Establishment or Expansion of Nike Inc in Spain

The establishment or
expansion of Nike Inc in
Spain

Table of Contents
INTRODUCTION...........................................................................................................................1
Background Information on NIKE .............................................................................................1
Background Information on the Business Environment in Spain ..............................................3
Analysis of the Business Scenario..............................................................................................6
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
Business expansion has signifiant potential to expose organisation products and services
to large base of customers. By making increase in overall consumer base company have effective
opportunity increase their product offering range and further improve overall sales and
profitability of entity (Anderson and et. al., 2016). Present report has been conducted on Nike.
Organisation is looking forward to expand their business in Spain. Expansion benefit
organisation to have greater access to talent and further have exposure towards foreign
investment opportunities. In addition to this, FDI opportunity which is looking by Nike as to
expand their business in Spain in licensing. As this FDI opportunity allows company to have
quick and easy access into foreign markets with lower capital requirements while ensuring large
return on investment(ROI). Company operate their services in apparel, accessories and sports
equipment industry and was established in 1964. In this report formative discussion has been
made on FDI opportunity for which company is looking for, PESTLE analysis and Porter's five
forces. In addition to this report include recommendation in context with business scenario.
Background Information on NIKE
Nike was established in the year 1964 by Bill Bowerman as Blue Ribbon Sports. First
retail outlet of company was formed in the year 1966 and their launched their Nike brand shoe in
1972. Organisation renamed itself in 1978 as Nike, Inc. Entity engaged in the operations related
to development, design, manufacturing, design, equipment, services, sales of footwear,
accessories and apparel. It has been identified that range or size of company is increasing at fast
rate throughout the years. Nike is having estimated number of 73,100 employees till 2018 all
around the world. In addition to this, in the year 2019 company operate their business with
having 1.152 retail stores all around the world. Further this has been evaluated that Nike operate
their functioning as corporate ownership. It has determined that this form of ownership mainly
involve any number of owners but it turns the business into a corporation, which is a distinct
legal entity. In the segment of current international operations Nike conduct their functioning in
more than 45 countries. Further it has been identified that in order to formulate any international
expansion Nike effectively acknowledges formative collaborative and flexible innovation. In
addition to this, it has been identified that company undertake advantage of advocacy agenda as
to evolve large-scale investments as well as policies for sustainable innovation in order to make
sure that organisation gain more competitive advantage as per compared to their competitors.

Along with this, financial estimates shows that Nike significantly move towards high growth and
profitability in continuous manner. As “FY19 was turned out as crucial year for company. As
with the help of signifiant digital advantage and innovation company effectively accelerate
towards more profitability and growth opportunities. It has been significantly reflected from
FY19 performance of Nike that with the help of their strategic transformation company created
extraordinary value for their shareholders and customers that further ensure long term sustainable
and profitability of entity. It has been identified that Gross margin of company increase by 80
basis points to 45.5 percent because of higher average selling process. Nike Direct revenues were
$11.8 billion, up 16% on a currency-neutral basis, driven by a 35% increase in digital commerce
sales, 6% growth in comparable store sales as well as the addition of new stores. Sales to
wholesale customers increased 10%.