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Introduction

Marketing Assignment I have been asked by "Nike" to generate a report which includes a full market analysis and a set of strategic recommendations to help secure their short, medium and long term future. Nike itself is a huge organisation and has various sectors within its organisation. In the report I am going to focus on the UK footwear market sector. In this report I will firstly explain a brief history of Nike and how it was formed and how it has developed into the extremely successful brand we know today. I will explain the products range they currently have and identify the markets from within which Nike function. I am then going to look at the footwear market sector as a whole and try to assess the current situation of the market and the future predictions of the market by looking at both the micro and macro factors affecting the sector. Using this I can try to explain how this may affect Nike in particular which will help me discover what I believe may be the best strategic recommendations Nike can realistically develop and implement. I will apply a SWOT analysis to Nike to try to discover the attractiveness of the options they have in relation to changing strategic objectives in the short, medium and long term. I will assess the extent to which Nike can use its strengths to allow them to exploit opportunities and counter threats and the potential weaknesses of Nike that may pose a threat to its marketing position. ...read more.

Middle

* Competition - Nike is the leader in the Footwear market worldwide however there are other large organizations that compete for the market share and in the UK footwear market it is assumed C&J Clarke holds a slightly higher market share in the UK footwear market than worldwide leading competitors Nike or Adidas. * Distributors - Nike are such a large and established organization that they have a lot of market power and so has its fellow competitors. Most of these large companies that take most of the UK footwear market share sell to retailers and so retailers have the buying power and can put pressure on organizations like Nike to push prices down, hence why the footwear industry is so price competitive. * Suppliers - The top companies in the footwear market produce most of their products in the East where labour costs are lower so they can produce products cheaper and thus sell at a cheaper and more competitive price. From further research I found that in the UK footwear market it "generated total revenues of $9.8 billion in 2005, an increase of 3.7% since 2004, representing a compound annual growth rate (CAGR) of 2.7% for the five-year period spanning 2001-2005" (Data Monitor). Also, the market volume "grew by 3.8% in 2005 to reach a volume of 326.7 million pairs" (Data Monitor). This shows the UK footwear market is getting more profitable and is growing. Opportunities, Threats to Nike and Potential Strategies It is important to identify the key strengths and weaknesses of Nike to try and find strategies that may be used to help protect the weaknesses and oppose threats and identify and fulfill new opportunities in the market. ...read more.

Conclusion

Both of these economies have large populations and with the estimated high growth of these economies I think Nike should try and penetrate these markets if they continue to grow. Threats to the Nike organization in the medium term may be the forecasted predictions of the UK footwear market. Future forecast of the UK footwear market shows there may be a minimum volume growth of footwear in the market within the next five years. This shows Nike have to ensure they adopt a strategy that may help protect the company at the time the volume of footwear demanded is low. It is vital Nike can operate effectively and recover after the market slowdown in volume and return as competitive as before if not more competitive. With price still decreasing in all retail sectors it is important Nike always try to cut its manufacturing costs to stay competitive. Pricing strategies could be put in place to tackle this threat and more research into sourcing cheaper resources to manufacture the footwear. In the long term (5+ years), falling prices has led to volume growth of footwear in the UK being minimal in the future forecasts, it shows "From 2007-12, market growth in value terms will be minimal, while volume growth is expected to decline from 2009 onwards" (Mintel). This makes it very important for Nike to try and gain as much market share as possible before it becomes saturated and no future volume growth can be achieved. This could be achieved with more endorsed products and advertising campaigns to capture the consumers. This could also apply to the medium term. ...read more.

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