Communication Strategies in Nike Inc - Assignment Example

CHOOSE A MULTINATIONAL COMPANY AND CRITICALLY EVALUATE THEIR COMMUNICATIONS STRATEGIES. NIKE Inc. (USA) Introduction to the company and history NIKE, Inc. has been established in the year 1968. The company’s prime business is designing, developing and worldwide marketing of the top quality footwear, equipment, accessory products and apparels. The business of the company is spread worldwide with the company owned manufacturers, retail stores and independent distributors over 160 countries through out the world market. Nike is having de-centralized production centers with specialized contractors situated out side the United States. The company manages the production of equipment products manufactured both out side and within in the U.S Nike is dominating the sports material industry for the past 33 years. Nike emerged as the number one athletic footwear company in the US and secured the position of number two American brands in terms of name recognition among overseas consumers, the status of the company matched with that of renowned organisations such as IBM and Coca-Cola.  This high degree of recognition is one of the main reasons how Nike has been so vastly successful. (Company overview accessed on 10.03.2006) ORGANIZATIONAL ISSUES Does it have a vision statement? “Values and mission is the vision of Nike”. Values and Mission both are hand glove, which makes the vision a meaningful. Nike’s core values center on the spirit of competition and the thrill of winning, its mission is a big hairy, audacious goal that has led it to annihilate its competitors, Adidas and Reebok. What are the goals and priorities? The company’s goals include, delivery of value to the shareholders by building a profitable portfolio of global footwear, apparel, equipment and accessories brands. And High single digit revenue growth; Mid-teens earnings per share growth; Increased return on invested capital and accelerated cash flows; and Consistent results through effective management of its diversified portfolio of businesses. Nike is continuously engaged in construction of its effective and impressive strategies and to achieve the goals with its profoundly qualified and experienced team of directors and presidents and its CEO. The strategies are focused in four key areas such as 1.Deepening the company relationship with consumers, developing, improving and maintaining the relationship with the consumers is vital for any organization especially the company engaged in the business of consumer goods; 2.Delivering superior, innovative products to the marketplace, it is very important to keep a keen watch on the improving trends in technology and fashion to and adjust the quality of the products to suit accordingly to the changed conditions there fore this good strategy which can keep the customers behavior intact with the company product; 3.Making the company’s supply chain a competitive advantage, through operational discipline and excellence, the company supply chain also plays important role in the business sine it is ultimate wing which enables to reach the company product to the intended audience if this supply chain is not monitored, managed and not made at competitive and advantageous to the end audience the market for the product will immensely effect; and 4.Accelerating growth through focused execution, construction and planning of the strategies only the first step towards achieving the aimed growth of the industry the aims and objective can be achieved only when they are implemented and put into execution.. (Corporate Report, accessed on 10.03.2006) How is information given to community? The communication strategies of the company with its audience includes the marketing communication teams these teams which includes the supplier chain, distribution chain and the sales divisions; Posters this mode of communication leaves impressions on the consumers about the company products, the posters depicting quality and its feature of the product the company wants communicate to the intended audience; Trade shows and Displays, trade shows and displays is also effective means of communication. In this trade shows the customers are impressed with show conducted by the professional marketing personnel and the audience get an opportunity to have an interaction with the company personnel and there by improving their relations and leading to loving the product; Video the trade show and display is having limited scope of coverage of the audience. The Video show is the better one where the audience field is large, it will have a consistency in the presentations and communications, and other visuals to days world the communication through visual display is enormously increasing with wide support form the vast audience community; advertising agencies, advertising is the age old mode of communication but still it is ever shining. This is considered to be the most popular mode of communication; Electronic media and web sight through which the company sends the messages to its audience about its products, services, brand and logo. In modern world the electronic media is the best and most impressive mode of communication it will reach the communication through out global world with in a few seconds and it is the fasted mode of communication which the company is adopted like any other companies do. (Media campaign accessed March 10, 2006) Dan Weiden is one of Nike’s advertising agencies of Nike, who states that ultimate goal of advertising is to make a connection with the audience.  One ad featured the Beatles and clips of Nike athletes Michael Jordan and John McEnroe juxtaposed with pictures of non-celebrities also engaged in sports.  It was aimed to inferring that real athletes prefer Nike and that, if the general audience buys the brand they will play better too.  Nike’s unpredictable image-based ads have ranged from the shocking, such as its portrayal of real blood and guts in a Search and Destroy campaign used during the 1996 Olympic games; to humorous, such as the first ad used to launch Michael Jordan’s Jordan brand wear.  The latter advertising made the tongue-in-cheek suggestion that Jordan himself had a hand in production by slipping away from a Bulls game at half time to run over to his company and then making his way back in time for the games second half. The communication through advertising is proved to be the most impressive and lays strong impact on the customer behavior. Nike has shifted to the new phase in its marketing campaign, emphasising more of its product innovation skills than the jokey, edgy attitude that it displayed earlier.  The company intends that the advertisements need to tell the consumers that the company is about product innovation and not just athletes and exposure. With the launch of the ‘I can’ campaign, Nike is showing less of the celebrity athletes that previously adorned its marketing output and showing more product usage than in the previous ‘Just Do It’ campaign.  In ‘Just do it campaign Nike athletic shoes used the tag line ‘Just do it’ the tag line appeared on television and print but was never used with a voice-over. Nike’s strategy was that it is viewers to interpret the message themselves, while showing various men and women leading active lifestyles. A life style in which the audience could realize their goals was the promise, the Nike shoes served as a support for the promise. (Annual report, 2005) Community leader and stakeholder involvement. Foot Locker Inc., is the significant customer of the company it operates a chain of retail stores specializing in athletic footwear and apparel, during the fiscal year 2005 it has contributed approximately 11 percent of global net sales of NIKE, Inc., which is the highest of any single customer contribution. In United States Nike is having six employee network extending the community support to the company in fostering professional development, identifying mentors, enhancing work performance, assisting in recruiting diverse professionals, encourage, improve teamwork, develop increased community interaction within and across the work groups. Theses networks include 1.Native American Employee Network; 2.Latino Employee Network; 3.Gay, Lesbian, Bisexual, Transgender & Friends Employee Network; 4.Disabled Employee Network; 5.Asia Pacific Employee Network and 6. African American Employee Network The other community support the company is possessing is the strong student community. The students formed the Nike Awareness Campaign that has succeeded in getting the attention of both former Coach Dean Smith and Chancellor Hooker. The students demanded the administration that UNC to use its contractual partnership with Nike to influence improvement in working conditions at Nike factories in the third world. (Annual report, 2005) SITUATIONAL ANALYSIS Market trends Analysts forecast a change in Nike’s future despite of its healthy levels of growth.  Although the company remains well managed, experts feel the company will have to work harder for future growth.  Consumers are becoming less than enthralled with Nike’s $100-plus prices and are ‘clearing out’ their Nike-filled closets with other brand name clothing. Local media an active communication tool. Local media is playing a vital role in the economic growth of Nike and also the strengthening of its communication strategies with its end audience and its subsidiaries situated over wide area of the global world, by publishing the valuable and information on the company strategies and its marketing policies, inventions and also its news etc. It is one of the media through which the company is reaching its audience and its stake holders such as employees, subsidiaries and its share holders scattered all over the world. The potential allies/partners The following are the potential allies/partners that are substantially contributing to the growth the company. Nike achieves this growth with its established the effective communication strategy with them. 1. Converse Inc., North Andover is the wholly owned subsidiary of Nike, which is engaged in designing, and distribution of athletic and casual footwear, apparel and accessories under the Converse. 2. Cole Haan Holdings Incorporated, headquartered in Yarmouth, Maine sells a line of dress and casual footwear, apparel and accessories for men and women under the brand names Cole Haan, Series and Bragano˝. 3. Hurley International LLC, headquartered in Costa Mesa, California, is involved in designing and distribution of a line of action sports apparel for surfing, skateboarding, and snowboarding, and youth lifestyle apparel and footwear under the Hurley brand name. 4. Bauer NIKE Hockey Inc., headquartered in Greenland, New Hampshire, is yet another wholly-owned subsidiary of Nike that Manufactures and distributes ice skates, skate blades, protective gear, hockey sticks, licensed apparel and accessories under the Bauer and NIKE brand names. Bauer also offers a full selection of products for street and roller hockey. 5. The Company formed Exeter Brands Group LLC, a wholly owned subsidiary of the Company, aiming for the development of the Company's athletic footwear and apparel business in retail channels for value-conscious consumers, and to market and license athletic footwear and apparel. (Annual report, 2005) Board of directors Nike is feathered with the eminent Board of directors with profound knowledge and experience in the corporate sector and they are greatest assets for the company in designing and implementing the corporate strategies including the communication strategies. The company’s continuous and immense growth reflects the performance role of the top management of the company consisting of its board of directors and their team of experts. Mr. Mark parker, the President and Chief Executive Officer of NIKE, Inc. leads his team of directors namely Mr John G. Connors, Mr Timothy D. Cook, Mr Jill K. Conway, Mr Ralph D. DeNunzio, Mr Alan, Mr B. Graf, Jr, Mr Douglas G. Houser, Mr Jeanne P. Jackson, Mr Philip H. Knight, Mr Orin C. Smith and Mr John R. Thompson, Jr. (Corporate Governance, accessed March 10, 2006) PRODUCT/SERVICE DESCRIPTION The company is having three segments such as designing, marketing and selling. Nike designs its footwear products to suit the particular requirements and needs of the athletes. The company always stress and concentrates on the quality with innovative designs to suit the modern style and high performance competition, these products are designed for men, women and children both for the casual use and professional sports persons. Nike brand has extended beyond its purist athlete roots to connect with the mass continuum of the athletic shoe consumers, from toddlers to seniors, from athletes to fashions. Nike markets shoes designed for baseball, football, bicycling, tennis, golf, volleyball, aquatic activities, hiking, wrestling, cheerleading, outdoor activities and other athletic and recreational uses. It markets through professional teams, licensed college and league logos. Nike sells sports apparels, athletic bags and accessory items, sports inspired lifestyle apparel and footwear apparel and accessories of specific purpose. The sales also include skates, bats, gloves, golf clubs, sport balls, timepieces, electronic media devices, eyewear, and other equipment designed for sports activities. The company also produces and sells through its licensees, NIKE brand swimwear, cycling apparel, children's clothing, school supplies and eyewear. The company also sells small amounts of various plastic products to other manufacturers through company’s wholly owned subsidiary, NIKE IHM, Inc. (Annual report, 2005) Current position/image Nike, experiences moderate fluctuations in aggregate sales volume. Changes in seasonal and geographic demand for particular types of footwear, apparel and equipment leads to this variation in the product sale. Since NIKE is a consumer products company, the relative popularity of various sports and fitness activities and changing design trends affect the demand for company’s products. It is the time for the company to respond to shifts and trends in consumer preferences by adjusting the mix of existing product offerings, developing new products, styles and categories, and influencing sports and fitness preferences through aggressive marketing. This risk is a common and continuous which the to be vigilant and respond in time to avoid adverse effect on sales and profitability of the company. (Annual report, 2005) The best methods of communication with target audiences Nike has reviewed and aligned its successful marketing aged formula.  The company intends to shift attention to its product innovation and how the company has evolved. The success of the company should be attributed in part to its wildly successful concept-based audience communication strategy through advertising campaigns.  The company uses a process that is often called ‘image transfer’. Nike ads almost never specifically place a product, or mention the brand name. A mood or atmosphere is created and then the brand is associated with that mood. (Annual report, 2005) The best strategies for gaining and keeping participants/customers Nike’s new strategy is the international domain.  That may prove to be the most difficult element for Nike to undertake.  According to one source there seems to be pretty strong recognition that in a few years Nike will be larger outside the United States than inside.  The problem that the company faces is that even though international sales currently make up one-third of Nike’s business, international business still pales in comparison with the domestic sales. Nike would like to expand into the soccer and international sports arena, but to do so it will have to refocus marketing and distribution in order to re-establish itself as an authentic, technically superior sports shoe.  In the future, Nike would like to build up its presence in the key markets of China, Germany, Mexico and Japan. Nike will focus its advertising on sports, and will feature sports that are of particular interest in a specific region.  Nike keeping in view the rising competition and changing trends it adopts and strengthens the communication effective communication strategies to connect its audience in most effective way. Such communication strategies includes "futures'' ordering program, that allows retailers to order five to six months in advance of delivery with the commitment that 90 percent of their orders will be delivered within a set time period at a fixed price; the NIKE sales offices to solicit sales in the United States; independent sales representatives to sell specialty products for golf and outdoor activities. In addition, the company also utilizes the its Internet website for selling NIKE brand products. Nike also operates 184 the retail outlets in the United States such as U.S. Retail Stores Number NIKE factory stores, which carry primarily overstock and closeout merchandise; NIKE stores including NIKE Women Stores; NIKE Towns designed to showcase NIKE products; NIKE employee-only stores; Cole Haan, Converse, and Hurley stores including factory and employee stores. Nike also operates 190 retail outlets out side the United States such as U.S. Retail Stores; NIKE factory stores; NIKE stores and employee-only stores; NIKE Towns; Cole Haan stores, including factory and employee stores. (Annual report, 2005) The competitors In the United States and on a worldwide, the athletic footwear, apparel and equipment industry is keenly competitive. Nike competes internationally with an increasing number of athletic and leisure apparel companies, athletic and leisure shoe companies, sports equipment companies and large companies having diversified lines of athletic and leisure shoes, apparel and equipment, including Reebok, Adidas and others. Reebok and Adidas are the number two and three businesses in the industry, respectively, are the prime competitors of Nike, Nike being the number one.  Adidas is giving stiff competition to Nike in women’s sports, running and soccer.  Reebok is focusing upon environmental issues in response to criticism of third-world exploitation levelled at the sportswear industry. Reebok and Adidas have recently featured more product-focused ads and have met with a great deal of success.  Despite this rearranged focus, Nike is not backing away from innovative marketing. EVALUATION ISSUES Current progress towards corporate goals Nike has intend to improve the communication strategy and make it more effective taking the company targets, performance improvement strategies, business activities corporate disclosure etc to its core stake holders such as consumers, share holders, employees, business partners and subsidiaries and its community. Therefore it selected the Corporate Responsibility Report, drawn by the top executives such he Chief executive Officer and the president of Nike after the debate and discussions on the subjects with his well qualified and experienced collogue directors. The company through this report conveys to its stakeholders that the company wants to build trust and enable stakeholders to judge the company not on perception, but fact. The transparency is an essential tool in this process the company wants to put forth the facts and figures before its stakeholders in similar strategy of ‘Just do it’ campaign where the company has left to the customers to interpret the tag line similarly here also the company leaves to its stakeholders to judge the company’s growth and prosperity by taking the facts and figures of the company to them this new communication strategy the company introduced to reach its community spread all throughout the world. By this way the company is able to win the laurels of its stakeholders. This report keeps the live communication with not only the beneficiary community but also its subsidiaries especially situated over seas. This report the company places on its web site to enable to reach to all its community including its subsidiaries at overseas. The report consists of prime wallops of the Nike brand business activities and the social and labor impact on work force in its supply chain. The report also delineates how Nike is initiating to integrate corporate responsibility into its fundamental business practice by inclusion of CR compliance, quality, price and delivery into balances scorecard used for its purchasing process. The report also incorporates the focus on substantial and innovative manufacturing impacts, product design, and climate change and toxics elimination. Therefore it is proved to be the unique communication tool of the company. (Corporate Report, accessed on 10.03.2006) Reference List: 1. Company Overview, accessed March 10, 2006 from the World Wide Web: http://www.nike.com/nikebiz/nikebiz.jhtml?page=3 2. Corporate Report, accessed March 10, 2006 from the World Wide http://www.nike.com/nikebiz/gc/r/fy04/docs/FY04_Nike_CR_report_pt1.pdf. 3. Media campaign accessed March 10, 2006 from the World Wide Web www.mediacampaign.org/publications/ integr_plan/intro-3.html 4. Annual report (2005) accessed March 10, 2006 from the World Wide Web http://invest.nike.com/edgar.cfm 5. Corporate Governance accessed March 10, 2006 from the World Wide Web http://www.nike.com/nikebiz/nikebiz.jhtml?page=7 Read More