Economic Brief #1:
Nike Inc. is a worldwide company established in 8th September 1969 and is engaged in the development, design, marketing and selling of the footwear, apparels, 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 the retailers through the retail stores and on the internet websites and by the mix of independent licensees and distributors in the world. Some of the products being sold by the company include footwear, apparels, accessories, and equipment. These products are produced by the 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 also Golf. The men’s training consists of baseball and also American soccer products services. They are also involved in the marketing of the products designed for the 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 apparels with the licensed team, college and league logos.
The marketing of the Nike Company’s products follows 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 like a discount for more purchase are held constant. For the law to exist, there are two reasons, i.e., substitution effects and substitution effects. In case of the income effect, the customers afford more products at low product while the substitution effects the customers can substitute expensive product with cheaper one. 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 Vise Versa. The combination of demand and supply laws in Nike Inc. can be represented graphically as shown below.
The company is have been considered to be the greatest supplier of footwear since it became into existence. At the moment, the company is suffering from the decline in the sales of footwear due to economic recession (brainmass.com, 2018). The growth of footwear sale in the developing countries have substantially dropped due to increase in competition within the industry. It has also been witnessed that there is an increase in sales by both internets and also a telephone. This is due to the advancement in technology globally thus making it easier for ordering and selling of Nike products.
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/