NIKE World Cup: Founded in 1964, NIKE, Inc. (NYSE:NKE) has helped revolutionize athletic footwear, apparel, equipment and accessory products for the last 40 years. It is currently the dominant player (and largest seller) in its category. For this company, emerging markets in Asia and Latin America represent massive growth opportunities. There is a growing demand for its products in these regions, thanks to the interest in sports and the growing economic prosperity their people have been experiencing. In this sense, Brazil represents a key market to increase its global footprint and market share.
Next year, the country will hold the World Cup and in 2016 the Olympics. On its latest letter to shareholders, the company’s management has made it clear that it is preparing an extraordinarily ambitious marketing plan before these events take place. Its gains are also likely to increase as NIKE will also be the sponsor for Brazil National Football team in 2014 World Cup.
The firm is already known for its strong branding –it is famous for its “swoosh” logo and its “just do it” tag line, as well as for its association with celebrity sportspersons. Although adidas AG (FRA:ADS) is an opponent to consider and will continue to be one next year in Brazil, NIKE has many other competitive advantages that will help it continue -and deepen- its global expansion.
NIKE has several international opportunities for revenue expansion. Along with that, the company owns a very strong innovative culture and significant pricing power, which help it keep its margins above industry averages. During the past quarters, the company has had impressive and solid top-line growth, going up over 30% year to date. Also, as of September 23rd this year NIKE will be the second ever sports apparel company to be included in the Dow Jones Industrial Average, or DJIA. The firm has also been engaged in a consistent share repurchase program, thus showing its commitment of returning value to shareholders.
Brazil poses a key opportunity for the company to keep expanding its promising global marketing strategy and its market share. Besides selling world cup sports products, it will start a “Make History” campaign through a mobile app. This will enhance users’ experience with active participation in the World Cup, as it will allow them to compete for their countries online. The firm will also take part in a platform that will give app users the chance to ask questions to football stars sponsored by NIKE. The company expects this Brazilian opportunity to further fuel the company’s sales and to keep increasing its consistent positive earnings along with a strong revenue growth. Check back for more updates on the NIKE World Cup situation.
Disclosure: Pamela Gaviño holds no position in any stocks mentioned