Nike has focused its marketing efforts on the digital space in recent years. The Company's operating segments include North America, Western Europe, Central & Eas tern Europe, Greater China, Japan and Emerging Markets. Young athletes also form part of Nike’s target market. In 2017, Nike changed its reportable operating segments. This includes markets that may become developed markets in the future or were in the past. Plus, continued innovation and product quality are keys to success. Notably, China is a key target market for several luxury brands. First coined in 1981, emerging markets, or emerging market economies, are natio… In comparison, its consolidated revenues increased at a CAGR of 4.4% over this period. An emerging market (or an emerging country or an emerging economy) is a market that has some characteristics of a developed market, but does not fully meet its standards. Revenues for the NIKE Brand were $7.7 billion, up 8 percent on a currency-neutral basis driven by double-digit growth in Western Europe, Greater China, Emerging Markets and Japan, including strong growth in … Nike’s other competitor is Puma, the third largest shoe and sports clothing supplier. Consumer spending should be a crucial growth driver in China going forward. Brazil, the largest economy in Latin America, is another of Nike’s key target markets. Nike also developed various product lines endorsed by athletes such as LeBron James. Strong topline growth and high margins make Greater China Nike’s key target market. For example, between fiscal 2017 and fiscal 2020, Nike’s Greater China revenues increased at a CAGR of 13.6%. The company is currently strategizing on how to widen the gap with its nearest competitors or increase the degree of separation. Historically, its first and fourth quarters have been relatively stronger in terms of sales. The segment’s revenue growth has stalled over the last few years. Nike (NKE) is the world’s leading sports footwear and apparel company. Nike is one of the pioneers of the manufacturing outsourcing strategy. Like Gillette, companies that hope to capitalize on emerging market opportunities during a global expansion need to begin by identifying the market with the most potential for success. Nike has four geographical reporting segments: Apart from these geographical segments, Nike also reports two other operating segments—Global Brands Division and Converse. This would benefit consumer discretionary companies like Nike, especially considering the boom in sports and sports marketing in China. Greater China: In terms of growth, Greater China is Nike’s key target market. NIKE, Inc. is engaged in the design, development, marketing and selling of athletic footwear, apparel, equipment, accessories and services. More than half of all Nike’s factories are concentrated in Emerging Markets. Hurley’s target market is action sports such as surfing and skateboarding. In the United States, economic growth rates have tapered down. Emerging markets have lower-than-average per capita income. The company introduced the Nike+ running sensor in collaboration with Apple (AAPL). As a key target market for Nike, Greater China’s sales have been growing at a brisk pace. The EMEA segment accounted for 26.0% of Nike’s revenues in the first quarter of fiscal 2020. It took the company 18 years to earn its first $2 billion in revenue. Nike consolidates Asia (ex-China) Pacific and Latin America as one reporting segment. Last year, Converse incurred higher administrative expenses due to higher marketing expenses and investment in digital business. It includes casual apparel and footwear products, which are sporty but not necessarily high performance. The term "frontier market" is used for developing countries with smaller, riskier, or more illiquid capital markets than "emerging". The region’s percentage contribution to Nike’s top line has increased for two reasons. Nike (NYSE: NKE) announced its Q3 2019 financial results on March 21, 2019 followed by a conference call with analysts. Nike purchased Converse in 2003. We’ll also look at how these key target markets have performed over the last couple of years. Nike is the leading sports footwear and apparel company in the world. Nike Inc. shares moved toward fresh record highs in after-hours trading Friday, after the athletic-apparel giant reported a return to revenue growth. However, it also sees some stabilization in that domain now. US-based Nike is the world leader in athletic footwear and apparel. Between fiscal 2017 and fiscal 2019, the region’s revenues increased at a CAGR of 7.2%. Five years ago, Greater China’s contribution to Nike’s revenues was in the single digits. The United Kingdom, France, Germany, Austria, and Switzerland are Nike’s key target markets in Europe. To do that, they first need to understand what constitutes an emerging market. Nike’s operations consist of the design, development, marketing, and sales of athletic footwear, apparel, and equipment. Leadership. The Greater China segment should benefit from the Chinese government’s efforts to increase consumer spending. Wholly-owned NIKE, Inc. subsidiaries include Converse Inc., which designs, markets and distributes athletic lifestyle footwear, apparel and accessories; and Hurley International LLC, which designs, markets and distributes surf and youth lifestyle footwear, apparel and accessories. The APLA segment’s EBIT margin was 25.3% in Q1 of fiscal 2020. To get more information on Nike Inc 's FOOTWEAR, APPAREL, EQUIPMENT & OTHER, OTHER, North America, EMEA, Asia Pacific, Other Emerging Markets, Global Brand Divisions, Total segment. However, in fiscal 2018, the Men’s Training segment grew at a faster rate. Key Business Issues Increase market share in all the markets to counter the threat from the recent Adidas/Reebok merger Expand further into international markets such as Emerging markets and spur growth in the European and Japanese markets Number of Factories grouped by Operating Region This number rises to 70% when considering only footwear factories. Its sales are seasonal and dependent on geography. Leaders of emerging markets are willing to undertake the rapid change to a more industrialized economy to remain … Analysts believe that, Nike Free Shoes, Nike can not develop if the second and third tier cities in China's… In this article, we’ll look at Nike’s target markets. Peddie will report to Elliott Hill, President of Geographies and Sales for the Nike Brand. Investors The strategist and CNBC contributor was especially bullish on emerging markets and U.S. small-cap stocks, adding to holdings in those two areas. As a result, Greater China’s percentage contribution to Nike’s top line has increased significantly. To add to that, some of the countries in the region, especially Argentina, have faced currency devaluations. FedEx Executive Richard Smith Owes Much of His Wealth to His Father, Europe, Middle East, and Africa (or EMEA), North America is Nike’s largest segment, accounting for 40.3% of total revenues in Q1 of fiscal 2020, down from 41.7% in Q1 of fiscal 2019. Nike expects sales in emerging markets the next 5 years, 10% annual growth Nike is expected in the next 5 years which includes large emerging markets including China, will be about 10% annual revenue growth rate. Nike ( NKE ) is the largest global manufacturer of athletic footwear, apparel and equipment by sales volume, and competes with Sketchers ( SKX ),. In Greater China, economic growth has slowed down. From its status as an export- and investment-led economy, China has been trying to steer its economy toward a consumption-driven economy. The westernization of emerging markets, such as China, is lifting hundreds of millions of consumers out of poverty and into the middle class. Will Cruise Ships Sail in 2021 and Will the Industry Recover? Innovative Products – Although Nike has produced many products, there is still a lot to innovate. Plus, Nike is facing strong competition from companies like Under Armour (UA) and Lululemon Athletica (LULU). Notably, Converse has been losing ground in North America to brands like Vans. "Tom has been instrumental in driving Nike’s holistic marketplace management strategy worldwide," said Trevor Edwards, President of the Nike Brand. Save money on things you want with a Nike Emerging Markets deals, promo code and coupons. NIKE, Inc. (NYSE: NKE) announced today that Tom Peddie will become VP and GM of the Emerging Markets geography. EMEA: Previously, Nike reported Western Europe and Central and Eastern Europe as separate segments. We’ll also look at the risks and opportunities that Nike faces in its target markets. Nike uses psychographic segmentation variables to make its offerings more attractive to the target customers. Greater China is Nike’s key target market. In comparison, Nike’s major competitor in the US market, Under Armour, NKE, UA, and VFC are part of the Vanguard Total Stock Market ETF, Nike’s North American segment grew at a compound average growth rate (or CAGR) of 1.5% from fiscal 2017 to fiscal 2019. Meanwhile, Latin America has reported subdued growth over the last five years. Nike acknowledged the evolution of the North American retail market as consumers shift toward online sales. Nike categorizes its revenues by geography, with the exception of its separate unit, Converse. Converse’s target market focuses on consumers of casual sneakers, accessories, and apparel. With an eye toward ensuring future growth, young athletes are also a big part of Nike’s sales strategies, especially in categories such as soccer, basketball, and running. Select each division with the arrow. This is higher than what the company achieves in its developed markets. Nike and Emerging Economies. The stock has slid 20 percent this year, about three times more than larger competitor Nike. The segment’s revenues have increased at a CAGR of 3.5% between fiscal 2017 and fiscal 2019. The brand’s margins have come down over the last five years. The segment is the smallest geographical region for Nike and accounted for 12.6% of its Q1 of fiscal 2020 revenues. Read More: However, the company discontinued support for wearable devices last year, including Nike+ SportWatch GPS and Nike+ FuelBand. Emerging Markets – Although Nike already has a presence in many foreign countries, there is still plenty of opportunities for Nike. When labor costs there climbed in the mid-1970s, it gave South Korea and Taiwan a run. Peddie is currently VP of Global Sales and is a 24-year Nike veteran. The US economy is also largely driven by its consumer sector. Nike's net income rose to $1 billion, or 60 cents per share, in the quarter, from $846 million, or 49 cents per share, a year earlier. Nike's emerging market story is starting to show financial returns for the company. However, it is one of the company’s more profitable segments, with an EBIT (earnings before interest and taxes) margin of 25.6% in the, providing the customer with premium, must-have products as well as a premium experience, transforming the marketplace and expanding its direct-to-consumer footprint. The second aspect that we need to consider is that revenue growth in North America, which is Nike’s biggest geographical market, has sagged. Nike’s Jordan collection, named after basketball superstar Michael Jordan, is also a premium-label brand targeted at athletes. Being present i… Nike acquired Converse in 2003. With respect to the Chinese economy, the contribution of the consumer sector is much lower compared to India and South Korea. It reported an EBIT margin of 21.9% in the quarter. This is not surprising when considering that 65 out of the 75 largest companies globally originated in developed countries, which only acc… Nike is already the category leader in most markets it operates in. NIKE, Inc. (NYSE: NKE) announced today that Tom Peddie will become VP and GM of the Emerging Markets geography. By growing 8% in 2012, the company added that much in just 12 months. It accounted for 15.8% of Nike’s total revenues in Q1 of fiscal 2020. The United Kingdom, France, Germany, Austria, and Switzerland are Nike’s key target markets in Europe. “We are looking forward to his leadership in the Emerging Markets as we continue to elevate the brand, build strong consumer connections and drive premium marketplace executions.”. Its portfolio brands include the NIKE … Nike … This segment reported an EBIT margin of 24.9% in Q1 of fiscal 2020. Should You Invest in Organic Fertilizer Stocks? Nike’s high-performance athletic gear is mostly targeted at professional athletes. This timeline depicts Nike's revenue in emerging markets from 2009 to 2017, by segment. According to Nike, conversion from licensees to a direct distribution model had a minimal impact on Converse’s fiscal 2019 revenues. It also launched the Nike+ FuelBand. Peddie is currently VP of Global Sales and is a 24-year Nike veteran. Nike expects emerging markets to outpace the growth rate of its developed regions and grow at a low double digit rate. In fiscal 2019, the Women’s Training segment grew faster than the Men’s Training segment. Peddie has previously held senior-level management positions in Nike’s global sales organization having served as VP Sales for both Asia Pacific and North America. It optimizes the manufacturing and production processes. North America is Nike’s largest market. However, in 2017, the company realigned its reporting structure. Nike delivers innovative products, experiences and services to inspire athletes. The company went high-tech with its push into digital sports and e-commerce. How? The Converse brand comprised 5.2% of Nike’s revenues in Q1 of fiscal 2020. NIKE, Inc. based near Beaverton, Ore., is the world’s leading designer, marketer and distributor of authentic athletic footwear, apparel, equipment and accessories for a wide variety of sports and fitness activities. Low income is the first important criterion because this provides an incentive for the second characteristic, which is rapid growth. A Business Week article, entitled, “The Swoosh Index for Emerging Markets” explained it: Nike first started using Japanese plants in 1964. While apparel and footwear is fragmented, concentration increased during the review period, with many of the largest companies expanding their geographical reach beyond their home markets. We’ll look at these opportunities and their potential later in this article. A growing middle class has made China an attractive target market for foreign brands. Asia and Latin America are driving sales growth as economies expand in emerging markets. The Company's operating segments include North America, Western Europe, Central & Eastern Europe, Greater China, Japan and Emerging Markets. Nike’s innovations, products, and services seek to develop athletic potential, according to the company. Nike’s target market is largely consumers ages 15–45. Meanwhile, Nike faces some challenges in its target markets. As with Nike’s other target markets, its products are seen as a premium brand in this region also. Women are an important part of Nike’s target market. Skillz Is Taking Esports Public — Will Other Competitive Gaming Platforms Soon Follow? The brand’s percentage contribution to Nike’s top line has come down over the last five years. In Q1 of fiscal 2020, the segment’s EBIT margin was almost 40%. Peddie will replace Roland Wolfram who, after 16 years with Nike, has decided to retire from the company on Jan. 9, 2015. For more information, visit www.nikeinc.com and follow @Nike. Furthermore, Greater China is a high-margin market for Nike. Firstly, Nike’s sales in the region have increased sharply. In the 1990s, production jumped to Indonesia and China, which now account for two-thirds of Nike … These high-performance lines are targeted at athletes. It uses separate campaign or strategy to cap the market potential of the different segments.Targeting is the important aspect of the marketing strategy, especially when a company is in different businesses. In this article, we’ll look at Nike’s key target markets. Now, it reports Europe, Middle East, and Africa as a consolidated business segment. The company’s operations are spread around the world. In accordance with Nike for the fiscal first three quarters of total income in emerging markets $ 3,580,000,000 estimated revenue for the fiscal year about 50 billion U.S. dollars, an annual growth of 10% would mean that by 2015, emerging markets need more than 8 billion U.S. dollars revenue. Nike is not only a very popular sports brand, but it's also s a great stock. The brand’s product line focuses on the premium target market. Furthermore, if the US-China trade war worsens, US brands like Nike could face backlash in China. 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