Investigating the Causes of the Decline in Nike Essay Example

lower demand during the last quarter, which consisted of three colder months when warmer clothing was in higher demand.

The recent losses of Nike may be attributed to the failure of its analysts to consider seasonal changes in consumer preferences, resulting in the production of unsought-after goods and unsatisfactory profits. Various solutions exist to help the company recover from its financial slump.

Implementing a new line of clothing, a new advertising campaign, under-predicting sales for last quarter, and selling new shares are all viable solutions that can be executed separately or in tandem. One method of forecasting future performance involves analyzing past sales and records to predict how the firm will behave in the forthcoming quarter. These predictions are then made accessible to both current and future investors. Positive projections, indicating robust sales and a high volume of orders, are likely to attract investment, while negative projections may deter investment.

If Nike instructs its analysts to intentionally under-predict expected sales, they could benefit in the long run. With lower predicted profits, investors won't anticipate earning big profits. However, since these are underestimates, investors will receive more than expected. As a result, Nike shareholders will be content at the end of the fourth quarter, while other investors will see profit potential, driving Nike stock prices back up. Additionally, Nike clothing is fashionable and in demand during its "A Nike Season" campaign, especially during spring when people become more active and eager to buy sporting apparel and accessories. This presents a great opportunity to launch a new ad campaign promoting new products or designs.

Nike has the opportunity to declare summer as their season and showcase new designs for shorts,

t-shirts, and swim-wear through an advertisement. In addition, the NCAA Finals are set to take place on March 31 in Atlanta, providing a chance for Nike to promote its products and connect with consumers. As the NCAA basketball tournament occurs during March, Nike's sponsorship for players like Michael Jordan and Vince Carter makes basketball shoes a suitable product line for the company to feature.

The Kansas team is highly competitive in the NCAA championship and has a loyal following. Instead of sponsoring the entire team, it may be more financially practical to sponsor an individual player. John Gooden, a standout on the team, is favored for a promising career in the NBA. Therefore, Nike could benefit from designing custom shoes for Gooden and signing him as an endorser.

Nike's shoes alone may not suffice, as American consumers have a penchant for casual clothing and thus, the company should contemplate introducing a new line of apparel. The design of this line of clothing should blend Nike's athletic touch with street style to create a versatile collection suitable for both play and street wear. Ideally, this new line will be marketed under the catchy slogan "For the playa' when he is off the courts", which reflects the NCAA hype and holds appeal for the younger generation. For the advertisement, it would be preferable to feature NCAA athletes instead of NBA athletes, as the latter are commonplace.

The public will likely take notice of innovative designs with a successful ad campaign, attracting investors and increasing Nike's sales and popularity. Generating capital remains a major challenge, though selling additional shares and borrowing from banks during this period of low interest rates

is feasible. It's possible that the new clothing and shoe lines won't succeed, but business always involves risks. Some critics may argue that the ad campaign will fail if either the Kansas team loses the NCAA or John Gooden doesn't meet expectations.

To maximize potential profits, I recommend advertising the full campaign during the NCAA Finals and releasing the line at the start of the first quarter of the following business year. This strategy will attract investors to Nike stocks in the fourth quarter, instead of waiting until the next year, leading to an increase in stock prices and providing Nike with necessary capital to develop new shoes and clothing.