Introduction to Business

Business Analysis : Nike's Eternal Innovation

Ferina Lestari 130518013

2018/2019
 Chapter 1

Introduction

Nike is one of the most common brand that we can see in many market in this world now.
Nike Inc. is American Multinational Coorporation that is engaged in the design, development,
manufacturing, and worldwide marketing and sales of footwear, apparel, equipment, accessories,
and services. Nike also produce their product for all costumers, men, woman, boys, ans girls. So
the product is acceptable for all gender and ages.

Nike Company is founded by Bill Bowerman and Phil Knight in January 25, 1964. Nike
was founded when Oregon athlete and businessman, Phillip Knight, considered Importing shoes
from Japan to compete with German brands such as Adidas and Puma which has dominated the
United States market. He considered it, because labor in Japan has cheaper price and It will made
the Shoes Price more cheaper too.

When 1979, Nike is already dominate half on US market and grow stronger and stronger.
Although there was an attack from another brand in 1980, nike managed to survive and again
topped in 1990 with "Air Jordan" shoes supported and promoted by Michael Jordan himself.

Also, in 1980 Nika expand its product to many types and sell it all over the world. In 1990
Nike move to Oregon and build its first retail store in downtown Portland. It first retail stor built
in November 1990.

This day, Nike is remain stronger by being the market leader in sports shoes, and also an
important player in sports clothing and accessories. Fortune magazine reported sales of US $ 3.7
billion in 1994 and profits of US $ 299 million (Fortune 1995). About 60 percent of the company's
sales in the United States, around 30 percent in Europe and 5 percent in Asia.

In Indonesia, Nike has been operating since 1988. In a press interview in November 1994,
the coordinator of the Nike company in Indonesia, Tony Band, said the companies used in
Indonesia amounted to 11 contractors. Among them are the former bases of Nike's associate
companies in South Korea and Taiwan - which also at the same time produced for other brands
such as Reebok, Adidas and Puma.
 Chapter 2

Literature Review

To expand the market, also for diversity product line or we can called it to “Survive” in
this business world firms must to develop new product so they won’t be outdated. When firms
must faces their competitor, and must complete also adapting with consumer needs they can’t only
depends on one single best products forever because people will get bored.

It is emtimated that we needs to produce 50 new fresh product with fresh idea before we
can generate one product that is success in the market. There only a few product that can be well
accepted by the market, and win the costumer heart. Many good and fresh idea have failed in the
market, because creating a new successful product had been harder day by day. In order o faces
the market and increase our change to developing new fresh product we need some version of a
seven-step process for developing physical goods.

1. Product ideas
We must begin with searching the new fresh idea for the product that will be produced.
We can get the ideas by observe and understand what the market want.

2. Screening
After collecting all of those ideas, we must separate all of the ideas and only focus on
using those that are in suitable with the capabilities and circumstances of the company.

3. Concept Testing
With all of these selected ideas, we must do market research and find costumers input
about them.

4. Business Analysis
When we finish with that market research, we can start to analyze the production cost
and benefits to see whether the products meets minimum profitability goals,
5. Prototype Development
After that analysis, we can start to make the protorype that odten needs expensive
equipment so we can produce the first product with our idea. It might be takes long
time.

6. Product Testing and Test Marketing

When the prototype has done, we can know the problems and fix that. So we can start
to produce limited product and sell it to see market reaction for that product.

7. Commercialization
If the response was good, we can begins to produce the product in the big amount and
promoting those product.
 Chapter 3

Case Review

(This section will be focused to discuss why Nike can survive and be the market leader in all over the world.)

‘ Nike in the world’s larget company that lead all of the sports market in this world and earns
$US14 billion for its revenue. Nike can be survive in this business world by keep giving their best
new product and also adapt with what are the costumers need. For example, they produce a shoe
that can make people can have stronger feets with mimicking the barefoot runners.

The first innovation of Nike start in 1971, when Bill Bowerman want to create a better sole
for running shoes by putting rubber iron into his wife’s waffle iron. When it work, it was started
to change the running world. After that first important innovation, Nike also have the next
innovation by announce Nike Air, that can be use for reduced shocked and disitributed pressure.

Nike can develop the product by built the Nike Sports Research Laboratory (NSRL) so
they can develop their product and decide which one is suitable with tha company and market.
Their main research is focusing in the physical needs of athletes. This NSRL works with Nike
design Team and have partnership with many major Universities all over the world.

Furthermore, the researcher also working with 20 men and women to observe the body's
reactions, especially the legs when we run without shoes. So, with that experiment Nike can know
what will they do with that information, what is the most needing thing for them, and what
innovation that can be fulfill that needs.

In the end, with all the research and effort that they do, they can survive and be the leader
of the sport market. They have many costumers that are very rarely complain them and they can
be fulfill what the market needs and what the market want.
 Chapter 4

Result and Discussion

 What challenges that Nike faced when they want to survive the sports market?
 What has nike done to conquer the market?

ANSWER

 The challenges that must be faced by Nike and the other companies are the market. Because
the market are change so fast, and as a firm we need make our choice in order to survive.
We can follow the market wants, or follow the trend so we will be survive and have same
product with the other. Or we can make our own innovation that can be accepted and loved
by the market. As a firm, Nike needs to always developed new product so they won’t be
outdated.

 From what we can see, Nike has taken several steps ahead of other companies. They has
build their NSRL and take a big focus for their research. With that research, they can know
what that must be done and they can know what is the main need of the costumer in that
time. With all of the information, they can create their new product and it will be accepted
in the market. They know how to make costumer follow them, ans they know what is
exactly the costumers needs.
 Chapter 5

Conclusion

Nike is very inspirational with all of their innovation to every athlete in this world. They
can adapt the market by considering that everybody is an athlete. They never run out of ideas and
will always tryinh to be the foremost in design, function, and product innovation, especially in
sports products. Through their intensive research and development, and the observation of their
customers they can become the most prominent sport company and can continue to survive in the
sport market. Nike has many regular customers who love their products because they are in
accordance with what is needed, and loved by all markets in every country in the world.
 References

https://id.wikipedia.org/wiki/Nike,_Inc.

https://www.nike.com/id/en_gb/?ref=https%253A%252F%252Fwww.google.com%252F

https://en.wikipedia.org/wiki/Nike,_Inc.

www.afrbiz.com.au

Ebert, Ronald J, Griffin, Ricky W. 2017.Business Essential Eleventh Edition, Malaysia: Pearson
education