Verse0825 BUSINESS PROJECT REPORT PART 1 TEMPLATE JULY 2019 SEM

business project report (part 1) (10%)

pib(m)002 | introduction to business: management & marketing

INTAKE: JULY 2019 Semester 1

GROUP:

Name

Student ID

Kok Yu AI

19058866

Faith Tan

Ashley Sun Wy Mun

Chiam Yan Lin

Derrick Chan

Thanes

Criterias Done

Companies research on: (Please select one from the companies listed below)

Highlight the one you have selected Uniqlo & H&M

Nike & Adidas

Proton & Perodua

Family Mart & My News

Air Asia & Malindo

Body Shop & Face shop

Haagan Dazs & Baskin Robins

Company description:

Brief description about the company you observe- include the following: –

Company background: Who is the owner/shareholders of the company.

Objectives of the company/ mission of the company; vision: strategic goal of the company- direction the company and what the organizations’ want to achieve in the future.

(200-220 words) /8

Company A:

Founded in 1964 by Bill Bowerman and Phil Knight, Nike is now owned by Knight’s son, Travis Knight who is also the sports apparel giants’ biggest shareholder.

Other notable shareholders include Nike CEO, Mark Parker and former president of the Nike brand, Trevor Edwards. As a profit organization, Nike’s objective is to first and foremost make a profit for its shareholders. As a sports brand, Nike’s mission is to bring inspiration and innovation to every athlete in the world. The vision of the company is to remain the most authentic, connected and distinctive brand. One of the goals Nike works towards is valuing the opportunity to work alongside all stakeholders in the fashion industry and to learn and share best practices.

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Nike also wants to minimize its environmental footprint, paired with a goal to enhance sustainability through its supply chain by using more sustainable materials overall. In 2020, the organization hopes to make its products seem more premium, ignite female sneaker culture and earn 50 billion in annual revenue. Nike also aims to serve the next generation of athletes by raising awareness about the lack of physical activity, especially among the younger generation and working with others to get kids to be more active.

Company B:

In July 1924, Adidas was founded by Adolf Hassler. The current biggest investor of the company is Egypt’s richest man, Nassef Sawiris. Notable Adidas shareholders are River Park Advisors LLC and Putnam Investment Management LLC. One of the objectives of Adidas is to be consumer centric, putting consumers at the heart of everything they do and striving to serve them in the best possible way. The mission of the sporting company is to strive to be the global leader in the sporting goods industry with brands built on a passion for sports and a sporting lifestyle. Adidas is committed to continuously strengthening their brands and products in order to improve their competitive position. Adidas’ vision is to be the design leaders with a focus on getting the best out of the athletes with performance guaranteed products in the sports market globally. One of the goals Adidas is working towards is to increase collaboration. Adidas hopes to invite more athletes, consumers and partners to co-create the future of sport of and sports culture. In 2020, Adidas hopes to replace conventional cotton use by using 100 percent sustainable cotton. The apparel giant also wants to create a completely new supply chain for Parley Ocean Plastic. Thirdly, Adidas hopes to increase health education and management strategies, by way of using sport to improve not just physical but also mental health.

Product / service description:

Brief explanation about their product/service they provide in the market.

Product differentiation: How are their product different from their competitors’ in

the market.

Brief explanation about their target market.

(200-220 words) /8

Company A:

Question A

Nike has been producing sports equipment for a long time. One of the products that Nike created is running shoes. Nike running shoes are quite popular in the sports industry. Nike designs the running shoes in a lightweight, durable and flexible way. It delivers a soft and comfortable ride so our foot can move naturally. Long-distance running can be provided due to the comfort of the shoes.

Besides that, Nike also produces basketball shoes. The sports shoes which a lot of people recognized for Nike is Nike Air shoes. Nike Air shoes use the idea of pressurized air to reduce the impact between the land and the shoes. Therefore, the midsole of Nike Air shoes will return to the original shape and volume. That is the reason why Nike uses Nike Air in certain sorts of basketball and running.

Mostly people emphasized street style, especially for teenagers. Sneakers such as the Nike Air Force and Nike Cortez got worn since the 1980s. The designs of the Nike Air Force and Nike Cortez and the swoosh logo on them represent Nike’s simple yet classic style. Nike is still improving the form of these Nike sneakers, and some unique designs keep coming out recently.

Apart from this, Nike releases football shoes, tennis shoes, skateboard shoes, tops, shorts, leggings, outerwear etc. Varieties of accessories like crossbody bags, duffle bags, socks, caps, hijab and headbands are included in Nike products.

Question B

There are three main target markets of Nike, which are kids, women, and runners. Kids who love playing sports helps Nike’s business to grow tremendously. Nike invites young athletes for sponsorships to wear Nike’s product. Thus, it can attract a lot of young kids to buy its product. We also noticed that Nike has partnerships with some professional players as this is one of the significant ways to promote its products to the kids.

According to CEO Mark Parker, Nike puts in more efforts on runners. Today, Nike has a collaboration with Apple which is Apple Watch Nike +. Apple Watch Nike + is an ultimate tool for runners. It includes Apple’s application, Siri commands along with integration with the Nike Run + Club app for motivation to go for a run, training plans and guidance from the best coaches and athletes in the world. This product also features built-in GPS to track the user’s distance and route, so they don’t have to run with their phones.

Other than that, Nike is expanding women’s product, such as sports bras and leggings. It is because women who join training and sports activities increase since a few years ago. That is the reason why Nike put in more effort into women as its target market. Nike also intends on releasing Hijab for Muslim women. Because of religion, they need to cover up their head by using Hijab and even during sports activities. According to Nike, The Nike Pro Hijab is made from durable and lightweight fabric which delivers the best breathability. The pull-on design ensures the Hijab won’t go untucked while working out.

Company B:

Adidas has been producing different shoes, apparels and sports equipment in the past 70 years. Adidas’s aim is to have a product that delivers high performance, which is made in a sustainable way as innovation is a core of all the products.

One of the examples of where environmentally friendly innovative ideas and new technologies have been used in the creation of the products is the Parley For The Oceans.

Since 2015, adidas has partnered up with Parley for the Oceans, an environmental organization and global collaboration network. As a founding member, Adidas supports Parley for the Oceans in its education and communication efforts as well as commits to the Parley A.I.R. (Avoid, Intercept, Redesign) strategy. Adidas is using Parley for the Oceans plastic as an eco-innovative replacement for virgin plastic in conjunction with their aim to prevent plastic from entering the ocean. Adidas is driving eco-innovation around materials and products, and new ways of using them, with the ultimate goal of reinventing current plastic and instead transforming it into performance sportswear. In 2018, Adidas continued to roll out Parley Ocean Plastic across our key categories and were able to exceed our target, with more than five million pairs of shoes containing Parley Ocean Plastic made.

Synthetic fibers are widely used in our industry due to their unique performance properties such as softness to the touch, elasticity, light weight, high durability and superior moisture management. Recent studies, however, show that synthetic fibers can contribute to environmental pollution, particularly through the release of microfibers into the environment and the associated risk of water contamination.

Pricing method/strategy:

Brief explanation about pricing method for each of the company.

(80-90 words) /4

Company A:

Originally, Nike used cost-based pricing. Cost-based pricing involves calculating the cost of the goods then marking up the selling price to achieve a desired profit. This strategy worked well for Nike because consumers were willing to pay high prices for Nike products. Since Nike consumers are willing to splurge on the products, Nike took a new approach to their pricing model using customer value-based model in 2014. When Nike raised their prices, the consumers began to view the brand as more premium. So, Nike now uses a more premium pricing strategy.

Company B:

Adidas uses skimming prices as well as a competitive pricing strategy. Adidas uses the market-skimming price when they introduce a new and unique product in the market. Adidas uses the competition-based pricing method to set prices based on the those strategies, prices, costs, and market offering of their competitors such as Nike, Puma and Reebok. As the target market of Adidas are the middle class and high end customers, Adidas also takes on a premium pricing strategy. Setting a higher price point leads to consumers seeing the brand as more premium and the products as higher quality, and as such, Adidas rarely drops their prices.

Promotional method:

Brief explanation about their promotional method to create awareness, interest, maintain and grow their market share (Stakeholders).

(200-220 words) /8

Company A:

Nike is carried by multi-brand stores and the exclusive Nike stores across the globe. Nike sells its product to about 20,000 retail accounts in the U.S. and in almost 200 countries around the world. In the international markets, Nike sells its products through independent distributors, licensees and subsidiaries. The company has production facilities in Asia and customer services and other operational units worldwide.

Promotion is largely dependent on finding accessible store locations. It also avails of targeted advertising in the newspaper and creating strategic alliances. Nike has a number of famous athletes that serve as brand ambassadors such as the Brazilian Soccer Team (especially Ronaldo, Renaldo, and Roberto Carlos), Lebron James and Jermane O’Neal for basketball, Lance Armstrong for cycling, and Tiger Woods for Golf.

Nike also sponsors events such as Hoop It Up and The Golden West Invitational. Nike’s brand image the Nike name and the trademark swoosh; make it one of the most recognizable brands in the world. Nike’s brand power is one reason for its high revenues. Nike’s quality products, loyal customer base and its great marketing techniques all contribute to make the shoe empire a huge success.

Company B:

Adidas markets through various marketing vehicles but the majority of marketing is concentrated on television and product placements. The creative team of Adidas is known to pump adrenaline in their customers through ads which are well made, very creative and filled with energy. These ads attract the customers towards the brand by sending the right marketing message to the customer.

The tagline of Adidas “Impossible is nothing” is in itself a very powerful statement for the

brand.

After television, product placement is the second line of promotion for Adidas. The popularity of the brand is because it ties up with the top players across the world such as Lionel messi, Ronaldinho, Sachin tendulkar and various others.

At the same time, Adidas also sponsors teams and some of the top teams include Real Madrid, France, Great Britain (in football), England and South Africa (in cricket) and several others. Here is a list of all the sponsorships done by Adidas.Placement:

Brief explanation about how the companies made their product conveniently available in the market.

(80-90 words) /2

Company A:

Nike distributes its products through distributors to retailers, flagship stores and license holders. Nike has set up 20000 retail outlets in the United States and has expanded its business to 200 countries worldwide. It also uses e-commerce which provides convenience to customers. Nikeid, which is an online store is set up to provide customization service to customers. Most of the retail outlets are set up in cities as their target customers are those who have middle to higher income. In Malaysia, Nike retail outlets and multi-brand stores can be easily found in shopping malls.

Company B:

Adidas distributes its products through distributors to retail outlets and multi-brand showrooms. It also has exclusive stores, which is owned by Adidas. It also uses e-commerce where customers can check the latest releases, prices, sizes, and the nearest store location. Consumers can also directly make an order through e-commerce. Most of the retail outlets are set up in cities as their target customers are those who have middle to upper income. In Malaysia, Adidas retailers and multi-brand stores can be easily found in shopping malls. 

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