PRINCIPLES OF ACCOUNTING
TOC o “1-3” h z u EXECUTIVE SUMMARY3INTRODUCTION4PROJECT FEASIBILTY5
This paper presents an analysis of Niky that deals with the sale of Niky shoes for sports persons. Phil knight the CEO of Niky had taken sixteen years to build Niky into a competitive number one athletic-shoe company in US. During the development of Niky, Adidas a Germany company was dominant in the market and it owned about 80% of the market share. Knight marketing techniques and approach revolutionized the industry through provision of groundbreaking technologies that made Niky brand the most recognizable in the world. By 1980, Niky had dethroned Adidas in the market share.
The CEO owned almost half of the company shares. Before the company became Niky, it began as a small company known as Blue Ribbon Sport. The CEO of the company Mr. Phillip Hampson Knight was born in 1938 in affluent suburb of Portland. He becomes one of the best middle-distant runners in his high school track team.
“The company’s mission is to provide exceptional footwear”
The company contains qualified and experienced manufactures and designer. They are responsible for creating exceptional services and incomparable footwear to their customers.
The main aim of Niky include
To attain their customer’s satisfactions
To reach all markets segments
To produce quality footwear
To operate in the global market
Labour for construction6,500
Other miscellaneous charges 2,000
Total Initial Expenses14,800
Office building and properties 250,000
Other miscellaneous charges 7,000
Total Initial Assets Required510,000
Required capital 350,000
COST OF SERVICES
Items Price Daily Qty Weekly Qty Monthly Qty Yearly Qty Daily Exp. Weekly Exp. Monthly Exp Yearly Exp
one shoe 2 4 28 120 1440 4 28 120 1440
Closed sport Shoe 4 4 28 120 1440 8 56 240 2880
Adidas 8 14 98 420 5040 56 392 1680 20160
basketball shoes 6 2 14 60 720 6 42 180 2160
ANNUAL VARIABLE EXPENSES
Radio and TV adverts6,100
Maintenance of equipments5,000
Other expenses 2,400
ANNUAL FIXED EXPENSES
AS AT DEC 19, 2013.
PROPERTY AND ASSETS
Property and Building140,000
CAPITAL AND LIABILITIESAED
Opening capitalPrevious year’s
Profit for the Year70,000
Advanced Fee from Contracts22,000
PROFIT & LOSS ACCOUNT
FOR THE YEAR ENDED DEC 19 2013.
Dr. Professional Charges87,000
The increased demand for the products in the sporting clothing market in USA over the last 20 years provided a great opportunity for Niky Shoe Company. The only good quality brand, which existed in the US market, was Adidas shoes from Germany which were very expensive and not available. This economic situation provided a very good environment for Niky brand to take root very quickly due to its availability and affordability. Niky is usually making much profit due to its increased sales and lowered costs through economies of scale it is enjoying.
Marketing will help the company to increase sales and reduce costs. Utilization of internet for marketing will provide Niky with an intangible asset such as market research and consumer buying trends. Through data retrieved from consumer’s Niky will be able to analyze and monitor the buying behaviours. Market research helps them to generate data to be used in analyzing the market trends to organize promotions and marketing campaigns.
Niky has no problem with the price, this is because it acts as prices setter alongside Adidas and Reebok. Niky sells its products at whatever price because of an inelastic demand for its products. Expensive promotions don for Niky produced tuned consumers to believe that Niky produces quality products, which are worthy whichever price they will charge. More so, Niky does not gain competitive advantage through the prices they charge customers.
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