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Nike Case Study
MRKT 1001
Professor Fidgeon
26 January 2017
Situational Analysis:
Mike Parker, the CEO of Nike, promised to boost their revenue from 20 billion dollars to
50 billion by 2020 (Lashinsky, 2016). Parker, being one of Nike’s earliest out of college recruits,
has had eyes on him for almost forty years. Phil Knight, a co-founder and chairman of Nike, and
Parker work back and forth to continue the success of the athletic wear empire. Since Parker’s
time as CEO, he has surpassed sales against competitors such as Adidas and Lululemon. From
the years 2006-2015, Nike’s stock price has increased by 505% (Lashinsky,2016). Being the
worldwide leader in athletic shoes including basketball, running and soccer styles; plus,
maintaining 62% of the united states shoe industry sales, Nike is #1 (Lashinsky, 2016).
The brand is successful not only because of Parker, but because of the work ethics he has
inflicted behind the scenes. The inventory management dealing with retailers, the ability to sell
the product, and commitment to technology all contribute to the global success. Parker is also a
massive design influencer for the brand. He is constantly observing his surroundings and art
work, whether it be in his office or the world, for design inspirations. He is involved in the brand
and not an extroverted spokesperson. Parker, although introverted, has proven to be a strong
leader for the brand. Being familiar with the company and the way it works, Parker can approach
those who lead with questions that will intrigue them to find the answers on their own, therefore
intercepting different creative and inspiring opinions. Instead of a one path mind that controls the
outcome of products, this technique allows for collaboration and creative freedom.
A marketing approach that has improved Nike’s sales by 70% is the grouping by sport
instead of region (Lashinsky, 2016). Instead of appealing to an entire geographic location, Nike
will focus of the sport apparel at hand. Meaning that they take the need of a specific loved sports
apparel over the appeasement of an entire location. Also, Nike’s dedication to promotion is top
dollar. They spend more money than any competitor to have their logo on display. Sponsoring
numerous globally known outlets has proven to increase their sale rates.
Nikes take on technology is also a huge part of their success. Rather than sitting in the
shadows waiting for another brand to make technological advances, they are on the forefront of
this movement. Spending years of time and millions of dollars to have their brand as advanced as
possible, Nike is ahead of the game in apparel technology, digital marketing and branding.
Between studying the movement of professionally endorsed athletes, investing in 3-d printing,
and working with advanced digital companies, Nike advances their product at a constant rate.
Although competitors do exist, Nike is the leading company in global sportswear.
B. SWOT Analysis

Mark Parker has been a successful asset to Nike since he joined in 1979
1. He was recruited out of college and joined the design outpost
2. Soft-spoken shoes designer, who is now CEO and making strides
in expanding Nike
3. Will be promoted to chairman after Phil Knight’s official

Parker has more than doubled Nike’s sales

Nike is the world leader across athletic shoe categories
1. Running, basketball, and soccer are the major categories lead
exceptionally in

Has 62% of share in the U.S. athletic shoe market
1. Skechers who has the second highest percentage of share, has 5%

Has exceptionally fast growth
1. Annual sales growth of 8.5%, with a target of 10% growth
2. 11% of sales in 2015 ($3 billion) was printed profit
3. Technological growth in design, marketing, manufacturing, and

Has fought off competition and has entered a new level within the industry
1. Lululemon has assumed Nike’s former challenger

Has a strong product line that has cash cow divisions
1. Jordan shoe line and Converse and Hurley sportswear labels

Phil Knight, co-founder and chairman is 77 years old
1. Did not show up to Nike’s biannual meeting for investors this past
2. Goes long periods of time without being in contact with someone
in the company, particularly his CEO Parker

William Perez, who was hired when Knight retired, lasted less than one
1. When he was hired he was Parker’s superior, who has since taken
over this position

Women’s shoes and apparel account for 20% of revenue

Nike’s FuelBand fitness tracker was discontinued last year
1. Was not a core product, but is willing to keep integrating trackers
into products

Introverts are typically not in executive roles like CEO
1. Though Parker is doing extremely well, Apple’s CEO Tim Cook is
also showing the industry how well introverts work within this

Expanding online sales by marketing through social media
1. Multiple social media platforms can provide opportunity to
promote online sales by directing consumers to their websites

Offer customized items including apparel and accessories
1. Many companies, including Nike, offer customized sneakers

Athletic companies can expand into dress clothes, dress shoes and
d. Threats

Under Armor is a rival with athletic sponsorship
1. Stephen Curry of Golden State Warriors and golfer Jordan Spieth

The athletic industry is highly competitive
1. If one company gets a hold of new technology before another, they
are already at a disadvantage

Retailers sell products at a lower price than directly through company
1. Allows for consumers to shop until they find a better deal
2. Companies can not control if a retailer lowers their prices, even for
a day, and makes the sale
D. Problem Statement
While Parker has doubled revenue for Nike, his promise to raise revenue to $50 billion by
2020 seems very challenging and uncertain, therefore, they must adapt.
D. Development of Alternatives
1. “Web sales increased 55.1% to $1.19 billion from an Internet Retailer estimated $767.0
million in fiscal 2014.” (Mark Brohan) Internet sales growth will be an indicator if an
increase to $50 billion is feasible. The 250% growth expected by 2020 will need to be
helped by improved online sales first and foremost. In 2017, sales are increasingly being
made by online retailers. The ease of purchasing online is magnificent and simple tricks
can help increase online sales including coupons for return purchases and a “products you
may also like” section before checking out and paying for goods. This will increase the
total of each order. That extra profits will add up.
2. A great alternative to spike current sales would include introducing specialty clothing
which could include a line of dress clothes including suits and tuxedos. A name like
Nike would break into this market remarkably easy. Comfortable suits tailored to
“athletes” or “anyone with a body” as Nike suggests (Lashinsky, 2016), would be an
incredibly successful line. This line could include more items such as slacks, shirts,
underclothes, ties, cufflinks, and other accessories that would both make the customer
look and feel great, but also expand further in the clothing and accessories industry. Also,
Nike’s sales of women’s clothing, accessories and equipment only made up 20% of their
business (Lashinsky, 2016). Having more women purchase products can be a massive
help to Nike, but they must market more to women than they have in past years. They
could start a marketing campaign to drive sales for female’s merchandise. Nike could
cater to certain styles of shoes to empower women’s causes such as breast cancer
awareness, women’s marches, and other athletic events. Sponsorships for causes would
also drive business.
3. If Nike expanded its role in having corporate social responsibility to do more for the
communities they are currently in, more people will identify with the brand. Using
observation, people know that many who identify with Nike, most likely do not identify
with other brands as strong. CSR can cost a lot of money to Nike, so we would suggest
making very modest investments to get the most out of every dollar. This investment
could have large returns if it reaches the right people. Nike should start backing causes
that are hot in the media, because they could capitalize off the free publicity.
4. Nike should be taking advantage of all the stores who want to buy a lot of merchandise in
different areas. Nike previously was very picky with what types of products were sold to
different stores. An example was when the article spoke about a skate shop near a mall in
England that Nike would send skating equipment, but would not send basketball gear.
This helped Nike sales at the mall, but the skate shop missed possible
revenues. (Lashinsky, 2016) This may help other stores that are focused on certain
sports, but it could be affecting sales negatively because maybe a customer would have
bought more Nike gear at the skating store. Their “category offense” approach
(Lashinsky, 2016) has boosted sales for individual stores, but having more Nike products
in more places will affect sales positively.
E. Recommendations
Nike is in a great position to continue their trend of sales and operations excellence, however,
reaching their goal of $50 Billion by the year 2020 is a very ambitious target. They have many
avenues to improve sales and meet their goals, but need to work quickly because time is of the
essence. Nike must make modest and smart investments in capital to ensure gains and should
focus on low, or “no cost” marketing such as publicity and public relations. Nike must grow
internet sales exponentially to reach their goals, they should be reaching out to more online
retailers and work on increasing amount of money per order by taking advantage of tricks that
will increase order size.
By creating lines of specialty clothes such as dress clothes and boosting sales of women’s
apparel and accessories, Nike will gain an advantage by selling more items that they historically
have sold none of or, or less of. Improving current CSR will also drive sales by increasing the
amount of customers who identify with the brand. Finally, Nike should stop being picky with
who they sell to. An individual Nike store in England received a 20% sales boost by not having
some products in a skate shop near it (Lashinsky, 2016), however the skate shop lost out on sales
and Nike lost sales for those folks who would have purchased a product had it been in the skate
shop. By amending current actions and following the above ideas, Nike will see the incredible
growth it is now seeking.
Works Cited
Lashinsky, Adam. “Nike’s Master Craftsman.” N.p., 12 Nov. 2016. Web.
Mark Brohan Research Director. “Nike Annual Web Sales Top $1 Billion for the First Time.”
Nike Annual Web Sales Top $1 Billion for the First Time. Internet Retailer, n.d. Web. 24 Jan.

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