IT Positioning Nike Company for Competitive Advantage - Essay Example

Information Technology Positioning Nike Company for Competitive AdvantageIntroduction:The use of information technology (IT) in the modern times can be found to provide huge benefits in the functioning of an organization. The successful performance of the Nike Company to a large extent depends on the use of the information technology. The study focuses on the use of the information technology by the Nike Company and how it provides a competitive advantage for the organization over its competitors.

Background of Nike Company:The Nike Company came into existence in the year 1971. The company had reached to a leading position in and after 1980. However, the company had lost its position by the mid-1980. Innovative products and marketing strategies brought the company back to its position. In the process, the new tagline called “Just do it” was discovered. During the 1990s, the company proved to be successful in launching its new sports apparel products as well as the campaign programs.

Gradually the company has been improving in its delivery of products and by the present times, the company has enhanced both in its products as well as in its marketing and leads the industry of sports apparels (History & Heritage).The use of Information Technology: Nike Company is highly benefited by the use of information technology since the planning, development, implementation and maintenance of technology used by the company are managed by the information technology across the world. The focus of the company is in providing its business with all the requirements to perform its sales and marketing of its designed products.

In order to effectively perform the activities, the company has an admirable team of IT experts who design, formulate and support solutions to make certain that the functions of the company are not affected by any means. The IT division of the organization is primarily concerned with the solutions provided for the brand, product and the market of the company, the retail and commerce taking place through the internet, the connectivity of the business and the strategic planning of the company, the different tools and architecture required, and the IT infrastructure as a whole (Overview- Information Technology).

Thus from the above mentioned information it can be realized that the use of information technology by the company is not only necessary but it has also proved to enhance the operations of the company providing with effective measures and solutions towards successful implementation of the organizational activities in production, manufacturing and ultimate sales of the products. The company can be understood to use a high level architecture system to enable the systematic processes as mentioned above.

From the users’ point of view, it can thus be reflected that the information technology has been provided an essential position in the management of the company focused to compete with its competitors. The technology has been selected by the company to enhance the activities efficiently and effectively thereby reflecting the significance of the use of IT in leading the industry. Analysis of the Forces of the company and the Position of the Company in the Market:The five forces that Porter had focused on to determine an analysis on an organization’s position in the market are the risk of entry by potential competitors, the bargaining power of buyers, the bargaining power of sellers, the threat of substitutes, and the intensity of rivalry among different firms (Hill & Jones, 43) (Appendix A).

This particular study focuses on one of the forces- the risk of entry by competitors. In this respect, it can be realized that the company is leading in the industry and the fear of the entry of competitors is not significantly impacting the operations of the organization. This is primarily because the activities of the Nike Company have created a competitive advantage facilitated by the contribution of the information technology that has highly enhanced the operations of the company. With enhanced need for innovation and effectiveness, Nike’s competitors like the Adidas are also planning for appropriate use of the IT in their systems to implement their activities successfully (adidas Retail sets a course for the future with Connected Retailer solutions).

The effect of the efficient use of the latest information technology on the Nike Company can be observed from its financials that reflect a continuous growth in its revenues over the years (Appendix B). The revenue of the company has increased from $9,893m in 2002 to $20,862m in 2011. The Return on Equity for the company has shown an increase from 18.2% in 2002 to 21.8% in 2011 (Annual Reports- Nike’s Performance).Conclusion: It might be concluded from the study conducted that information technology has become a significant factor in the management of an organization enabling to efficiently implement its operations thus successfully achieve its profits.

References1) “adidas Retail sets a course for the future with Connected Retailer solutions”, FCBCO, n.d., October 26, 2011 from: http://www.fcbco.com/vendor-resource-guide/retail-merchandising-systems/Retail%20Merchandising%20-%20NSB%20Case%20Study%20-%20adidas.pdf2) “Annual Reports- Nike’s Performance”, Nike, 2011, October 26, 2011 from: http://invest.nike.com/phoenix.zhtml?c=100529&p=irol-reportsannual3) Hill, Charles & Gareth Jones. Strategic Management Theory: An Integrated Approach, Mason: Cengagae Learning, 20094) “History & Heritage”, Nikebiz, 2011, October 26, 2011 from: http://www.nikebiz.com/company_overview/history/1950s.html5) “Overview- Information Technology”, Nikebiz, 2011, October 26, 2011 from: http://www.nikebiz.com/careers/career_areas/it.

htmlAppendix A: Porter’s Five Forces for Nike (Hill & Jones, 43)Appendix B: Financials of the Nike Company (Annual Reports- Nike’s Performance)The Revenues over the Years (in $ million):Year2011201020092008200720062005200420032002Revenue20,86219,01419,17618,62716,32614,95513,74012,25310,6979,893The Returns on Equity over the years (in %):Year2011201020092008200720062005200420032002ROE21.820.718.025.422.423.323.221.618.918.2