Nike – Company Profile Essay Example

apparel, equipment, and other businesses. The footwear category includes shoes for men, women, and children with various classifications like running, cross-training, basketball, tennis, golf, baseball, football and volleyball. In terms of the apparel product line; Nike offers athletic bags as well as sports inspired lifestyle clothing items. Moreover; the company also provides professional teams and colleges' apparel.

Nike markets a range of sporting equipment under their Nike brand, including golf clubs, sport balls, eyewear, bats, skates and more. The company has the license to sell children's clothing and school supplies under the same brand. Additionally, Nike operates several subsidiaries such as Bauer Nike Hockey, Cole Haan Holdings, Converse, Hurley International, Nike Golf and Exeter and Exeter brands Group. Their footwear and apparel products are manufactured overseas, whereas equipment products are produced domestically and internationally.

[1]Nike is the top provider of athletic shoes and apparel worldwide and operates with numerous factories across the globe, mainly in Asia where production costs are lower. To stay competitive and survive in such a market, increasing competitiveness is crucial.

In the highly competitive industry featuring brands such as Adidas and Reebok, Nike must keep up with the latest trends and emerge as a leader by not only reducing costs but also investing in new shoe technologies. Being the predominant player in the market is a significant advantage for Nike and a considerable strength, accounting for about 40 percent of the global footwear industry.

Nike’s products are produced in a mix of over 160 countries by independent distributors and licenses. Their brand name, associated with the recognisable “Swoosh” logo, is a significant competitive advantage. Since 2000, Nike’s economy has experienced impressive growth

due to revenue increases in their product portfolio. As a result of this strong economy, Nike is able to invest in upcoming expansion projects. The company produces their products in developing nations.

Nike's product production largely occurs in Asian countries such as China, Indonesia, and Vietnam. This shows that Nike is investing in developing nations to minimize costs. Additionally, Nike utilizes a program called "Future" which allows retailers to make specific product orders up to six months in advance.

Nike's investment in developing countries serves as confirmation that these markets are crucial not just for Nike, but for other companies as well. The company boasts a robust product portfolio containing a broad array of sports products such as footwear and clothing, which is constantly being strengthened with new offerings, placing competitors under pressure. Despite being a global powerhouse, Nike's vulnerabilities are few, and "sweatshops" represent a significant weakness for the company due to their connection with child labor, making consumers increasingly conscious about the manufacturing process of its products.

The allegations are causing scrutiny of Nike's brand image. Despite this, the company has potential for growth within the sporting goods industry, which generated $51.3 billion in sales in 2005 and is projected to increase by 3% in 2006. Nike's involvement in this sector positions them to profit by meeting consumer demand. Furthermore, Nike is a prominent sponsor of athletes and sports events, leading to widespread recognition among the global population.

There is a great chance for Nike with their personalized product feature, allowing customers to create their own footwear and more. Consumers are eager to pay extra for exclusive goods, highlighting a significant opportunity. On

the other hand, rising costs of raw materials like plastic compounds and synthetic rubber are posing as a threat as they increase the cost of producing sports products and footwear.

If oil prices continue to rise, Nike may struggle with the increased raw material costs and may have to produce their goods in low-cost Asian countries. This could pose a threat to Nike due to the competition from Chinese products, which are known for their low prices. In fact, in 2005, Chinese shoe imports to Europe skyrocketed by 700%, potentially causing consumers to choose these cheaper options over Nike's products.

Despite Nike's significant global market share, the production of inexpensive products poses a significant risk to the company's market position. Additionally, Nike has faced criticism for their environmental policies in the past, failing to act responsibly in this regard. These accusations have been true, and the company has been accused of various negative environmental practices.

Nike has been accused of storing harmful chemicals alongside flammable fuels, posing a significant danger to both the environment and the individuals working at the storage facilities due to potential chemical reactions. Additionally, burning non-reusable materials such as garbage has resulted in the release of black smoke and CO2, contributing to well-known environmental issues like the greenhouse effect. Finally, Nike's use of toxic chemicals has created damaging vapors that not only endanger employees working near them, but also further harm the environment.

To avoid harming the environment, it is necessary to take action. Fortunately, Nike has shown a positive attitude towards environmental concerns by making significant efforts to maintain a credible and positive environmental policy. One example of this effort is seen in

their manufacturing plant in Vietnam, where they have discontinued the use of toxic adhesive substances. These toxic glues pose great health risks to factory workers who handle and inhale them. By halting the use of such harmful substances, Nike has taken an encouraging step towards change and improving their environmental policies.

Nike has made a commitment to implement sustainable business practices as part of their environment policy. The goal is to ensure intergenerational quality of life, restore the environment, and add value for customers, shareholders, and business partners. Although this pledge is significant, it will take several years to make changes in manufacturing and other areas. In order to address environmental concerns, Nike is collaborating with CERES (The Coalition for Environmentally Responsible Economies).