Emerging Markets: While Nike already has a presence in many emerging markets, we believe that there is still significant growth potential there. Rapidly growing economies like China, along with other emerging markets like India and Brazil, have the potential to drive future earnings growth. While China accounted for roughly 9% of 2014 revenues, the company believes this figure will rise as it continues to enhance its brand image there. It is also realigning its product portfolio to better appeal to Chinese customers’ tastes and preferences. All told, we think Nike should be able to increase its share of the global footwear market by continuing to grow its base in these regions, which have been reporting higher growth rates than developed markets for the past few years.
Innovative Products: Given Nike’s focus on R&D, as mentioned in the strengths section of this analysis, the company is typically on the forefront on product innovation. While products like FuelBand, a wearable technology that monitors physical activity, may not have been as successful as hoped, Nike still has its eye on the next “big thing”. The company’s brand strength, coupled with its focus on R&D, should allow it to remain at the forefront of new technologies in the footwear and wearable technology space.
Emerging Markets: While Nike already has a presence in many emerging markets, we believe that there is still significant growth potential there. Rapidly growing economies like China, along with other emerging markets like India and Brazil, have the potential to drive future earnings growth. While China accounted for roughly 9% of 2014 revenues, the company believes this figure will rise as it continues to enhance its brand image there. It is also realigning its product portfolio to better appeal to Chinese customers’ tastes and preferences. All told, we think Nike should be able to increase its share of the global footwear market by continuing to grow its base in these regions, which have been reporting higher growth rates than developed markets for the past few years.Innovative Products: Given Nike’s focus on R&D, as mentioned in the strengths section of this analysis, the company is typically on the forefront on product innovation. While products like FuelBand, a wearable technology that monitors physical activity, may not have been as successful as hoped, Nike still has its eye on the next “big thing”. The company’s brand strength, coupled with its focus on R&D, should allow it to remain at the forefront of new technologies in the footwear and wearable technology space.
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