Investigation on Success Factors of Nike Company - Research Proposal Example

Research Proposal about Nike Contents Introduction 3 1Background 3 2 Objectives and research questions 3 3 Significance ofthe Research 4 2.Nike Corporation 4 2.1 Background of Nike 4 Strengths 5 Weaknesses 6 Opportunities 6 Threats 7 2.2 Nike success factors 7 Marketing activities 7 Extensive research and development 8 Wide range of relative products 8 3.Methodology 9 3.1 Research methods 9 3.2 Sampling strategy 10 Population 10 Sample 10 3.3 Ethical issues 11 3.4 Timescale 11 References 13 Appendix (Consent Form) 15 1. Introduction 1.1 Background Nike is a strong brand that has dominated the markets in the last decade. It boasts of being the most competitive sports and Fitness Company (Hellman, 2014). Nike Company has headquarters in Beaverton, Oregon, and has opened up many branches across the world. Many experts refer to the Pacific Northwest as Nike’s hometown. As by now, statistics indicate that Nike has employed over 24,000 across the world (Hellman, 2014). Nike enjoys success because of their business model. The leadership of the Corporation has spent a lot of money in bringing out the best out of its employees, such as developing the best logistics, and supply-chain management (Mustamil, 2014). Additionally, the Corporation has developed top-flight information systems, active marketing campaigns, and their cutting-edge running shoe design. This research aims to investigate the main success factors of Nike as a brand. 1.2 Objectives and research questions The primary aim of this study is to conduct a detailed analysis of the main success factors of Nike as a brand. The assessment of the success factors will look particularly at Nike’s business model by asking the following questions: What are the steps that led Nike to be a brand globally? What were the motivational factors behind making Nike being a brand? 1.3 Significance of the Research Understanding the success factors of Nike will benefit many marketers, who will read this study, in designing their marketing strategies. There is lack of enough studies that analysed Nike Corporation. This study will add to the existing literatures about Nike Corporation. Literature review 2. Nike Corporation 2.1 Background of Nike Nike was founded in 1962 (Pink, 2012). During those times, the company was just importing shoes to Japan. The founders of Corporation were Bill Bowerman and Phil Knight. These two businessmen worked under the brand name ‘Blue Ribbon Sports’ before changing to ‘Nike (Pink, 2012)’. Statistics indicate that currently Nike holds a global market share of over 35% (Abrams, 2003). In the US, where the company is situated, the corporation has about 22,000 retails. The Corporation sells products in more than 150 countries. A study by Hellman conducted a SWOT analysis of NIKE (Hellman, 2014). Here are the findings: Strengths Product innovation Many experts refer to Nike as a technological giant (Ghodeswar, 2014). This is because the corporation is always ahead of the technology curve. Its technology strategies are among the reasons the company attracts loyal customers and influential endorsements from elite athletes, such as Tiger Woods (Hellman, 2014). Most recently, the company designed the ‘Nike Flyknit’, an innovative footwear platform (Hellman, 2014). This platform uses yarns and fabrics to create a featherweight, formfitting, virtually seamless upper. Experts argue that this innovation fits good athletes playing basketball. Nowadays, basketball players prefer minimalist footwear. Nike Flyknit was developed to capitalize on the growing trend of minimalist footwear trend (Debelak, 2003). Strong cash flow Nike boasts of strong capital. From the company’s financial resources, Nike generates a lot of free cash flow. The company then uses the cash flow to increase the shareholder value. The company has a modest dividend payout and an aggressive buyback program (Hellman, 2014). From financial documents of the company, Nike repurchases the stocks approximately $2 billion annually (Hanrahan, 2010). Weaknesses High advertising costs After a closer analysis of Nike’s marketing strategies, one notices that the corporation often relies on major sports stars to advertise the company. The company usually signs lengthy endorsement deals, which are super costly, with these stars. Opportunities Favorable industry trends Many consumers in the sportswear sector are demanding more minimalist footwear (Hoskisson, 2008). Athletes have increased the desire to include fashion in the athletic realm. These desires and demands are a boost to Nike. From studies, Nike is always known to emphasize on style (Hoskisson, 2008; Verbeke, 2013; Hill, 2009). That said, one notices that many people wear Nike gears casually, rather than during sporting occasions. Emerging market growth There are very many emerging markets in the world. For example, the company could open up more branches and factories in China (Debelak, 2003). China is regarded to be an emerging market with a huge population and emerging middle class. Additionally, experts argue that Nike could perform very well in Brazil because it is an emerging market, and many people have a passion for sports, especially football (Debelak, 2003). Threats Heightened competition There are very many competitors out there, such as the V.C Corporation (VCF). This corporation sells majority of its merchandise through Timberland and the North Face labels (Ghodeswar, 2014). Product Cost Inflation The firm is faced with the threat of rising raw material costs. Moreover, there is the issue of labor inflation. For this reason, Nike has to be more creative in order to make improvements in this area (Hellman, 2014). 2.2 Nike success factors Marketing activities Nike spends a lot of its revenues on high profile athletes or athletes’ teams with the aim of marketing the brand name (Hellman, 2014). Additionally, the company’s logo of ‘Just Do It’ attracts many customers as noted in the study by (Ries, 2010). By positioning itself as an expensive product and premium brand, Nike attracts a lot of high-class customers (Pantaleo, 2008). A quantitative study by Rangan concluded that Nike’s marketing strategy is focused on improving the brand image (Rangan, 2006). The study gave the examples of Nike’s distinctive logo and advertising slogan. A study by (Ries, 2010) concluded that slogans are used to describe features and benefits of a product or company. However, the study states that long slogans are very memorable and efficient for marketing. This is contrary to many studies that say that short slogans are memorable and easily makes a consumer feel good and ideally want to buy it (Debelak, 2003; Hanrahan, 2010; Hoskisson, 2008). Extensive research and development Research and development departments according to an article by (Lacoma, 2014) are important in creating new products and add new features to old products. An excellent R&D department could help a company create a new market for an enterprise, reduces spending on researches, develop strategies that create strong marketing campaigns, and match the trends. For this reason, Nike uses the Research and Development department to look for new ideas that could respond to increasing consumer needs. This has enabled the company appeal to changing demographics and new marketplaces with ease. Wide range of relative products Nike manufactures variety of products for sports activities. A study by Hil, (2011) noted that Nike makes Jerseys, shorts, shoes, and many more products. This ensures the company has a big market share (Hil, 2011). 3. Methodology This is a quantitative research because the researcher will use statistical methods to analyze various theories. This study aims to investigate the factors leading to Nikes success. The research question in this study, therefore, concentrates on the positivist paradigm. In this type of paradigm, the researcher will generate hypotheses, and then test them. Moreover, this research will identify and discuss the influence of outcomes, which is why it concentrates on positivist paradigm. 3.1 Research methods This study will use the survey method to conduct the research. The researcher will prepare structured interviews for the survey. The interviews will be the means of collecting data. The respondents will be asked to answer the interview questions in the exact order they appear. The researcher will prepare closed questions. The intention to use closed questions is because they give each respondent limited choices of possible answers. The closed questions will be made up of both dichotomous and rating scale questions.. The researcher will interview the respondents at places of convenience. To collect data from employees, the researcher will call them and conduct a 30-40 minutes interview. If the employees do not have phones, the researcher will contact them personally. To ensure external validity, the researcher will carry out interviews in areas convenient for the respondents. In this case, the areas include offices, parks, homes, or in vehicles. To ensure internal validity, the researcher will prepare close-ended questions. This is to ensure uniform data collection. A pilot interview study will be conducted to ensure reliability. 3.2 Sampling strategy Population This study will be made up of Nike employees, employees of other organisation, consumers of Nike, Market analysts, and sport teams. Sample The researcher will have two sampling options. He will have both probability and non-probability sampling. However, the researcher will concentrate on non-probability sampling because the population is unknown, and each unit has a probability of being included. The researcher will use quota sampling process when selecting the respondents. From studies, quota sampling process is known to be accurate in choosing a sample that reflects the whole population. The researcher will visit Nike’s wholesale and retail shops in order to select the quota sample. Below is the breakdown of the sample Employees (Nike) 120 Employees (Other organizations) 75 Consumers (Nike) 70 Market analysts 50 Sport teams 15 In total, there will be 380 respondents. 3.3 Ethical issues The researcher will prepare an informed consent, found in the appendix. The consent will enable the participants know exactly what they are being asked to do. The researcher will not pressurize a person to participate. Participation will be voluntary. The researcher will respect individual autonomy. He will allow the respondents to decide what to do, even after signing the Consent Form. The researcher will avoid causing harm to the respondents The researcher will maintain anonymity and confidentiality. He will remove the contributor’s name from the answered questionnaires. The researcher will protect all the data collected. He will be clear about the level of confidentiality he can and cannot, guarantee. The researcher will take particular care in research with vulnerable groups (Tight, 2001). 3.4 Timescale Work to be completed Resources required July Design of a conceptual framework for the project Books, the internet, and articles August Decide on quantitative, qualitative, or mixed-method Books September Read the Sources Books, journals, the internet October Design and create the questionnaire for the study Decide on whether to use a focus group or not, or interview, or not Books, Journals, Internet, Consultations November Decide on the specific topic to study Decide on the possible structure and headings Write the literature review Rewrite the research proposal Books December Create the consent form Collect data Analyse data The internet The research itself January Compile the research The research itself References Abrams, R. (2003). The Successful Business Plan: Secrets & Strategies. The Planning Shop. Debelak, D. (2003). Successful Business Models: Surefire Ways to Build a Profitable Business. Entrepreneur Press. Gershon, R. A. (2013). Media, Telecommunications, and Business Strategy. Routledg. Ghodeswar, B. M. (2014). Building brand identity in competitive markets: a conceptual model. Pathumthani, Thailand: School of Management, Asian Institute of Technology, Klong Luang. Hanrahan, W. (2010). Business, Environmental Audit Critically, assess the Strategic Direction of the Nike brand. University of Newcastle Upon Tyne. Hellman, J. (2014). NIKE: A Short SWOT Analysis. Value Line, 2. Hil, C. (2011). Essentials of Strategic Management. Cengage Learning. Hill, C. (2007). Strategic Management: An Integrated Approach. Cengage Learning. Hill, C. (2009). Strategic Management Theory: An Integrated Approach. Cengage Learning. Hoskisson, R. (2008). Understanding Business Strategy: Concepts and Cases. Cengage Learning. Lacoma, T. (2014). The Advantages of Research & Development Business Strategies. Chron. Lei, D. (2013). Demystifying Your Business Strategy. Routledge. Mustamil, N. (2014). Determining Brand Personality of Nike Sports Shoes Using Aaker’s Brand Personality Scale. International Journal of Innovation Education and Research, 2(6), 1-10. Pantaleo, D. (2008). From Strategy to Execution: Turning Accelerated Global Change into Opportunity. Springer Science & Business Media. Pink, M. (2012). Rainforest Strategy: The Planets Most Successful Business Model. Charisma Media. Rangan, V. K. (2006). Transforming Your Go-to-market Strategy: The Three Disciplines of Channel Management. Harvard Business Press. Ries, A. (2010). Strength in length: The long slogan advantage. Branding strategy insider. Tight, M. (2001). How to research. 2nd edition, 6, 153-191. Verbeke, A. (2013). International Business Strategy. Cambridge University Press. Appendix (Consent Form) Consent Form CONSENT FORM Title of Project: [INVESTIGATING THE SUCCESS FACTORS OF NIKE] Name of Researcher: [NAME OF CHIEF INVESTIGATOR] Please initial all boxes 1. I confirm that I have read and understand the information sheet dated [DATE] (version [VERSION NUMBER]) for the above study. I have had the opportunity to consider the information, ask questions and have had these answered satisfactorily. 2. I understand that my participation is voluntary and that I am free to withdraw at any time without giving any reason, without my medical care or legal rights being affected. 3. I understand that relevant sections of my medical notes and data collected during the study may be looked at by individuals from [COMPANY NAME], from regulatory authorities. where it is relevant to my taking part in this research. I give permission for these individuals to have access to my records. 4. I agree to my supervisor being informed of my participation in the study. 5. I agree to take part in the above study. Name of Participant Date Signature Name of Person Date Signature taking consent. Read More