five force model for woodland
PORTERS FIVE FORCES ANALYSIS
Nike Brief History
Nike has one mission statement: To carry out the legacy of innovative thinking left by the founding members by developing products that enable athletes of all abilities to maximize their potential while beating competition and creating value for shareholders. Nikes headquarters are located in Beaverton, Oregon in Portland and the company operates in more than 160 countries all over the world with more than 30,000 employees across all six continents (Nike 2011).
Nike Today
Nike today is the largest manufacturer of athletic footwear, clothing and equipment globally by sales with 2011 revenues of more than US $23billion ahead of closest rivals Adidas, Puma, K-Swiss and Under Armour which it competes with in the sportswear market. Nike has been steadily increasing its market share of the sportswear market from an initial 3.7% in 2006 to 4.6% in 2011, even though this declined in 2009. Many analysts expect this market share to reach about 6.3% by 2017. The company also expects to make big gains from the London 2012 Olympics for its footwear division (MSN money 2012)
Figure 1: Nike Apparel Market Share
Figure 2: Nike Footwear Market Share
However even though Nike is expected to attain big gains from the London 2012 Olympics, its competitors are not sitting still and letting Nike take any such gains. Adidas, which is one of main rivals of Nike, has invested more than £100million in the Olympics to not only boost its profile, but also close the market share gap with Nike. Adidas has already posted better sales and profit results in 2012 compared to Nike. In fact, Adidas, also the second largest apparel manufacturer in the world after Nike, has been outperforming Nike since 2006 (Torry 2012).
Below, we will do an industry analysis using Porters 5 Forces of Competition Framework to help us understand the various variables influencing competition and profitability for Nike within the sectors in which
Nike Brief History
Nike has one mission statement: To carry out the legacy of innovative thinking left by the founding members by developing products that enable athletes of all abilities to maximize their potential while beating competition and creating value for shareholders. Nikes headquarters are located in Beaverton, Oregon in Portland and the company operates in more than 160 countries all over the world with more than 30,000 employees across all six continents (Nike 2011).
Nike Today
Nike today is the largest manufacturer of athletic footwear, clothing and equipment globally by sales with 2011 revenues of more than US $23billion ahead of closest rivals Adidas, Puma, K-Swiss and Under Armour which it competes with in the sportswear market. Nike has been steadily increasing its market share of the sportswear market from an initial 3.7% in 2006 to 4.6% in 2011, even though this declined in 2009. Many analysts expect this market share to reach about 6.3% by 2017. The company also expects to make big gains from the London 2012 Olympics for its footwear division (MSN money 2012)
Figure 1: Nike Apparel Market Share
Figure 2: Nike Footwear Market Share
However even though Nike is expected to attain big gains from the London 2012 Olympics, its competitors are not sitting still and letting Nike take any such gains. Adidas, which is one of main rivals of Nike, has invested more than £100million in the Olympics to not only boost its profile, but also close the market share gap with Nike. Adidas has already posted better sales and profit results in 2012 compared to Nike. In fact, Adidas, also the second largest apparel manufacturer in the world after Nike, has been outperforming Nike since 2006 (Torry 2012).
Below, we will do an industry analysis using Porters 5 Forces of Competition Framework to help us understand the various variables influencing competition and profitability for Nike within the sectors in which