Nike fuel band II with smartfit™ technology

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Information about Nike fuel band II with smartfit™ technology

Published on March 10, 2014

Author: AnandGautam4



A marketing plan for Nike's next generation wearable device that can measure mental well-being (stress & quality of sleep) and provide real-time feedback to improve athletic performance.

Nike FuelBand II with SmartFit™ ANAND GAUTAM

What it is? Nike FuelBand II with SmartFit™ is a wearable device that:  Monitors heart rate, breathing rate, quality of sleep and even stress (applying machine learning to heart rate variability) all in one device  Gives real-time feedback on athletic performance such as lengthening your stride or speeding up  Personal analytics dashboard to easily monitor activities on a weekly/monthly basis and integration with social media to get encouragement from peers  Ability to transfer data to third-party ecosystem and allow integration with health insurance exchanges and doctor’s office

Product Objectives & Revenue Estimates  To develop & launch a new wearable fitness device with state-ofthe-art sensors with a SmartFit™ athletic wear accessory, and a personal analytics dashboard  To position Nike as a well-being/healthy lifestyle company rather than a retailer and manufacturer of athletic gear and apparel  Will reach profitability by year 6 with $38.6 millions in profit

Market Growth & Segments Market Growth  Global wearable devices unit shipments will cross 100 million milestone in 2014, and 300 million units five years from now  Global wearable device market will be a $12 billion market by 2018 Core Market Segments  Recreational Fitness consumers (20 percent of US population)  Corporate wellness programs (Top 1/3 of Fortune-500 companies employees)

Customer Profile  Recreational Fitness consumers • In a Bloomberg survey, have shown interest in sensor-enabled wristwear (33%) and medical devices that transmit data (38%) • Want real-time feedback on athletic performance • Want integration with social media to get encouragement or motivation  Corporate wellness programs • Want to monitor worker’s stress levels to improve well-being as well as worker productivity and collaboration • Desire analytics so employees can be better informed and make adjustments to their behavior and/or work style • Want to improve employee satisfaction and retention while reducing healthcare costs

Competitor Analysis        Strengths Longer battery life with a time display in a bracelet form-factor Can monitor mental-wellbeing such as stress and quality of sleep Act as a coach by giving real-time audio tips and help improve athletic performance Personal analytics dashboard which provides weekly/monthly summaries of activity Weaknesses    Opportunities Large, untapped market with no clearly  identified leader Clearly identified market segments  Opportunity to educate consumers and gain a first mover advantage  Higher price point New Product so greater likelihood of bugs If vital signs are monitored incorrectly, might be liable for lawsuits as the product is practically a health device Threats Lot of uncertainty in the market size estimates and adoption rate of wearable devices Copycat products can be launched within a short timeframe albeit without accessory services such as analytics dashboard Backlash because of privacy issues

Core Product Strategy  Value Proposition - For recreational fitness consumers and corporate wellness clients, FuelBand™ II with SmartFit™ is a wearable device that unlike Fitbit or Jawbone, provides monitoring of major vital signs all in one device, real-time fitness coaching, and aggregate analytics to monitor weekly/monthly health trends that can be easily transmitted wirelessly to loved ones or to the doctor  Product Positioning - Nike’s FuelBand II with SmartFit™ athletic wear integrates monitoring of major vital signs in one device with real-time feedback and analytics to improve performance on the go and reach the well-being you want  Quality-Based Differentiation – Nike FuelBand™ II will be differentiated from the competition as we have a “whole product” solution

Financial Summary Income Statement Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Revenue 0 0 $750,000,000 $1,500,000,000 $3,000,000,000 $3,900,000,000 Cost of Goods Sold 0 0 $375,000,000 $750,000,000 $1,500,000,000 $1,950,000,000 Gross Profit 0 0 $375,000,000 $750,000,000 $1,500,000,000 $1,950,000,000 $150,000,000 $150,000,000 $60,000,000 $120,000,000 $240,000,000 $390,000,000 $25,000,000 $75,000,000 $225,000,000 $375,000,000 $750,000,000 $1,170,000,000 ($175,000,000) ($225,000,000) $90,000,000 $255,000,000 $510,000,000 $390,000,000 0 0 22,500,000 63,750,000 127,500,000 97,500,000 Net Income ($175,000,000) ($225,000,000) $67,500,000 $191,250,000 $382,500,000 $292,500,000 Net Present Value ($175,000,000) ($180,000,000) $43,200,000 $97,920,000 $156,672,000 $95,846,400 R&D Expenses MSG&A Expenses Operating Profit Taxes

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