Strategy Formulation - NIKE - Research Paper Example

?NIKE Company NIKE Company Overview Phillip Knight a business graduate from the of Stanford Nike initiated NIKE Company in the year1962. The company started has an importation business organization that dealt with sportswear including athletic shoes from Japan to United States. Originally, NIKE was known as the Blue Ribbon Sports (Stead, and Stead, 2004). Later it was named NIKE after successful growths and expansions. Currently, the company indulges in business activities encompassing of designing, product development marketing of footwear, sporting equipment, apparel, and accessory product. It is the largest footwear seller all over the world. NIKE currently sells to over 160 countries all over the world including Europe, Australia, Canada, Latin America, Asia, and United States. Some of its facilities are in Oregon, North Carolina, Tennessee, and Netherlands. It also has leased facilities that include Nike-women stores, Nike-towns, Nike factory stores, and more than 100 administrative and sales offices. NIKE brands include Bragano, Converse, Cole Haan, Hurley, g series, and Baver (Griffin, 2007). SWOT Matrix Strengths NIKE has a market advantage since it is recognized worldwide. Almost everyone understands and knows what NIKE. Its brand is recognizable almost at a glance. This indicates how its marketing department is vigorously promoting its products. A part from its worldwide recognition, it has a fantastic product expansion capacity. NIKE is known for making sports equipment to apparel including sneakers (Michman, Mazze, and Greco, 2003). In fact, its presence in the global market has intensely increased. Notably, it has high sales in the international market. The company has also secured the promotional services of well-established celebrity athletes (Pride, & Ferrell, 2006). Weaknesses Notably, NIKE is inefficient in predicting that it has and labor problems that often affect its operation. For example, in 1996, the company engaged in child labor, in Pakistan, and this tainted its image in the labor market. The company also faces exceptionally stiff prices competition from other companies that produce and market the same products (Blakey, 2011). Most of the NIKE competitors are trading their products at lower prices in order to attract market. They also experience high operation costs in markets that are not suitable for its products since they begin by sneakers. Opportunities The company has the opportunity of promoting its brands not only as sportswear but also as fashion-oriented products (Blakey, 2011). A number of people use NIKE products exclusively as fashion wears. It also experiences high demand for both footwear and clothing meant for leisure activities. The company should employ and development its use in internet sales that has been provided to increase its growing capacities with an excellent marketing platform. Threats Experience a large number of Competitors who replicate the product designs of NIKE and its business model (Bamberger and Meshoulam, 2000). Some of these companies that give NIKE stiff competition include Adidas-Solomon AG, Reebok, and many others. It experiences financial losses due to unstable costs and margins caused by the use of different international currencies. These are threats that result from the fact that it is involved in international trade where it has to buy and sell goods in different foreign countries. The model of its products has not changed much from what was designed by Knights. This has significantly reduced the competitive advantage with other similar products that have much improved. BCG Matrix Nike operates on segments including Apparel, equipment, and footwear that it supplies mostly in Europe, U.S, Africa and Middle East, Latin America and Asia pacific (Slack and Parent, 2006). However, NIKE has a problem with child particularly in the Nike air shoe, which has not only faced difficulties in its sale but has also received several, complains from the customers. Therefore, it is important that this shoe’s quality be improved towards meeting customers’ needs. The recent times have seen women and children designs become star, commanding high market demands. Its cash cow is the athletic footwear which has experienced stable market preference since its introduction (Blakey, 2011). Nike shoxs has seen its market demand wane progressively making it the dog. Key Factors Improved e-commerce focus, the emergence of new markets, increased demand for women wears and many other factors. Its current ratio is at 1.45 (1982), 1.82 (1983). This translates to sufficient cash that can be used for additional investment. Its earning per share was at 1.37 in 1982 and 1.53 in 1983. The Boston Consulting Group matrix indicates a progressive market share that increases with increases with an increase in growth rate of the sales of the industry (Blakey, 2011). Recommendations To meet the current market demands and competition in the industry, NIKE should introduce more products or improve on the currently available products in order. This initiative will improve the product outlook and satisfy the emerging consumer demand. The company needs to develop more products both in sportswear and fashion wear in order to expand its markets and increase the volume of sales. It should also expand further into foreign markets both in the future and currently through aggressiveness and being the leading footwear industry. Technology is crucial for the company. It should be quick to adopt new technologies that have in-depth capacities not only to increase but also to improve the production of both fashion wear and athletics wear in order to continue dominating the market as a leading foot wears and ports wear producer in the global market. Research is also necessary for the company to ascertain of the consumer demands and market changes. The prevailing circumstances and future predictions in relation to the international markets are also noteworthy since they will assist management in planning and designing response to eventualities that might be projected. New trends in the global market should also be adhered to for purposes of staying at par and relevant within the market. Designs for both children and women are necessary to be considered with relation to trends and fashion. The company should also enhance on line marketing. Internet purchasing and ordering systems that are currently employed in businesses towards expanding the market through increased purchasing and selling on-line. Through this, company will improve and increase its efficiency in trade and profitability. Quality control should also be improved through the establishment of better methods that will assure consumers of continual quality. When the consumers’ confidence is affirmed, more profits are likely to be realized. Moreover, the company should sign Quality contract with the manufacturers to ensure that products that their products meet the expectations of consumers. Extra expenses results in reduced net profits that the company can make. Therefore, it is crucial that the company control its expenses by avoiding unnecessary expenses. Consolidation of United States sales is also beneficial for solid decision-making; thus, the company should consolidate its domestic outlets and enhance effective management of international sales and competitors. References Bamberger, P. A., & Meshoulam, I. (2000). Human resource strategy: Formulation, implementation, and impact. Thousand Oaks, CA: Sage. Blakey, P. (2011). Sport Marketing. Exeter: Learning Matters. Griffin, R. W. (2007). Principles of management. Boston, MA: Houghton Mifflin Co. Michman, R. D., Mazze, E. M., & Greco, A. J. (2003). Lifestyle marketing: Reaching the new American consumer. Westport, Conn: Praeger. Slack, T., & Parent, M. M. (2006). Understanding sport organizations: The application of organization theory. Leeds: Human Kinetics. Stead, W. E., & Stead, J. G. (2004). Sustainable strategic management. Armonk, NY [u.a.: Sharpe. Read More