Description of the Organization and Its Current Products
Nike is the world’s leading designer, marketer, and distributor of authentic footwear, apparel, equipment, and accessories for a wide variety of sports and fitness activities including basketball, football, golf, and running (Zentes, Morschett, & Schramm-Klein, 2011). Nike Inc is an American company that sells sports apparel and shoes. The company was founded in 1964 by the athlete Philip Knight and the coach Bill Bowerman and named after the Greek goddess of victory, Nike (Van Tulder & Van der Zwart, 2006).
In the past decade, the company has established a strong brand portfolio with several wholly owned subsidiaries, which are subsumed in the Nike Inc group. Zentes et al. (2011) noted that one of the subsidiaries is Cole Haan, which designs, markets, and distributes luxury shoes, handbags, accessories, and coats. The second is Converse Inc., which designs, markets, and distributes athletic footwear, apparel, and accessories (Zentes et al., 2011). They further noted that Umbro Ltd., one of the Nike’s subsidiaries, is a leading United Kingdom-based global football brand that has over 70 years of experience and heritage. It helps Nike’s global leadership in football.
The Company’s National and International Operating Locations
Nike headquarters are located on 176 acres in Beaverton, Oregon. They currently feature 17 separate buildings, each named after an athlete whose performance and endorsement has contributed to the development of the company. Wong (2012) indicated that in addition to offices, the operations center also has several gyms, athletic fields, and trails for employee use. The regional headquarters for Europe, Middle East, and Africa are located in Netherlands. According to Van Tulder & Van der Zwart (2006), Nike Inc. has 11 offices in the Asia Pacific region which are located in Australia, China, Hong Kong, Japan, Korea, New Zealand, South East Asia, and Taiwan. Nike also operates manufacturing offices in Vietnam and Indonesia.
Historical Background Summation of the Company
University of Oregon track and field coach Bill Bowerman and Phil Knight, a former runner at Oregon and later Stanford MBA student, developed a shoe to assist runner’s performances. Bowerman and Knight each agreed to contribute $500 to create Blue Ribbon Sports in 1964 (Wong, 2012). In the initial stages, Blue Ribbon operated out of the basement of Knight’s house and the back of his car, but the first 300 pairs of shoes were sold in 3 weeks. Ten years later, they changed the name of their company to Nike, which signifies the Greek winged goddess of victory and at the same time unveiled the now iconic swoosh logo (Wong, 2012). Over the last 40 years, Nike Inc. has grown from a small business to an international leader in athletic footwear and apparel. Nowadays, Nike operates in more than 170 countries around the globe. Through their suppliers, shippers, retailers, and other service providers, Nike directly or indirectly employs nearly one million people. It includes an estimated number of 34,400 Nike employees across six continents (Armstrong & Kotler, 2009).
The Company's Financial Status Based on Its Financial Records
In June 2012, Nike’s fourth quarter revenues rose 12 percent or 14 percent on a currency neutral basis to $6.5 million, the largest revenue quarter in NIKE, Inc.’s history (Annual Report, 2012). It was also noted that earnings per share for the quarter rose 6 percent as a result of continued strong demand for NIKE, Inc. brands (Annual Report, 2012). The company’s revenues grew by 18 percent to $6.1 million, which is 11 percent not including currency changes. The figure below adapted from Nike Annual Report (2012) shows the company’s revenue for the last five years which has been on the increasing trend except in 2010, which had 1 percent drop in revenue compared to 2009. The financial success can be partly attributed to Nike being one of the most heavily advertised and best known brands in the world. The overall impression is that the company has performed well despite the recent financial crisis.
For the fiscal year ending May 2010, Nike Inc. reported total revenues of $19,014 million, a 1 percent drop from 2009. It is therefore ranked 124 in the Fortune Top 500, the most prominent annual ranking of America’s largest corporations. In 2011, Nike Inc.’s annual revenue rose to $20,862 million, which signified a steady growth of the company’s income (Zentes et al., 2011). According to Zentes et al. (2011), the financial success of Nike Inc. is attributed to its innovativeness, a large product portfolio, and its best known brand in the world. The growth in revenue in 2011 is also a result of the company’s reorganization of the Nike brand into a new model consisting of six geographies which include North America, Western Europe, Central and Eastern Europe, Japan, and Greater China (Zentes et al., 2011). Looking at the emerging markets such as China, the segments have relatively low absolute contribution but have constantly gained in importance over the past two years with sales growth above 25%.
The Company's Mission Statement in Relation to Concern for its Employees and Customers
Nike’s mission statement is “to bring inspiration and innovation to every athlete in the world.” Through its mission statement, the company has been considered an innovative leader in the sports retail sector through unique strategic marketing initiatives. According to Wong (2012), Nike Inc. was the first company to utilize top-tier athletes in its products’ advertising campaigns. The concern for customers of the company is reflected in Nike sponsoring teams and leagues on both professional and collegiate levels. When diversifying into more product lines, the company has utilized creative marketing and advertising platforms to build brand awareness and equity. Nike’s theme “Just Do It” has been synonymous with Nike products and has been incorporated into advertising campaigns and television commercials (Wong, 2012).
Nike employs professionals in a wide variety of departments including distribution, finance, marketing, product management, research, design and development, and information technology. Wong (2012) indicated that Fortune magazine named Nike one of the “100 Best Companies to Work For” in 2008. It is because the company offers numerous employee benefits such as campus fitness centers and a 50 percent discount on company products, as well as it directs its corporate responsibility efforts in addressing conditions in oversea contact factories (Wong, 2012).