Nike's Strategic anagement in Solving Problems - Case Study Example

Use the Strаtеgiс Маnаgеmеnt to solve рrоblеm Name Institution Question 1. Nike Inc. Synopsis of the Nike’s key current strategic components Nike, Inc. is a manufacturing American multinational corporation that has headquarters in Beaverton, Oregon. The company has many branches in different countries, such as South Africa, Europe, and China among many, but sale of Nike products is global. The mission statement of Nike Inc. is “To Bring Inspiration and Innovation to Every Athlete in the World (if you have a body, you are an athlete).” Nike Inc. has a vision and a focus, “to serve the athlete” and it was established during the moment when the company was incepted. The company aimed at offering quality and superior products to all people especially the athletes and it did this by providing them with a niche market. The aim of the Nike Inc. to meet the desires of the athletes because its products are produced having some unique functionalities that would enhance suiting of the general global population (Zhu, 2010, 540). In the shared vision of Nike Inc. the company has a strong belief of successful establishment of the company culture as it results to innovation of its products. There are the shared values in all the ranks of Nike Inc. and this allows Nike Company to achieve its set goals after creating, as well as perpetuating these values. This includes the following principles; simplify and go, it is the company’s nature to innovate, and Nike is a company. In addition, consumers are allowed to make their decisions, the company is supposed to be a sponge, there is the notion of doing right things always, and immediate involvement. Nike employees understand that they are on the offense at all times and they should master the core fundamentals as they play their roles. These shared valued systems make the Nike employees to be more empowered to manage responding effectively and at a higher rate and makes, the company’s collective consciousness to be validates. The objective of Nike Company is to meet the needs of many athletes inspire the entire world and enable the company to grow through innovation (Tao, 2013, 378). The corporate strategy of Nike is to achieve high growth and to manage its business lines. The business strategy of Nike is that Nike produces high quality products that make it to remain competitive in the market. Functional strategy of Nike is engaging in the market research and marketing its products in the global market. The company produces accessories, footwear, apparel, services, and equipments used in athletics. Question 2. Industry environment Nike Inc operates in an industry that deals with production and sale of sport wear and it has a good position in the sports’ wear industry (Feng, 2014, 49). This is an industry where clothing, shoes, and apparels used by athletes when playing or watching games. The industry is affected by some political factors, such as trade policies, government changes opinions from the stakeholders, as well as crisis in that Nike operates in a number of countries and it competes with other companies. Some of the economic issues facing Nike Inc. in the industry, like internal finance inadequacy, changes of the economy, taxation issues, importation and exportation policies, and employment challenges globally. There are also the social-cultural factors affecting Nike in the sport wear industry and this include the attitudes of the consumers, demographics, ethical matters, shift of the consumer population, as well as the views of the media(Tao, 2013, 380). Technological issues are other environmental factors affecting the sport wear industry and this comprises of the changes in the technology usage of the internet in activities, such as marketing, innovation, and technological research conduct, as well as going green. Sport wear industry is also faced with legal issues ad this includes issues like; global legislation, law of competition, law set by the consumers, and legislation of the companies. In addition, there are some environmental factors faced by Nike Inc. in the sport wear industry and this comprises of; the values of the stakeholders, issues associated with going green, the culture of the company, and the staff morale as they work (Epstein, et al. 2010, 253). Nike Company has several direct competitors and they include; Adidas, Reebok, Converse, and New balance. Other competitors comprise of UnderArmor or the Puma, Timberland, Woodland, and Hurley (Kreng, & Wang, 2013, 79). All these companies manufacture footwear and other sport wear. Due to strong competition and domination of the market by Adidas Company, Reebok International, Converse an American lifestyle company, New Balance Athletic Shoe, Inc. and Nike, Inc. it becomes challenging to new companies to enter into the market (Ofek, & Johnson, 2011, 60). This is also contributed by the condition of the economies of scale, cost disadvantage, capital requirements, switching of the costs, and the government policies. The quality of the Nike Inc. sport wear makes customers have no bargaining power and it has won trust of the stakeholders because of its products. The market share of Nike, Inc. and its competitors is as follows; Nike is the industry leader having a market share of 47%, Reebok following with 16% and Adidas 6% and other small manufacturers sharing the remaining 31% of the entire market. From the above information, it is clear that footwear industry is a perfect competitive environment with free entrance of market players (Erspamer, et al. 2011, 3). It is clear that, products of Nike, Inc. do not have close substitutes and the costs of its products are favourable to all potential customers. However, the demand curve facing Nike company is likely to be relatively elastic and this gives Nike the ability to ‘markup’ its price beyond marginal cost. This environment of the industry served by Nike Inc enables it to focus in developing new working strategies and implementing them in the market in order to remain competitive in the sport wear industry. Nike’s resources and capabilities Nike uses capital to produce its products and there are different products that are produced by Nike Inc. in order to fit the needs of the market (Epstein, Buhovac, & Yuthas, 2010, 353). The company engages in designing, development, manufacturing, and global marketing and international sale of accessories, footwear, apparel, services, and equipments used in athletics. Nike, Inc. is the largest trader of athletic footwear, as well as athletic apparel globally (Carr, 2013, 1). The company designs shoes used in outdoor activities, such as tennis, baseball, golf, hiking, Volleyball, soccer, football, cheerleading, bicycling, wrestling, and aquatic activities among other recreational and athletic uses (Tao, 2013, 381). Nike, Inc. sells sports outfit and garnishes fitting different sport activities and it sells some sports-inspired routine apparel, such as eyewear, bags, socks, protective equipments, sport balls, and basic sport apparatus (Kreng, & Wang, 2013, 83). Apart from Nike’s footwear, accessories, and apparel businesses, Nike sells its products using other trademarks in specific markets (Erspamer, et al. 2011, 3). The company owns several apparel and footwear companies specializing in diverse sports, such as Cole Haan, Hurley International LLC, Converse Inc., Umbro Ltd., as well as Nike Golf. The company is capable of remaining being competitive in the market through its activities and its position in the market (Kreng, & Wang, 2013, 84). The major raw materials used to manufacture Nike products are; rubber, foam cushioning supplies, leather, plastic compounds, canvas, nylon, and the polyurethane films applied in cushioning of apparatus (Tao, 2013, 381). The Nike make, apparel is manufactured approximately totally exterior the United States, in 34 diverse countries. The key material used to manufacture Nike apparel are; synthetic and natural fabrics, heat and water resistant, threads, metal and plastic hardware fabrics. Nike Inc. has a strong distribution capability that enables it to reach the diverse market. Nike, Inc. is very committed in marketing the products and the company in general. The company has strong connections with some influential and successful athletes, teams, and coaches. The company also contacts leagues like Tiger Woods, Michael Jordan, and Serena Williams with the aim of popularizing its products (Erspamer, et al. 2011, 4). The company responds to changes and trends in the market to meet customer interests through change of product mix offerings, manufacturing new products, categories and styles, and carrying out aggressive marketing to remain in the market. Nike, Inc. produces men, women, and children sport wear, such as footwear, t-shirts, caps, and sunglasses. The company concentrates much in meeting the needs of people who participate in and those who like sports and athletics globally (Carr, 2013, 2). Products of Nike, Inc are sold in different countries and the most common Nike products or the most sold are; basketball, cross-training, children, running, and women shoes. All these make Nike Inc. to be more competitive and to retain the strategy of value creation. Strategies (business-level, corporate-level, co-operative, international) In order for Nike Inc. to remain being competitive and to retain the competitive advantage in the sport wear industry, it requires adopting strong strategies that will enable it to have changes in the co-operative, international, business, and corporate level (Ofek, & Johnson, 2011, 60). Nike Inc. requires consider the price of the products when selling them with the aim of getting profit and it should ensure that consumers are always satisfied. Product differentiation is another strategy that can enable Nike Inc. to increase the demand of its products and attract more customers. It is also necessary for Nike Inc. to practice innovative advertisement, as well as brand loyalty for customers to continue purchasing products from the company. There is also the strategy of involvement of customers in the marketing of the Nike Inc. products in order to have its market being expanded. To enhance competitive advantage of Nike Inc. in the market, the company has to focus at sustainability. Ultimately, the company has to engage in market transformation and ensure proper usage of the materials, as well as outsourcing some of the services for positive operation impact. According to (Zhu, 2010, 543), this is done through production of compelling and innovative products. The company should also focus on the main profitable terminals and ensure that its management team is very committed to achievement of its goals and objectives (Piskorski, & Johnson, 2012, 33). Nike Inc. should begin marketing its products more in the nations where there is population growth and join hands with some of the companies that are capable of enhancing its success (Epstein, et al. 2010, 255). The company should engage the environmental and social strategy of ensuring that the company operates and in the marketing strategy, Nike should ensure that the image of its products is favourable. Nike Inc. should ensure that, through collaboration with consumers, there is brand leadership (Tao, 2013, 381). The distributional strategy allows Nike Inc. to supply its products to all its customers especially where the orders have been raised or during the rainy seasons whereby the demand of Nike products go high automatically. Nike Inc. has to focus of marketing its products in the international market in order to meet its goals and to win over its rivalry, such as Adidas. Two questions What is the production cost met by Nike Inc.? Nike Company manufactures the products and manages its business using factors of production, such as labour, capital, enterprise, and land. The factories of Nike, Inc. are constructed on different locations where land is used. Moreover, manufacturing of the products is done through human and mechanical labour. There is the use of oil in Nike Company, which is used to operate the company’s machines during production of plastic. Land is a natural resource where a factory structure is located and it is apparent that, Nike has several retailers in around six continents and headquarters in Oregon. There are many workers in Nike factories who assist in production of apparel, footwear, and athlete equipments. Nike Company employs people from different locations and people with different experiences and skills. Another cost is related with marketing and advertisement of the Nike products. How does Nike Inc ensure emphasise on sustainable environment? The production process involved in Nike Company makes use of oil, which is used to operate all the company’s machines in different factories during production of plastic. Nike, Inc. also uses rubber to make the sole of the shoes and other parts of the sport’s wear. This makes the company to generate some negative externalities where production process involves emission of some gases and substances to the atmosphere. Because of this, the company has tried to mitigate the externalities by ensuring proper drainage of all waste material emitted from the company and cleaning the gases using some chemical to reduce their harmful effects as they get to the atmosphere. Moreover, the company has build factories in places where they are easier to manage and places where there is possibility of refreshing the environment after emission of waste. Conclusion The leadership in the strategic planning department will add a great value to the reputation, as well as the success of Nike Inc. This is where the company will engage in strategic planning and ensures that its products get a positive and effective business opportunity. The leadership of Nike Inc. ensures that customers are well served and approached with high respect whenever they approach the company wanting to purchase its products. In addition, leadership of Nike enables the employees to improve their performance because of being involved in the decision-making and being set free to interact with their managers and supervisors. Through the Nike Inc. leadership, the company manages to win over the competitive advantage over its rivals and it retains its good market position in the market. The pricing of the Nike products is also done with reference to its effective leadership whereby uniform prices are charged to all markets globally. The Company manages to do thorough research and development activities in order to explore new market and to reach many customers. Ultimately, through Nike leadership, the company manages to invest its revenue through other activities. References Carr, A. U. S. T. I. N. (2013). Nike: The No. 1 Most Innovative Company of 2013. Fast Company. Epstein, M. J., Buhovac, A. R., & Yuthas, K. (2010). Why Nike kicks butt in sustainability. Organizational Dynamics, 39(4), 353-356. Erspamer, M., Al Khamees, Q., Panjaitan, T., & Peacock, J. (2011). NIKE Apparel: An Analytical Investigation and Development of Plans. Feng, B. (2014). Study on supply chain management strategies of sports goods company. Advances in Services Science and Services Information Technology (Set), 52, 49. Kreng, V. B., & Wang, B. J. (2013). An innovation diffusion of successive generations by system dynamics—An empirical study of Nike Golf Company. Technological Forecasting and Social Change, 80(1), 77-87. Ofek, E., & Johnson, R. C. (2011). Nike Football: World Cup 2010 South Africa. Harvard Business School Marketing Unit Case, (511-060). Piskorski, M., & Johnson, R. (2012). Social strategy at Nike. Harvard Business School Case, 9-712. Tao, S. (2013). Sports Equipment Based on High-Tech Materials. 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