ARAB ACADEMY GRADUATE SCHOOL OF BUSINESS – SMART VILLAGE

COMPREHENSIVE EXAM
May 2024
Congratulations on being one step away from earning your degree!
Dear Students, Graduate School of Business (Smart Village campus) wishes you; your family and your
loved ones to be all safe and well. Based on the online newly implemented system in alignment with the
government precautionary procedures a new assessment has been developed for your comprehensive
exam.
Please read carefully the deliverables below
The comprehensive examination is an open resources exam. It is a comprehensive case followed by six
questions based upon the program objectives. Please note that you will need a minimum of 60% to be
granted an overall grade of “Pass” and successfully pass your exam.
DELIVERABLES

 Date: Friday 31 may 2024

 Time: 10:00am
 Duration: 8 hours (plus one hour for prayers)
 Location: Smart Village Campus
 Format: Physical exam, you will receive a hard copy exam paper in the exam room, to be returned
at the end of the session
 Deadline of acceptance is Friday 7hpm; after which no paper will be accepted
 Based on the above you need to bring with you a laptop. (optional internet support, additional
electricity plugs)
 Exam cover page should include: comprehensive exam, December 2023, student name
 Papers without references will not be evaluated
 Papers should be typed, Times New Roman, font 12, please ensure titles and subtitles are font 16 -
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 Please close your answers in PDF
 Please make sure to return your exam only to the following address: exam.gsbsv@gmail.com
 Return email title should include: comprehensive exam, December 2023, full student name
 Ensure from administration that your email is safely received before leaving the premises.
 Please be informed that all exam papers returned will be subject for: plagiarism test, similarity test
and AI test. Any detection of AI will result in a direct F; it is strictly not allowed to use any AI tools
in your exam.

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 History of Nike: Company timeline and facts

Phil Knight started his business selling shoes from the trunk of his car — today, Nike is worth $140 billion.
Here's how it happened.

 By JACK MEYER AND LAURA RODINI; UPDATED: BY THE STREET; APR 17, 2024 6:53 PM
EDT

Swoosh. Nike’s logo looms large over the footwear industry. The uncontested titan of athletic shoes has
built itself up through high-profile endorsements, sleek designs, and PR campaigns that don’t shy away
from controversy. But the brand worn by Lebron James, Cristiano Ronaldo, and Michael Jordan didn't
come out of nowhere. Nike’s (NKE) history begins with a self-described average track runner and a coach
obsessed with the reflection of speed into design.

Who owns Nike?

The story of Nike starts with Blue Ribbon Sports in 1964. Back then, Phil Knight had just received his
MBA at Stanford following his graduation from the University of Oregon. This left him with two crucial
experiences that set the trajectory of his future.

Phil Knight meets Bill Bowerman. Rewind in history to Knight’s years at the University of Oregon, where
he ran for the school's track and field team. It was here that he met coach Bill Bowerman.

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Aside from an intensely competitive nature, Bowerman was obsessed with his runners having the best
shoes. He was always experimenting with different models — even going so far as to learn from a local
cobbler.

According to Nike, Knight was the first student chosen to try Bowerman's customized running shoes. He
was not a star athlete, which made him a good test subject for Bowerman's design.

Company legend has it that the shoes worked so well that Knight gave them to his teammate, Otis Davis
— and he went on to win gold in the 400-meter dash while wearing them at the 1960 Olympics.

1964: Blue Ribbon Sports is born

After the University of Oregon, Knight went through Stanford's MBA program. There, he wrote a paper
theorizing that the production of running shoes should move from its current center in Germany to Japan,
where labor was cheaper.

Knight got the chance to put this theory into practice shortly after his graduation in 1962. He took a trip to
Japan and struck a deal to export the popular Tiger shoe brand to the U.S.

Coach Bowerman supported Knight's venture, believing that German shoes were the best on the market but
that they weren't anything too special to be replicated or even improved on. The two struck a 50-50
ownership deal in their new company, Blue Ribbon Sports, which was established in Eugene, Oregon, on
Jan. 25, 1964.

When was Nike founded?

Knight initially sold Blue Ribbon Sports' new shoes out of his car when he got back to the States. It quickly
became clear that a demand existed for an affordable, high-quality alternative to brands like Adidas and
Puma, which dominated the market at the time.

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1965: Bowerman's new design makes waves

In 1965, Bowerman proposed a new shoe design to the Tiger shoe company. His design included support
via a cushioned inner sole, soft sponge rubber in the forefoot and top of the heel, a hard sponge rubber in
the middle of the heel, and a firm rubber outsole.

This design was a major success — and a source of contention between Blue Ribbon and its Japanese
supplier. It was dubbed the Tiger Cortez, and it hit shelves in 1967. The design was an instant hit thanks to
its comfortable, sturdy-yet-stylish design.

Around the time of its initial success, though, relations soured between Blue Ribbon and Tiger. Knight
claims that the Japanese company wanted a way out of its exclusivity deal with Blue Ribbon and sought to
sink the company, while Tiger claims to have discovered Blue Ribbon Sports selling their own version of
the Tiger Cortez under a new line of shoes they called "Nike."

1971: Nike is founded

Blue Ribbon Sports and Tiger formally split in 1971, and a lawsuit from Tiger followed. A judge eventually
ruled that both companies could sell their own versions of the shoe design, making it the only sneaker to
become a best-selling model for two different shoe companies. The Nike Cortez and the Tiger Corsair (now
sold by Tiger's modern incarnation, Asics) were both sales hits.

After the split with Tiger, Blue Ribbon Sports fully rebranded itself as Nike. Phil Knight initially wanted
to call the company "Dimension 6." Thankfully, Jeff Johnson got the inspiration for the name Nike after
seeing the name of the Greek goddess of victory in a dream. Next, the new brand needed its own logo.

Nike reached out to a design student at the nearby Portland State University, Carolyn Davis, to provide
sketches. The Oregonian reported that Phil Knight reluctantly settled on a swoosh design, saying, "Well, I
don't love it, but maybe it will grow on me."

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Davis charged $2/hour and received a total of $35 for the logo. But understanding the power that the logo
conveyed, Knight, who eventually warmed up to it, held a party for Davis, awarding her 500 shares of Nike
stock, speculated to be worth roughly $1 million today.

After formally incorporating on May 30, 1971, Nike, Inc. expanded upon the initial successes of Blue
Ribbon Sports. While thinking over breakfast about a way to give running shoes more traction, Coach
Bowerman saw the grooves in the waffle his wife made him and wondered how it would look inverted.

Not one to pass on an idea, Bowerman poured melted urethane into his waffle iron. Unfortunately, he forgot
to add anti-sticking agents, and it glued shut. Nevertheless, the idea had taken root, and with the help of
another waffle iron and presumably a better spray, Bowerman designed his ideal sole — and the iconic
"Waffle Trainer" was born.

This shoe was a major success for Nike, the first of many to come as the company maintained strong and
steady growth through its early days, culminating in its 1980 IPO, which made Knight and Bowerman very,
very rich.

Bowerman’s shares were worth $9 million; as the company’s chief executive, Knights are worth much more
— $178 million.

Since then, the company has only continued to grow, helped in part by a series of clever ad campaigns,
most famously the 1988 "Just Do It" slogan campaign (apparently inspired by “let's do it,” the last words
of convicted American murderer Gary Gilmore in 1977 before a police squad opened fire).

Nike’s biggest endorsements

The celebrity endorsements Nike has inked have proven even more powerful than its slogan. Nike struck
gold by signing athletes like Tiger Woods, Kobe Bryant, and Lebron James in the early stages of their
careers.

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By far the most lucrative endorsement Nike has ever had, both for the company and its sponsor, has been
with Michael Jordan. Spotting potential, Nike tried to swoop in for an endorsement from Jordan before the
start of his first season with as a pro in 1984.

Despite having never worn a pair of Nikes before and harboring hope for a deal with Adidas, Jordan ended
up signing on with Nike after a meeting in which they promised the soon-to-be star $500,000 a year for five
years, two die-cast Mercedes automobiles, and shoes customized to his specific requests.

The deal proved a smash hit for Nike, with Jordan quickly rising to superstardom and his shoe line, Air
Jordans, minting over $100 million in revenue by the end of 1985.

Air Jordans continue to be a cash cow for Nike. Despite sales declines in the mid-aughts, the brand still nets
the company billions of dollars more than 20 years after Jordan retired from basketball. In 2021, Nike netted
$5.1 billion from the line; Jordan pocketed 5% of that, or $255 million that year alone — swoosh.

Nike's milestones: A company timeline

1964: Phil Knight and Bill Bowerman found Blue Ribbon Sports.

1971: Cutting ties with Onitsuka Tiger (now Asics), Blue Ribbon Sports becomes Nike Inc., using the
swoosh logo created by Portland State University student Carolyn Davis for $35.

1971: Bowerman comes up with the iconic sole pattern for Waffle Trainers after putting rubber into a waffle
iron.

1972: Romanian tennis player Ilie Năstase becomes the first athlete to sign an endorsement with Nike.

1979: Nike introduces patented "Air" technology with new Tailwind shoes.

1980: Nike completes IPO with a price of 18 cents a share.

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1984: Nike signs Michael Jordan, launching the Air Jordan series.

1987: Nike drops an ad for its new Air Max shoes set to The Beatles' "Revolution," the first ad to use the
band's music.

1988: The first "Just Do It" campaign launches with an ad featuring 80-year-old running icon Walter Stack
running across the Golden Gate Bridge.

1989: The "Bo Knows" ad campaign, featuring baseball and football star Bo Jackson, is released.

1990: The first Niketown store opens in Portland, Oregon.

1991: Activist Jeff Ballinger publishes a report exposing low wages and poor working conditions in
Indonesian Nike factories. Nike responds by instating its first factory codes of conduct.

1996: Nike signs Tiger Woods.

1998: In the face of widespread protest, Nike raises the minimum age of its workers, increases monitoring,
and adopts U.S. OSHA clean-air standards in overseas factories.

1999: Nike co-founder Bill Bowerman dies at 88.

2002: Nike acquires surf-apparel company Hurley.

2003: Nike signs Lebron James and Kobe Bryant.

2004: Nike acquires Converse for $309 million.

2004: Phil Knight steps down as CEO and president of Nike but retains chairman role as William D. Perez
becomes the company's new CEO.

2008: Nike signs Derek Jeter.

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2012: Nike becomes the official supplier of NFL apparel.

2015: Nike becomes the official supplier of NBA apparel.

2017: Nike launches its first plus-sized clothing line.

2018: Nike unveils a new ad campaign featuring athlete and political activist Colin Kaepernick, garnering
a mix of public approval and backlash.

2019: A few days before the Fourth of July, Nike cancels the release of a sneaker bearing the 13-star
American flag of Betsy Ross on the shoe's heel. Reportedly, this decision came after Colin Kaepernick
privately voiced his criticisms of the design to Nike, seeing as the 13-star flag represented America during
a time of slavery and has been used in tandem with the Confederate flag by hate groups, including the Ku
Klux Klan.

2019: Nike announces it will stop selling its products on Amazon. It had embarked on a two-year test run
to see if doing so would limit counterfeits and redirect sales to its own channels; instead, overall sales
declined.

2020: Nike reports a 5% loss in sales in China due to the outbreak of COVID-19, the company’s first
decrease in six years. However, total online sales increased to $5.5 billion from $3.8 billion in 2019.

2020: John Donahoe is named CEO.

2021: Shares hit an all-time high of $172.49 on November 5, 2021, fueled by direct-to-consumer sales
growth, which effectively cuts out the need for a retail middleman.

2024: Nike uniforms at the Summer Olympics in Paris cause a stir, as female designs are criticized for
being too revealing (and further evidence of the sports industry’s sexism).

2024: Nike releases its Field General 82 sneakers, proving how what is old is new again.

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Nike's biggest controversies

Like most large, multinational companies, Nike has faced its fair share of criticisms and controversies, for
the most part relating to the environmental and social impacts of the popular sports apparel maker's
operations.

Working conditions & pay in overseas sweatshops

Nike has faced a long history of controversy over its labor practices. The company was founded on the
principle of finding cheaper labor to produce the same-quality goods and followed this principle unfailingly
— until it finally came back to bite them.

Nike's factories were initially in Japan, but they relocated to source cheaper labor in South Korea, China,
and Taiwan. As the economies of these countries developed, Nike again shifted, moving away from labor
in South Korea and Taiwan to focus on China, Indonesia, and Vietnam.

Not much was noted about this until activist Jeff Ballinger published a report in 1991 documenting the poor
working conditions of Nike's operations across Indonesia. This was followed by a popular article in Harper's
Magazine detailing the life of an Indonesian Nike employee who worked for 14 cents an hour.

Outrage fermented among the public, with protests against the shoemaker at the 1992 Olympics and
increased media scrutiny about the plight of sweatshop workers. This came at the same time the company
sought to expand its Niketown retail stores, resulting in mass protests.

With activism growing around college campuses, calls for boycotting the company, and pressure put on its
stars like Michael Jordan to denounce the brand, Nike made a concerted effort in 1998 to improve the labor
conditions of its factories.

These efforts included raising the minimum age among workers, increasing the monitoring of factory
conditions, and enforcing U.S. standards for clean air. This was followed by the creation of the Fair Labor
Association in 1999, an audit of roughly 600 factories between 2002–2004, and the public disclosure of all
of its factory locations in 2005.

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While reports of abuse at Nike factories persist, many human rights activists have acknowledged that Nike's
efforts have minimized the worst problems at these factories, and the public outcry today over the
company's labor conditions is a shadow of what it once was. Colin Kaepernick's Nike sponsorship

On Labor Day of 2018, Nike made a huge splash, tweeting a photo of NFL player Colin Kaepernick as the
new face of its brand.

The 49ers quarterback had become a lightning rod for controversy after being the first football player to
take a knee during the national anthem in protest of police brutality toward black Americans. He received
a mix of support and backlash from the public, with some calling him a hero and others criticizing his
actions as "un-American."

This controversy only intensified when Donald Trump added his own criticism of the protest. 49ers
management consequently did not renew Kaepernick's contract, and no other NFL team signed him.

Fittingly, the ad featured a black-and-white photo of Kaepernick's face with the text, "Believe in something.
Even if it means sacrificing everything," and the classic Nike slogan, "Just Do It."

Nike initially took some heat for this campaign, but it is largely seen as a smash hit, generating tons of buzz
and growing new audiences for the company. After suffering initial losses, Nike had posted $6 billion in
gains within a month — even winning an Emmy for its efforts.

Environmental concerns

While Nike has taken strides to increase its eco-friendliness, joining the Sustainable Apparel Commission
and implementing a number of reusable materials in its clothing, it still has a ways to go.

The primary environmental criticism following Nike has been its refusal to eliminate hazardous materials
from its supply chain. As pointed out by Greenpeace, this affects everything from factory workers to
waterways to consumers. The hazardous chemicals pollute the environment, threaten to poison those who
work with them, and allow a potential health risk to persist among users of Nike's apparel.

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Nike has claimed to be working toward eliminating these toxic chemicals, and it announced a complete
phase-out of PFC products in 2021.

What's Happening with Nike stock in 2024?

Nike’s stock has been seeing red since the beginning of 2024 as the company warned of single-digit revenue
declines as it made cost-cutting improvements as well as continued to iron out pandemic-related supply
chain snarls. In February 2024, the company announced it would be cutting 1,600 jobs, or 2% of its
workforce.

In its third fiscal quarter, the company reported that sales increased 3% from the same quarter in 2023 to
$5.07 billion, while overall sales were flat at $12.43 billion. China revenues rose 4.5% to $2.08 billion. In
comparison, Adidas posted its first annual loss in three decades

Analysts viewed these developments positively, raising their outlook on shares for 2024 from neutral to
buy. In addition, Nike CEO John Donahoe promised a “robust pipeline of innovation” at its Investor Day
in September.

"Our brand storytelling will leverage our athletes and sport moments to become sharper and bolder,
beginning with the Olympics this summer … And we're increasing our investment in wholesale to
help us elevate and grow the entire marketplace."

—Nike CEO John Donahoe, Q3 2024 earnings call, March 21 2024

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 NIKE IN THE NEWS

Nike CEO blames oddly specific problem for brand issues

The footwear and apparel company has been losing ground to its competitors.

 By The Street; JENA WARBURTON; APR 22, 2024 12:08 PM EDT

Blink and you might miss an important trend when it comes to the fashion industry. Thanks to the rapid
integration of social media by virtually all fashion brands – and the breakneck pace at which fans of fashion
use social media – trends or movements can come and go in the blink of an eye.

Whether its brands being showcased on Snapchat during New York Fashion Week, the metaverse hosting
its very own fashion week, or influencers showing off their latest styles on TikTok, it can be tough to keep
up.

This is especially the case with footwear. As athletes influencers build their own brands (and social media
presence), it's important for them to stay on top of what's considered cool to wear, and what may be a little
outdated. In fact, it's kind of a part of their jobs.

Currently, what's old is cool again. Vintage footwear styles like Adidas' Sambas and Campus sneakers are
everywhere from the high streets of London to college campuses in the United States. So-called dad
shoes – specifically New Balance's highly popular Unisex 530 sneakers – are almost always sold out in
stores and online.

So establishing a foothold for Nike (NKE) , which has historically specialized in sleek silhouettes and
bright colors, has been tough when neutral and chunky styles are now popular.

As a result, Nike has been struggling to gain back the enthusiasm its brand once enjoyed so steadily during
the earlier 2000s.

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Nike CEO identifies a problem

Some CEOs have called out Nike, claiming "they stopped a little bit bringing in new stuff,” per JD Sports
CEO Régis Schultz earlier this month, adding "shoppers get bored very quickly."

Aware that growth and imagination seem to be an issue at his company, Nike CEO John Donahue isolated
one particular issue that may be to blame, claiming the problem "is fairly straightforward."

Since the onset of the pandemic, Nike adopted a remote work policy that Donahue said hurt its competitive
edge.

“But even more importantly, our employees were working from home for two and a half years,” Donahoe
said in an interview with CNBC. “And in hindsight, it turns out, it’s really hard to do bold, disruptive
innovation, to develop a boldly disruptive shoe, on Zoom.”

Eager to right the ship, however, Donahue says the company has been working on a “bold, disruptive” plan
to churn out new products and hopefully reinvigorate excitement for the brand.

“So we realigned our company, and over the last year we have been ruthlessly focused on rebuilding our
disruptive innovation pipeline along with our iterative innovation pipeline,” he said. “So the pipeline is as
strong as ever.”

Nike plans a comeback

Nike stock is down 11% year-to-date, and in December the sneaker maker slashed its revenue outlook for
the forthcoming fiscal year, citing weaker digital demand in the U.S. and stronger headwinds in its key
Europe-Mideast-Asia region.

It also announced a $2 billion cost-cutting plan. In February, Nike laid off 2% of its employees. It has also
been working to streamline and simplify some of its lines.

But the sneaker maker is planning a comeback in 2024.

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It plans to make the upcoming 2024 Paris Summer Olympics an exhibition for some of its refreshed product
lines, specifically in the track and field category.

“We’ve done more to advance running than any brand in the world over the last 50 years and we continue
to lead with elite runners,” Donahoe added. “Innovation has always been what’s marked Nike in running,
as in other categories, and so we’re not just going to copy what other people do.”

Nike Kicks Off Multi-Year Innovation Cycle

By Business Wire; Tu, April 11,2024

New products fueled by insights from the world’s leading athletes, brought to life by computational design
and advanced manufacturing

PARIS, April 11, 2024--(BUSINESS WIRE)--Today, NIKE, Inc. (NYSE: NKE) extended its position as
the undisputed leader of footwear and apparel innovation by debuting a new line-up of products that
signaled a multi-year innovation cycle. Brought to life by the full power of digital capabilities and cutting-
edge technology, the company is delivering better, faster, more efficient solutions for athletes this summer
and opening a world of creative possibilities — including Nike's first sculpted, visible Air Zoom unit in the
new Pegasus Premium running shoe.

The proprietary, sculpted Air unit connects the heel and forefoot and uniquely contours to the natural profile
of the foot, delivering an entirely new springy, smooth sensation. Combined with ZoomX and ReactX foam,
the new cushioning system creates more energy return for everyday runners.

In addition, Air, Nike’s most revolutionary, ubiquitous and versatile cushioning platform, powers the
products Nike athletes will wear on the track, court and pitch this summer. Nike has optimized Air by
leveraging computational design and incomparable athlete data from the Nike Sport Research Lab to create
footwear that helps all athletes break barriers.

"For more than 50 years we’ve listened to and over-delivered for our athletes with the best of Nike
innovation. We always push the boundaries of what’s possible and take risks to help create the future of

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sport together," said John Hoke, Nike’s Chief Innovation Officer. "This summer, the difference maker is
the massive energy return that Nike Air delivers to athletes. Taking what we learned from our super-shoe
technology, we’re introducing new Nike Air Zoom shapes and sensations across all sports."

The best of Nike’s Air innovation for this summer will debut in the Nike Blueprint Pack, spanning footwear
for track and road racing, basketball, football, skate, breakdancing and lifestyle. The blue, white and orange
colorway is a nod to Nike’s co-founder, Bill Bowerman, and his obsession with enabling the best-possible
athlete performance.

Nike’s world-class athletes, including Dina Asher-Smith, Shelly-Ann Fraser-Pryce, Eliud Kipchoge and
Sha’Carri Richardson, revealed the brand’s 2024 federation kits, which are the most data-driven and
visually unified Nike’s ever produced. Based on 4D motion-capture data, with pixel-level precision and
specifically designed for each competition, the kits were inspired by the distinct identities and diverse
communities of each country and sport.

Nike outlines US$2 billion cost savings plan, misses sales estimates on weak demand

Published Fri, Dec 22, 2023 · 06:42 AM

The company’s wholesale business has been under persistent pressure as retailers keep a tight lid on
product stocks and cut back on orders. PHOTO: REUTERS

NIKE said on Thursday (Dec 21) it was seeking US$2 billion in savings over the next three years by
streamlining operations, after it missed quarterly sales estimates due to a weak North American wholesale
business and feeble recovery in China.

Nike CFO Matthew Friend said the sportswear giant was looking ahead “to a softer second-half revenue
outlook”, sending the company’s shares down about 6 per cent after the bell.

The company’s wholesale business has been under persistent pressure as retailers keep a tight lid on product
stocks and cut back on orders, hurting sales, despite strength in the brand’s own stores and online business.

Nike’s wholesale revenue fell 2 per cent to US$7.1 billion in the second quarter.

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The company is also undertaking a restructuring aimed at delivering up to US$2 billion in cost savings over
the next three years, including simplifying its product assortment, increasing automation and streamlining
its organisation.

“Nike’s talking about reducing the number of products ... perhaps the company feels there are too many
products that are not high-margin and not really generating significant sales,” David Swartz, senior equity
analyst at Morningstar, said.

Nike beats profit estimates as higher pricing pays off

Published Fri, Sep 29, 2023 · 06:23 AM

NIKE topped Wall Street estimates for first-quarter profit on Thursday (Sep 28) as higher prices of its
sneakers and apparel helped offset a hit from waning demand and persistent cost pressures.

The company’s shares were up about 2 per cent in extended trading.

Nike’s inventories also fell 10 per cent, indicating the company has been successful in reducing excess
product stocks ahead of the holiday season, quelling some investor concerns that it would be forced to offer
steep discounts.

The company’s strong brand would help it maintain its premium pricing even in a more promotional
environment, analysts have said, adding that as competition in sportswear heats up, its leading position and
innovative products would also help Nike outpace other brands.

That comes against the backdrop of US consumers having sharply cut back on discretionary spending,
which has prompted wholesalers to place fewer orders, denting business in North America, Nike’s largest
market, where revenue slid 2 per cent in the first quarter.

Meanwhile, in China, Nike’s most profitable market, revenue rose 5 per cent driven by strength in apparel,
but that was short of the 15.4 per cent jump expected by analysts, as consumers in the country pulled back
spending amid high youth unemployment and growing worries about the economy.

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Nike posted total revenue of US$12.94 billion in the quarter, missing analysts’ estimates of US$12.98
billion, according to LSEG data.

The company reported a profit of US$1.45 billion, or 94 US cents per share, beating estimates of 75 US
cents per share. REUTERS

Nike announces second phase of layoffs

By Digital 360 - Abbas Haleem | Apr 23, 2024

The company's layoffs are connected to a plan the retailer announced Dec. 21 in releasing results for its
fiscal Q2 ended Nov. 30, 2023.

Nike Inc. announced layoffs for 740 employees at its world headquarters in Beaverton, Oregon.

The Nike layoffs are connected to a plan the retailer announced Dec. 21 in releasing results for its fiscal
second quarter ended Nov. 30, 2023.

“The Company is identifying opportunities to deliver up to $2 billion in cumulative cost savings over the
next three years,” Nike said in a press release at the time. “Areas of potential savings include simplifying
our product assortment, increasing automation and use of technology, streamlining our organization, and
leveraging our scale to drive greater efficiency.”

Nike ranks No. 8 in the Top 1000, Digital Commerce 360’s database of the largest North American e-
retailers by online sales. It’s also the highest-ranking Apparel/Accessories retailer in the Top 1000.

In its fiscal third quarter ended Feb. 29, 2024, it reported that consolidated revenue grew to $12.43 billion
from $12.39 billion in the year-ago period.

FoxBusiness News, Feb 2024

Nike had approximately 83,700 employees as of May 31, 2023.

'The actions that we’re taking put us in the position to right-size our organization to get after our biggest
growth opportunities as interest in sport, health and wellness have never been stronger," Nike said in a
statement to FOX Business.

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Starting Friday, more than 1,600 positions will be cut as the company tries to increase its investment in
high-priority areas such as running, women's clothing and its Jordan brand, CEO John Donahoe told
employees, according to a memo seen by The Wall Street Journal.

A second phase of the cuts will be completed by the end of the quarter. Employees in stores, distribution
centers or on the innovation team aren't expected to be let go, according to the report.
FOOT LOCKER TEAMS UP WITH NIKE, JORDAN BRAND TO DELIVER THE CLINIC
AHEAD OF 2024 NBA ALL-STAR GAME
The company employed more than 83,000 people as of May 31, 2023.

"This is a painful reality and not one that I take lightly. We are not currently performing at our best, and I
ultimately hold myself and my leadership team accountable," Donahoe said in the memo.

To better compete with rivals, the chief executive said the company "must edit, shift and divest less critical
work to create greater focus and capacity for what matters most." The company noted that this decision isn't
about one quarter or near-term revenue but its ongoing plan to reinvest its savings to fuel its long-term
growth and create capacity to invest in the areas of greatest opportunities.

In December, the Oregon-based company announced a $2 billion cost savings plan after seeing weak
consumer spending, which it blamed on a "highly promotional marketplace with increased macro
headwinds, especially on digital."
Part of its cost-savings plan included simplifying the company's product assortment and increasing
automation and use of technology, as well as streamlining the organization.

At the time, the company noted that plans to streamline would cost between $400 million to $450 million,
largely due to severance expenditures.

Nike is among the latest in a growing list of companies that have cut jobs. Layoffs have mounted across
several industries, including tech, media and Wall Street.

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 Nike to cut 2% of workforce as sportswear giant seeks savings

Published Fri, Feb 16, 2024 · 01:00 PM

NIKE will slash its global workforce by about 2 per cent as the sportswear giant pushes on with efforts to
reduce costs to counter a weaker sales outlook and growing competition.

The Oregon-based firm did not provide the number of workers that will be affected, though it currently has
about 83,700 employees worldwide.

“The actions that we’re taking put us in the position to right-size our organisation to get after our biggest
growth opportunities as interest in sport, health and wellness have never been stronger,” Nike said.

The job cuts follow an announcement in December that the company is looking for as much as US$2 billion
in cost savings, including reducing its workforce and simplifying its product lineup as growing consumer
caution weighs on sales.

That sparked a slump in Nike’s shares, which have struggled to recover and remain down about 2 per cent
this year. The job cuts will occur in two phases, according to a Nike memo seen by Bloomberg News. The
first phase will kick off Friday and run into next week, while the second round will be completed by the
end of the company’s fourth quarter.

Nike sues New Balance, Skechers for patent infringement

Lawsuits accuse rival shoemakers of copying Nike's design and manufacturing methods

Published November 7, 2023 8:56pm EST

Nike, Inc. is suing competitors New Balance and Skechers, accusing the rival shoemakers of patent
infringement for allegedly copying Nike's method for making the top part of sneakers.

In a pair of lawsuits filed Monday, Nike accused New Balance and Skechers both of stealing its "Flyknit
technology," which the Oregon-based company says has been hailed as "the most groundbreaking sneaker
innovation in over 40 years."

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Nike claims it developed the Flynight method for designing and manufacturing shoe uppers over the span
of ten years, and its competitors are using it despite it being patented. The company is demanding that both
New Balance and Skechers stop using its technology, and is seeking damages.

NIKE ABANDONS PORTLAND STORE RE-OPENING AMID ‘THEFT AND SAFETY ISSUES’
Skechers told FOX Business it does not comment on pending litigation. Neither Nike nor New Balance
immediately responded to requests for comment.
In the complaints, Nike notes that it has sued several companies for using the Flyknit technology in the
past, including Adidas, Puma and Lululemon. Adidas and Puma settled those suits, while Nike's case against
Lululemon is still ongoing.

Ticker Security Last Change Change %

NKE NIKE INC. 94.00 -0.20 -0.21%

SKX SKECHERS U.S.A. INC. 59.65 +1.62 +2.80%

Nike's website states that its Flyknit technology "uses high-strength fibers to create lightweight uppers with
targeted areas of support, stretch and breathability."

Nike Starts speeding out sneakers that will shape its future

By Bussiness Times Published Mon, Apr 15, 2024 · 07:06 AM

NIKE picked the Palais Brongniart, the former home of the Paris stock exchange, as the venue for its most
high-stakes product launch in years.

On display behind the Corinthian colonnade, this past week were a barrage of new-product developments
that Nike hopes can reignite its fortunes after a tough year. There is a new Alphafly built for marathoners,
improved track spikes, boots for footballers and a new basketball shoe. But the main draw was the 41st

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iteration of its Pegasus shoes, the centrepiece of Nike’s running business, and a premium version that the
company is aggressively fast-tracking to market.

“Force and speed are part of our machine going forward,” Heidi O’Neill, Nike’s president of consumer and
marketplace, said. “We cut almost an entire year off of the innovation.”

These shoes, unveiled ahead of the Paris Olympics set for July, kick off a three-year product-development
cycle that will shape Nike’s future, and there is a palpable sense of urgency among top management at the
world’s largest sportswear retailer.

Nike has stumbled badly over the past several quarters, with a sales slowdown and inventory issues rattling
its operations. In December, chief executive officer John Donahoe laid out a plan to cut as much as US$2
billion in costs over the next three years, including layoffs that will slash 2 per cent of the company’s
workforce.

Wall Street has been concerned about demand for Nike shoes, worrying that it is over-reliant on older
models and is not releasing enough new goods quickly. Nike expects revenue to fall by a low-single-digit
percentage in the first half of its fiscal year, which starts in June. The stock is down 15 per cent so far this
year.

Nike pins hopes on Olympics in race to take back market share

By Business Times Published Thu, Apr 11, 2024 · 01:26 PM

NIKE is set to unveil new kits for the Olympic national teams it sponsors including the United States and
Kenya, seeking to bolster its credentials as a performance gear brand for top athletes as well as everyday
consumers.

After a long stretch of lacklustre sales, this summer’s Olympic Games in Paris offer a fresh chance for
Nike, the official outfitter of Team USA, to direct the world’s attention to its so-called performance
products such as running shoes.

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 The high-end shoes Nike will spotlight at the Olympics serve a relatively limited audience of amateur
runners willing to spend US$285 for the latest Nike Alphafly 3 model. That compares to US$250 for rival
Adidas’ equivalent Adizero Adios Pro 3.

Brands such as On Running, Hoka, and Lululemon are taking market share from Nike, while a trend away
from chunky basketball sneakers and towards low-profile “terrace” shoes such as the Adidas Samba is also
hurting the sportswear giant.

Nike warned three weeks ago that its revenue in the first half of its 2025 financial year would shrink and
said it would cut back on orders of established shoes such as the Air Force 1 as it tries to focus on new,
innovative products.

While Nike, with an annual revenue of US$51.2 billion in the year to May 31, 2023, is much bigger than
Adidas and Lululemon, analysts at HSBC expect its annual sales growth to lag those brands in 2024, 2025
and 2026.

Case Study: How Nike is Leveraging AI Across its Operations

By by AIX September 2023

Background
Nike, a global leader in sportswear and athletic footwear, has long been at the forefront of innovation and
customer engagement. In recent years, the company has made substantial investments in Artificial
Intelligence (AI) and other emerging technologies to transform not just its products but also its customer
experience, supply chain, and IT operations. This drive towards tech-enabled solutions has been especially
significant in the face of the global pandemic, which pushed consumers and businesses more towards digital
platforms. Nike has collaborated with partners like Cognizant to modernize its IT infrastructure, offering
both onsite and remote support across a wide range of hardware and applications. With a focus on
sustainability, customer engagement, and operational efficiency, Nike’s AI journey represents a compelling
case study in corporate innovation.

Key Takeaways
 Nike employs AI to enhance customer experience through hyper-accurate shoe fitting, personalized offers,
and virtual assistants.

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 Advanced analytics and AI-driven strategies have been adopted in Nike’s supply chain to improve speed,
accuracy, and sustainability.
 Collaboration with IT major Cognizant to bring in hyperautomation and AI into Nike’s technology
operations, aiming for improved service productivity and cost savings.
 Challenges include data privacy concerns, achieving 24/7 customer service accessibility, and ensuring the
sustainable use of technology.
Deep Dive: How Nike is Leveraging AI Across its Operations
Approach
Nike’s approach to AI is holistic, covering a wide array of applications from customer experience to supply
chain management. In customer engagement, Nike uses AI-powered apps that offer hyper-accurate shoe
fitting and personalized recommendations. The company also employs AI for deep customer analytics,
aided by its acquisition of Zodiac, a data analytics firm. On the supply chain side, Nike has integrated AI
and machine learning to predict product demand and to forward-position popular products, reducing lead
times and improving service quality.

Implementation
Nike has been pragmatic in its AI implementation. Customer-facing AI solutions include an app that
employs augmented reality and a 13-point measuring system for shoe fitting. In its supply chain, the
company has opened multiple regional distribution centers fueled by AI algorithms to meet localized
demand more effectively. Furthermore, through a five-year agreement with Cognizant, Nike is enhancing
its global technology operations. This includes multilingual IT customer service, deskside and dispatch
depot, as well as application and infrastructure support.

Results
Nike’s AI initiatives have been quite successful. The AI-powered apps have not only improved customer
relationships but have also provided valuable data for product design and inventory management. Nike has
also tripled its digital order capacity in specific markets thanks to AI-enhanced supply chain operations.
The collaboration with Cognizant is expected to bring new self-service capabilities, improve service
productivity, and offer significant cost savings.

Challenges and Barriers

While Nike has seen significant gains from its AI investments, challenges do exist. Data privacy is a
significant concern given the vast amount of customer data collected through various apps. The ambition
for 24/7 customer service through AI tools like chatbots also poses its own set of challenges, including

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maintaining the quality of service. Additionally, the drive for sustainability requires Nike to continuously
scrutinize its tech-enabled operations for environmental impact.

Future Outlook
As consumer behavior and technology continue to evolve, Nike is poised to further its AI capabilities. Plans
likely include the expansion of AI in customer service applications, increased automation in the supply
chain, and deeper collaborations with tech partners like Cognizant. Given its past performance and strategic
focus, Nike’s AI initiatives will undoubtedly continue to play a significant role in shaping both the company
and the broader retail industry.

Conclusion
Nike’s journey in AI represents a well-rounded strategy that touches multiple facets of the business, from
customer experience to supply chain and IT operations. By focusing on delivering personalized experiences,
optimizing operations, and tackling challenges head-on, Nike serves as a textbook example of how AI can
be effectively implemented in a large, global enterprise. Its efforts in AI have not only improved its bottom
line but have also set the stage for future innovations that will likely continue to redefine the retail
landscape.

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 HRM Question

Question 1:
As indicated in the case, Nike had gone through many downzoning processes. Discuss the downsizing
process's advantages and disadvantages, indicating its impact on Nike’s competitive advantage.

Marketing Questions

Question 2:
Nike's "Just Do It" campaign is one of the most successful advertising campaigns in history. It
wasn't only about selling shoes and sportswear. It was about motivating people to be their best selves and
to push beyond their limits. Analyze the “Just Do It” campaign and explain why it’s so successful.
Question 3:
How does Nike segment its marketing campaigns to reach different demographics? And does Nike consider
behavioral segmentation in its marketing strategy? Also advise future technologies (e.g., big data, AI) to
enhance its segmentation strategy?

Strategic Questions

Question 4:
The Covid-19 experience has changed the lives of the organizations around the world. Based on your
understanding of Nike’s strategic management practices, why and how did the covid-19 influence their
choice of strategy? Please explain.
Question 5:
Despite the volatility of the Fashion industry and the trend concept, Nike CEO clearly states: “Innovation
has always been what’s marked Nike in running, as in other categories, and so we’re not just going to copy
what other people do.” Today Nike is laying off, restructuring, increasing prices, investing in disruptive
innovation and fueling AI. While competition is going vintage they are holding on their legacy of innovation
and change. In the light of the Nike’s current internal and external environment, is this the right
strategic decision? In both case yes or no please justify your answer using scientific methods and
tools.

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 Finance Question

Question 6:
The following is a table (1) that summarizes some selected financial ratios of Nike Co. for the three recent years
from 2021 till 2023 and Industry Average:

Table (1) Nike Co. Selected Financial Ratios and Industry Average

Industry 2023
Selected Financial Ratios 2022 2021
Average

Current ratio 2.5689 2.7228 2.6294 2.4814

Gross Margin 38.4867 43.5246 45.9837 46.5657

Operating Margin 12.1464 11..5489 14.2903 15.5755

Pre-Tax Profit Margin 8.8632 12.1073 14.2389 14.9558

Net Profit Margin 9.68 9.8891 12.8765 12.8764

Total Assets Turnover 0.710 1.3647 1.1585 1.1801

Receivable Turnover 14.870 12.3982 10.0086 9.9794

Days Sales in Receivables 45.670 29.4397 36.4687 36.5786

ROE – Return on Equity 43.390 36.2039 39.5655 44.8578

ROA – Return On Assets 4.570 13.5088 14.9947 15.1749

Debit / Equity Ratio 0.450 .6379 .6117 .7374

Operating Cash Flow Per Share 1.386 0.5001 -0.9155 2.575

Given some selected financial ratios of Nike Co. Analyze different dimensions of the company’s financial
health along with the recommendations about its major strengths and weaknesses. [Don’t limit your
analysis to only a description of what has increased or what has decreased without providing the
meaning/analysis of that].

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