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Nike has recently announced that they will be cutting ties with retailers deemed mediocre. Since some traditional sporting goods chains have gone out of business, Nike is looking for new partners and ideas.
One new partner Nike has looked at shifting more of its products to is Amazon, which already has a large user base and a sizable logistical network. This is a good plan, since sports gear companies like, The Sports Authority and City Sports have gone out of business, they are unsure if other bland Brick or Mortar stores will survive. Nike will still be sticking out with certain retailers such as Nordstrom’s which brings a higher clientele and can purchase more of the expensive Nike shoes and items. In most retail chains, in-store sales have declined with the advent of the internet, so it makes sense for Nike to increase online retail. Their goal is to increase online sales from 15% to 30% of revenue. Nike is also looking at innovative ideas such as selling on Instagram and other social media sites. They are trying to get ahead of competitors such as Adidas, whose sales have been on the rise. I agree with Nike’s new focus on online selling and reviewing what retailers they sell with. I am unsure though on if selling on social media sites such as Instagram will succeed for Nike. (Agreement) CVS Health Corporation is expanding the pharmacy side of its business to outside of the actual stores. The article describes how CVS is going to start next day delivery for prescriptions. CVS is also looking into possibly buying a health insurance company, Aetna Inc. This is possibly a preemptive effort with the possibility of other companies getting into the Healthcare and pharmacy business. With companies like Amazon possibly pushing into the healthcare and pharmacy business, CVS is worried about potential competition and its recent sales. CVS just stated their retail sales dipped 2 percent over the last quarter. This information does not surprise me. It actually reminded me of an article I read on the NY Times, about how Amazon is certainly going to get into the pharmacy business. The NY Times article did maintain that the actual threat Amazon poses now could be overblown. Amazon only applied for licenses in about twelve states and some licenses could be for other types of products. An analyst for Jefferies, an investment banking firm, agreed with the above sentiment, expressing “It’s not evidence of a retail entry into the pharmacy business”. This could mean that CVS is overacting to a possible market entry, by expanding its next day delivery and through its purchase of Aetna Inc. (Association - Information) https://www.wsj.com/articles/cvss-revenue-rises-as-it-pursues-aetna-1509972920
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