Nike Corporation - Manufacturing, Marketing and Supply Chain - Research Paper Example

?Nike Introduction Nike Corporation is a US-based designer, supplier and marketer of authentic sports equipment and sportswear, both shoes and apparel. The company’s global headquarters is a place near Beaverton city but is within unincorporated Washington County. The company leads globally in the design and supply of athletic apparel and shoes, and sports equipment. In its 2008 fiscal year, the company recorded an excess of US$18.6 billion in its revenue and it employed over 30,000 people globally. According to The Oregon, Precision Castparts and Nike are the only Fortune 500 corporations headquartered in state of Oregon. This is to say that the company is one of the richest companies in Oregon. Mission statement and goals Nike’s Mission statement is: To bring inspiration and innovation to every athlete in the world. According to Bill Bowerman, everybody who has a body is an athlete. The company therefore aims at bringing inspiration and innovation to the entire humanity. The company has five goals for its business processes. These are, to provide an environment which develops individuals to maximize their contribution to Nike, to provide innovative and quality products and services both internally and externally, to identify consumer segment opportunities that are focused, to establish and nurture good emotional ties with groups of consumer and to maximize profits (nikerepository.com 1). History and products Nike was founded in January 1964 by Philip Knight, a track athlete in the University of Oregon, and his coach Bill Bowerman. They gave the company the name Blue Ribbon Sports . Initially, the company operated as a distributor for Onitsuka Tiger (the current ASICS), a Japanese shoe maker. At that time, it was making high sales at local track meetings and other evens related to sports out of an automobile that belonged to Knight. The company grew rapidly and opened its first retail store in 1967. By 1971, its relationship with Onitsuka was almost ending and Blue Ribbon Sports prepared to launch its own line of shoes that would bear the Swoosh latest designed by Carolyn Davidson (nikerepository.com 1). In January 1971, Nike first used the swoosh and released its first group of products named Nike and bearing the swoosh. Their first products were brands of truck running shoes. In 1978, Knight and Bowerman changed the name of the company to Nike corporation. By 1980, the company had taken over almost half of the athletic footwear market even without TV advertisements. Since then, the company has expanded and as of November 2008, it had acquired some companies to become its own major subsidiaries. These are Converse Inc, Umbro, Cole Haan and Hurley International and Nike Golf. Other Nike subsidiaries are Bauer NIKE Hockey Inc and Exeter Brands Group LLC. Nike produces a vast range of sports equipment and sportswear. Currently, the company produces a variety of shoes, shorts, jerseys, baselayers and other types of sportswear designed for use in a range of sport like basketball, ice hockey, cricket, tennins, lacrosse and other track and field sports. The name Nike is the name of a Greek goddess of victory and Nike Corporation markets all its products under its own name. This also include Nike Pro, Nike Golf, Nike+, Nike Skateboarding. Some of the products produced or sold by its subsidiaries are marketed under different brand names for example Air Jordan/Jordans which are sold by its Jordan brand subsidiary. Manufacturing, marketing and supply chain In order to meet its global demand, Nike has contracted over 700 shoe factories and these factories are now manufacturing Nike-branded products. Most of the contacted factories are located in Asia including China, India ,Indonesia, Vietnam, Pakistan, Taiwan, Thailand, Philippines and Malaysia. CRS Wire. (2005). Manufacturing and marketing is therefore achieved is therefore through subsidiaries and contracted companies. Currently, the company operate in over 160 countries globally. Nike recognised the need develop a well-coordinated and efficient SC for the industry and its business. Nike’s supply chain (SC) is composed of shippers, retailers, distributors, suppliers and other service providers who work together to avail the company products to its customers all over the world. Corporate social responsibility Nike approaches its CSR in an athlete style, that is, pushing towards higher and higher performance levels. The company not only focuses at getting better at what it does. Instead, it also strives at achieving the best, innovating for a better world and creating value for business. Information nikeinc.com (1) reveals that Nike is using the power of its brand and the passion of its customers to bring about positive environmental, social and even economic changes. It focuses its CRS in areas that will have the greatest impact like materials used for designing its products, manufacturing process and sports where its products are mainly consumed. Nike has a vision that is a directly related to its CSR. This vision is; to help NIKE, Inc. and our consumers thrive in a sustainable economy where people, profit and planet are in balance. In order to achieve this, the company is integrating sustainability practices and principles into everything it undertakes. This ranges from design, rethinking processes, developing sustainable materials and advocating for change in industry. The company focuses at sustainability and this is seen through the type of products its produces. Water is getting and to encourage its sustainable use, the company produces products that are less reliant in water and oil. The company uses healthier chemistry to lower the impact of the ingredients of its products through the product cycle. The company also designs for recycling and their consumers take back their used products to the company for recycling. It has also developed a program for its suppliers to encourage them to adhere strictly to high water standards when producing products for Nike and others (Nike. Inc. 82). in terms of energy utilisation, the company has also collaborated with some companies to achieve an integration of energy efficiency into its business operations. Because its SC covers multiple jurisdictions from raw materials to manufacturing shipping to retail and finally to consumers, the company supports need for the adoption of a mature and consistent public policy position. It supports policies that deliver cost-effective and efficient delivery of its products in a responsible manner. Its efforts concentrate on facilitating security, safety and efficient transport of its products throughout the SC. In addition, the company advocates for policies that help to ensure that it’s SC, from factory to consumer, operates in a way that considers both people and the environment in every step. The company works with a number of organisations to advocate for such policies. These include national governments, NGOs and industry associations. Five weeks after the Dirty Laundry report was released by Greenpeace, Nike has responded by announcing that it put in efforts to end the release of harmful chemicals across its global SC by 2020. The investigation for this report found hazardous chemicals in samples of waste water released from textile factories and it also found evidence linking this to Adidas and Nike. Nike sponsors several sports teams and high profile athletes around the globe with the Swoosh logo and the highly recognized trademarks of "Just do it." Nike donates money to charities for example, the Homeless World Cup, an organisation that helps homeless people. In 2004, the company started the yellow Livestrong wristband which has sold as many has 70 million units. 1$ from each unit goes to Lance Armstrong Foundation to help people fight cancer (Nike. Inc. 128). Nike has been building partnerships with Native Americans and in 2007, the company designed a unique athletic performance shoe specifically to help Native Americans lower Type 2 diabetes and enhance participation in sports. Through the ninemillion.org, Nike has contributed to changing the lives of youths in refugee camps by funding their education. The company has also been on the forefront of fighting against HIV/AIDs through soccer. Nike also focuses on other economic developments like infrastructure. In Vietnam for example, the company has played a leadership role, and in collaboration with multilateral development organizations and other businesses, the company has supported the development of infrastructure in Vietnam. The company’s many other community investment programs are spread across various sports but all of them have the common goal of inspiring and creating environmental and social change. However, Nike does not have a perfect CSR record. Todd et al (196) explain that Nike employees in Thailand footwear factory were exposed to toxic isocyanates and other chemicals. Apart from exposure, dermal exposure was also major problem and posed a risk of allergic and asthmatic reactions (Todd 169). Management techniques used in Nike Nike employs a strategic management technique to win in its competitive industry. Its board of directors of consists of two types of directors. It consists of both independent directors and management directors. This means there are those that are directly involved with the company and those that indirectly involved with the company. The combination of these two categories of directors benefits the company in that independent the directors bring outside experience, help the overall team in thinking “outside the box” and provide a different framework for reference. This oversight board contributes actively in management decisions when strategies are being formulated. Evaluation of Company success There is no doubt that Nike is a successful company. The company has managed to develop a strong brand image and earns a lot more than its competitors. In 1999, its revenue for the fiscal year ending 31st May was $8.777 billion representing a 8% decline from revenue earned in 1998. This drop marked a first time decline in revenue since 1994. Since then, the company has been successful and within a 10-year period, it was able to achieved a 300% growth. Nike has a good inventory management and cost control and because of this, it has always been able to achieve high net income. The company has diversified into e-commerce and thus achieved increased sales. One of the key things that can be changed to enhance this success is its board of directors. The average age for this team is 62, the youngest being 49 and the oldest being 79. This is a weakness in that there is lack of young people in the team who could bring in new and more innovative perspectives to the company and assist in achieving its goals. Conclusion Nike started as a small sales business but has since then grown into a global leader in the designing, manufacturing and supply of sportswear and equipment. The company equips athletes with the finest sports equipment and sportswear to continuously improve their performance and thus achieve their goals. Because of this, Nike dominates its competitors even though it operates in a highly competitive industry. The company has a good and strategic management that ensures that the strategies are formulated basing on results of internal analysis of the company has well as the situation outside the company. Despite the dynamic market for athletic footwear, Nike will continue to expand its product lines and maintain its position as a powerful global brand. Works Cited CRS Wire. (2005). Nike Publishes List of Global Contract Factories in Push for Greater Transparency and Collaboration to Improve Footwear and Apparel Industry Labor Conditions. Online: http://www.csrwire.com/press_releases/24956-nike-publishes-list-of-global-contract-factories-in-push-for-greater-transparency-and-collaboration-to-improve-footwear-and-apparel-industry-labor-conditions. Retrieved on 13th December, 2011. Nike. Inc. (2009). corporate social responsibility FY 07 08 09. Online: http://nikeinc.com/pages/responsibility. Retrieved on 13th December, 2011. nikerepository.com (2010). Nike, Inc. Company History and Information. Online: http://www.nikerepository.com/nike-company-history. Retrieved on 13th December, 2011. Todd Lori et al. "Health Survey of Workers Exposed to Mixed Solvent and Ergonomic Hazards in Footwear and Equipment Factory Workers in Thailand." Annals of Occupational Hygiene (3) pp 169- 205. (2008). Read More