- April 25, 2014
- Posted by: essay
- Category: Term paper writing
Nike is one of the most successful companies operating in the sportswear and sport shoes industry. Nike is a renowned and popular brand, but at the moment, the company faces considerable financial problems. Nevertheless, the company is still concerned with the further marketing development and market expansion. The further market expansion raises the problem of fundraising that is quite difficult to do in the time of the economic recession and negative effects of the global financial crisis. In such a situation, Nike should look for effective options to raise funds, but, at the moment, investments in Nike are quite risky.
On analyzing possible ways to attract funds and to raise funds for the attraction of financial resources, it is possible to define several ways of the development of the company. In actuality, fundraising is quite difficult in the contemporary business environment. Therefore, Nike can raise funds attracting investors and going public to attract additional funds. In fact, investors can provide Nike with substantial financial resources because they rely on the brand of Nike. Nike is very popular brand that increases the confidence of customers in the company. In such a context, Nike can attract substantial financial resources due to the popularity and reliability of the brand and the intention of customers to invest in the company they are confident in. At this point, investors may be particularly interested in the development of long-run investments. In such a situation, Nike can count on the flow of investments attracted by the company.
Fundraising through investments is very important and beneficial for the company because Nike can raise funds fast. In fact, going public is one of the most effective ways to raise funds fast because the company does not need to spend substantial financial resources and time to attract investments. Investors, in their turn, are interested in the development of the company and they can expect high return on investments in a long-run perspective, even if the current financial performance of Nike is far from perfect. In this regard, the popularity of the brand is the determinant factor that may attract a large number of investors fast.
Furthermore, Nike can use bank loans but, in actuality, this way of fundraising is not very efficient. In fact, bank loans are an effective way of fundraising, when the company expects to raise funds. In such a way, the company can raise funds from banks, but the company will have to pay off interest rates which may be high because of negative effects of the economic recession and the global financial crisis.
Alternatively, Nike can acquire new brands and expand its market share but this strategy is costly. The acquisition of new brands is effective and easy way to expand the market fast. However, in terms of fundraising, this strategy is absolutely ineffective. In stark contrast, Nike is likely to need to find new financial resources to fund acquisitions of new brands and to conduct restructuring of the company.
Therefore, attracting new investments and going public is the best way of fundraising for Nike in the contemporary business environment. In fact, investments and going public is easy and fast way of the development of fundraising and this way of fundraising is the most effective way of fundraising at the moment.
At the moment, investments in Nike are quite uncertain. At any rate, if I had $100,000 on my bank account, I would not invest in Nike. At the least, I would invest just a part of my $100,000 bank account, while the rest I would invest in other companies to secure and to diversify my investments. In such a way, I prefer diversifying my investment portfolio, instead of focusing on Nike solely.
The investment in Nike is not very attractive because the current financial development of Nike is uncertain. The poor financial performance of the company raises the problem of its further development. At any rate, I cannot be certain that the company will keep growing in the future. The risk of the further decline of the financial performance of Nike persists.
In recent time, the financial performance of Nike has been stumbling. The economic recession and negative effects of the global financial crisis persist. Therefore, Nike may keep stumbling that increases the risk of financial losses in case of investment in the company right now. I would not take the risk and to spend my $100,000 capital on the investment in Nike.
Therefore, it is unreasonable to invest in Nike at the moment. At any rate, the investment of all funds in Nike is unreasonable. Instead, it is possible to invest a part of the sum and diversify investment portfolio. On the other hand, investments in Nike may be attractive in a long-run perspective. However, current risks still outweigh possible return on investments.
Thus, Nike is currently facing financial difficulties. Therefore, the company needs to raise funds. In this regard, the company can attract investors and go public to raise funds fast. However, I would not invest in the company at the moment.