Our Picks ---

Industry: Athletic Shoe and Apparel

Company: Nike

Threat of Entry:

• Capital needed to start a shoe company
• Demand on technology/Learning Curve
• Access to market or distribution channel
• Access to raw materials
• How easy to survive, i.e. can they compete with existing companies
• Is there a significant entry barrier? (For example, advertising cost, large capital requirement, etc)

Threat of Substitute:

• What are the substitutes for athletic shoes and apparels? Except formal dress shoes, it seems that all other shoes are substitutes (??).
• To find answer for the above question, we need to know

• And what can make them change their tastes?

Negotiating Power of Buyers

• Who are the buyers? Big department stores, chain sports good stores, specialty stores, etc
• Are there many buyers?
• How do they influence prices?
• What is the relationship between shoe companies and distribution channel, co-dependent or one-sided?

Negotiating Power of Sellers

• What are the raw materials needed?
• Are these raw materials commodity?
• Are there many suppliers?

Industry Rivalry

• Who are the major players
• Athletic Shoes

1. Nike
2. Reebok
3. Fila
4. Adidas
5. Converse
6. ASICS
7. Keds
8. New Balance
9. L.A. Gear
10. Airwalk
11. Other less famous brand

• Athletic Apparel

1. Nike
2. Reebok
3. Fila
4. Adidas
5. Converse

• What are the relative strengh of each company
• How do they compete with each other? cut-throat price competition, competing on brand name without lowering price, etc
• How much product differentiation is there
• How fast the industry is growing? Domestic market and international market
• Exit barrier

• Expansion: easy or difficult

After we find all the above information, we should be able to address

The article that Dominique copied has a pretty good summary for this. But we need to find out how the players are responding the changes and how the industry is changing.

• How did it get started?
• How did it become a giant?
• What was the company’s strategy? Did the strategy change over time?

• Major strategic decisions in the past
• How did they change the company?

• Its effort to build a brand name. And a piece of Air Jordan story?
• Global sourcing, bad publicity on labor issues overseas
• Global expansion, $200 million soccer sponsorship
• Broadening its product scopes: from shoes to apparel

• How did Nike add value?

I gather that we should have enough information for this part once we collect relevant information for the previous analysis.

S&P report

Investment Analysis for Nike --- current and future strategy

Hoover’s Company Profile (Library)

Databases

Nike and other companies websites

etc.

Annual Reports

Articles in newspapers and magazines

Book on Nike -- past strategy and competition with rivals, some industry insight also