Economic Brief #1:
Nike Inc. is a worldwide company established on 8th September 1969 and is engaged in the development, design, marketing, and selling of footwear, apparel, accessories, equipment, and other services. This company operates in different segments, including “North America, Greater China, Western Europe, Japan, central and Eastern Europe and other emerging markets like Africa” (nikeinc.com, 2013). Therefore, in this paper, we are going to illustrate the core economic concepts that relate to micro and macroeconomics, the role of goods and services in the economy, economic growth, and economic trends about Nike Inc.
Goods And Services
This company is involved in the selling of products and services to retailers through retail stores and on internet websites, as well as by a mix of independent licensees and distributors around the world. Some of the products being sold by the company include footwear, apparel, accessories, and equipment. These products are produced by a contractor who is independent. In the previous year, the company focused on the Nike brand offering in different categories to enhance sports-inspired lifestyle products. The categories include running Jordan Brand, Nike basketball, soccer (football), women’s training, men’s training, sportswear, action sports, and golf. The men’s training consists of baseball and American soccer products and services. They are also involved in the marketing of products designed for kids and other recreational and athletics use, like crickets, volleyball, tennis, indoor activities, etc. The company’s footwear is designed mainly for athletics use. The products are sometimes worn for leisure and casual purposes. The company is also involved in the marketing of sports apparel with the licensed team, college, and league logos.
Economic Concepts
Nike’s products are marketed according to the law of demand. The law of demand states that “when the price of the products decreases, the demand for the products will increase, and when the price of the product increases, the demand decreases” (Frank, 2000). However, this can be true when other factors, such as discounts for more purchases, are held constant. There are two reasons for the existence of the law, i.e., substitution effects and substitution effects. In the case of the income effect, the customers can afford more products at a low product, while in the substitution effect, the customers can substitute expensive products with cheaper ones. Also, Nike Inc. also operates under the law of supply. The law of supply states that “the relationship between the number of products supplied and price of the product or services is directly proportional, assuming that all the other factors remain constant.” The law shows that in case of high prices, Nike Company is keen on producing and supplying more products to the market and vice versa. The combination of demand and supply laws in Nike Inc. can be represented graphically, as shown below.
Economic Trend
The company has been considered to be the greatest supplier of footwear since it came into existence. At the moment, the company is suffering from a decline in footwear sales due to the economic recession (brainmass.com, 2018). The growth of footwear sales in developing countries has substantially dropped due to an increase in competition within the industry. It has also been witnessed that there is an increase in sales through both the Internet and telephone. This is due to the advancement in technology globally, which makes it easier to order and sell Nike products.
References
brainmass.com. (2018, January). Nike company. Retrieved from brainmass.com: https://brainmass.com/business/competitive-advantage/nike-company-450002
Frank, R. (2000). Macroeconomics and Behaviour. New York: The McGraw-Hill Companies.
nikeinc.com. (2013, December). Nike Inc. – The official corporate website for Nike and its affiliate brands. Retrieved from Nike Inc: http://nikeinc.com/
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