Tomahawk, WI 9/30/2013 (BasicsMedia) – Nike Inc (NYSE:NKE) has made a name for itself in the world of sports apparels. However, what many people may not realize is that it is a top designer as well in producing casual wear, and other accessories. But it is true that the company is closely associated with the design and development as well as selling and marketing of athletic apparel as well as footwear. It sells its products through its numerous retail stores, as well as the online store. It uses a network of licensees and distributors to promote its products as well. Why does it enjoy such strong results?

 Factors Responsible for NKE’s Superb Performance

It is difficult to attribute NKE’s strong financial results to only one factor. A combination of factors is often cited as the reason why Nike is such a strong stock. Moreover, other companies which deal in these types of apparel, those designed for use by athletes and sportspeople, aren’t dong anywhere as well as Nike. One may say that NKE enjoys one advantage over its competition; the fact that it is the world’s largest seller of apparel and footwear for athletes. It is true that this gives NKE an advantage over others, but it can’t be the only or main reason.

 What I think NKE has managed to do better than all its other competitors is the fact that it has ensured that it spreads its products all around. You can never get NKE being held hostage by any single group of clients. Each of its customers doesn’t bring in or account for more than 10% of the company’s revenue at any given period. This is an area where most companies struggle a lot in since they are unsure how to design and sell products which enjoy demand from a wide spectrum of people.

 NKE Doesn’t Depend on One Market Only

 Secondly, the fact that NKE prefers to outsource most of its production operations has also helped it save some money. Close to 42% of Nike’s footwear is produced Vietnam, while 30% and 26% is produced in China and Indonesia respectively. Its apparels are also produced in the above countries in addition to Thailand, Malaysia, Cambodia, Mexico, Pakistan, Turkey and Sri Lanka. The biggest factories in these countries are not allowed to account for more than 6% of the total production or sales. NKE has used this policy to keep its operations a major success.

NKE Benefits from Easily Available Raw Materials

 Some of the raw materials which NKE depends on in the production of its apparels and footwear include fabric, threads, leather, canvas, synthetic rubber, plastic compounds, as well as nylon and specialized performance fabrics. The beauty of it is that it can get these raw materials without much difficulty thereby ensuring that production is never hampered at any given moment. NKE is quite reliable in terms of production and this has won over some loyal customers over the years.

 The sponsorship packages for athletics teams and other sports teams have also helped a great deal. NKE has been very busy with advertisements and thus has helped the company continue creating awareness of its products. The fact that NKE doesn’t take its position as the largest producer and seller of athletics footwear and apparel has played a major role as well in ensuring that it continues posting profits.

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