Niki: An International Business

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1) Is Niki's production facilities centralized or decentralized?

Nike first sold footwear in Europe in 1978. Two years later, the first Nike European Headquarters opened. Then, in 1994, Nike centralized European distribution at the Laakdal [Belgium] Customer Service Center. The current EMEA headquarters, a state-of-the-art complex designed by William McDonough + Partners, opened in 1999 in Hilversum, The Netherlands. http://www.nike.com/nikebiz/nikebiz.jhtml?page=25&cat=approach

The Middle East has been included in the region since the beginning as a geographical area followed by the Nike Partners organization. (Nike Partners was the subsidiary in charge of dealing with local distributors located in Eastern Europe and Middle East, including Israel.) The region's latest addition, Africa, came under the control of the European region in the middle of 2000. http://www.nike.com/nikebiz/nikebiz.jhtml?page=25&cat=approach

In terms of revenue, the EMEA region is Nike's second largest region; it is the third largest in terms of manufacturing.
Employees: Approximately 6,000 Nike employees are based in the EMEA region.
Factory Base: There are 104 contract factories located in the EMEA region. These factories employ 29,242 workers.
Countries where Nike offices are located: Nike branch offices and subsidiaries are located in 27 countries in the EMEA region: Austria, Belgium, Bulgaria, Croatia, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Israel, Italy, Lebanon, the Netherlands, Norway, Poland, Portugal, Russia, Slovakia, Slovenia, South Africa, Spain, Sweden, Switzerland, Turkey and the United Kingdom.
Revenue FY'05: For the full year, EMEA revenues grew 12 percent to $4.3 billion, compared to $3.8 billion last year. Seven percentage points of this growth were the result of changes in currency exchange rates. Footwear revenues were up 12 percent to $2.5 billion. Apparel revenues increased 12 percent to $1.5 billion and equipment revenues rose nine percent to $284.5 million. Pre-tax income increased 23 percent for the full-year to $917.5 million. Thirty-one percent of Nike brand revenue was generated by sales in the EMEA region in FY'05. http://www.nike.com/nikebiz/nikebiz.jhtml?page=25&cat=approach

2) Does the company standardize products or adapt them for different markets?

It is more viable to sell "standardized" products - e.g. a sports car with a small engine is undesirable because it reduces the value of the full-features product. Insofar products will get increasingly more features over time thereby increasing the number of (potential) users. This is most evident in standard computer software, like Microsoft Office or Windows.
Standardization, as opposed to heterogeneity, offers huge benefits for their users as well as manufacturers. Consider the example of Microsoft Word or Windows. The mass of users has a demand for more standardized word processing programs and more standardized operating systems. It provides positive network externalities, such as it e.g. allows data exchange and lowers or even eliminates switching costs; when an employer moves from one company to another. Finally, standardization, which is often accompanied by high consumer demand, is more likely to offer high profit opportunities to manufacturers.
However, Nike is willing to adapt for different markets, and is innovative in this sense. For example, Nike has set up an online consumer forum called "NikeChat" where consumers not only can post their own ideas for improvement of Nike products, but can also read about the innovative suggestions of other consumers, thus sparking further innovation. http://www.nikechat.com

3) Also any resources I can get would be helpful. Thanks

See information below, which is highly informative.
See http://www.nike.com/nikebiz/nikebiz.jhtml?page=11
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Bid Credits: 2 Deadline: March 9, 2006, 1:42 am EST

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