Nike 2009 Annual Report Download - page 8

China (i) should not be within the scope of the investigation, and (ii) does not meet the legal requirements of
injury and price in an anti-dumping investigation. We anticipate final decisions in both cases will be made in late
2009.
Footwear Imports into Turkey
In 2006, Turkey introduced a safeguard measure on all imported footwear into Turkey with the goal of
protecting its local shoe manufacturing industry until August 2009. In June 2009, Turkish shoe-manufacturers
submitted, and the Turkish Government agreed to review, a request for extension of the safeguard measures
claiming that the rehabilitation process of the local Turkish industry was interrupted due to the continuing
increase of footwear imports. We are working in broad coalition with other companies in our industry to oppose
the continuation of these safeguard measures. We anticipate a final decision in this review will be made in early
fall 2009.
Trade Relations with China
China represents an important sourcing and marketing country for us. Many governments around the world
are concerned about China’s growing and fast-paced economy, compliance with World Trade Organization rules,
currency valuation, and high trade surpluses. As a result, a wide range of legislative proposals have been
introduced to address these concerns. While some of these concerns may be justified, we are working with broad
coalitions of global businesses and trade associations representing a wide variety of sectors (e.g., services,
manufacturing, and agriculture) to help ensure any legislation enacted and implemented (i) addresses legitimate
and core concerns, (ii) is consistent with international trade rules, and (iii) reflects and considers China’s
domestic economy and the important role it has in the global economic community. We believe other companies
in our industry as well as most other multi-national companies are in a similar position regarding these trade
measures.
In the event any of these trade protection measures were implemented, we believe that we have the ability to
develop, over a period of time, adequate alternative sources of supply for the products obtained from our present
suppliers. If events prevented us from acquiring products from our suppliers in a particular country, our
operations could be temporarily disrupted and we could experience an adverse financial impact. However, we
believe that we could abate any such disruption, and that much of the adverse impact on supply would, therefore,
be of a short-term nature. We believe our principal competitors are subject to similar risks.
Competition
The athletic footwear, apparel and equipment industry is keenly competitive in the United States and on a
worldwide basis. We compete internationally with a significant number of athletic and leisure shoe companies,
athletic and leisure apparel companies, sports equipment companies, and large companies having diversified
lines of athletic and leisure shoes, apparel and equipment, including Adidas, Puma, and others. The intense
competition and the rapid changes in technology and consumer preferences in the markets for athletic and leisure
footwear and apparel, and athletic equipment, constitute significant risk factors in our operations.
NIKE is the largest seller of athletic footwear and athletic apparel in the world. Performance and reliability
of shoes, apparel, and equipment, new product development, price, product identity through marketing and
promotion, and customer support and service are important aspects of competition in the athletic footwear,
apparel and equipment industry. To help market our products, we contract with prominent and influential
athletes, coaches, teams, colleges and sports leagues to endorse our brands and use our products, and we actively
sponsor sporting events and clinics. We believe that we are competitive in all of these areas.
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