NKENike, Inc.

Nike is a sportswear brand whose value rests on marketing and on the shift to selling direct.

Manufacturing is outsourced to contractors in Asia; the company owns design, the brand and the channel. Most of the value is created by marketing: athlete and team contracts, limited releases, recognisable franchises. That supports prices several times above cost but demands continuous promotional spending.

The strategic shift of recent years is direct-to-consumer: own stores, app and website instead of wholesale partners. The direct channel carries higher margins and yields customer data, but withdrawing from retail chains cost shelf space, and part of that decision had to be reversed. The balance between the two channels is the main storyline in results.

The weak points are China, where demand swings with sentiment and local competition, and fashion itself: sneakers compete on relevance rather than function, and a missed cycle shows up in inventory. Clearing excess stock at a discount hurts margin more than manufacturing cost inflation does.