Nike Business Essay

1107 Words Sep 8th, 2008 5 Pages
NIKE Inc. principle business activities are the design, development, and worldwide marketing of high quality footwear, apparel, equipment, and accessory products.
They sell their products through NIKE owned retail stores and internet sales, and through a mix of independent distributors and licensees worldwide.

Virtually all products are manufactured by independent contractor, with all footwear and apparel manufactured outside the US, while equipment products are mostly manufactured within the US.

Nike has therefore no factories. It does not tie up cash in buildings and manufacturing workers. This makes a very lean organization. Nike is strong at research and development, as is evidenced by its evolving and innovative product range.
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Their business is seasonally affected, which could result in fluctuations in their operating results and stock price
7. “Futures” orders may not be an accurate indication of their future revenues
8. Their “Futures” ordering program doesn’t prevent excess inventories or inventory shortages, which could result in decreased operating margins and harm to their business
9. They could be adversely affected by the financial health of their retailers
10. Consolidation of retailers or concentration of retail market share among a few retailers may increase and concentrate their credit risk, and impair their ability to sell their products
11. Failure to adequately protect their intellectual property rights could adversely affect their business
12. They are subject to periodic litigation and regulatory proceedings, which could result in unexpected expense of time and resources
13. Their international operations involve inherent risks which could result in harm to their business
14. Currency exchange rate fluctuations could result in higher costs and decreased margins
15. Their products are subject to risk associated with overseas sourcing, manufacturing, and financing
16. Their success depends on their global distribution facilities
17. They significantly rely on information technology systems in their supply chain, and any failure, inadequacy, interruption or security failure of that technology could harm their ability to effectively

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