Nike Business Essay Example

maintain the strength of its brand.

The company has several wholly owned subsidiaries, each with a specific focus. NIKE IHM Inc. sells small plastic products to other manufacturers, while Cole Haan designs and distributes dress and casual footwear, apparel, and accessories for both men and women under the brand names of Cole Haan and Bragano. Converse Inc. is also a subsidiary of the company.

NIKE acquired several wholly owned subsidiaries that design, distribute, and license athletic and casual footwear, apparel and accessories. Converse, Chuck Taylor, All Star, One Star, John Varvatos, and Jack Purcell are sold under one subsidiary. Another subsidiary, Hurley International LLC, designs and distributes sports apparel and accessories under the Hurley brand. Umbro is a subsidiary that designs, distributes and licenses primarily soccer-related athletic and casual footwear, apparel and equipment. NIKE bought all of their capital stock on March 3, 2008. The industry can be found at the following website: http://www.fairolympics.

From page 5 of org/background/Company_Profiles.pdf, it is acknowledged that NIKE regards PUMA and ADIDAS as primary contestants. Additionally, two risks have been identified: 1) intense competition faced by the products and 2)...

Inability to predict consumer preferences and develop innovative products could hinder net revenues and profits. Technical innovation and superior product quality are essential for competing in the market. Failure to recruit top-class product endorsers could adversely affect business.

Noncompliance by contractors with their code of conduct, local regulations, and other standards may have adverse effects on their business (6). Seasonal factors affecting their operations could cause fluctuations in both their stock price and operating results (7). The accuracy of future revenues cannot be guaranteed based on their "Futures" orders (8). Their "Futures" ordering

scheme does not mitigate excess inventories or inventory shortages, which could impair operating margins and harm the business (9).

The financial health of their retailers could have negative consequences for them (10). If retailers consolidate or if market share becomes concentrated amongst a few, this may increase their credit risk and hinder their sales (10). Failing to properly protect their intellectual property rights could have an adverse impact on their business (11). From time to time, they may be subject to litigation and regulatory proceedings that require unexpected expenditure of time and resources (12). Their international operations come with inherent risks that could be harmful to their business (13) .

Potential increases in costs and decreases in margins may result from currency exchange rate changes 15, while risks related to overseas sourcing, manufacturing, and financing impact their products 16. Availability and effectiveness of global distribution facilities play a crucial role in their success 17, and their supply chain heavily relies on information technology systems. Any deficiency, interruption or security threat associated with this technology could negatively impact their business operations 18.

Possible financial losses may result from failed investments in business and operations, which could negatively impact their financial results (19). The business is dependent on key personnel, and the departure of these individuals could cause harm to their business (20). If the chairman sells a significant amount of shares, the market value of their common stock may decrease (21). anti-takeover measures could negatively impact a potential acquisition of the company or decrease the value of the common stock (22).

Nike's stock may face a decrease if it does not meet analyst expectations. On February 15, 2007, they

had a two for one split, as their stock had increased over 70% in the past five years. This was to appeal to small investors and align with similar companies in the industry. They purchased sports apparel supplier, UMBRO, known for their association with the England national football team's kits for $660M in early 2008. This added to Nike's football business and increased Goodwill from $131M to $449M. Revenues are recognized differently for wholesalers and retail stores, with inventory valuation at lower of cost or market and straight-line depreciation utilized for all items.There are various timeframes for leases and agreements related to buildings, ranging from 2 to 40 years. Similarly, machinery and equipment typically come with leases or agreements of 2 to 15 years. For computer software, the timeframe generally falls between 3 and 10 years.