UNIVERSITY OF NORTHAMPTON FOREIGN TRADE UNIVERSITY

SCHOOL OF BUSINESS HO CHI MINH CITY CAMPUS

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FINAL ASSIGNMENT

Module: APPLIED NUMERACY FOR BUSINESS

Code: AAF020-1

ANALYSIS
Student: Nguyễn Thanh Hoàng FOR EXAMINERS ONLY
Student ID: 2312459011 Grade (in number):
………………..
Cohort: K61NOA
Grade (in words):
Semester: II
………………..
Academic Year: 2023-2024 Examiner 1
Headteacher: Lê Trung Thành (Signature & Fullname)
Submission Date: 15 April 2024 ………………..
Examiner 2
Student’s Signature: Hoang
(Signature & Fullname)
………………..

Ho Chi Minh City, April 2024

UNIVERSITY OF NORTHAMPTON FOREIGN TRADE UNIVERSITY
SCHOOL OF BUSSINESS HO CHI MINH CITY CAMPUS
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FINAL ASSIGNMENT

Module: APPLIED NUMERACY FOR BUSINESS

ANALYSIS

Student’s Full Name: Nguyễn Thanh Hoàng

Student ID: 2312459011
Cohort: K61NOA
Semester: II Academic Year: 2023-2024
Lecturer: Lê Trung Thành

Ho Chi Minh City, April 2024

STATEMENT OF AUTHORSHIP
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 Except where reference is made in the text of the mid-term assignment, this
assignment contains no material published elsewhere or extracted in whole or in part
from an assignment that I have submitted or qualified for or been awarded another
degree or diploma.
No other person’s work has been used without due acknowledgment in the mid-
term assignment.
This mid-term assignment has not been submitted for the evaluation of any other
modules or the award of any degree or diploma in other tertiary institutions.

Ho Chi Minh City,

April 2024

Nguyễn Thanh Hoàng

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 ii

TABLE OF CONTENT
S

STATEMENT OF AUTHORSHIP...............................................................i
TABLE OF CONTENTS................................................................................ii
INTRODUCTION...........................................................................................5
[Task 1] Explain the changes in net income over time and discuss the
possible causes for these trends......................................................................5
[Task 2] Determine the relationship between revenue and marketing costs.
Discuss any possible limitations to this regression analysis.........................7
[Task 3] Compare the revenue of Nike, Adidas and Puma over time.
Discuss and explain the possible reasons for Nike’s dominance in the
footwear and apparel industry.......................................................................9
[Task 4] Analyze and explain the changes in the number of employees over
time. Discuss the potential causes for these trends.......................................11
CONCLUSION................................................................................................11
REFERENCE:.................................................................................................12

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INTRODUCTION

Nike Inc is a multinational corporation mostly known for its sportswear, footwear and
being the world's largest supplier of athletics shoes. And over the years since the 1980s till
2024 this brand still remains as the top choice for sportswear and shoes to the public.
Because of that the corporation had amassed billions of dollars in net income every year,
the purpose of this paper is to analyze Nike Inc income from 2005 to 2023.

[Task 1] Explain the changes in net income over time and discuss the
possible causes for these trends.

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Based on the data, from 2005 to 2008, Nike had a steady rise in its net income until 2009
the apparel revenue dropped significantly with a drop of 396 millions dollar in net income
due to challenging market conditions and a shift in strategies to optimize the product
assortment. The challenge was Nike Inc was affected by the financial crisis in 2007 to
2008. With the decrease in the consumer spending and cost of raw material increasing
during the recession Nike suffered a devastating hit to its stock with the pre crisis peaking
at around 13 $ to less than 9$ when the market bottomed out in 2009. Nike recovered its
stock and revenue in 2010 when the economy recovered and its net income sat at 1900
millions dollars which is 413 millions dollars more than when the market bottomed out in
2009.
From 2010 till 2019, Nike had a steady growth in its revenue and net income per year only
in 2018 when the brand was affected by the Tax Act, which offset the strong revenue
growth with a decrease of 54 percent to $1.9 billion.

In 2020, Nike suffered from 2 different crises: the corona virus and the oil price war.
During these crises when many countries in the world start quarantines, leading to
consumers not having the need to go outside as much so consumers do not have a need to
buy Nike products as much. Inadition to the pandemic the oil price crash does not help
with Nike's situation and with the shipping of good prices increasing and being more
limited Nike took a big hit to its revenue. Nike net income that year dropped significantly
compared to the previous years with a 1490 millions dollar drop in net income. As the
economy recovers in 2021 and a rise in demand and Nike shifting their business model to
be more cost efficient and E-commerce growth. In 2021, Nike net income grew
exponentially making 3188 millions dollar more than when the pandemic started and 1698
millions dollar more than in 2019 before the pandemic.

Nike net income continued to increase and peaked in 2022 at 6046 millions dollars until
the Ukraine war in 2022 started with the Russia sanction taking effect on the world

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economy. Making Nike net income decrease by 976 millions dollars compared to 2022 in
2023.

[Task 2] Determine the relationship between revenue and marketing

costs. Discuss any possible limitations to this regression analysis.

Without a good marketing campaign there would not be a good sale that year and Nike is
infamous for having great marketing campaigns with effective celebrities and influencer
endorsement. Even though marketing is closely related to the brand revenue the same can
not be said for the marketing cost and revenue. A good marketing campaign does not need
to be expensive. From the data we can see that Nike tries to limit the amount of expenses
for marketing to only be around 3 to 4 billion dollars a year. And with the rise of social
media, advertising now costs less and still is effective. In the early days of the internet and
social media, Nike spent 3 billion on advertising in 2014 and made almost 28 billion
dollars in revenue for the following year. This number would only scale up as the
technology and internet slowly get more advanced. From 2014 till 2017, the revenue grew
steadily in billions while the cost for marketing is still relatively the same, only increasing
by millions.

In 2018, a new social media platform started to rise globally which is TikTok. Since then,
advertising has never been easier and as effective. TikTok's ability to reach a more diverse
audience and are the most popular social media for the current generation is perfect for
Nike's goal of reaching to every audience of every age. In 2020, the revenue took a slight
dip because of the pandemic and the oil price wars affecting the brand stock but nothing
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too significant for the spike in revenue in the upcoming years. By 2023 Nike revenue
peaked at 51 billion dollars, almost double the revenue in 2014 while the marketing only
cost 1 billion more than in 2014.

The graph shows a positive linear regression relationship between the two variables of
Nike’s marketing cost and Nike’s revenue. The limitation of this scatter plot shows that the
marketing cost independent variable affected Nike’s revenue a dependent variable but in
reality other factors might come into play in affecting the revenue like the economy or any
scandal about Nike. Another limitation is the sample size, a small sample size can affect
the accuracy of the graph, like having too many outliers making it hard to determine the
relationship between variables.

[Task 3] Compare the revenue of Nike, Adidas and Puma over time.
Discuss and explain the possible reasons for Nike’s dominance in the
footwear and apparel industry.
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Even though Nike was founded much later than Adidas and Puma, Nike was still able to
rise on top and assert dominance as the more popular and have a stronger brand image in
the public eyes and most of the time Nike revenue is more than both Puma and Adidas put
together. Nike's main market area is in North America, successful for marketing strategies
which were groundbreaking and culturally resonant with its customer. And if you have a

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good media presence and solid reputation in North America it can translate well to other
parts of the world.

Adidas has had steady revenue growth throughout the years but until today is still nowhere
near the size of Nike with Nike making 15.9 billions more than adidas in 2022. Nike
mainly focuses on being the best footwear supplier in the world but Adidas still dominates
the European market as the number 1 sportswear manufacturer and only are second in the
world after Nike.

And in last place, one with the slowest revenue growth rate is Puma. While Puma still have
a steady revenue growth throughout the years it still fails to compete with Nike in hype and
popularity because Puma brand image and marketing is relatively weak compared to Nike
and Adidas.

Nike's ability to connect and understand a diverse range of customers is also one of the
reasons for its success. Nike knows how to effectively use influencers in their marketing
campaign to create a better brand image and connect with its audience like how they chose
Colin Kaepernick as the face of Nike campaign while he was protesting against police
brutality giving the brand 1400% in social media attention and engagement.

Nike’s slogan “Just do it” a simple yet direct and powerful statement as a slogan create
Nike an image just like an athlete pushing themself to their limit and defy any odds. The
“Just do it” slogan can create a range of emotion from the consumer, these words of
encouragement to pursue their dream is all Nike needed to create a strong bond between
brand and audience.

[Task 4] Analyze and explain the changes in the number of employees

over time. Discuss the potential causes for these trends.

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From 2009 to 2011, the economy is still recovering from the recession in 2008, Nike had to
use some cost-cutting measures like, reducing the workforce or reducing pay to recover
from the recession.While Nike is still expanding and opening more stores worldwide
which explains why the number of employees does not increase significantly.
From 2012 to 2016, Nike has completely recovered from the recession and grew
exponentially with more stores around the globe and entered a huge market like China
which requires much more manpower to properly operate. And the desire for job
increasing comes an increase of 32700 employees since 2011.

From 2017 to 2023, the number of employees increase slow down with the brand having
increased 13000 employees since 2016. This was mainly because the brand suffered many
tragedies during this period like covid where they had to lay off thousands of employees
for cost cutting reasons and decrease in number of consumer visit stores because of the
pandemic. The brand was able to operate properly with the increase in retail stores and
small increase in the number of employees, mainly because Nike started to invest heavily
in digital capabilities and e-commerce.

In 2023, Nike had around 1023 retail stores worldwide and 54 offices worldwide and 1
headquarter in Oregon USA. These numbers explain why Nike has a massive amount of
employees worldwide.

CONCLUSION
This was an analysis of Nike Inc revenue, economy through statistic and graph, how Nike
remained on top as the best in the industry throughout the years since 2005 till now, how
the brand number of employee change throughout the years. Nike itself had already
dominate the shoes industry to further improve Nike could try to dominate the fashion and
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clothing industry and collaborate with other brand to both reinforce Nike image and gain
more revenue from new customer.

REFERENCE:

P. Smith (2023),Nike's net income worldwide from the fiscal years of 2005 to
2023,Statista,https://www.statista.com/statistics/241685/net-profit-of-nike-since-2005/

D. Tighe,Global revenue of adidas, Nike and Puma from 2006 to

2022,Statista,https://www.statista.com/statistics/269599/net-sales-of-adidas-and-puma-
worldwide/

NIKE, Inc (2009), NIKE, INC. REPORTS FISCAL 2009 FOURTH QUARTER AND
FULL YEAR RESULTS, Investor. Nike, https://investors.nike.com/investors/news-events-
and-reports/investor-news/investor-news-details/2009/NIKE-Inc-Reports-Fiscal-2009-
Fourth-Quarter-and-Full-Year-Results/default.aspx#:~:text=Apparel%20revenue%20was
%20down%20significantly,5%20percent%20to%20%24375.7%20million.

NIKE, Inc (2010), NIKE, INC. REPORTS FISCAL 2010 FOURTH QUARTER AND
FULL YEAR RESULTS, Investor. Nike, https://investors.nike.com/investors/news-events-
and-reports/investor-news/investor-news-details/2010/NIKE-Inc-Reports-Fiscal-2010-
Fourth-Quarter-and-Full-Year-Results/default.aspx#:~:text=Fiscal%202010%20revenues
%20down%201,diluted%20EPS%20up%207%20percent

NIKE, Inc (2018), NIKE, INC. REPORTS FISCAL 2018 FOURTH QUARTER AND
FULL YEAR RESULTS, Investor. Nike, https://about.nike.com/en/impact-resources/nike-
inc-reports-fiscal-2018-fourth-quarter-and-full-year-results

NIKE, Inc (2020), NIKE, INC. REPORTS FISCAL 2020 FOURTH QUARTER AND
FULL YEAR RESULTS, Investor. Nike, https://investors.nike.com/investors/news-events-
and-reports/investor-news/investor-news-details/2020/NIKE-Inc-Reports-Fiscal-2020-
Fourth-Quarter-and-Full-Year-Results/default.aspx

NIKE, Inc (2021), NIKE, INC. REPORTS FISCAL 2021 FOURTH QUARTER AND
FULL YEAR RESULTS, Investor. Nike, https://investors.nike.com/investors/news-events-
and-reports/investor-news/investor-news-details/2021/NIKE-Inc.-Reports-Fiscal-2021-
Fourth-Quarter-and-Full-Year-Results/default.aspx

Trefis (2020) , 2008 vs. 2020 Crisis Comparison: How Did Nike Stock Fare During
Coronavirus Crisis Compared to S&P 500?,
https://www.trefis.com/data/companies/NKE/no-login-required/6RcJnHoG/2008-vs-2020-
Crisis-Comparison-How-Did-Nike-Stock-Fare-During-Coronavirus-Crisis-Compared-to-S-
P-500-#:~:text=Drawing%20lessons%20from%20the%202008,its%20approximate%20pre
%2Dcrisis%20peak.

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PV Vyshnavi, Jeenal Jain (2023), Nike vs Adidas: Who is Leading the Market?,
https://startuptalky.com/adidas-vs-nike/

Brand vision insight (2024), How Nike Became the Leading Force in the Sports
Industry,https://www.brandvm.com/post/nike-marketing

Chad Wyatt (2023), The Power of Three Words: Nike's 'Just Do It' and the Evolution of
Marketing Innovation, Linkedin, https://www.linkedin.com/pulse/power-three-words-
nikes-just-do-evolution-marketing-innovation-wyatt

IRS (2017) Tax Cuts and Jobs Act: A comparison for

businesses,https://www.irs.gov/newsroom/tax-cuts-and-jobs-act-a-comparison-for-
businesses

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