Nike Corporation’s Products, Competitors, Profit, and Advantage

Subject: Case Studies
Pages: 3
Words: 785
Reading time:
3 min
Study level: College

Introduction

Nike is a multinational corporation that specializes in selling footwear, clothes, and various sports equipment. The company was founded in 1964 by Bill Bowerman and Phil Knight (Gupta, 2021). Nike, Inc. refers to a part of a vast business sector specializing in producing goods for sports. The main message of Nike and its goal is to enable people to feel comfortable during their activities and provide them with quality goods to help athletes reach better performance.

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Products, Competitors, and Geographic Area

Nike is based on merchandising goods for sport, for example, sports apparel, footwear, various accessories, and athlete wear. The corporation produces goods for women, men, and kids and divides the collections into six key categories. Nike also created their Jordan Brand, which is worldwide famous for its original shoes. In addition, the company designed multiple mobile apps for smartphones that help people keep fit and track the results of training. Moreover, Nike produces things for leisure and casual wearing, including casual apparel, shoes, and accessories.

There are multiple competitors in this business segment that suit sportswear and athletic footwear. Adidas, Puma, New Balance, Reebok, and Under Armour are competitors (Gupta, 2021). Adidas is considered the biggest rival of Nike because both these companies produce relatively homogenous goods. For instance, it is feasible to find almost all goods categories in Adidas presented in Nike. Concerning other companies, nearly all of them specialize in manufacturing original and comfortable footwear for sports, leisure, and casual wear.

Initially, the company was founded in Oregon, the United States. The headquarters of Nike is located in the city of Beaverton (Gupta, 2021). With time, Nike began to distribute their goods over the globe. For instance, there are plenty of Nike stores in various markets, including the United States and European markets. Moreover, some sources see the opportunity for development in the emerging markets of Brazil, China, and India. Overall, the production of Nike is distributed almost everywhere, and there are possibilities to grow further.

Cyclicality of Profit

According to Nike’s report on the 2021 fourth quarter and the full fiscal year, the corporation informs that its revenues were 12,3 billion dollars, up 96 percent compared to 2020 in the fourth quarter (‘NIKE, Inc. Reports,’ 2021). Revenues for the entire year also increased by 19 percent in 2021. It is also interesting to compare the results of the current fiscal year to 2020; the report dated 2020 speaks that revenues declined by 6,3 billion dollars compared to 2019 (‘NIKE, Inc. Reports,’ 2020). As seen, Nike’s revenues declined in 2020 because of closed stores during the pandemic period. However, by 2021, Nike managed to recover profits and benefited from pandemic limitations abatement. This way, the corporation’s revenues are cyclical, and it is seen how the company loses and gains profits due to changing circumstances. In addition, Nike managed to benefit from sales online in various marketplaces during the two years of the pandemic.

The information presented in Nike’s reports might be essential when considering the corporate’s current market share to that of their rival companies. As for revenues for 2021, it is seen that Nike has a considerable increase in profits despite impacts of and circumstances that confused the manufacturing. Several competitors of Nike suffered a recession of demand for their production. Considering net losses of Nike during 2021, it constituted 790 million dollars, which may be called an insignificant loss when measuring the corporate’s profit. In the sector of manufacturing sportswear and footwear, Nike takes the most dominant position in comparison with its rivalries (SEC Report, 2021). The information concerning revenues for a determined time, gross margin, and net losses is crucial if comparing the company’s market share with the market shares of its competitors.

Company’s Advantage

The corporation is considered the largest seller of goods for athletes. However, Nike has a main rival Adidas, and this competition is justified. The thing is that Adidas and Nike produce homogenous goods, and it is possible to take any product for sport or casual usage in both of these companies (SEC Report, 2021). Moreover, several years ago, Adidas outrun Nike in revenue for a year. Experts often compare these two companies because they strive to develop, generate new ideas, and offer the best options for a customer.

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Conclusion

Overall, it is possible to suggest that Nike corporation stays in a dominant position. There are many stores worldwide, as well as online shops in marketplaces. Nike offers a wide range of goods and services for athletes and people who want to wear quality casual clothes. The corporation’s revenues have grown during the current fiscal year; the company recovered from the pandemic. Nike takes a leading stance among its competitors and continues to develop.

References

Gupta, S. K. (2021). Nike SWOT 2021 | SWOT Analysis of Nike. Business Strategy Hub.

NIKE, Inc. Reports Fiscal 2020 Fourth Quarter and Full Year Results. (2020). Nike News.

NIKE, Inc. Reports Fiscal 2021 Fourth Quarter and Full Year Results. (2021). Nike News.

SEC Report. (2021). Nike, Inc. 2021 Annual Report 10-K. SEC.Report.