Name: Ajinkya Sirsikar
ID: 913747268
BUS-783 COMPANY PAPER- NIKE, Inc.
Goal: I would like to see myself working for NIKE, Inc., a renowned sports brand
Division: Athletic Shoe Division
Department: Manufacturing
Position: Planning Manager
Classification for the manufacturing division according to North American Industrial Code
System (NAICS) is as follows:
Following analysis for NIKE as per Michael Porter’s Five Forces:
Barriers to Entry
The footwear manufacturing industry is a highly saturated and a challenging industry.
However for NIKE in the USA, the threat of new entrants is low because of the following
reasons:
Strong Brand Loyalty
Economies of Scale
High-end Marketing
High Research & Development cost
Legal barriers & patents
Bargaining Power of Suppliers
A typical NIKE shoe is made from three types of raw materials: cotton, rubber & foam.
When dealing with commodity items like these, the company has abundant options for
suppliers. Any supplier that meets the requirements can supply such indistinguishable
product, which makes NIKE dominant over its suppliers. Hence the bargaining power of
suppliers is extremely low in this industry.
Bargaining Power of Buyers
Formerly the buyer power has been minimal. But in the recent years there have been
various retail and vendor consolidations, for example Footlocker acquisition of Footaction
and American Sporting Goods acquisition of And1, which show signs of increasing
concentration of buyers thereby increasing buyer power overall1. Also the price of NIKE
products is comparatively higher than the other brands. Customers are price-sensitive and
