Securing Higher Grades Costing Your Pocket? Book Your Assignment at The Lowest Price Now!

International Marketing: Nike Inc

tag 253 Downloads12 Pages 2,766 Words tag Add in library Click this icon and make it bookmark in your library to refer it later. GOT IT

Question:

Describe about the Nike Inc, the world’s largest US multinational sports retailer company, based in Beaverton, Oregon, USA?
 
 

Answer:

Introduction:

Nike Inc is the world’s largest US multinational sports retailer company, based in Beaverton, Oregon, USA. The company has successfully made its presence by more than 930 retail stores across 190 countries all over the world. The company generally operates as an autonomous distributors and licensees. Majorly, Nike Inc. are spread their operation across six geographic segments: Western Europe, Central and Eastern Europe, North America, Japan, Greater China and Emerging Markets (Papadopoulos and Heslop 2014.). Now the company is all set to increase its sales ratio through new stores rollouts and continual digital enhancements and innovation.

This report will prepare for the board of directors of Nike Inc. for addressing internal and external factors impacting on the retail market of sports and the market recommendations. The primary focus of the report will discuss the internal and external business environments related to Nike and evaluate potential market for international market expansion. There are two options will be discussed for entering the international market including joint ventures or foreign direct investments. Discussing the suitable international marketing strategies, the report will recommend key areas of marketing mix that needs to be adapted or standardized by the chosen company.

Macro Analysis (PESTEL Analysis):

Nike Inc is a popular sport retail brand and recognized as the premium manufacturer of footwear, sports accessories, apparel for athletics and other equipments. In this section the external business environment of Nike will discuss the threats and future business opportunities in the macro or remote environment.

Political Factors:

The sport business of Nike has influenced by political factors (Czinkota and Ronkainen 2013).The company has been fortunate because the government of US has already enforced several policies which will foster its growth of the business (Nike.com 2016). Nike enjoys low rates of interest and steady exchange rates and competitive tax provisions which helps it immensely to advance its growth.  The government has already taken initiatives to make transparent global value chain business. However, Nike Inc faces critical political issue in nations such as Indonesia, Thailand and Vietnam. All countries are already suffered from political unrest. Furthermore, the trade protection policies in certain nation have also adverse effect on sales and services of Nike. Some of the political factors determine related to the Nike’s business which includes political stability in major of the global markets, increasing open policies for trade, and improving several national governments support for infrastructure.

Economic Factors:

Like majority of the consumer facing firms, Nike faced difficulties due to challenging trading conditions since the financial crises of 2008-2009 and contingent economic slowdown. This situation has applied in both the Asia Pacific region and Western markets. However, the company bears the accountability of being the prominent manufacturer of sports apparel and footwear and generated revenue by raising 5 percent to $7.8 billion up 13 percent in the year of 2015 (Nike.com 2016). Nike Inc is also believes in overseas economy. A weak Asian and Euro recession is going to be a biggest setback for the company. However, the global market would be able to help Nike in times of recession and its sales haven’t suffered much.  In short, the economic external environment is significant in determining the performance of Nike which include factors like developed market’s economic stability, Emerging growth of emergent markets,  and decelerated economy  of China

Nike Inc finds countries like the United States are moderately stable and it provides many opportunities (Czinkota and Ronkainen 2013). However, the company finds slow but stable growth in these countries. There are many high-growth developing countries, ensures rapid growth in the developing market, however escalating labor costs in the supply chain of the company and production facilities is indeed a matter of concern.

 

Socio-cultural Factors:

Due to growing preoccupation with health and fitness, Nike Inc has been constantly evaluating themselves in the emerging market. However, the company previously faced many issues regarding the rising demand from its CSR. On the other part of the global world, the company finds challenges such as constantly changing globalized framework, political consumerism which influences in the opportunities of the trans-national companies which are outsides regulatory powers of national governments (Nike.com 2016). However, there are several positive socio-cultural factors such as increasing wealth in the developing countries individually, intention of giving more emphasis on safety of the product, and emerging consciousness of sports and health-fitness.

Technological Factors:

This sport retail business is constantly transformed according to technologies available for business processes. However, more given efforts on R&D investments among others firms threaten Nike Inc as they build up more technologically advanced apparel, shoes, and equipments. Thus, rising obsolescence in the technological field also threatens the company by putting pressure to increase its product development efforts (Nike.com 2016). On the contrary, Nike finds several enthusiastic market opportunities by using mobile technologies for their products to capture consumers who frequently use such apps and mobile tools. In this context, various technological factors are found which significantly affects Nike Inc. Such factors include increased R&D efforts among other firms, fast technological obsolescence and demand of advanced technologies.

Environmental Factors:

Larger implications of environmental law create opportunities for Nike Inc (Nike.com 2016). These improve the sustainability of the business activities that can easily address climate change. There are various ecological or environmental factors are notable such as growing laws for environment, climate change and rising sustainability strategies among firms.

Legal Factors:

There are various legal considerations are significant in the retail sport manufacturers like Nike such as improving law implications across the developing countries , rising consumer laws in developing countries and larger application of health and safety regulations.

 

Micro Analysis (using Porter’s Value chain):         

How organization creates values – it is always a significant business consideration. The value that has created and captured by a firm is the profit margin. Porter’s value chain is important for discussing the internal business environment of Nike Inc. Using this technique, the report will identify how inputs of Nike are changed into the purchase of outputs by consumers.

(Source: Fearne, Garcia Martinez and Dent 2012)

Inbound logistics

There are various factors are included in the Nike’s inbound logistic such as Nike purchased their raw materials in bulk from the local market. Being famous as local logistics providers, the company has been engaged in importation of specialized materials and successfully maintained its inventory.

Operations:

The company is engaged in various operations such as outsourcing, manufacturing sports equipments, designing (R&D), technical innovation,

Outbound Logistics

The company is known for its strong control over worldwide distribution channel and J-I-T delivery system.

Marketing and Sales

High brand reputation and recognition have already been achieved worldwide by the company. For this reasons, the company has easily make strategies for value based pricing and price advantages. Sometimes, the company used aggressive marketing strategies as well.  

Service

The company cares for customers and their demands Nike has given more importance in after sales service and value added services.

Market Evaluation:

In this section, there are four countries are chosen to analyze the potential international markets. These four countries include Finland, Cyprus, Indonesia and Australia. By using 12C framework, the market potentiality will be evaluated through different perspective.

12C framework

Finland

Cyprus

Indonesia

Australia

Country

i) Finland has open market policies that supports dynamic investment and trade

ii) Over the past five years, the country has undergone slowdown and uncertainty.

i) Cyprus has moderately free market and economic policy of the nation are mainly focused on the fiscal discipline, structural reforms and privatization

i) Various reformation has been addressed the nation’s structural weaknesses and improve competitiveness

ii) Indonesia’s growth potential has become static due to inefficient legal and investment structure of the country

i) The country holds the largest mixed market economy with GDP of AUD$1.62 trillion as of 2015

ii) The nation’s economy is dominated by its service sector

Channels

Import-oriented distribution structure (traditional)

Retail channel of distribution pattern

Alternative middle man choices preferred

Import-oriented distribution structure (traditional)

Commitment

Non-corrupted transparent international market, limited government interference, regulatory efficiencies and huge labor market availability commits huge open market exposure

Scarcity of efficient skilled labor and hugely government interference discourages the business structural flexibility. Furthermore, the country faced the long term financial instability due to global recession

High availability  of skilled labor

Low business freedom and restricted labor freedom decreases the regulatory deficiencies and level of nation’s commitment

Being positioned as 12th largest national economy, Australia provides huge international market where skilled labors are available at the higher rates.

Currency

The foreign currency does not fluctuate much against the home currency of Finland. This is the reason the countries inflation rate is 1.2 percent (Chung, Lu Wang and Huang 2012). However, the country currency has undergone economic slowdown and uncertainty, but this has been improving day by day due to government generates equal exposure of foreign and domestic investors and financial system remains competitive.

Low inflation rate indicates low currency fluctuation but the financial system has experienced strains and uncertainty

High inflation rate (6.4 percent) ensures currency volatility and uncertainty of loss of the business

Australian dollar dips against the US currency and fell below 70 US cents. Furthermore, high inflation rate is threatening the economic conditions of the country and discourages FDI as well.

Communication

Preferred transparent communication maintains during the establishment of the international business

Mixed communication patterns have been followed

Mixed communication patterns have been followed

Transparent communication  and negotiation has been maintained between domestic and foreign country.

Capacity to pay

Due to have a huge monetary freedom and stable economic growth ensures higher capacity to pay

Low capacity to pay by domestic business participants

Moderate capacity

Mixed capacity

Contractual Obligation

Less

moderate

higher

less

Choices  (Media)

 Advertising

Personal selling

Advertising

Advertising

Consumption

High  demand for retail sport industry ensures huge consumption demand (Shank and Lyberger  2014)

Low consumption patterns

Low consumption

High consumption

Concentration (of markets)

Selling abroad by concentrating limited nationalities

Selling abroad by

concentrating limited nationalities with same cultural background

International business will concentrate demands of the different groups

International business will concentrate demands of the different groups due to availability of various cultural backgrounds

Caveats (legal applicability)

Low

High

Moderate

High

Culture/Consumer behavior

High preferences of sport apparels and accessories

Low preferences of sport apparels and accessories

Low preferences of sport apparels and accessories

Moderate preferences of sport apparels and accessories


(Source: Created by author)

Recommended Market

Based on the 12C framework, this has been observed that Finland has the highest business opportunity for the business of Nike Inc. Finland has already benefited open-market policies that support investment and international trade as well. By exploring international business, Nike Inc will get encouraging regulatory business environment which maintains high degree of sustainable competitiveness. The reason behind recommending this market is Finland’s efficient legal framework that strongly upholds the rule of laws and ensures the minimum tolerance for corruption. Furthermore, the recommended nation has the stable economic condition which largely encourages new market entry. However, businesses need to take a firm strategic decision about the suitable market entry strategy either joint venture or foreign direct investments to gain the overseas distribution into proposed market. On the other hand, large consumers or cultural background of Finland have shown their keen interest in fashionable sports apparels and accessories which are delivered by  sports retail companies like Nike Inc (Brohi et al. 2016). Thus Finland would be the most favorable place for the international business expansion of Nike.

 

Joint Venture or FDI as the market entry strategy

There are various market entry modes practiced by organizations including exporting, licensing, joint venture or direct investment. This section will investigate either joint venture or FDI- as the most suitable market entry strategy for Nike Inc to gain the overseas distribution into the market of Finland.

By the selection of Joint venture as the suitable market entry strategy, there are five common objectives would be accomplished by the chosen foreign business (Shah 2015). This includes successful market entry, reward/risk sharing, technology sharing; qualify for joint product development and meeting the regulatory requirements. However, several strategic issues could be faced by the proposed business due to various reason such as less proprietary knowledge, performance ambiguity, conflicts between culture, lack of parent firm support, conflicts over disoriented new investment and many others.

On the other hand, foreign direct investment is all about direct ownership of facilities in the recommended country like Finland. By this market entry mode, Nike would be involved in transfer of resources such as personnel, technology, capital and many more. Though the nation has huge labor market availability, this would be an added advantage for the international business like Nike. This indicates low requirement of the human capital during the establishment of Nike’s business in Finland. Here it is recommended to involve in direct market investment through the establishment of the new business enterprise. This market entry mode is the most suitable because it will give the company a high degree of control in their operations and the ability to better know the customers of Finland and competitive environment (Blery and Kakokefalos 2014). This would be perfect because Nike has a high level of resources and kwon for its high degree of commitment in other parts of the world (Moosa 2016). Therefore, FDI should be chosen by Nike as an appropriate market entry strategy to gain overseas distribution into the market of Finland.

 

Recommendation for key areas of the marketing mix:

Before entering into the foreign market, businesses need to decide the proposed market mix specifically the consideration of the factors like product, price, people and promotional strategies. To make the efforts more standardized, the following considerations must be followed:

Price: To capture the international market, Nike needs to fix their product’s price as reasonable. Low price would not be possible because the company has already achieved the brand reputation across the other nations. Though the retail sports market is less competitive in Finland, the company could use the Skimming pricing strategy while entering into the market of Finland. In that case, the firm will set an higher price and then slowly lowers the price to make the product available for the wider audiences.

Product: Nike’s products are already popular among sports lovers. Therefore, the company should maintain their brand image by delivering same quality product in different parts of the nation.

People: High profile consumers along with young sport lovers are the main targeted people for this new business establishment.

Promotion: Nike would promote their products by different advertising strategies such as website promotions, media promotions and so on.

In this way, the company can establish international market in different parts of the world and generate more revenues in the long run.

 

References:

Blery, E.K. and Kakokefalos, G., 2014. Marketing Footwear: A Case Study from Greece. Research in Business and Management, 1(1), pp.90-104.

Brohi, H., Khubchandani, R., Prithiani, J., Abbas, Z., Bhutto, A.H. and Chawla, S.K., 2016. Strategic Marketing Plan of Nike.

Chung, H.F., Lu Wang, C. and Huang, P.H., 2012. A contingency approach to international marketing strategy and decision-making structure among exporting firms. International Marketing Review, 29(1), pp.54-87.

Czinkota, M.R. and Ronkainen, I.A., 2013. International marketing. Cengage Learning.

Fearne, A., Garcia Martinez, M. and Dent, B., 2012. Dimensions of sustainable value chains: implications for value chain analysis. Supply Chain Management: An International Journal, 17(6), pp.575-581.

Gilligan, C. and Hird, M., 2012. International marketing: strategy and management (Vol. 17). Routledge.

Kapoor, A., 2014. Competition Mapping and Market Analysis for Sportswear. NIFt.

Moosa, I., 2016. Foreign direct investment: theory, evidence and practice. Springer.

Papadopoulos, N. and Heslop, L.A., 2014. Product-country images: Impact and role in international marketing. Routledge.

Priem, R.L. and Swink, M., 2012. A demand‐side perspective on supply chain management. Journal of Supply Chain Management, 48(2), pp.7-13.

Shah, K.U., 2015. Choice and control of international joint venture partners to improve corporate environmental performance. Journal of Cleaner Production, 89, pp.32-40.

Shani, D. and Chalasani, S., 2013. Exploiting niches using relationship marketing. Journal of Services Marketing.

Shank, M.D. and Lyberger, M.R., 2014. Sports marketing: A strategic perspective. Routledge.

Terpstra, V., Foley, J. and Sarathy, R., 2012. International marketing. Naper Press.

Verbeke, A., 2013. International business strategy. Cambridge University Press.

www.nike.com, (2016). [online] Available at: https://www.nike.com [Accessed 30 Jul. 2016].

OR

Cite This Work

To export a reference to this article please select a referencing stye below:

My Assignment Help. (2016). International Marketing: Nike Inc . Retrieved from https://myassignmenthelp.com/free-samples/international-marketing-nike-inc.

"International Marketing: Nike Inc ." My Assignment Help, 2016, https://myassignmenthelp.com/free-samples/international-marketing-nike-inc.

My Assignment Help (2016) International Marketing: Nike Inc [Online]. Available from: https://myassignmenthelp.com/free-samples/international-marketing-nike-inc
[Accessed 12 December 2019].

My Assignment Help. 'International Marketing: Nike Inc ' (My Assignment Help, 2016) <https://myassignmenthelp.com/free-samples/international-marketing-nike-inc> accessed 12 December 2019.

My Assignment Help. International Marketing: Nike Inc [Internet]. My Assignment Help. 2016 [cited 12 December 2019]. Available from: https://myassignmenthelp.com/free-samples/international-marketing-nike-inc.


Looking for an answer 'who will do my essay for cheap', MyAssignmenthelp.com has the perfect solution for you. We boast highly skilled and talented 3000+ essay writers, who are committed to providing needed essay help to students in Australia. They resolve students' academic problems and make sure students are well-equipped to write a good quality essay. Hence, students don't need to waste their time in searching, 'who will write my essay at cheap', instead they pay for the best essay help services at MyAssignmenthelp.com.

Latest Management Samples

EMBA 3312 Operations Management For Process Capability Index

Download : 0 | Page : 1

Answer: (b) Computation of ‘Process Capability Index’ (CPK) and ‘Process Capability Ratio’ (CP) for initial capability study  Process Capability Index is the minimum of the given function. (x bar – LCL)/ 3 standard deviation = (162.696-158.892)/(3*1)= 1.27 Similarly, (UCL – x bar)/ 3 standard deviation = (1.665 -162.696)/(3*1) = 1.27 Hence, the Process Capability Index (CPK) =1.27 Now, Process ...

Read More arrow

MGT502 Business Communication For Event Management

Download : 0 | Pages : 8

Answer: Introduction Business Communication is a process that is goal oriented. It is used to communicate the organization’s rules, policies, regulations, plans and strategies to the people who are within the organization and also outside it. In the current times, business communication has become very crucial in an organization as it helps in covering a wide range of aspects like advertising, event management, marketing, branding, exte...

Read More arrow

MEC 61003 Renewable And Alternative Energies

Download : 0 | Pages : 4

Answer: Analysis Of The Pv-Disel Hybrid System The PV/diesel hybrid system incorporates both photovoltaic system and diesel generator in supplying electricity to the load. This technology aims in reducing the operation hours of a diesel generator in every possible means. How PV/diesel hybrid system works? The solar photovoltaic system and the diesel generator are integrated to harness a clean solar power and at the consequently compensate f...

Read More arrow

PSYC71-409 Total Quality Of Life Influencers For Physical Function

Download : 0 | Pages : 13

Answer: Introduction According to Fayers & Machin (2013) there has been a lot of focus on the definition of quality of life in the contemporary years in terms of social policies which in turn have directed providing care and service provision which impacts positively on the quality of life of an individual. According to Buffel, Philipson & Scharf (2012), quality of life is very subjective to the individual since it is not scientifica...

Read More arrow

SYD502 Introduction To Systems Development

Download : 0 | Pages : 6

Answer: Introduction: A process map is a diagram developed to illustrate the process of business process mapping. Business process mapping can be identified as a subsidiary of business process management. Business process mapping is the process through which process maps showing visual representations are drawn. A process map is mainly used to show the relationships existing between inputs and the steps to come up with a product for example o...

Read More arrow
Next
watch

Save Time & improve Grades

Just share your requirements and get customized solutions on time.

question
We will use e-mail only for:

arrow Communication regarding your orders

arrow To send you invoices, and other billing info

arrow To provide you with information of offers and other benefits

1,162,585

Orders

4.9/5

Overall Rating

5,051

Experts

Our Amazing Features

delivery

On Time Delivery

Our writers make sure that all orders are submitted, prior to the deadline.

work

Plagiarism Free Work

Using reliable plagiarism detection software, Turnitin.com.We only provide customized 100 percent original papers.

time

24 X 7 Live Help

Feel free to contact our assignment writing services any time via phone, email or live chat.

subject

Services For All Subjects

Our writers can provide you professional writing assistance on any subject at any level.

price

Best Price Guarantee

Our best price guarantee ensures that the features we offer cannot be matched by any of the competitors.

Our Experts

Assignment writing guide
student rating student rating student rating student rating student rating 5/5

2109 Order Completed

99% Response Time

Emma Zhong

Ph.D in Project Management with Specialization in Project Communications Management

Singapore, Singapore

Hire Me
Assignment writing guide
student rating student rating student rating student rating student rating 4/5

3076 Order Completed

99% Response Time

Emily Wei

Doctor of Philosophy (Ph.D) in Civil Engineering

Singapore, Singapore

Hire Me
Assignment writing guide
student rating student rating student rating student rating student rating 5/5

752 Order Completed

100% Response Time

Hugh Cleave

Masters in Human Resource Management (MMgt, HRM)

Wellington, New Zealand

Hire Me
Assignment writing guide
student rating student rating student rating student rating student rating 5/5

203 Order Completed

97% Response Time

Richard Alpert

PhD in Psychology

London, United Kingdom

Hire Me

FREE Tools

plagiarism

Plagiarism Checker

Get all your documents checked for plagiarism or duplicacy with us.

essay

Essay Typer

Get different kinds of essays typed in minutes with clicks.

edit

GPA Calculator

Calculate your semester grades and cumulative GPa with our GPA Calculator.

referencing

Chemical Equation Balancer

Balance any chemical equation in minutes just by entering the formula.

calculator

Word Counter & Page Calculator

Calculate the number of words and number of pages of all your academic documents.

Refer Just 5 Friends to Earn More than $2000

Check your estimated earning as per your ability

1

1

1

Your Approx Earning

Live Review

Our Mission Client Satisfaction

this essay was very well written and i loved how the works cited page was included

flag

User Id: 356802 - 12 Dec 2019

Australia

student rating student rating student rating student rating student rating

well i haven\'t submit the assignment yet but after go through it ,is perfect but i don\'t think my prof will reject it

flag

User Id: 149273 - 12 Dec 2019

Australia

student rating student rating student rating student rating student rating

on of the best work. Work like that make me very happy to request another one . thank you and I am grateful.

flag

User Id: 264099 - 12 Dec 2019

Australia

student rating student rating student rating student rating student rating

The work was great. It was written very professionally and academically with such a short deadline all for a great low price. Their service is always the best!

flag

User Id: 264374 - 12 Dec 2019

Australia

student rating student rating student rating student rating student rating
Have any Query?