Chapter 4 – Solved Cases
47
Thanks for giving me focus that we need to consider only
on the footwear market. Worldwide, how much does each
company own in footwear?
Client: Good. Adidas' global share of the branded footwear
market is 34%, vs. Nike's 38%, according to NPD Group
.
Adidas’ share includes the Reebok brand as well.
What is Nike’s objective in assessing whether to add the
likes of Costco and other whole-sellers? Is it to increase
market share, or profits, or both?
Nike’s three long-term financial goals are high single digit
revenue growth; mid-teens earnings per share growth; and
increased return on invested capital and accelerated cash
flows. So, to answer your question, yes, they want to increase
not only revenue and profits, but also market share. However,
this should not come at the cost of diluted brand equity.
Yes, I am planning to go in-depth into the valuation of
Nike as a brand. However, before I do that, I want to
understand Nike’s business a little better. So, I have a few
more questions.
Shoot.
Through what channels does Nike currently sell its shoes?
Primarily through a combination of retail accounts, NIKE-
owned retail stores, independent distributors and licensees, in
the United States and over 160 countries worldwide. The
biggest retail account is Foot Locker, Inc., which accounts for
Copyrighted Material
