1.

VISION, MISSION, OBJECTIVES AND STRATEGIES

1.1 Vision Statement

To bring inspiration and innovation to every athlete in the world 

1.2 Mission Statement

To carry on Bowerman’s legacy of innovative thinking, develop products that help
athletes of every level of ability reach their full potential, and to create business opportunities
that set Nike apart from the competition and provide value for their shareholders.

1.3 Objectives
The following are the objectives of Nike:
1. To become the leading sports brand in the world by reinforcing its position as an
innovator and technologically savvy marketer in sportswear industry i.e. leading through
product differentiation strategy innovation.
2. To make profit for the shareholders.
3. To improve the quality of their mission statement. 
4. To employ a range of marketing communication tactics that can cater to the organization’s
target market, which have different nationalities, genders, cultures, and ages.

1.4 Strategies

a. Nike's grand strategy is Growth. The company feels the international marketplace
(rather than the domestic) is where the majority of growth will be realized in the next
five years. Product Differentiation is the product strategy that Nike has utilized and will
continue to use as design creativity is one of Nike's core competencies.

b. International Marketing. Nike feels strongly that their biggest opportunities for
growth lie in the countries on South Africa, India, Mexico, Peru, Chili, Bolivia, and several
eastern European countries. Nike is planning to expand marketing in these areas in the
next several years to build demand and distribution systems. Nike also plans to contract
manufacture its shoes in several of these countries.

c. Contract Manufacturing. The use of contract manufacturers is only way in which Nike
produces anything. Nike does not directly manufacture anything. Nike provides
footwear and apparel designs to it hundreds of different contract manufacturers and
they make the products. Nike plans to continue using this strategy for manufacturing
while building their design and marketing core competencies.

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d. Labor Practices. Nike has come under a great deal of fire from the press and the
public about the pay and conditions the workers receive at its contract manufacturing
facilities in the Far East. The bad press contributed to poor performance in 1998 for
Nike. During the past year, Nike's CEO strengthened the company's labor practices by
ordering implementation of several new measures:

o Increased age requirements for Asia-based footwear workers to a US-standard of

18 years of age,
o Improved factory indoor air quality by substitution of safer water-based
adhesives in the assembly process, and
o Increased wages 40 percent for entry-level Indonesian factory workers.

These initiatives are part of a larger program that began when the company established
its Code of Conduct in 1992.

e. Expansion into the Golf and Hockey Markets - Nike has begun to market golf balls
and hockey equipment. Aggressive marketing in these areas including the signing of
Tiger Woods and the Jersey Logo deal with the National Hockey League, have positioned
Nike to sell products bearing their swoosh. Hockey and golf TV viewership has been
steadily rising over the last several years and so have golf ball sales and hockey
equipment sales. Nike plans to establish itself as a player in these arenas.

f. Commitment to Marketing through Michael Jordan- Nike has Michael Jordan under
contract until 2023 and is planning to expand his sub product line which already is a
major division under Nike. Casual wear with Jordan name will be added and his shoe line
continued for the foreseeable future.

g. Cost Cutting- Nike has cut approximately 350 million in operating expenses in the last
2 years. They have also laid off 1900 workers. Although the bulk is completed, they plan
to continue cutting costs for another year. Nike undertook most of these actions in
anticipation of a sagging Asian market and changes in consumer buying. Both of which
came true to make 98 a very poor year for Nike.

h. Nike Town - Nike is planning on building additional Nike-Town Superstores in major

cities over the next several years. The next to receive a Nike-Town is Denver. It is
planned to be opened later in 1999. Nike just completed the 28,000 square foot Nike
Town in Coral Gables. These stores feature a motif divided store with video and sound
effects in each department. Each Nike-Town sells a full line of shoes and apparel.

i. Marketing to Women- Nike is stepping up its marketing to young women in an

attempt to appeal to a greater share of female consumers. TV and radio advertisements
are featuring young female athletes who are competitive, committed to sport, and
outfitted with Nike product

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 2. PROPOSED VISION AND MISSION STATEMENT

Nike mission statement must be analyzed to see the total number of mission component
it has.
NO. COMPONENT YES/NO
1 Customer Yes
2 Product or services Yes
3 Markets Yes
4 Technology No
5 Concern for survival, profitability, and growth Yes
6 Philosophy Yes
7 Self-Concept No
8 Concern for public image Yes
9 Concern for employees Yes

This is a good mission statement, however it lacks two components: technology and
self-concept. The company must evaluate whether it is technologically advanced and has
self-concept, thus both of it it needs to be added in their mission statement.

2.1 Proposed Vision Statement

As time goes by, the existing company’s vision must be updated in order to sustain competitive
advantage, thus we proposed this vision that is, “Seizing the future athletic with brands
represents performance, quality, and fashionable sports product.”

2.2 Proposed Mission Statement

We desire to deliver superior products to customers and athletes that are both safe and
dependable. Our well-trained employees and experienced executives will ensure a competitive
advantage for our markets, growth for the company, and profits for our shareholders. Our
commitment to social responsibility and the communities in which we operate will ensure
business relationships and alliances for the future and a perception of concern with our
stakeholders. We will continue to utilize innovation and technology to provide our employees
with the best possible work environment while adapting to the many changes in the global
market.

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 3. EXTERNAL OPPORTUNITIES AND THREATS

3.1 External Opportunities

a. Growing Internationally International opportunities are a major focus for the next

few years. There has been much fine tuning in this area by creating regional
headquarters to focus on the individual foreign markets. A warehouse was created in
Japan to house both shoes and apparel. Endorsements have been granted to athletes
from various countries to help strengthen the brand identity. All of these factors helped
contribute to the company's earnings in Europe to increase 35% from the prior year.
This focus on gaining world acceptance of Nike's products will help position itself as the
industry leader throughout all parts of the world. Because the has taken the effort to
position its foreign operations, it will be ready to meet the needs of the international
community when the industry makes its reversal.

b. Expanding efforts in the Female Sector of the market. Three times as many young
women are participating in US sports as were just 10 years ago. Women represent a huge
market. Reebok sells nearly 50% of it shoes to women after its great success with
aerobics shoes in the late 1980's. Nike has begun to take notice of the female market and
started to market to it. We feel the female sector is strong opportunity in both athletics
and casual wear.

c. Expanding efforts in the Female Sector of the market. Three times as many young
women are participating in US sports as were just 10 years ago. Women represent a huge
market. Reebok sells nearly 50% of it shoes to women after its great success with
aerobics shoes in the late 1980's. Nike has begun to take notice of the female market and
started to market to it. We feel the female sector is strong opportunity in both athletics
and casual wear.

d. Expanding efforts in the Female Sector of the market. Three times as many young
women are participating in US sports as were just 10 years ago. Women represent a huge
market. Reebok sells nearly 50% of it shoes to women after its great success with
aerobics shoes in the late 1980's. Nike has begun to take notice of the female market and
started to market to it. We feel the female sector is strong opportunity in both athletics
and casual wear.

e. Granting Exclusive Lines To Stores While Nike has generally striven to offer a

standardized line in retail venues around the globe, it may be well served to grant
exclusivity of certain products to specific stores. This is a different approach but may
very generate demand by restricting supply of certain products. This is an age-old
marketing tactic but it may offer Nike a new opportunity.

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3.2 External Threats

a. Continued Bad Press about Asian Labor - Nike has still not shaken the image of
using oppressed workers to manufacture its goods. Nike is worried this could turn into a
duplicate of the famous "unintended acceleration" that Audi faced in the 1980's. Like
Audi, Nike has been largely cleared by governmental agencies here and abroad, but that
doesn't necessarily mean all is well. Bad public recognition can hang around long beyond
what seems reasonable. Audi's image was so badly damaged that they nearly stopped
importing to the US seven years after the original bad press.

b. Jordan's Effort to Promote - Nike still depends on Michael Jordan's promotion of the
Nike line. Nike feels that Jordan is still a powerful force in the industry even though he
has retired from the NBA. It is unclear, however, how much effort Jordan will put into his
marketing for Nike. Jordan has publicly stated his main goal is attention to his family,
and being a good father is a full time job. If Jordan does the minimum to fulfill his
obligations with Nike, it will probably hurt Nike's performance.

c. Asia’s Recession The economic recession in Asia continues to hurt Nike as a

significant amount (30%) of their sales comes from that region of the world. Experts
seem to agree that predicting the end of the Asian problem is difficult. Most experts think
the recession will last at least several more years. This is a big problem for Nike, and
something they have little control over.

d. Loss of Managers and Exec's Nike's employee stock option plan has made
millionaires out of many Nike employees. This has left Nike with an unprecedented
number of retirements and departures of key personnel in 1998. The losses have hurt
Nike but may hurt them more in the next two years than they have in last year. This may
seem like an internal problem but it was caused in part by a strong US economy. It is also
exacerbated by the general difficulty in finding replacements with specific industry and
company knowledge, which the departed employees had.

e. Reebok Targeting Kids lines Competitor Actions - Reebok has started to spend more
on marketing kids shoes in an effort to not only reap the short term sales but gain long
term customer loyalty. This is a threat to Nike in a general sense as many industries
"generation turnover". Reebok has captured 70% of the shoe market in India over the last
several years. This area of Asia has traditionally been Nike's. Adidas is number one in
Germany and making steady gains in Europe as whole. Aggressive marketing and new
products have lead the way in Europe for Adidas. K-Swiss while a small company in
comparison, is nailing the market and has grown 400% in the past two years. Their
approach is the opposite of Nike's in almost every category: no top athlete endorsees,
very few color schemes, and low budget advertising. These hallmark s are working for K-
Swiss. Generation changes in demand can sneak up on a giant like Nike and before you
know it, their product is out and someone else's is in. This is particularly true in shoe
retail. All of these small competitors are a real threat to Nike.

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f. Reebok Targeting Kids lines Competitor Actions - Reebok has started to spend more
on marketing kids shoes in an effort to not only reap the short term sales but gain long
term customer loyalty. This is a threat to Nike in a general sense as many industries
"generation turnover". Reebok has captured 70% of the shoe market in India over the last
several years. This area of Asia has traditionally been Nike's. Adidas is number one in
Germany and making steady gains in Europe as whole. Aggressive marketing and new
products have lead the way in Europe for Adidas. K-Swiss while a small company in
comparison, is nailing the market and has grown 400% in the past two years. Their
approach is the opposite of Nike's in almost every category: no top athlete endorsees,
very few color schemes, and low budget advertising. These hallmark s are working for K-
Swiss. Generation changes in demand can sneak up on a giant like Nike and before you
know it, their product is out and someone else's is in. This is particularly true in shoe
retail. All of these small competitors are a real threat to Nike.

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 COMPETITIVE PROFILE MATRIX

Critical Success NIKE ADIDAS PUMA

Factors Weights
0 to 1.0 Rating Weighted Rating Weighted Rating Weighted
1 to 4 Score 1 to 4 Score 1 to 4 Score
Advertising 0.1 2 0.2 3 0.3 3 0.3
Product Quality 0.08 4 0.32 3 0.24 2 0.16
Price 0.08 2 0.16 3 0.24 1 0.08
Competitiveness
Management 0.06 3 0.18 3 0.18 2 0.12
Financial Position 0.08 4 0.32 3 0.24 1 0.08
Customer Loyalty 0.05 3 0.15 2 0.10 1 0.05
Global Expansion 0.05 3 0.15 3 0.15 2 0.1
Market Share 0.08 4 0.32 2 0.16 1 0.08
Technology 0.09 4 0.36 3 0.27 1 0.09
Brand 0.1 4 0.4 4 0.4 3 0.3
Recognition
Portfolio 0.08 3 0.24 4 0.32 2 0.16
Diversification
Product 0.09 4 0.36 3 0.27 1 0.09
Positioning
Research & Dev 0.06 4 0.16 3 0.18 1 0.06
Totals 1 3.31 3.05 1.67

1- Major weakness
2- Minor weakness
3- Minor strength
4- Major strength

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 Nike shows highest score of 3.31, second is Adidas, which is 3.05 and the lowest score of 1.67 that is
Puma. The competitive profile matrix (CPM) weighs brand recognition and advertising. The brand
recognition and advertising (0.1) is the most important item on the list of critical success factors because
consumers first recognize the brand name of such product and it helps to maintain customer satisfaction
and thus, Nikes score on this factor as the highest in comparison to their other competitors. Technology
rates .09, (Product Quality, Price Competitiveness, Financial Position, Market Share and Portfolio
Diversification) both score 0.08, Management .06, Research and Development .06, Customers Loyalty .
05, and Global Expansion .05, Advertising .1. The advertising weight, 0.05. CPM does not reflect a high
level in ranking the critical success factors, but does release valuable information in comparison to their
competitors on the CPM.

The weight on each factor depends on their importance in the company thus; in this analysis the
Brand recognition and Advertising is the most important because this is what the company focuses on.

5. EXTERNAL FACTOR EVALUATION (EFE) MATRIX

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 Key external factor Weight Rating Score
Opportunities
International opportunities in India, Bolivia, Chile, 0.15 3 0.45
Mexico.
Female Sector of the market 0.10 3 0.30
Opportunities in the casual and brown shoe 0.10 4 0.40
marketplace.
Move of headquarters to Portland under very 0.05 2 0.10
favorable conditions.
Target marketing/Granting exclusive lines to 0.10 3 0.30
retailers
Threats
Asian Labor Perception 0.15 2 0.30
Air Jordan, declining ROI on big name stars 0.10 3 0.30
Asian Recession (30% of business) 0.10 2 0.20
Loss of key executives 0.05 3 0.15
Reebok has to lead and in Asia. 0.10 3 0.30
Total 2.8

6. INTERNAL STRENGTHS AND WEAKNESSES

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6.1 Strengths

6.2 Weaknesses

a. Respond to Asian Situation. The rapid deterioration of the Asian Pacific marketplace
was not anticipated nor reacted on in a timely manner. If a corporation is going to be global
they need to watch all aspects of the market. Once again, Nike could not react quickly
enough to adjust production levels to reflect consumer demand. Making the problem worse,
Nike could not adjust its spending to compensate for the velocity of the order slowdown. It
appears that Nike could have made adjustments in their strategies and restructuring before it
caused approximately 1,600 positions in layoffs. They where not paying attention to their
growth versus demand.

b. Management Style/Culture. 
Strengths Management style for Nike is truly a strength that the initial creator Phil Knight
has continued to practice. His philosophy that people should find a sense of peace at work
while playing by the rules but be ferocious is evident throughout the corporation. The
corporate culture is health conscious young people with 41% of corporate employees under
30 years of age. The corporate building is on 74 acres with wooded areas, running trails, a
lake and a fitness center. Employees are asked to participate in a benefit and compensation
program call Life Trek that offers some unique benefits. There is also the Worktrek and
pay/performance/teamwork plan for salary issues. Nike is caring by attempting to provide
for whole life of employees.
Challenges

 One man management team.

 Knight has trouble listening to the street.
 Key players now are rich retired.

c. Nike too big for "cool image" The average American teenager now buys ten pairs of
athletic shoes a year. That translates into $1billion worth of Nike shoes. However, the
market may be changing. It may be cooler to own boots or brown shoes. That image may be
harder to capture in the long run. If everybody has Nikes how can a teenage be cool or
different?

d. Product Pricing. How many pairs of athletic shoes at $50-$150 do a teenager need? If

the price is that high, do I get what I pay for in value? Maybe the old Adidas or Converse
will make a surge in the market for the more conscious older adult when it comes to value.

7. INTERNAL FACTOR EVALUATION (IFE) MATRIX

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Key Internal Factor Weight Rating Score
Strengths 0 to 1.0 1-4
World class r&d development 0.10 4 0.40
Marketing 0.15 4 0.60
Distribution network 0.10 4 0.40
Social responsibility 0.10 3 0.30
Management culture 0.10 3 0.30
Financial strengths 0.10 4 0.40
Weaknesses
Slow asian response in distribution 0.05 2 0.10
One man manegement team 0.10 2 0.20
Nike too big for cool image 0.15 2 0.30
Price of product too high 0.10 2 0.20
Total 1.0 3.20

Total Weighted Score of Strengths (TWSS)= .40+.60+.40+.30+.30+.40 = 3.69

.10+15+.10+.10+.10+.10

Total Weighted Score of Weaknesses (TWSW) = .10+.20+.30+.20= 2.00

.05+.10+.15+.10

Internal Factor Evaluation (IFE) Matrix is a summary step in conducting an internal strategic-
management audit. This strategy-formulation tool summarizes and evaluates the major strengths and
weaknesses in the functional areas of business, and it’s also provides a basis for identifying and
evaluating relationship among those area.

In rating IFE, we rate it according to its significant importance in the company. The rating “1”
indicates the lowest level of importance and the rating “4” indicates the highest level which designates the
most important factor. The total weighted score is 3.69, which is an indicator that generally Nike is
effective. However, its weakness can be also considered high which is 2.00, this means that Nike must
find the way to overcome weaknesses to focus on the future challenges.

8. 0 STRENGTH, WEAKNESS, OPPORTUNIES and THREATS (SWOT) MATRIX

STRENGTHS:

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A. World Class R&D Department
B. Marketing
C. Distribution Network
D. Social Responsibility
E. Management Culture

OPPORTUNITIES:

A. International Opportunities in India, Bolivia, Chile, Mexico.

B. Female Sector of the Market.
C. Opportunities in the casual and brown shoe marketplace.
D. Move of headquarters to Portland under very favorable conditions.
F. Target marketing/ Exclusive line.

WEAKNESSES:

A. Slow Asian Response in Distribution Network.

B. One Man management team
C. Nike too big for "Cool Image".
D. Price of product - too high

THREATS:

A. Asian Labor Perception.

B. Declining ROI of big named stars.
C. Asian Recession (30% of business).
D. Loss of key executives

8.1 TOWS MATRIX

The TOWS Matrix

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 Strengths:  Weaknesses: 
1. World Class R&D 1. Slow Asian Response in
Department Distribution Network.
2. Marketing 2. One Man management
3. Distribution Network team
4. Social Responsibility 3. Nike too big for "Cool
5. Management Culture Image".
6. Financial Strength 4. Price of product - too high.
Opportunities:  SO Strategies  WO Strategies 
1. International Use strength to take Overcome weaknesses with
Opportunities in India, Bolivia, advantage of opportunities opportunities
Chile, Mexico. Use strong competencies in Lease Shoes! (See
2. Female Sector of the Research and Development, recommendations)
Market. Marketing and Distribution to Overhaul international
3. Opportunities in the casual strengthen the hold in the distribution network
and brown shoe marketplace. international, female and (Complete)
4. Move of headquarters to brown shoe market. Nike may be too big to be cool
Portland under very favorable Sell social responsibility and but big enough to take
conditions. international record to advantage of the international
5. Target marketing/ Exclusive improve international market, especially via Joint
line. opportunities. Ventures, etc.
Target Marketing
Create Exclusive Lines.
Threats:  ST Strategies  WT Strategies 
Use strengths to avoid threats Minimize weakness and avoid
1. Asian Labor Perception. Investigate campaign to threats
2. Declining ROI of big named reestablish 'cool' image.
stars. Advertise victory in lawsuit
3. Asian Recession (30% of about 'sweatshops' Nike has Continue to watch Asian
business). an acceptable work market from a financial
4. Loss of key executives. environment. perspective.
5.Reebok has the lead with Allow inspectors into Asian
kids and in Asia.[Adidas-K plants.  Refine marketing
Swiss - Have "cool" image Nike has good current strategy for Asian
now]. financial position which products.
should carry it through any  Try to utilize price
recessions. elasticity in U.S.
Investigate campaign to market.
reestablish 'cool' image.
Ensure new executives are Develop succession plan.
acculturated into the Nike
environment.

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