Nike's International Business: We Run India Event Analysis Report

This report provides a comprehensive analysis of Nike's international business strategy, specifically focusing on the 'We Run India' event. It begins with an introduction to international business and its relevance to Nike, followed by an in-depth examination of the company's background, including a SWOT analysis that highlights its strengths, weaknesses, opportunities, and threats. The report then delves into the relevance of the 'We Run India' event, exploring market entry strategies like penetration pricing, STP strategies, and market segmentation based on demographics, psychographics, and behavior. It identifies the target audience as professional athletes and discusses the importance of organizing events to create awareness. Furthermore, the report analyzes contemporary issues such as government regulations, safety, cultural barriers, and changing customer preferences that may impact the event's success and suggests ways to address them. It concludes with a marketing plan for the launch of the event, emphasizing the application of relevant academic models and theories to justify all decisions and suggestions. The report aims to provide a strategic overview of Nike's approach to entering and succeeding in the Indian market through the 'We Run' event.

International Business
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TABLE OF CONTENTS
INTRODUCTION .........................................................................................................................1
TASK 2............................................................................................................................................1
Organizations background including SWOT analysis.................................................................1
Relevance of Nike We run race in the identified new market, market entry, STP strategies......3
Relevance to target audience.......................................................................................................4
Analysis of contemporary issues that may impact on success of the event and the ways they
can be addressed..........................................................................................................................5
Detail of the event theme.............................................................................................................6
Marketing plan for launch............................................................................................................6
Knowledge and application of relevant academic models and theories to justify all decisions
and suggestions............................................................................................................................7
Conclusion.......................................................................................................................................8
REFERENCES..............................................................................................................................10
APPENDICES...............................................................................................................................12
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INTRODUCTION
International business includes all the commercial transaction that occurs between two or
more regions, countries, nations beyond their political boundaries. Such is undertaken by the
private firm for the purpose of attaining huge amount of profitability. In addition to this public
organization undertakes international business for profit as well as for political reasons (Hill,
2008). International business is referred to as all those activities of business that are comprised of
cross border transactions of goods, services, resources among two or more nations. In the present
study international business has been discussed with respect to Nike. The firm is American
Multinational Corporation that is involved in designing, developing, manufacturing and
marketing of footwear, apparel, accessories as well as services. In order to promote the business
Nike is planning event in 2016. The host city for this would be India. The event will be known as
We Run India 2016.
The present report entails to understand the organization's background and analysis of its
strength, weakness, opportunities and threats. Further the report also includes target market for
the new event. In addition to this the study also involves analysis of the contemporary issues that
might affect the success of the event and the manner in which it can be addressed.
TASK 2
Organizations background including SWOT analysis
Nike is regarded as an American multinational brand that is involves in designing,
manufacturing, developing, marketing and sales of its products and services across the globe.
The different categories of products Nike sales include apparel, footwear, equipment, accessories
as well as services. The company is one of the largest suppliers of athletic shoes and apparel. In
addition to this it is major sports equipment manufacturer. Nike was incorporated in the year
1968. The company is headquartered near Beaverton, Oregon. It is the world's leading designer,
marketer as well as distributor of athletic footwear, equipment, accessories and apparel for wide
range of sports and activities related with fitness (Leung and et.al, 2005). The firm possesses
48000 employees across the globe and makes annual revenues in excess of $25 billion. The
company makes sales through Nike owned retail stores as well as internet websites. The SWOT
analysis of Nike has been enumerated in the manner below:
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Strengths Product innovation: The Company has greater advantage of staying ahead of the
technology. This has assisted it in attracting large number of customers. Further through
influential endorsement from professional athletes such as Michael Jordan to Tiger
Woods Nike is able to grab attention of large of number of customers (Stock and Watson,
2005). Most recently the company has launched innovative product in the market place
that is Nike Flyknit. This is an innovative footwear platform that makes use of yarns and
fabrics in order to develop featherweight, formfitting and virtually seamless upper. Strong cash flow: The Company is generating a huge amount of free cash flow. A portion
of this is used for the purpose of enhancing shareholder value. Beside modest dividend
payout cash is being utilized with the aim to fund aggressive buyback program. The
company posses’ large amount of cash in order to maintain research and development
budget.
Weakness High cost of advertising: The marketing strategy of the firm includes locking up majority
sports starts in lengthy endorsement deals. This is regarded as successful tactic as evident
by the global awareness of the brand Nike. The firm has strong share positions within
each of its categories. The strategy cost higher to the business. The cost of endorsement is
much higher for the business and is rising like competition from new sector participants.
Opportunities Favorable industry trends: The popularity of the firm is growing faster as it has
operations across the globe. A focus on fashion athletic is providing Nike a boost as style
plays major role in line of footwear and apparel. Direct to consumer: E-commerce presents big opportunity for Nike. The firm is planning
to expand its base of retail shops and factory stores as such would assists Nike in keeping
best control over its brand (Johnson, Lenartowicz and Apud, 2006). With this the
company can manage its inventory effectively and can win wholesale accounts. The firm
has 750 retail units across the globe that includes 300 in United States.
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 Emerging growth of market: In China the conditions are bit challenging. This is because
the company is experiencing moderate economic slowdown. But as the China has huge
population and emerging class offers greater opportunity to Nike.
Threats Product cost inflation: With the increase in cost of raw material the company is facing
greater issues in managing the demand of the customers. Further the labor inflation acts
as another major issue (Nike: A short Swot analysis, 2015). These are major threats to
business that can affect its long term success and survival in the market place.
 Heightened competition: The market for sports shoes as well as garments is highly
competitive. The firm like Nike is facing cut throat competition. Its rivalries are
developing alternative brands with the aim to take away market share of Nike.
Relevance of Nike We run race in the identified new market, market entry, STP strategies
Nike is regarded as one of most competitive organization. The company has sponsored
top athletes and has gained valuable coverage. In order to promote the business the company is
engaged in organizing event in several parts of world. In accordance with the case scenario being
a international events team for Nike the host city chosen is India. The market identified for we
run race is India. This is with the aim to increase awareness about the innovative products that
are being manufactured by Nike. In India the company can make market entry to penetration
pricing strategy (Luo and Tung, 2007). This is because middle class population in India is higher
in comparison to upper income class. This would assist in offering greater success to the business
for long run course of time. The company is already operating its business functions in Asia thus
through its expansion in India it can make huge amount of profitability. There is large number of
competitors that offers cut throat competition to Nike. But through innovation the company can
position its products and services within the market in an effective manner.
Nike can segment its market in India on the basis of different criteria. This includes
demographic, psychographic as well as behavioral. On the basis of demographic the company
can segment market in categories that is male, female as well as kids (Forsgren and Johanson,
2014). The Mission statement of Nike is to bring inspiration as well as innovation to different
athlete across the globe. On psychographic basis the company can segment market based upon
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the personality of the individual. The people who are sports centric can be targeted by the
company. This is because the company majorly deals in sports brand through its focus would be
the people who are engaged in such activities. Behavioral segmentation can be done on the basis
of benefits. This can be categorized into three major types which include utility based; style
based as well as technology based (Hohenthal, Johanson and Johanson, 2014). As the company
is promoting sports segment for different class of people thus it can undertake multi-segment
targeting. This strategy is beneficial for Nike as the firm is required to focus on two or better
defined market segments and wants to develop various strategies for them.
Positioning is regarded as the development of product and brand image in the minds of
customers. It includes improvement in the perception of the customers regarding the experienced
they would gain through selection of the product. The company can position itself as an
innovative brand that is engaged in offering high tech products to the customers in accordance
with their requirement.
Relevance to target audience
The target audience for the Nike's event we run India would be professional athlete. This
is due to the reason that they have major need for making purchase of the company's product in
order to satisfy their need to a greater extent. It is important for the organization like Nike to
make selection of target market that possesses greater needs for the products that are being
offered by them (Meyer and Thein, 2014). Professional athletes have greater need of using sports
shoes as well as equipments as it is their job. Thus in order performs the job with effectiveness
they are required to make use of quality products. This would assist in fulfilling their needs to a
greater extent.
The awareness among the target audience for Nike cannot be spread through
advertisement but such can be effectively done through organizing events. With the events such
as we run the firm cannot invite different athlete as well as local people in order to create
awareness among the mass (Czinkota and et.al., 2009). Through this the individual can gain
knowledge regarding the innovative products that have launched by Nike in the market place.
This has huge impact on the sales as well as profitability of the business. Moreover it has greater
role towards increasing the knowledge of the products in relation to the other competitors. Thus
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comparison can be made by the customers in an effective manner. From the analysis the product
selection of the best one can be done by the clients.
Analysis of contemporary issues that may impact on success of the event and the ways they can
be addressed
There is existence of several issues that can be faced by Nike while organizing event We
Run India 2016. The following are the contemporary issues that might affect the success of the
event: Government regulations: The government regulation in different nations varies to a
greater extent. For the purpose of carrying out event it is important for Nike to comply
with the policies that are being formulated by government in India with respect to
organization of event in the nation (Wild, Wild and Han, 2014). This acts as major issue
for Nike that can affect the successful accomplishment of the event in India. Safety and security issues: Another major issue that can be faced by Nike can be in
relation to safety and security. Due to terrorism the occurrence of the event is affected to
a greater extent. With the presence of such barrier success of the event is hampered. Cultural barriers: There is huge difference among the culture prevailing in the local and
international environment. As Nike is organizing event in India thus it has little
knowledge about the culture prevailing in the nation. This would result in affecting the
success of the event to a greater extent.
 Changes in the preferences of customers: Due to changes in the preferences of the
customers event of Nike is affected greatly. The needs as well as requirements of the
customers’ changes with time (Dunning, 2012). This compels the company to bring
alterations within its products that are being promoted by them. This would otherwise
result compelling customers to switch to another brand.
There are certain ways that can be used to address the issues that can be faced by Nike.
These are enumerated in the manner below: Market research: In order to gain insight to the changes needs as well as preferences of
the customers it is essential for Nike to carry out market research in an effective manner.
This would assist the firm in knowing the products that are demanded by them.
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 Compliance with the policies of government: Through compliance with the policies of the
government the issues faced in relation to this can be addressed in an effective manner. It
is important for Nike to follow the legislation developed by Indian government in order
to organize successful event.
Detail of the event theme
Nike We Run Series 2016 is another event plan that is being organized by the company
for the sake of increasing awareness among professional athlete. The event would include more
than 15000 runners and there will be 15 races across the globe. The Nike's we run race will range
in distance from 7 km to a full marathon. This would present the enthusiasm of a particular city.
It is essential that the event is tailored to an individual city. The “we run race” will bring together
athletes as well as various musicians (Griffin and Pustay, 2005). Various courses of distances
have been kept in order to challenge the athlete has been kept in the event. The event would take
place on a grand level. As there is involvement of large number of people thus awareness
regarding the product can be creating in the minds of targets in an effective manner.
Along with this the marathon would includes hoarding of the different products that are
not familiar within India. We run race would be conducted for children above 12 years in which
the distance will be kept minimal. Along with this the females will also be included in the race in
order to promote the product in an effective manner. Along major segment would be of male. All
the different segments are kept with the aim to provide knowledge regarding the segment in
which company deals. This would assist the firm in making promotion of its products before
huge mass (Rugman and Collinson, 2009). This would further assist the business in increasing its
sales as well as profitability to a greater extent. Moreover with this organization can resolve the
cultural barriers that are affecting marketing of its products to a significant level. Schedules of
the marathon at different places in India will be devised so that planning can be done in an
appropriate manner. This would assist in attaining success through event.
Marketing plan for launch
Marketing plan is one that offers detail knowledge regarding how a company plans to
attain its objectives that are related with marketing. With the assistance of marketing plan
company can effectively promote its entire brand or line of products in an effective manner. A
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sound marketing plan is of greater importance in attaining economic success of new product. The
marketing plan for launch of product has been enumerated in the manner below:
 The first and foremost step is related with market research. It is important for Nike to
gain insight to the needs of people in Indian market. This would assist the firm in
fulfilling the needs of the target market in an effective manner.
 Another step is related with evaluation of the competition. This implies, making
determination of the differences that occurs between current product offerings as well as
with those competitors (Morrison, 2006). Thus with this company can provide suitable
product to the customers in an effective manner.
 At this stage marketing strategy is determined and test is being carried out. This is in
order to gain insight to the responses of the focus group in relation to the promotion
made. Nike can make promotion through online means.
 Another major step is development of public relation program. This can be done by
organization of events such as we run in India (Papadopoulos and Heslop, 2014). This
offers company with greater opportunity to present the product and services in an
effective manner.
 Further the readiness of the launch is being evaluated. This is in order to make sure that
the product is ready when it is announced.
 Another major step after launch is creation of time line in the marketing plan so that each
and every personnel within Nike can follow it regularly.
 Moreover training is essential part in marketing plan. Under this customer service
department is offered with training in order enhance the sales of the product in an
effective manner.
Knowledge and application of relevant academic models and theories to justify all decisions and
suggestions
Marketing mix has been presented with the aim to justify all the decision as well as
suggestions. The model of seven P’s has been enumerated in the manner below:
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 Product: The product in Indian market will be sports related so Nike has major strength
in this. Further under this the company would target male, female as well as kids in order
to fulfill their requirement in an effective manner. Price: As there is large mass belonging to middle income group thus price of the product
will be kept reasonable. Place: For distribution of the product Nike can make use of retail shops as well as online
means. This would assist it in gaining the attention of large of customers. Promotion: The promotion of the product will be done through organization of marathon.
This is because such would assist in increasing awareness among large mass within
minimal duration of time. Physical evidence: The location where services are delivered plays significant role. It is
important for Nike to attract large market by making differences in the user experiences. People: This element of marketing mix is very crucial (Lorette, 2015). It is important for
Nike to hire local people in India so that better understanding can be developed among
them. This would result in enhancing the sales of business.
 Process: It is important to keep balance between standardization and customization. The
process needs to involve activity that is given more attention and is clearly defined.
CONCLUSION
It can be concluded from the study that international business can be effectively by the
means of making promotion in an effective manner. With the assistance of this company can
create awareness in the market place. The firm like Nike can expand its business operations in
India by organizing event that is we run. Through this it can grab the attention of several
professional athletes in an appropriate manner. This would act as an aid in increasing the sales of
the business to a greater extent. It has been inferred from the report that analysis of business
strength and weakness would act as a boon in making expansion of the business in international
market in an effective manner. With the assistance of marketing plan the activities can be carried
out in smooth manner. Further this would facilitate in creating greater awareness among the
people. In addition to this several barriers have been determined that has impact on the success
of the event.
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REFERENCES
Journals and Books
Czinkota, M. R. and et.al., 2009. International business. Dryden Press.
Dunning, J. H., 2012. International Production and the Multinational Enterprise (RLE
International Business). Routledge.
Forsgren, M. and Johanson, J., 2014. Managing networks in international business. Routledge.
Griffin, R. W. and Pustay, M. W., 2005. International business: A managerial perspective.
Pearson Prentice Hall.
Hill, C., 2008. International business: Competing in the global market place. Strategic Direction.
24(9).
Hohenthal, J., Johanson, J. and Johanson, M., 2014. Network knowledge and business-
relationship value in the foreign market. International Business Review. 23(1). pp.4-19.
Johnson, J. P., Lenartowicz, T. and Apud, S., 2006. Cross-cultural competence in international
business: Toward a definition and a model. Journal of International Business Studies.
37(4). pp.525-543.
Leung, K. and et.al., 2005. Culture and international business: Recent advances and their
implications for future research. Journal of International Business Studies. 36(4). pp.357-
378.
Luo, Y. and Tung, R. L., 2007. International expansion of emerging market enterprises: A
springboard perspective. Journal of international business studies. 38(4). pp.481-498.
Meyer, K. E. and Thein, H. H., 2014. Business under adverse home country institutions: The
case of international sanctions against Myanmar. Journal of World Business. 49(1).
pp.156-171.
Morrison, J., 2006. The international business environment: global and local marketplaces in a
changing world. Palgrave Macmillan.
Papadopoulos, N. and Heslop, L. A., 2014. Product-country images: Impact and role in
international marketing. Routledge.
Rugman, A. M. and Collinson, S., 2009. International business. Pearson Education.
Stock, J. H. and Watson, M. W., 2005. Understanding changes in international business cycle
dynamics. Journal of the European Economic Association. 3(5). pp.968-1006.
Wild, J., Wild, K. L. and Han, J. C., 2014. International business. Pearson Education Limited.
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Online
Lorette, K., 2015. Marketing plan for a new product launch. 2015. [Online]. Available through:
<http://smallbusiness.chron.com/marketing-plan-new-product-launch-1475.html>. [Accessed
on 24th October 2015].
Nike: A short Swot analysis. 2015. [Online]. Available through:
<http://www.valueline.com/Stocks/Highlight.aspx?id=15623#.VisQ2qW1Gkp>. [Accessed
on 24th October 2015].
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APPENDICES
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