Recommendations of Nike Inc Cost Of Capital Case Analysis

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Recommendations of Nike Inc Cost Of Capital Case Study Analysis

On the basis of above internal and external analysis of the company along with the assessment of numerous alternatives, the company is recommended to consider alternative 3. As alternative 3 would permit the company to expand in global markets without any decrease in its local earnings and any wear and tear of its market position. The company might pursue alternative 1 which would allow the company to focus on potential international markets rather than the regional markets but as the company is highly reliant on the local markets with 90% of its shops in the United States, there fore pursuing option 1 would result in the significant decrease in business's income.

Aletrnative-1: Expanding International Brick and Recommendations of Nike Inc Cost Of Capital Case Analysis Stores

The business has a long term market position in US which can not be created soon in the brand-new markets. The alternative would assist the company to expand in global markets along with the elimination of problems raised in its local markets related to its variety.

Pros:

• Exploration of brand-new global markets.
• Boost in profits from global markets.
• Removal of concerns associated with diversity.
• Earnings diversity.
• Step towards being a strong global brand name.

Cons:

• Loss of substantial incomes from the local markets.
• Increase in competition.
• Distinctions in cultures could led to a failure of the brand name specifically in Asian countries.
• Low revenues at preliminary levels.
• Boost in marketing expenses to acquire market share.

Alternative-2: Introduction of Click and Recommendations of Nike Inc Cost Of Capital Case Help Stores

With the increased trends towards online shopping, the online stores like Amazon, Alibaba and so on might posture a severe risk to the market share of company. In this circumstance the business might consider presenting Click and Recommendations of Nike Inc Cost Of Capital Case Analysis shops. These stores with a low requirement of funds to settle would enable the business to reach global markets, without ending its domestic stores.

Pros:

• Low financial investment
• Lowering competitors hazard
• Access to the world markets
• Increasing the size of customer base
• Easy to handle
• Large Earnings
• Low Operating Expense
• Easy brand-new market entrance

Cons:

• Hazard to the marketplace position
• Elimination of brand name Originality
• Elimination of the terrific store experience.
• Threat of decrease in elite sales.

Alternative-3: Expansion towards International Markets Without closing Domestic Stores

Another alternative that the business might think about, is to expand towards the global markets without closing its domestic shops that adds to the major part of incomes of the company. The advantages and disadvantages associated with Alternative 3 are given listed below;

Pros:

• Decreasing competitors risk
• Access to the world markets
• Enlarging consumer base
• Big Revenues
• Expedition of brand-new worldwide markets.
• Increase in earnings from global markets.
• Earnings diversity.
• Action towards being a strong worldwide brand.

Cons:

• Extension of problems associated with diversity.
• Differences in cultures could caused a failure of the brand especially in Asian nations.
• Low incomes at preliminary levels.
• Boost in marketing expenses to acquire market share.



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