Licensing-Franchising

Nike

Licensing-Franchising

Licensing- one company allows to sell or produce it’s products in other foreign countries with the licensing agreements and fee structure is negotiable so, both of these companies get more benefits from this method. Nike is one example of licensing. It had been using this marketing strategy around the world wider, according to the numbers of Nike producing factories, in 2019 there were 545 factories in 41 countries . On the fist stage China stands with 109 plants , producing Nike footwear , appeals and equipments. Furthermore, these products are being bought around the world continuously . So, Nike started Licensing with China from 1981s in Mainland producing athlete’s shoes and appeals. At the same time Nike expanded it’s international and aggressive marketing system in Japan, South Korea, Taiwan and European countries to compete with German brand Adidas. Coming to revenues of Nike, it earned $5.13 billion in 2018 with 14 percent of it’s global trade in China . So Nike has been paying more attention on marketing since the beginning. Because, it could not get huge amount of money from producing and selling products in local country. But, global trading bring it more benefits like being famous ,getting incomes , having top factories and markets in the most developed countries also co-operating world’s top outstanding soccer teams, players and athletes helped to become one of the best brand of sport wears and equipments in the world. For example, according to July 2020 statistics it earned $35.568 million from international trade. In local country North America Nike earned $14.484 million, it means that Nike earned 40.7% of it’s total trade. And other revenues from Europe, Middle East & Africa $9,347 million (27%) , Greater China $6.679million (18.9%), Asia Pacific & Latin America $5.028 million (14.1%) rounding percentages. Moreover, Nike is still getting revenues from Licensing system around the world and maybe this method of marketing will help to more incomes in the future.

Franchising- it is an agreement between one or more companies to allow using one’s brand name with operating system in order to get incomes and includes specific relationships and responsibilities to reach the goal. According to data about Nike franchising strategy it did not deal with this marketing project.

Multinational Corporation

Multinational Corporation- means that headquarters operate in one company and they control their offices which are located in another countries. Coming to Nike as an international corporation, it’s products are being sold to more than 160 countries including sport clothes, balls , foot wears ,appeals and sport equipments. First idea of trading internationally proceed by Phil Night when he was studying at the university. Because the labor cost would be cheap and he found some countries South Korea and Taiwan where he could carry out his project. Today the results are more than he expected. So Nike has some targets in order to reach it’s marketing system. These are:

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  Investing to buyer brands as a need and motivation
  
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  Using partnership and investments to keep up to date with brand news
  
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  Share intellectual property to quick track changes through GreenXchange
  
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  Creating a promotional agenda to develop sustainable investment and sustainable investment policy to ensure the brand is competitive in the global economy.
  

Furthermore, there must be some conditions to trade with Nike. For those reasons Nike can co-operate with another country. For instance:

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  Place must be prestigious
  
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  Transportation must be developed in order to employees meet easily
  
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  The country must have up to date technologies
  
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  There must be highly educated people so that the headquarters can attract professionals
  

So, Nike is also earning from selling it’s products through the internet. According to latest statistics of Nike, it earned $2.539 million in seven months from January 2020 until July 2020 and other amount will be calculated and announced after the New Year. Both of online or offline selling strategies bringing it more incomes because Nike is world’s leader of producing and selling athletic footwear and appeals.

https://daxueconsulting.com/nike-in-china/

http://www.fundinguniverse.com/company-histories/nike-inc-history/

https://www.chinalawblog.com/2019/08/nike-likes-manufacturing-outside-china-and-you-should-too.html#:~:text=Nike%20opened%20its%20first%20factory%20in%20Mainland%20China,rising%20stock%20markets%2C%20and%20other%20foreign%20companies%20follow.

https://www.statista.com/statistics/241692/nikes-sales-by-region-since-2007/

https://coggle.it/diagram/Vy8OwG6dvl94NuRh/t/nike-a-multinational-company

https://www.statista.com/statistics/241685/net-profit-of-nike-since-2005/