boomers are expected to live longer than
previous generations, which means that they will be in
the market longer.
They are living longer because there has been a
decrease in the mortality rate of cancer, heart
diseases, and strokes.10 There has also been a large
number of people among the baby boomers who
exercise and smoke less.
With baby boomers living healthier lifestyles they find
that they can remain in the workforce for longer
periods of time. Which could be a threat to this
industry because of less leisure time they would be
spending outside of work because of later retirement,
or it could be an opportunity to make new work
appropriate clothing. As people get older they look for
clothing that is comfortable rather than clothing that is
just for looks. Since they will be working longer into
their life the need for more comfortable work clothes
will increase and clothing that both looks great and
feel comfortable will be top sellers to this market.
Ethnicity Changes
The United States has become more racially diverse in
the last several years than it ever has been and it is
Tom V. "Growing Old, Baby-Boomer Style." WebMD.
WebMD, n.d. Web. 13 Oct.
2016.http://www.webmd.com/healthy-aging/features/growi
ng-old-baby-boomer-style
Lizzie Parry. "Fewer Americans Are Dying of Heart
Disease, Cancer and Stroke than Ever before amid
Plunging Mortality Rates for Killer Conditions." Daily Mail
Online. Associated Newspapers, 29 Oct. 2015. Web.
http://www.dailymail.co.uk/health/article-3294299/Mortality
-rates-leading-causes-early-death-
SLOW-fewer-succumb-heart-disease-cancer-stroke.html
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predicted to continue to grow. As Donald Trump
becomes our next president laws may be passed that
are stricter on immigration, and immigration may level
out in the future years. Over the last few years Asian
immigrants inside of the United States have grow very
rapidly and are now passing the amount of Latin
American immigrants.11 This Asian culture growing
inside America could lead to big growth opportunities
inside the athletic and sporting goods industry. Asians
are into a wide variety of sports and fashion and more
Asian athletes are being found in all kinds of sports
within the U.S.12
Because of the growing diverse races in the United
States right now, trends are being influenced by all of
the different cultures and many of their styles are hard
to find inside of the United States. This could be an
opportunity for Nike to met some of the new styles
that are being brought inside the U.S. from immigrants
all over the world. Because of the mixture of different
races right now in the U.S., millennials and the
younger generations are growing up in a total new
environment than the older generations did. This new
environment is influencing and changing the lifestyle
of millennials in many different ways. We see that the
trend of rasta colors became really big from other
cultural influences over the last few years. Hairstyles
are changing to be more like the new european hair
styles rather than the common ones found inside the
united states.
A trend that is starting to rise right now is buying
unique and different clothing from outside of the
11
"Pew Study: Asian Immigrants May Overtake
Hispanics." CNN. Cable News Network, n.d. Web. 13 Oct.
2016.
http://www.cnn.com/2015/09/28/us/pew-study-immigration
-asians-hispanics/
12
"Why Aren't Asian-Americans Getting Their 'One Shining
Moment'?" NPR. NPR, n.d. Web. 13 Oct. 2016.
http://www.npr.org/sections/codeswitch/2014/04/02/29728
7958/why-arent-asian-americans-getting-their-one-shining
-moment
United States. A good example of this is the striped
wool sweaters bought from mexico, are becoming
popular among the younger generations.
Because of the growing differentiation in the U.S.
culture people are seeing things in a new light than
they did ten years ago. Businesses would be smart to
use this to their advantage and can capitalize on these
important changing trends by coming up with new
ideas that will target the diverse cultures.
Single Parent Households
Single parent households have been steadily
increasing all over the world.13 Single parents are
having a harder time supporting their families because
the time they have to spend taking care of children
and providing an income to take care of them. With
single parents trying to juggle both of these tasks it
leaves them with very little leisure time. This is a
threat to the industry in two major ways the first is
because as a single parent, more time will be spent
trying to provide for their families and less time will be
spent participate in sports and outdoor activities with
children. Second is that many will be on a tighter
budget, so nike shoes and other clothing could
potentially be replaced with the cheaper option.
13
O'Hare, Bill. "The Rise-and Fall?-of Single-Parent
Families." The Rise-and Fall?-of Single-Parent Families.
N.p., n.d. Web. 13 Oct. 2016.
http://www.prb.org/Publications/Articles/2001/TheRiseand
Fallof
SingleParentFamilies.aspx
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 exchange rates can influence the shares in the market.
If the dollar depreciates, many of the sporting goods
Economic trends in the become more expensive for domestic buyers. If this
happens there will be an increase in demands for
Industry products that are made in the United States. The
trade-weighted index is expected to have an increase
There are three important economic trends that are
in the United States going into 201715 , this means a
impacting the athletic apparel market. They are (1)
potential threat could arise in the industry. It also
Growth in the U.S. Economy, (2) Consumers wanting
means that opportunities could arise for Nike as well.
to buy locally, (3) Demands from sporting goods
stores, and (4) Online Buying.
Since Nike is a company that is founded in the United
States consumers trust the brand more than other
Growing in the U.S. Economy brands from different countries. Many Americans like
the idea of buying goods that were manufactured in
Over the past five years the per capita disposable the U.S. because they feel like they are supporting U.S.
income has been growing at a steady rate which is companies. Nike can use this to their advantage as
good, but it is not growing as fast as the U.S. changes in exchange rates happen they can show that
government would hope. Per capita disposable income they are an American company.
is determined by an individual's ability to purchase
goods or services. This means that more consumers
are spending more money on goods and services. Demands from Sporting Goods Stores
Since 2010 we have seen that income growth has been
Much of this industry relies on the sporting goods
improving slowly and labor markets becoming
stores like, Big 5, Cabelas, Dicks, Sportsmans, and REI
stronger. By the end of 2016, the per capita disposable
to distribute goods to consumers. Because of this
income is expected to grow 2.3% in the U.S.14 Because
many of the bigger stores require a wide range of
of this income growth it is expected that a greater
goods to meet the changing demands of consumers.
number of Americans will be returning to work and
Overtime consumers preferences change or they look
there will be improved stock values to drive customers
for things that will fit their needs better than what is
to makes purchases that were delayed during the
currently in the market. To try to stay ahead of their
recession.
competitors sporting retailers are requiring the
This could be an opportunity for Nike as consumers
industry to provide them with more options for the
are willing to spend more of their money they have
growing diverse consumers. Since more people are
been saving over the last couple of years. When the
entering the markets for sporting goods there will be a
economy is doing good customers spend money on
increase in the demand for sporting goods stores in
the new hot items and on trends that are currently
2016 and 2017 16.
happening. Since the health trend is big right now,
customers will be spending more on healthy habits
and that includes exercise and working out. New items
that come into the market that meet the healthy
lifestyle will be top sellers.

Consumers Wanting to Buy Locally

Imports in this industry are extremely important and
they account for a large portion of the domestic 15
Petrillo, N IBIS World Report Athletic & Sporting Goods
market demand. Because many business in this Manufacturing in the US. IBISWorld. 895, 13 Oct. 2016.
industry rely on these imports the fluctuations in Web.
http://clients1.ibisworld.com/reports/us/bed/default.aspx?b
edid=89
14 16
IBIS World Report Per capita disposable income. Rory, Masterson IBIS World Report Sporting Goods
IBISWorld. 895, 13 Oct. 2016. Web. Stores in the US. IBISWorld. 895, 13 Oct. 2016. Web.
http://clients1.ibisworld.com/reports/us/bed/default.aspx?b http://clients1.ibisworld.com/reports/us/industry/default.as
edid=33 px?entid=1079
5

Due to demand increase in stores it brings a potential
opportunity for those in the industry. This opportunity
comes from new potential markets opening up to
meet the demands of consumers demanding for a new
variety of clothing. New trends are popping up all over
the United States, to try meet the changing trends
companies are looking for ways to to add benefits to
consumers. These benefits are being meet by new
innovations happening in spandex type clothing, and in
running and basketball shoes.
Because department stores are demanding more it
could also bring potential threats to Nike. As
department stores demand more from Nike, it creates
distribution problems and higher competition on shelf
space within the stores. If Nike doesnt meet the
demands of department stores, they could be pushed
to areas of the store that dont get as much attention
from consumers, lowering their overall sells.
Online Buying
Today millions of people are turning to online
purchases over department purchases. Customer are
finding it easier to jump online order a product at
usually a cheaper price and receive it via mail in a
couple of days. Customer use to have to go out
shopping and drive from store to store to find the best
deals and it could become very exhausting to many
consumers. The easy of jumping online to compare
prices has changed the way customers are spending
money in the economy. Millennials are the key age
group for online purchases, spending more money
online in a given year than any other age group. They
spend around $2,000 annually online, despite having
lower incomes than older adults. 17
This economic trend of online shopping could be a
great opportunity for Nike. Nike would no longer have
to meet the demands of department stores and could
sell online directly to their customers. This would raise
the profits of each individual sell and they could even
offer a better price to consumers, than departments
stores selling other brands.
Environmental/Natural
Resource Issues Facing the
Industry
The environmental and natural resource issues that is
facing the sporting goods industry are: (1) Changing
prices of crude oil (2) Millennials demand that
companies become more environmentally friendly. (3)
Shifting trends of renewable energy and industry
responsibilities.
Changing Prices of Crude Oil
The change in oil prices affect this industry in two
important ways. When oil prices are low in the U.S.
transportation cost are much cheaper and can get
goods to stores at a decent price. High oil prices also
mean higher energy cost, so it costs more to
manufacture sporting goods. If this happens
consumers will find that it is too expensive to buy
sporting equipment, and will spend time doing other
things like watching TV. Oil prices are predicted to
increase in 2017 due to the higher demand for oil at
the cheaper price.18 This brings a potential threat to
17
Smith, Cooper. "The Surprising Facts about Who Shops
Online and on Mobile." Business Insider. Business
Insider, 23 Feb. 2015. Web. 13 Oct. 2016.
http://www.businessinsider.com/the-surprising-
demographics-of-who-shops-online-and-on-mobile-2014-6
18
IBISWorld Business Environment Profiles August 2016
World production of oiI. IBISWorld. 895, 13 Oct. 2016.
Web.
6
Nike as they would have to raise the price of their
goods to cover the increase of oil prices. As of right
now low oil prices are benefiting this industry, but if
they rise like is predicted to in 2017 it could lead Nike
having to rethink some of their current distribution.
Millennials Demand Environmentally
Friendly Companies
Right now there is a big trend of people wanting to live
healthier and longer lives, this means that many
millennials and younger generations are investing in
health. Not only are they exercising more and eating
healthier they are looking for ways to improve the
environment around them. This topic is becoming
more important to the growing population as time
goes on. People want to be breathing healthier air and
being in places where the environment is taken care
of.
Because of this, many millennials are demanding that
companies act in a way that is environmentally
conscious. This could either be an opportunity or a
threat for most companies in the industry. If they meet
the demands of the public they are seen as heroes,
and customers will remain loyal. If companies inside
the industry dont change the way they are doing
things and continue to neglect the environment,
millennials aren't afraid to step up challenge the
business. Many businesses like Brooks, Adidas, REI,
and Under Armor are among some of the companies
changing the way they operate to meet the demands
to become more green.19
This year Adidas is released a shoe that is made almost
entirely out of recycled material. Helping aid an
environmental organization aiming to stop the
pollution of the worlds oceans.20 Under Armor is using
their UA Green clothing line which is very eco-friendly.
http://clients1.ibisworld.com/reports/us/bed/default.aspx?b
edid=990025
19
English, Nick. "The 14 Athletic Wear Companies That
Are Actually Good for the World." Greatist. N.p., 27 Aug.
2014. Web. 13 Oct. 2016.
http://greatist.com/fitness/athletic-wear-companies-
social-good
20
Andrew, Elise. "Adidas Create a Shoe Made Almost
Entirely From Ocean Garbage." IFLScience. N.p., 2016.
Web. 13 Oct. 2016.
http://www.iflscience.com/environment/adidas-has-created
-new-shoe-
and-it-s-load-garbage/
Recycling millions of plastic bottles to make shoes,
clothes, and hats. They also strive to reduce the impact
on the environment by purchasing one kilowatt hour
of wind power for every kWh of electricity they use.21
Brooks is going green by rolling out a completely
biodegradable running shoe, that is just as durable as
other shoes used during that time of year. The shoe is
expected to biodegrade in 20 years in a landfill instead
of the traditional 1,000 years. 22 REI is working on
becoming a climate-neutral, zero waste-to-landfill by
2020. Many of REI buildings are ran partly off of solar
power and are certified by the Leadership in Energy
and Environmental Design.
Because of large amount of companies moving to
becoming more green it is important for a company to
show they are involved as well. Nike has done a great
job of doing this by implementing a list of ten ways
they are committed to help the environment.23 This
opportunity not only helps the environment it helps
companies save money by recycling, and using
alternative power like solar power and wind power.
Shifting Trends of Renewable Energy
and Industry Responsibilities
Right now there is a shifting environmental trend
where many companies are looking for ways they can
become more energy efficient and responsible.
Companies like General Electric, DuPont, and
McDonald's for example have even noticed the need
to become green. One would think that DuPont
wouldnt be one, but they have been taking steps to
more sustainable operations. They have successfully
lowered the emissions of airborne carcinogens and
21
English, Nick. "The 14 Athletic Wear Companies That
Are Actually Good for the World." Greatist. N.p., 2014.
Web. 13 Oct. 2016.
http://greatist.com/fitness/athletic-wear-companies-social-
good
22
"25 Big Companies That Are Going Green." Business
Pundit. N.p., 2015. Web. 13 Oct. 2016.
http://www.businesspundit.com/25-big-companies-that-are
-going-green/
23
Wang, Walter. "Top Ten Sustainability Initiatives of
Nike - CleanTechies." CleanTechies. N.p., 2015. Web. 13
Oct. 2016.
http://cleantechies.com/2012/02/13/top-ten-sustain
ability-initiatives-of-nike/
7
greenhouse gases they produce as a company.24 These
companies are looking and investing into renewable
energy and taking on actions to be more responsible
to the environment.
This can be challenging for the sporting goods industry
because it takes a lot of resources to provide products
to consumers. Using anything from cotton, metal,
rubber or wood products, to manufacture the final
product. It also takes a lot of energy to extract the
material are bring it to a final product stage. A great
example of a company striving to build up renewable
energy is Patagonia. Over the years, Patagonia has
work with other corporations, to develop strategies
aimed to reducing the environmental footprint
businesses leave behind. They have aligned with 1%
for the Planet and donate 1 percent of its sales to
environmental organizations around the world.25
If companies are not looking at ways to improve their
overall mark in the world, it can be a real down fall to
them. They will not only miss out on good relations
with the public, they will missing out on the savings
renewable energy can provide. It would be a great
opportunity for a company to work with these shifting
trends and improve their business and reduce their
overall impact on the world. It could also really
threaten a business in the long run if they dont start
looking for ways to implement renewable energy.
Science/Technology Trends in
the Industry
In the athletic world, there is always continuous
improvement by the athletes. Most of the short term
changes come from changes in style. However, there
are consistently new innovation trends that deal with
Science and Technology that companies are taking
advantage of to gain a competitive edge, or at least,
increase the size of the industry pie. By look at science
and technology we notice some important trends
within the industry coming from technology. They are:
(1) Science driven clothing, (2) Apps and online
24
"25 Big Companies That Are Going Green." Business
Pundit. N.p., 2015. Web. 13 Oct. 2016.
http://www.businesspundit.com/25-big-companies-that-are
-going-green/
25
Daniels, Fund. Ethics
Initiativehttps://danielsethics.mgt.unm.edu/pdf/patagonia.p
df
programing, (3) Reactive Materials/Fabrics, and (4)
Wearable devices technology.
Science Driven Sports Clothing
Every year, we see records being broken in sports.
Some of that comes from athletes improving
physically, but a lot of it comes from science in the
ways the athletes train and gear up. Companies within
the industry as well as Universities each invest into
research on ways to help the athletes perform. There
are high tech training facilities that measure the force
generated by different movements athletes will
perform.
The companies will then develop products that will
specifically fit the needs of the athletes and assist
them in their performance. Along with the research in
developing products that can withstand pressure from
the athletes movements, they also research into ways
to make those movements more effortless.26 There are
consistently new clothing items that are made with
materials that are more aerodynamic, water resistant
or flexible to assist athletes in each type of sport.27
Companies are incentivized to invest into scientific
research because to increase market share, finding
ways that your products will help athletes be better,
faster, stronger will set you apart. The scientific
research inspires different type of technology to be
developed. There is always opportunities moving
forward with science driven clothing, as athletes
change and needs arise for each individual.
Apps and Online Programing
Although the industry makes most of its money
through selling shoes, apparel and sport gear,
technology is used to find new customers for their
market. Not only can companies find new consumers,
but also increase the loyalty of the customers through
device apps and online programs. In recent years,
companies have spent time and money developing
26
Lauer, Caleb. "Three Innovations in Sports Clothing
Technology: Fashion vs. Function." Pro Player Insiders
Executive Editor Melissa Mahler. N.p., n.d. Web. 13 Oct.
2016. http://proplayerinsiders.com/nfl-
player-team-news-features/three-innovations-sports-clothi
ng-technology-fashion-vs-function/
27
"New Sports Clothing Technology: The Future
Performance Of Athletes | Royal Fashionist." Royal
Fashionist. N.p., 25 Mar. 2016. Web. 13 Oct. 2016.
http://www.royalfashionist.com/new-sports-clothing-
technology/
8
apps and online programs that teach athletes will
enjoy and use. Athletes no longer have to go from
store to store to find the right product for them.
They can get on a electronical device and use apps and
programs found online to find the right fit for them.
This trend is continually growing and more people are
found using devices to shop rather that go and shop in
department stores.28 This could be a great opportunity
moving forward in creating value to consumers and
businesses. Friendly website allow for customers to
find the right clothing, and reduces the amount of
returns they have to make. Companies wouldnt have
to worry about shoplifting of their hot items that
everyone wants.
These new apps and online shopping could also bring
threats, as consumers can shop anywhere without
having to move from store to store and can compare
products with ease. They can read review from other
consumers and become very informed about products
and can compare the prices to find the best option for
them. Nike was know as being one of the best when it
came to shoes and sporting equipment. As customers
went out to shop they knew Nike was a reliable brand,
with durable shoes and clothing, which would help
them lead to buy Nike over other brands. But with the
ability for consumer to become more informed about
new products and other brands, they can easily switch
to other brands with similar qualities.
Reactive Materials/Fabrics
Technology is also improving materials and the designs
of clothing. The industry is able to create clothing that
will protect athletes muscles and prevent soreness or
injury. New equipment is constantly being developed
that is more resistant to wear and will hold up to the
intensity of the sports. Moisture-wicking fabrics and
thermal technology are big right now in this industry.
Moisture wicking fabrics reacts to how one sweats.
The clothing does not absorb the sweat like most
fabrics, it brings it to the surface of the fabric where it
then can evaporate. Thermal technology reacts to the
temperature of a person's body. This thermal tech aids
28
Wilson, Jamar. "Topic: E-commerce Worldwide." N.p.,
2015. Web. 13 Oct. 2016.
https://www.statista.com/topics/871/online-shopping/
in keeping the body warm while working in colder
conditions and climates.29
Wearable Devices Technology
As stated above, athletes want to be better, faster and
stronger. They want to win. They want to use
equipment and technology to help bring them to the
next level. This is used in association with different
fitness trackers and smart technologies that monitors
how the athletes perform and gives guidance and
motivation. When these devices first start out they
were very trendy and everyone wanted one. In this
past year there have been a slight decline of these
device, but still could have a lot of potential for
athletes in training. Wearable devices could become
big if the right innovation came along, or they could
die off and other smart clothing will take over.30
Science has proven that humans physically perform at
a slightly better level than the past. However, athletes
are continually improving because of the science and
technology involved in the equipment and apparel
they use. Technological changes are booming in
industry right now and a lot of technology is being
added to everyday clothing.31
29
Lauer, Caleb. "Three Innovations in Sports Clothing
Technology: Fashion vs. Function." Pro Player Insiders
Executive Editor Melissa Mahler. N.p., n.d. Web. 13 Oct.
2016. http://proplayerinsiders.com/nfl-
player-team-news-features/three-innovations-sports-clothi
ng-technology-fashion-vs-function/
30
Dishman, Lydia. "Heres Why Youll Be Wearing smart
Workout Clothes Soon." Fortune. N.p., 16 Oct. 2015.
Web. 13 Oct. 2016.
http://fortune.com/2015/09/11/smart-wearables-fitness/
31
Dishman, Lydia. "Heres Why Youll Be Wearing smart
Workout Clothes Soon." Fortune. N.p., 16 Oct. 2015.
Web. 13 Oct. 2016.
http://fortune.com/2015/09/11/smart-wearables-fitness/
9

Political/Regulatory Issues
Facing the Industry
Besides the normal ups and downs that affect every
industry from political negotiation, the Sporting good
industry has been light and steady. There are
practically no regulatory or political restraints on the
industry on what can or cannot be done. The most
common regulations enforced are trade policies,
limiting how much can be produced or imported to
foreign countries. However this has had little effect on
the growth of the industry. Two other issues to be
aware of are: (1) Regulations facing football, and (2)
Sweatshops.
Regulations Facing Football
One of the largest sectors in the sports industry is
American Football. Medical studies have been
continually finding the dangers and risks of
concussions from playing this sport.32 In 2013 Frontline
on pbs released a documentary on how the NFL is
trying to hide how concussions were affecting
athletes.33 This left thousand of people angry and
32
"FRONTLINE." PBS. PBS, n.d. Web. 13 Oct. 2016.
http://www.pbs.org/wgbh/frontline/article/high-
school-football-players-face-bigger-concussion-risk/
33
"FRONTLINE." PBS. PBS, n.d. Web. 13 Oct. 2016.
http://www.pbs.org/wgbh/frontline/film/league-of-denial/
legislators, doctors, and the media are working to pass
new regulations to stop this sport or limit its contact.
This could threaten the industry because of the loss in
sales that come along with football.
Sweatshops
Sweatshops seem to be an ongoing problem with
many clothing industries. Since many of the companies
manufacture outside of the U.S. they are not held to
the same standards that are found inside on the U.S.
Companies are found with young children working in
dangerous areas in the factories and factories that are
built are not constructed well.34 This could leading to
new regulations that could be passed to try and aid for
better conditions. In the past Nike had to deal with the
problem of having a bad image for poor work
conditions in Indonesian. This really effected Nike and
it eventually caused layoffs and reduction in sales.35
Cultural/Social Trends in the
Industry
Cultural and societal trends highly influence a persons
purchase intent. The major trends in the industry are:
(1) Health Trends (2) Social media (3) The use of the
internet. (4) Athleisure (5) Activities with free time (6)
Participation in Sports
34
"10 Major Clothing Brands Caught in Shocking
Sweatshop Scandals." TheRichest. N.p., n.d. Web. 13
Oct. 2016.
http://www.therichest.com/rich-list/most-shocking/10-major
-clothing-brands-caught-in-
shocking-sweatshop-scandals/
35
Lutz, Ashley. "How Nike Shed Its Sweatshop Image to
Dominate the Shoe Industry." Business Insider. Business
Insider, 2015. Web. 13 Oct. 2016.
http://www.businessinsider.com/how-nike-fixed-its-
sweatshop-image-2015-6
10

Health Trends
Today people are moving much more towards a
healthy lifestyle.36 With all of the health tracking
devices on phones and watches people are constantly
working to improve their health. Societal trends are
still pushing towards being strong and healthy today.
Health, and the way somebody looks, is a very high
value in todays society. There are more people trying
to be in shape than ever before. People are constantly
counting their steps and how many calories they have
lost during the day. This increases the amount of
workout clothing that is worn and also increases the
desire to have breathable clothing.
This is a huge opportunity to capitalize on. With
people being so concerned with how they look and
how much they work out Nike could come out with
new products or programs to help people stay in
shape. They could come out with new healthy eating
habits, new stylish clothes, and new products to track
your health.
Social Media
With so much access to social media in the palm of
peoples hands, people are always posting pictures,
updates, and videos of their sporting activities. A lot of
companies are putting contests online to get people to
use their product. This opportunity is one that every
company should capitalize on.
Some already are. They have activities to encourage
people to do and whoever does it the best wins a
prize. Many companies are also encouraging people to
share the best pictures of their products with
incentives in doing so. Saying that whoever gets the
most likes or shares wins a prize. By doing this
products get free advertising and their customers
become evangelists.
With so many people using the internet everyday to
post their activities companies constantly see people
wearing their apparel and using their products.
36
Watson, Elwood D. "Younger Consumers Are Trending
Toward More Health-Conscious Eating." The Huffington
Post. TheHuffingtonPost.com, n.d. Web. 13 Oct. 2016.
http://www.huffingtonpost.com/elwood-
d-watson/younger-consumers-are-tre_b_6632166.html
Companies are capitalizing on these and
complementing customers on using their products.
They are also holding competitions to see who can get
the most steps in a day, run the most miles, loose the
most calories, ect. People are competing with their
friends to see who can workout the most.
Customers are becoming evangelists and sharing these
with their friends and encouraging them to also
compete and join the fun. Social media opens many
opportunities to increase sales in the industry. Under
armor released a new marketing campaign game on
snapchat for youth that allows them to run through
obstacles as Cam Newton. This is something that Nike
could easily do with all of their sponsors.
Internet
With the internet being such a big part of everyday life
less people are going into stores to buy products.
Many people will often look online at products before
buying them. Depending on where the products lies on
the o-continuum, people will also be reading reviews
on the product before buying them. This can be a
threat to the company because of the many trolls out
there who look for opportunities to bash the company.
With people always being on their phones, many
companies in the industry are reaching out to them.
Because people are always on their phones many
companies have developed apps that people can easily
download onto their devices and constantly look at
updates in the business, or interesting news.
Because apps are so trendy, there are even apps for
many different sports. The internet can be both a
threat and an opportunity. People might turn to
amazon before turning to your company's website
which could impose a threat. On the other hand Nike
could come out with more new apps for sports to help
their company grow.
11

Athleisure
With people working out more they are realizing that
they prefer to wear workout clothes than normal jeans
and t-shirts. More and more women are regularly
wearing leggings, jeggings, and other workout clothes,
even in the workplace.37 They are starting to become
socially acceptable to wear whenever and wherever
you want. With Nikes technology they could easily
develop a new product line to reach this demand for
comfortable, breathable, and stylish clothing in the
workplace.
More and more people are wearing athletic shoes,
rather than dress up shoes when doing things other
than sports. Companies like Lululemon are developing
more breathable nice looking work clothing so that
people can be more comfortable at work while still
looking professional. These companies are beating
Nike to this area could impose a threat upon them.
People are looking for shoes and clothing for fashion
not just athletics.This opens a huge door of
opportunity. Adidas is capitalizing on this opportunity
and just came out with 84 pieces of unisex clothes and
footwear.38 Nike needs to jump on this trend and come
out with a new line that nobody has seen yet.
Activities with Free Time
Americans tend to spend a good amount of their day
on leisure activities, which include watching TV,
playing sports, reading, etc. With so many new
activities becoming popular more time is spent
exercising. People are seeing the need to be healthier
and many people are finding time to exercise by riding
bikes to work which could increases the need for
breathable and comfortable clothing.
Most big companies are also encouraging their
employees to be healthy and to exercise. With more
37
Watson, Elwood D. "Younger Consumers Are Trending
Toward More Health-Conscious Eating." The Huffington
Post. TheHuffingtonPost.com, n.d. Web. 13 Oct. 2016.
http://www.huffingtonpost.com/2014/12/17/athleisure-work
out-clothes-not-working-out_n_6323520.html
38
Prutting/BFA.com, David X. "Alexander Wang Announces
Adidas Collab Because Athleisure Will Never Die." The
Cut. N.p., 2016. Web. 13 Oct. 2016.
http://nymag.com/thecut/2016/09/alexander-
wang-announces-adidas-athleisure-collaboration.html
people working longer hours there is less time for
leisure activities and exercising. This could be a threat
to the industry if the amount of leisure time continues
to decrease. This is a big opportunity to go into
developing breathable work clothes for
businessmen/women.
Participation in Sports
Overall the percentage of Americans participating in
sports activities has been increasing slightly over the
past couple of years and is expected to increase into
201739 . Part of this was due to rising unemployment
rates during the recession and people seeking for
activities to keep them active and busy. During this
time the trends of sport activities and becoming
healthier came along and has impacted the demand
for sporting equipment in a good way.
These trends bring new opportunities into the sporting
goods industry and it has seen an overall increase in
the sporting goods market. Most of the growth seen
now is not in team sports but in individualized
activities like fitness, bicycling and going to the gym.
This is great, but since more customers are
participating in sports, it means that there is a broader
consumer preference in sporting equipment.
Companies are responding by innovating in the fields
that they are good at. Over the past couple of years
many innovations have been made to sporting
equipment, shoes are made to fit different terrains
and weather conditions, workout clothing now has
sweat absorbing material that fits comfortably.
Conclusion
There is a lot of competition within the Athletic &
Sporting Goods Manufacturing industry as well as the
Athletic Shoe Store Industry. However, the industry as
a whole continues to grow as the number of
participants in sports increases, as well as the use of
athletic clothing spreads to other uses such as
athleisure. Companies have countless opportunities to
improve their own performance and take new and
existing niches in the company. Companies can focus
on existing demands from consumers in term of
desired functionality. In addition they can also focus
39
Petrillo, N IBIS World Report Athletic & Sporting Goods
Manufacturing in the US. IBISWorld. 895, 13 Oct. 2016.
Web.
http://clients1.ibisworld.com/reports/us/bed/default.aspx?b
edid=51
12
on new demands such as the form and style of the
products. Companies must also take advantage of the
trends with social media as that is how most
individuals are being influenced on a daily basis.
Chapter 2
Market Life cycle
The athletics and sporting goods manufacturing
industry is in the mature stage of its life cycle. 40 Over
the past decade the industry has faced many
challenges. There has been strong competition from
domestic and international players. 41 The different
strategies used by these competitors is making it
difficult for Nike to be number 1.
Product Life Cycle Stage
Over the last two years the growth in total revenue
has been growing in sporting goods industrys life
cycle. In 2015 it experienced a 4.7% growth, and in
2016 the growth is expected to be around 1.2% by the
end of the year.42 This in not bad considering that the
Athletic and sporting Goods Industries are in a mature
phase in their life cycles. Over the past couple of years,
the industry has faced challenges and difficulties in the
overall operating environment. The competition from
domestic and international players has become
extremely tough and there has been an influx of goods
being imported into the market. Industry operators
are facing many challenges and are seeing trends of
lower sales and profit because of the high competition
from global manufacturers. Not only that, but the
industrys value that it is adding to the overall
40
IBIS World Report Athletic & Sporting Goods
Manufacturing. IBISWorld. 895, Web.
http://clients1.ibisworld.com/reports/us/industry/industryou
tlook.aspx?entid=895
41
IBIS World Report Athletic & Sporting Goods
Manufacturing. IBISWorld. 895, Web.
http://clients1.ibisworld.com/reports/us/industry/industryoutl
ook.aspx?entid=895#IL
42
IBIS World Report Athletic & Sporting Goods
Manufacturing. IBISWorld. 895, Web.
http://clients1.ibisworld.com/reports/us/industry/currentperf
ormance.aspx?entid=89
economy is only expected to grow at an annualized
rate of .2% during the next 10 years, which is slower
than the 2.2% annualized growth in us GDP over 10
years.43
Industry Players and
Marketing Strategies
In this industry many marketing strategies are being
implemented, but many seem to not be working as
well as hoped. One huge problem that Nike is facing is
that they are using star athletes to endorse their
products. They are also continually working to
enhance many of the products design and functionality
to improve the overall benefits to the consumers.
These products and equipment are being advanced in
many ways and becoming lighter and better equipped
to deal with changing terrains and conditions.
Well guess what? Everything mentioned in the above
paragraph is exactly what every other competitor in
the industry is doing to increase revenue. Because
every brand is doing the same thing, the only thing
that differentiates them is their brand name. Nike
needs to do something to differentiate themselves
from their competitors.
Despite these advances the overall impact of the
industry has not been affected as hoped. The fact is
that many homes already have multiple sporting
equipment and some of the designs and
improvements are so small that consumers are not
recognizing them. These innovations are being
noticed, and new customers are buying into these
innovations but not enough to significantly increase
43
IBIS World Report Athletic & Sporting Goods
Manufacturing. IBISWorld. 895, Web.
http://clients1.ibisworld.com/reports/us/industry/industryou
tlook.aspx?entid=895
13
revenue. The top two major players in this industry are
Nike and Performance Sports Group, with others like
Callaway Golf Company and Escalade Inc. gaining in
2016.44
Successful Marketing
Strategies
To be successful in this industry some of the marketing
programs that are used by organizations need to be
spot on. Having a good brand name and image in this
industry is extremely important. Many customers are
becoming ever more health conscious and hold brands
to the same standards that they hold themselves at.
Retailers also are more likely to buy larger amounts of
goods that are trusted by consumers and are
respectable in the industry. It is also important to
produce products that meet quality standards set by
governments, retailers and consumers. Since many
sports involve equipment that must be deemed safe
for the consumers. A brand will fall quickly if its quality
is not up to par for extreme sporting events. Not only
do the products have to be safe they have to
accommodate a large range of clients. Products in this
industry and not be built for one size fits all, if a
company tries to market this way they will fail quickly.
To maintain market shares within this industry
companies, need to learn how to adopt new
technology quickly. These improvement dont seem to
move the revenue needle much but are important to
ensure that consumers dont switch to a different
brand.
Bargaining Power of
Customers/Buyers- High
Threat
The threat of bargaining power of customers/buyers is
high. When looking at the bargaining power of
customers and retail buyers on this industry we see a
couple key factors that play into it. They are: (1)
Customers can switch to a different brand very easily
(2) Retails following market trends and what
44
IBIS World Report Athletic & Sporting Goods
Manufacturing. IBISWorld. 895, Web.
http://clients1.ibisworld.com/reports/us/industry/majorcom
panies.aspx?entid=895
customers are spending money on (3) Key buying
industries within the athletic and sporting goods
industry.
Customers and Buyers
Because there is such a diverse range of products in
this industry customers/buyers have a high bargaining
power. Right now there is thousands of different
stores selling sporting equipment and hundreds of
companies in this industry that are fighting for the
customers and their growing trend of participation in
sports. If companies are not meeting the demands of
customers it is extremely easy for them to switch to a
brand that meets their needs. They are also growing in
bargaining power to put companies into check to meet
environmental needs. Since social media has become
increasingly popular all over the world large
companies need to watch and listen to their customers
if they wish to survive.
Retailers and purchasing power
Since customers are demanding high quality in
products and buying equipment that will best suite
them when participating in sporting activities.
Retailers are looking to purchase items from the
industry that are selling among consumers. They all
want to beat out their competitors, so they buy items
that will get customers inside their stores. This gives
big retailers like Dicks Sporting goods and Academy
Sports & Outdoors medium bargaining power, since
stores like these comprise a large portion of the
market shares, they are able to push the
manufacturers more than they use to.45
Key target markets
In the sporting goods industry there are four key areas
that are users of sporting goods. They are sporting
goods stores (retailers), department stores (retailers),
coaching in sports (end users) and ski and snowboard
resorts (retailers). Each of these markets have differing
levels of bargaining power when purchasing products
from the manufactures.
45
IBIS World Report Athletic & Sporting Goods
Manufacturing. IBISWorld. 895, Web.
http://clients1.ibisworld.com.dist.lib.usu.edu/reports/us/indus
try/majorcompanies.aspx?entid=1079#MP9752
14
Sporting goods stores have the the most bargaining
power because they make up the largest portion of
profit for the manufacturers. Department stores also
have a good amount of bargaining power because they
meet the customer's ever changing preferences for
sports and activities.

Sports coaches are buyers and have a medium to low

bargaining power. The coach gets to pick which type of
equipment to use, but they need good products that
will last. This causes them to partner with a trusted
brand. They often end up getting sponsored by these
brands.

Ski and Snowboard resorts have a medium bargaining

power. Since most of the equipment is used by a large
range of people they have to accommodate them
while giving them quality equipment to rent. This helps
consumers to return to the resorts because they were
pleased with the equipment.

15
16
 companies. Because they are the best in that area
customers trust them and buy from them in other
Nike Competitors High areas of sporting goods.

Threat Adidas, like Nike, is facing a lot of the same problems.

All companies in the industry are using the same
The competitive intensive of the athletic apparel
marketing strategies to promote their brand. They all
industry is very high and imposes a significant threat.
use professional athletes to promote their product,
Even though Nike has the biggest number of market
emphasize aspirational performance, and constantly
shares in the sporting goods industry, they face many
come out with similar products. Adidas recently came
threats from competitive rivalry in the industry. Some
out with a new product line of unisex clothing to reach
of these threats are (1) Foreign manufacturing. (2)
new customers. 46
Smaller companies growing quickly. (3) Competitors
and their marketing strategies into specific markets.
Competitors like Adidas and Under Armor are seen as
(4) Competitors widening their vision and coming into
the most threatening to the brand right now. They are
new markets that Nike already has the most of.
companies that have been growing at fast rates and
are taking small areas of business away from Nike. As
Right now foreign manufacturing is increasing and
they continue to grow and become more popular
they are producing products at a lower price than
among consumers it allows them to easily move into
companies producing in the US. This imposes a threat
new sporting equipment areas. Nike faces an ever
to Nike because products made at a lower cost are
growing competition in the sporting goods industry
cheaper for customers. This will give customers an
because the competitors are expanding into other
easy way to buy different product.
areas of sporting goods. These competitors are
dangerous towards Nike because Nike is not the only
Also smaller competitors like Under armor and
brand that is seen as the best. Nike is doing its best to
Escalade Inc. are growing at a quicker rate than Nike
fight off these brands and is improving their sporting
and reducing Nikes market shares. Since Nike is
equipment in many areas to try and turn customers
manufacturing such a wide range of products they
back to Nike. They need to differentiate themselves
have a lot of competitors in different areas. Brands like
from their competitors by coming out with something
Adidas, Under Armour, New balance, and Reebok have
new.
to be fought off continually. New balances main area
of focus is shoes. They sell walking and running shoes
that are very comparable to Nike, but is also getting
into sporting apparel. None of these manufacturing
brands are a large threat to Nike, but together it is
causing Nike to lose business in different areas of
Bargaining Power of Nikes
manufacturing, making it a high threat. Suppliers - Low Threats
A lot of the strengths of these competitors come from The bargaining power of suppliers impose a low threat
focusing on an area in the market where customers to the industry. Nikes suppliers affect their business
demands are being met in specific areas. Under Armor through the availability of raw materials. For Nike, the
started by making spandex underwear that was more large quantity of supplies and suppliers creates a weak
comfortable and had moisture-wicking technology to bargaining power for the suppliers. The high supply
help absorb sweat and keep athletes dry. They were minimizes the effects of individual suppliers and their
then able to expand into other areas of sporting goods ability to impact Nikes business. If Nike had large
because they had gained the trust of consumers in
that category first.
46
New balance focused was to make shoes more Prutting/BFA.com, David X. "Alexander Wang
comfortable and add arch support and other designs Announces Adidas Collab Because Athleisure Will
to improve overall comfort. By focusing on an area Never Die."
that needs improvement and gaining the trust of http://nymag.com/thecut/2016/09/alexander-wang-announ
customers has been very beneficial to some of these ces-adidas-athleisure-collaboration.html

17
quantities of particular supplies, the suppliers would
be able to have more power.47
In addition, the large quantity of suppliers creates
competition amongst the suppliers to strive to earn
Nikes business. This large population also reduces the
ability for individual suppliers to make demands that
would have an impact on larger companies.
If a supplier tries to raise the cost of the raw materials
or shipping costs, Nike has the opportunity to shop
amongst suppliers to get the number of supplies they
need from a company willing to provide at Nikes
desired price. Overall, because of the high overall
supply and number of suppliers, which both create a
weak force on Nike, Bargaining Power of Suppliers is
not a significant concern for Nike when creating
strategies.
Potential Entrants - Low
Threat
The threat of potential entrants is low. There are a
large amount of competitors in the Athletic Shoe and
Apparel, new entrants or new firms can always disrupt
Nikes industry. However, due to the high cost of
brand development and high economies of scale, the
threat of potential entrants is low. It is low because (1)
Products need to have a brand and there are already
many top brands in the industry. (2) Nike controls the
largest portion of the industry making their costs of
production much lower than competitors. (3) The price
and quality of Nike is too difficult to match.
Companies can easily produce athletic products.
However, to have an impact on the industry the
products need to be represented by a brand. Nike and
the other top providers in the industry each invest
millions every year into developing and marketing
their brand name. It is extremely expensive for new
entrants to develop a brand that can compete against
top companies.
Economies of scale is how as a company grows and
their production increases. With high increases a
company will have a better chance to decrease its
47
IBIS World Report Athletic & Sporting Goods
Manufacturing. IBISWorld. 895, Web.
http://clients1.ibisworld.com.dist.lib.usu.edu/reports/us/indus
try/default.aspx?entid=895
costs. This is important to note because as Nike
controls the largest portion of the industry, their costs
of production are significantly lower than a new
entrants cost. Leaving the new entrants at a
disadvantage and a low threat level.
In order for new entrants to compete against Nike,
they would need to invest into either lower quality
materials to keep costs down or will have low margins
to be able to compete with Nikes pricing and quality.
However, as there are many companies competing
with the pricing at a premium pricing strategy, such as
Nike, Adidas and Under Armour, associating a brand
not just with sports but with a cause could allow new
entrants to develop brands and take part of the larger
companies market share.
Competitive Substitutes
High
Substitutes are constantly becoming more and more
prominent in this market. They are a high threat to
Nikes industry. Different substitute threats that Nike
is facing right now are (1) technology and video games.
(2) Secondhand clothing (3) Other pastime activities.
Technology is constantly coming out with new
inventions that are driving people away from playing
traditional sports. The Wii has even successfully
changed sports into a video game that doesnt require
participants to wear athletic clothing. This is a high
threat because customers now have the choice to go
play sports on their TV instead of going out and
participating in the sport. Exercise is something that
people do on their free time. Video games and other
technology are driving customers away from buying
athletic apparel.
Secondhand clothing is also a threat to the industry.
More and more people are making their own clothes
or cutting up their new clothes to make work out
clothing. When people do this they dont have to go
out and buy new clothing to exercise in.
Pastime activities, other than exercise, are also
imposing a threat to the industry. We mentioned
technology already, but there are also different clubs
and activities that people can participate in instead of
exercising. Doing these other activities do not require
athletic apparel.
18
 One potential threat is that of people becoming
environmentalists and persuading people to go
Stakeholders/Influencers/Sha green. This is something that is very popular in the
world right now. There are many protests that are
pers Very low against the way that products are being made and
what they are being made out of. This is an
The threat of stakeholders is very low for Nike. They
opportunity for Nike to collaborate with solar
are low because they are more opportunities than
companies to be more environmentally friendly in
threats. There are three main stakeholders in the
using energy. They could also partner with different
industry right now. They are (1) Good health
green companies to know how to make their
promotions. (2) The influence of the media. (3)
products out of environmentally friendly materials.48
Environmentalists persuading people to go green.
With that being said there is also a growing trend to tie
Stakeholders are very influential at the moment in the
going green with athletics and eating healthy food.
Nike industry. Good health and exercise is one thing
Examples of these trends are organic and healthy
that is booming at the moment. A few examples of
foods. Kodiak Cakes has come out with many products
companies and people promoting good health are
that are healthy and environmentally friendly.
fitbit, city and competitive sport associations, work
livewell programs, and many more. So many people
Other companies in the industry are taking advantage
are getting into always tracking their health with their
of these stakeholders. We see that adidas is coming
different devices. A lot of people are starting to
out with recyclable products to promote being green.
exercise more and get out of the house. Because the
We also see that under armor came out with a filter in
positive influence of being healthy is strong Nikes
snapchat to promote their brand that was fun for the
industry is not threatened by these stakeholders, if
users of snapchat.
fact they are very advantageous to the industry. Nike
could partner with different health tracking devices to
While all of these are trending high right now, they do
help promote good health and promote their brand.
not impose a threat on the industry, rather they
impose a wide range of opportunity for growth for the
The media is also highly influencing people to be in
industry. Making new products to tie into these trends
good health. When we see people in the media looking
will become popular very quickly.
good, posting videos or pictures of workouts, or
different things like this people are influenced more to
exercise. This is a huge opportunity for Nike to take
advantage of. They could partner with many different
social media companies to help promote their product.
They could have a snapchat filter that could be fun for
Chapter 3
users and help advertise their brand. This could help a
lot more people be exposed to their brand. They are
already doing a great job partnering with sports teams
Strategic Market Position
and different schools to help market their products. Nikes mission statement is to bring inspiration and
innovation to every athlete. The co-founder also
stated If you have a body, you are an athlete. Nike is
somewhat stuck in the middle of the road as a
company. They are trying to be the cost leader in the
market. They dont have a niche market. Rather they
try to differentiate themselves from their competitors
by doing their best to reach out to every athlete. They
come out with products for all kinds of different
reasons.They dont focus on just one sport to
48
"The Environmental Awakening in Sport - The Solutions
Journal." The Solutions Journal. N.p., n.d. Web.
https://www.thesolutionsjournal.com/article/the-environment
al-awakening-in-sport/
19
specialize in, but they go after athletes of every sport. need to reach out to those dressing every day in
They dont just stop at products to improve athletic professional clothing. Other companies like Lululemon
ability for consumers, but they also came out with a lot are coming out with professional looking leisure
of leisure products to reach out to even more people. clothing which is one thing that Nike is lacking at this
They dont have one major focus and this has allowed moment.
them to reach a wide range of consumers. One of the
first companies that people think of when they think of
sports is Nike and their hold in the market shows this.
49
Product Portfolio Analysis
Nikes mission statement is to bring inspiration and
innovation to every athlete. Because they are trying to
reach such a wide variety of athletes sometimes they
do not make the best products for each sport. They
make good products for every sport and some great
products, but are lacking the best of the best for each
segment.

Nike is also starting to come out with a lot of leisure

clothing. They have come out with a lot of leisure
shoes and clothing. These leisure clothes are starting
to become really popular among the millennial
generation. This generation is always on the go and
wants to look good and be comfortable, and
sometimes, just feel comfortable.

Nike owns Jordan, Hurley, converse, and all of their Stars

own products. Because they own so many of these
different brands they are able to reach a huge variety
of customers through each different brand. This allows
Nikes business to grow a lot more than their
competitors. Jordan reaches a lot of basketball players.
Converse reaches the hip hop demographic. Hurley
reaches out to the surfers and skateboarders. And the
Nike brand reaches out to all other sports, even the
ones listed above as well as those searching for leisure
products. Nike came out with the Nike SB shoes which
has taken off among skateboarders all around the
world and has become super popular for leisure shoes
for those who are always on the go.
Because Nike is trying to reach a wide variety of
people we see that they are lacking the ability to reach
out to the business world and the professional look.
Nike has a lot of Nike golf products which are very
professional looking clothing. The clothing is very
breathable and looks super professional. If Nike wants
to reach out to every person who has a body, they
49
Jaskelainen, Liisa. "Topic: Sporting Goods Industry."
Www.statista.com. N.p., 2016. Web.
https://www.statista.com/topics/961/sporting-goods/
Nike has many products that are booming right now
and have been for a really long time and with
development can continued to grow. They also have
some products that need a lot of work and some that
they need to get rid of right away. We are going to
cover first the products that are doing well and can
continue to grow and then we will talk about the
products that need some work and what they should
get rid of.
One of Nikes products that is growing at an incredible
rate is their Nike SB shoe. These shoes came out for
skateboarders. Because of their popularity they have
started to put other skateboarding shoe companies
out of business. They have also started to become
extremely popular as everyday shoes. The Janoski
shoes are being worn by all kinds of different kinds of
people. The shoes have not only reached the
skateboarders, but also a large variety of people. The
skateboarding shoes tend to be more roomy for
peoples feet and are often worn as leisure shoes.

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Cash Cows
Nike has a lot of cash cow products. The list goes on
and on but to keep it simple we will just list that they
brands that Nike owns are all doing well and bringing
in a lot of cash. Hurley, Jordan, converse, and all
athletic shoes. Their running shoes are used by so
many runners, and their basketball, soccer, football,
and baseball shoes are all doing well. There leisure
clothing is also starting to become a cash cow for
them, meaning leggings and comfortable on the go
clothing.
Problem Children
One problem child that Nike has right now is their fuel
band. Their fuel is supposed to be like a fitbit and help
you keep track of your health and workouts. But they
have made is so similar to fitbit that nobody wants to
switch to a product that is the exact same to what they
already have. Nike has an opportunity and the ability
to make their fuelband new and different from that of
competitors. This is a huge opportunity for them to
capitalize and with new developments and benefits to
the fuelband it could become a star and possibly a
cash cow. 50
Another one of their problem children is their golf
apparel. With the technology of their golf apparel they
could come out with a new line of business
professional clothing that would differentiate
themselves from their competitors. With the
popularity of the on the go lifestyle business
professionals would love business professional
clothing that is more comfortable, breathable, and
stylish than existing products.
Dog
One of Nikes products that is really having a hard
time picking up is their snowboarding boots and
clothing. Their boots have gotten the attention of a lot
of people, but they arent any different than any other
boots and because they are not a snowboarding
50
Smith, Chris. "Nike FuelBand: The Rise and Fall of the
Wearable That Started It All." Wareable. N.p., 2016. Web.
http://www.wareable.com/nike/not-so-happy-birthday-nike-fu
elband-2351
company they dont have as much information as
actual snowboarding businesses to make their snow
clothing better than their competitors. This product
needs to be throw to the side so that they can focus
on products that they specialize more in.
Nike has a lot of good products that they can continue
to build upon to make cash cows like the line of Nike
SB products. They need to get rid of products like their
snowboarding apparel because they are not taking off
and cost a lot of money. They need to put their money
into building their problem children like coming out
with a line of business professional clothing using the
materials and technology that they already have from
their golf and other athletic clothing to reach popular
demand.
Competitive Advantage
Assessment
Nikes key strategic policies, programs, resources, and
assets that are building up their competitive position
are (1) Minimize Environmental Footprint (2)
Transform manufacturing (3) Its well known brand
name. (4) Unleash Human Potential.
Minimize Environmental Footprint
Over the last couple of years Nike has worked to track
and reduce the environmental footprint across their
value chain, while maximizing athletic performance.
They have done this eliminating waste, reducing
energy cost; reduce water usage, and implementing
standards for chemicals. By working towards becoming
environmentally friendly Nike has been able to get
smarter with the materials they are using. It not only
helps them reduce environmental impact, but helps in
setting a new bar to improve industry performance
and drive company growth.
Transform Manufacturing
Nike is doing this by changing the role of the worker
and increasing the role of technology. By focusing on
the roles of the worker and finding valued and skilled
workers, it helps to improve growth and sustainability.
When workers are properly motivated and fairly
compensated they will hopefully deliver a higher
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productivity rate and products that are flawless. By
focusing on technology and designs that are important
to consumers, they can produce products that will
meet the specifications of athletes, while reducing
waste that comes with the manufacturing process.
Well-known Brand Name
Nike has a brand name that is well established
throughout the world. They are the number one
shoemaker and make a variety of shoes for a vast
number of sports. Nike also has a large number of
stores throughout the United States to get their name
out there. Like Niketown, Nike factory outlets, and
Nike women shops. Because they reach a large
number of the world their swoosh is the number one
sports brand in the world. 51
51
"SWOT Analysis of Nike - Nike SWOT Analysis."
Marketing91.com. N.p., n.d. Web.
http://www.marketing91.com/swot-nike/
Unleash Human Potential
Human potential is powerful and when focused in the
right areas great things can happen. Nike feels that by
inspiring people and innovating they can bring out
greater human potential to athletes all over the world.
By striving to be engaged in peoples lives it helps
them position themselves as wanting to help people
stay active and participate in the world around them.
By being active in peoples lives all over the world it
helps Nike see all the different diversitys and what
innovations are needed to benefit these diverse
athletes. Great ideas have come from unexpected
places and individuals all over the world looking at
things in different perspectives. These different views
allow for the workplace at Nike to become diverse and
inclusive to everyone.
Another way Nike has unleashed human potential is by
investing in talent in their diverse employees. Since
Nike is such a large company in requires world-class
talent to fight off competitors. By seeking out and
inspiring employees to become the best they can it
helps Nike to find the world-class leaders, managers
and coaches. This will hopefully inspire employees to
work hard and fulfill their potential.
The last way Nike is trying to Unleash human potential
is focusing on Kids and creating a positive experience
with sports. If children have a positive experience with
sports and physical activity when they are young, it
makes them want to continue to have those
experiences. Today people are increasingly getting
active in sports and physical activities, and are bringing
their kids along with them. If Nike can help in aiding
these positive experiences among kids, the kids will be
more likely to remember the brand of Nike as a brand
trying to help them reach their full potential.
Nikes Sustainability and
Competitive Advantage
As Nike focuses on their three key strategies of
sustainability it can create a competitive advantage,
but will it be enough for the tough industry they are
in? To gain complete and sustainable advantage
company strategies must be valued by the customer,
be imperfectly imitated, complex, products must be
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rare, and products have no strategically equivalent
substitutes.
Valued by the Customer
Nikes strategies are valued by customers; many want
to see improvements to minimize the environmental
footprint of large companies and help to transform
manufacturing. Customer also find value in companies
that focus on what is best for the consumers or at least
seen that way.
Imperfectly Imitated
These means that Nike's strategies cant be possible to
exactly copy them. This area they are lacking, many of
the sustainable innovation strategies they are using
can be copied. The one that will be harder to copy is
transforming manufacturing, since this involves
employees and how they work in the company and
what roles they play it will be hard for another
company to imitate the overall manufacturing of
sports apparel. Using new techniques to reduce the
environmental impact could be hard to copy, like
recycling waste material to make other products.
Complex
This deals with the interrelationship between various
skills and assets that Nike has. Are they creating a
system that is hard to follow and is complex when
satisfying the wants and needs of specific consumers?
The innovations they have in place are lacking in
Complexity, the skills and assets they have are very
similar to those of Adidas or other companies have
and it is hurting them.
Competitive Advantage must be Rare
To be rare means that Nikes products must have
attributes that gives them the ability to differentiate
from other in the market. Many of Nike's products are
similar to others in the market, and can perform the
same way. They are working with material technology
to improve shoes that are used in different terrains,
like fabric that is water resistant for places that are
rainy or super light for long runs. These innovations
could be considered rare, but is it bringing the
competitive advantage needed over other product.
Strategically equivalent Substitutes
Right now many of Nike's products have some kind of
substitute with all of their products. Sporting apparel
and shoes can easily be substituted with other types of
clothing or shoes. Also other activities are coming into
play and customers are not buying as much sporting
equipment, because they are finding other things to
do with their time.
Marketing Objectives and Strategic
Initiatives
To improve Nikes overall Market Position they need
to change the way theyre currently positioned in the
market. They use to be seen as the best brand and
reliable when it comes to purchasing sports apparel
and shoes. But as time goes on they are losing that
position and consumers see them as just as good as
other brands like Adidas and Under Armor. To get out
in front again they need to think differently and find
areas that are currently not being meet by consumers.
Like those in the business world, or those working in
rough working conditions.
Conclusion
Nike's position in the marketplace is not as strong as it
used to be and as time goes on they need to look at
their strengths and weaknesses to find how they can
remain a key player in the market. Nike is a
well-known and developed brand all over the world.
They sponsor many events and have a large marketing
budget to promote new and developing products.
They are known to have reliable products that are
durable and fitting for many athletes. They constantly
look for ways they can improve products and expand
into new categories like skateboarding. Because the
the millennial generations is setting such a huge trend
for the on the go lifestyle we recommend that Nike
capitalizes on this opportunity to come out with their
first line of business professional clothing.
Some of the weaknesses they are facing is they arent
seen as the only option any more. Many athletes
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theyre sponsoring are not worth the money they are
spending on them. Products they are developing like
the Nike fuel band are not taking off as hoped and
products in the snow gear category are not as strong
as they used to be.
To help Nike stay on top they need to leverage the
strengths of continual product improvement and
looking into new areas that will benefit the changing
generation. They still have a great brand and it will be
easy for them to enter into new areas they are not
currently reaching like business millennials. The
weakness they need to do away with are their snow
gear products. Items they are trying to copy currently
have a large portion of the market and Nike is not
gaining enough of that market to pay off what they
spent to develop it. They can also look at areas that
are not doing as well, like the fuelband and see if they
can make it better and differentiate it from their
competitors.
Popularity of going green
One can quickly observe while looking into a variety of
different industry a common trend: Going green.
Companies are trying to use less energy, be more
efficient, use less materials, or recycle material.
Consumers are becoming more conscientious about
protecting the environment, and therefore, companies
are providing the products to achieve that. Many car
companies are striving to make greener cars that will
run on electricity. However, as cities grow, there are
more and more regulations on parking. Add in the
amount of traffic with the increasing number of cars
and Ford Motors has jumped on a new opportunity;
Investing into the bicycle sharing market.52
As we looked into opportunities like this for Ford, we
see that this could be a great opportunity for business
professionals to use during their commute to work.
However, we noticed one major flaw in this pursuit. It
is not comfortable to commute in professional attire.

Chapter 4 Current business attire does not provide performance

for any active activities, and hardly provides any
comfort for the wearer, especially in hotter or more
humid conditions.
Recommendation Launch a
Business Professional Line of
Clothing- Nike Polish
As mentioned in previous chapters there are a lot of
opportunities that are open and ready to be used to
build These opportunities are based on trends that are
becoming more and more popular. Like that of (1)
being green, (2) wearing leisure clothing, (3) the on
the go lifestyle, and (4) the use of social media in so
many different ways. Nike has some products that are
cash cows and are reaching a wide number of
customers.

As marketers, in order to strive to predict the future

and understand where to steer you brand, it is
important to often look outside of your industry.
Athletic apparel companies needed to look outside of
sports to see that consumers wanted to use their
products for leisure. What will be the future for
athletic apparel companies? How else might
consumers want to use a performance and
comfortable clothing? How should Nike pivot? 52
https://media.ford.com/content/fordmedia/fna/us/en/news/
2016/09/09/ford-partnering-with-global-cities-on-new-transpo
rtation--chario.pdf
24

Recommendation- Nike Polish
In order to support the initiative to go greener, and
promote a more active lifestyle and commuting for
business professionals we see a significant opportunity
for Nike to produce a Business Professional
Performance line. The same materials used in their
athletic clothing and current golf lines can be used to
create business professional attire for men and
women that would support the active commuting
lifestyle.
This active professional attire called Nike Polish will
not only support the consumers in the logistics of
physically commuting to work, but will also create a
much more comfortable lifestyle. Working eight or
more hours in a day in a button up with slacks or a suit
can become very uncomfortable, especially in a humid
environment or hot office. Consumers have turned to
athletic companies for more comfortable leisure
clothing. Nike can also take advantage of this and
capture business professionals as customers with a
business professional performance line.
Mission Statement
To expand the market and gain customer in the
business community by offering comfortable,
breathable and professional clothing to active
professional millennials who want a stylish
professional look when working.
Changing Golf apparel
Although Nike begun as an athletic company,
branching into the business attire market will allow
Nike to extend their portfolio, as they continue to
succeed in the athletic industry. They will be able to
differentiate themselves while staying true to the Nike
name meaning Victory. Nike has stood for victory in all
areas. No matter what sport or activity. Nike is there
to help you become victorious. They have already
developed many articles of professional attire that are
currently in their golf line. Therefore, all they will need
to do is expand that line and market the clothing to
professionals.
Almost all of Nikes top competitors offer some time of
golf polo and pant. All of these products are marketed
to golfers, but are adored by business professionals for
the business casual look. By being the first to come out
with this product before their competitors they will be
one step ahead of their competitors in continuing to
improve the product. Nike and its competitors are all
paying less attention to these business professionals
and the golf line while focusing on other products. If
Nike can bring back that focus and have a division
focus on developing and transforming the golf line into
a professional line, Nike can be the first to market and
dominate the market to skyrocket ahead of its
competitors. Nike can use its classic marketing and
advertising touch but with a business flare to then
differentiate themselves as a better performance
product for every necessity of life.
Staying cost efficient
Nike has always been a cheaper option for high quality
products because their costs are lower than
competitors and will do the same in this market.
Designing, advertising and catering to the elite
professionals, but in a price range for middle class.
They can also continue using their economies of scale
to find top performing business professionals to
sponsor with their clothing. There are countless
opportunities for them to tell new stories of business
professionals, living an active, comfortable
professional life. They can advertise with new sponsors
or use athletes in their clothing. This can even provide
new partnership opportunities such as strengthening
their Apple relationship with the professional side of
their current Nike watch.
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Using top designers
With Nikes current success, they have the funds and
the relationships to hire top designers to create the
best looking clothing. They also have the research and
material background to create products directly
tailored to the needs of consumers. By creating sweat
wicking, breathable, flexible business suits, and button
ups, Nike will be able to quickly launch into the
professional attire environment with a huge
competitive edge over all the current competition of
comfort and performance.

This will create the perfect opportunity for Nike so that

when a consumer in any type of environment and
thinks Elite or Victorious they will think of Nike
helping them to get there.

26

Executive Summary of
Marketing Audit
Marketing Overview
The biggest challenge that Nike is facing is being able
to differentiate themselves from other companies that
are operating almost exactly the same way as they are.
Under Armor and Nike even have the same words in
their mission statements. Under Armor's mission is to
make all athletes better through passion, design and
the relentless pursuit of innovation. Nike's mission
statement is "To bring inspiration and innovation to
every athlete in the world." Both companies state that
their focus is on innovation. Aside from innovation,
almost all of the athletic apparel industries is creating
similar quality products with similar pricing.
This difficulty in differentiation has decreased sales
and opened doors for customers to find and chose
competitors products over Nike products. Products
that these companies have are identical and
customers can easily shop for similar goods for a
cheaper price among other companies. Nike needs to
differentiate itself from Adidas and Under Armor to
become stronger in the market.
The millennial generation is always living on the go and
looking for fashionable, comfortable and breathable
clothing both for play and work. This opens an
opportunity for Nike to meet this need. Nike has the
means to come out with a business professional line of
clothing that is significantly more comfortable and
breathable than other professional clothing. Nike has
much of the technology already needed to develop a
comfortable professional clothing line that will meet
the needs of these customers.
Vision Overview
Since the company began, Nike has always been true
to their name of the Goddess of Victory. Their focus
has been of eliteness. Nike is well known in each
sporting industry for creating elite products and
sponsoring the most elite athletes. With Nikes
experience within the golf industry, they have created
high quality products for golfers that many business
professionals have adapted. These are professional
looking products, made from athletic material that
provides high levels of comfort.
Because of the on the go lifestyle Nike needs to
come out with a line of stylish, breathable and
comfortable business professional clothing. With many
businesses and leaders encouraging people to be
green and reduce co2 emissions more people will start
biking to work. Right now we are seeing an increasing
trend in the amount of people who are switching to
biking to get to and from work. Nike would have a
great advantage in the market if they would be the
first company to come out with a business
professional. This clothing line will meet those unmet
needs of active millennials and athletic business
professionals that are seeking clothing that is
comfortable, low maintenance, and looks professional
for work at their business.
Nike already has some of the needed technology of
business like clothing through their current golf wear
line, with some effort, they can develop a new life that
looks more business professional. This active
professional attire will not only support the consumers
in the logistics of physically commuting to work, but
will also create a much more comfortable lifestyle.
Working eight or more hours in a day in a button up
with slacks or a suit can become very uncomfortable,
especially in a humid environment or a warm office.
Consumers have turned to athletic companies for
more comfortable leisure clothing. Nike can also take
advantage of this and capture business professionals
as customers with a business professional
performance line.
Our mission statement with this new product line is to
expand the market and gain customer in the business
community by offering comfortable, breathable and
professional clothing to active professional millennials
who want a stylish professional look when working.
We will encourage those who buy this clothing to Just
do it at work. This will help business professionals to
be confident in succeeding in the workplace as well.
27
 at an incredible rate, we recommend that Nike comes
out with their own line of business professional
Articulation of Key clothing. People want to look professional at work and
feel comfortable at the same time. With the
Recommendations and Plan of technology that Nike has already developed through
their golf wear and other clothing lines they can
Action change that into a new line of comfortable,
breathable, and stylish business professional attire.
Our recommendation is for Nike to bring on Just do it and change the professional world in a
stylists to help them use their current line of positive way making everyone more comfortable.
materials to develop a professional line of
business professional attire for men and
women. The target audience for these products will be
business professionals who are also athletes who can
then wear Nike on the court, and in the office. Nike
can specifically target millennials who are moving with
the trends of commuting and travel. Business
professionals who would fit this market perfectly are
sales professionals. Sales professionals are constantly
traveling for appointments whether in a car or plane. A
common trait that sales professionals often share is a
competitive spirit, just like athletes.

The high performance material that Nike uses in

their golf and other athletic lines provides high
comfort and breathability. This will allow workers to
commute whether in the car or on a bike comfortably
without the need to change into other attire. This will
also allow professionals who are traveling long trips via
car or plane to travel comfortably, with little wrinkling
in the material.

We recommend that Nike sponsor business

professionals who are athletes, or professional
athletes who turned to business. These sponsors can
talk about the comfort of the product, and what it
allows them to do. Nike can directly market to sales
professionals who are traveling and show the benefits
of high performance business professional attire.

With this business professional line, Nike can expand

their market by continuing their brand of victory and
eliteness by helping business professionals to be
comfortable and perform everywhere from ball court
to board room.

Conclusion
Based on the analysis Nike needs to differentiate
themselves from their competitors and close the doors
for substitutes. WIth the on the go lifestyle growing
28