Professional Documents
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Nike
Nike
Bill Bowerman and Phil Knight launched it in 1964 under the name "Blue Ribbon Sports," and in 1971
company became formally known as Nike, Inc. The Nike squad, which includes the Jordan, Converse, and
Nike brands, gets its name from the Greek goddess of triumph.
INDEX
1. Company Mission, Vision and Values
3. Decision-Making Process
7. SWOT Analysis
9. Stakeholders Map
“Bring
Inspiration and
Innovation to
every athlete in
the world.”
Nike mission statement is “to bring inspiration and innovation to every athlete in the world.” The emphasis of this statement is on Nike's
power inside the sports industry. It particularly highlights this company's capacity to inspire and mold athletes into their finest selves. In fact,
it also suggests that this is what players should watch out for if they want to be clutch. The following are some elements co nnected to this
mission statement:
BRING INSPIRATION
Nike has been in the lead when it comes to encouraging its customers the best way it knows how —by giving them comfy shoes and clothing.
Additionally, the organization recognizes the value of dressing the part, which inspires their ambition to succeed. For insta nce, its extensive
selection of sportswear conveys a sense of what this is really about.
INNOVATION
The reason Nike has remained at the top of this market can be boiled down to its relentless pursuit of developing the most ad aptable,
aesthetically pleasing, and above all reliable products. When introducing any items on the market, it achieves this by enlist ing the brightest
minds in its team of professionals to further its inventive agenda.
In reality, the house of innovations features a wide variety of artifacts and data that demonstrate the company's dedication to sports -related
developments.
GLOBAL PRESENCE
Nike demonstrates in this section that it is a business that seeks to be recognized everywhere. The company's diversification strategies,
which include numerous items aimed at athletes around the world, are explained by the need to satisfy this requirement.
For instance, Nike has launched a number of initiatives that aim to develop sporting talent all around the world.
This vision statement paints a picture of Nike as a firm that
doesn't settle for the ordinary and instead seeks out the
most innovative, straightforward, yet very effective designs
VISION that have positive effects on the users.
“Do everything
possible to
expand human
potential.”
"Do everything possible to expand human potential," Nike's vision statement. Although carefully constructed, this statement d emonstrates that the
business does not restrict itself to particular techniques in order to provide its clients with the finest sports experience possible.
According to this vision statement, Nike does not settle for the ordinary; instead, the corporation seeks out the most innova tive, straightforward, yet very
effective designs that have positive effects on the users. The following traits are relevant to this vision statement in light of this observation:
IMPROVEMENT OF LIVES
Nike Corporation is a people-focused business that strives to have a positive influence on everyone it interacts with. The corpo ration does this by
including socially beneficial goals that run concurrently with its primary aims; these goals make up the company's corporate social responsibility.
Nike, for example, is recognized as a global leader in environmental conservation techniques, but this is not all. As part of its overarching goal of getting
the best out of the individuals it serves, the company is vocal about various social causes.
EXCEEDING EXPECTATIONS
If there are companies that have gone out of their way in what they do, Nike would definitely top the list. In all its operations, Nike has proven beyond
doubt that it does not simply give what the customer expects.
The ever-growing reputation of this company is directly linked to the incredible efforts it puts in manufacturing products whose quality goes over and
above the expectations of the market and Nike competitors as well. For years, there has been no comparison to what Nike does, their products are
simply extraordinary.
The top objective for Nike continues to be providing the greatest footwear, clothing, and other equipment to its athletes’ cl ients.
The business has been committed to it for many years, ever since it was formed. In fact, the corporation is aware of the vari ous needs of various
sportspeople, and by doing so, it inspires innovation to develop products that are specifically suited to the requirements of each category.
CORE VALUES
INNOVATION:
Updating their models and employing the latest technologies they keep innovating to give customers the best experience with
their products.
AUTHENTIC:
They are authentic in spite of the imitations of their brand that can be found in the market.
CONNECTED:
They keep connected with their customers in order to solve doubts, or for example they provide apps to train.
DISTINCTIVE:
With their quality, design and price they are distinctive to their competitors in the market.
IMPACTS AND PURPOSE OF
NIKE'S VALUES
RESPONSIBLE SOURCING
A world-class supply chain, according to NIKE, must be built on respect for the people who produce and transport our goods as well as those who support
environmental preservation.
Gender equity in the clothing and footwear manufacturing sector was assessed using the Gender Equity Self-Diagnostic Tool, which was completed by all suppliers.
Through Nike's Engagement and Wellbeing Survey, 490K contract manufacturing workers have been contacted since May 2017.
The Supplier Climate Action Program, a program that offers suppliers technical support to help establish more aggressive climate goals, received commitments from 11
of NIKE's major finished products and materials suppliers.
Nike's fundamental labor, health, safety, and environmental standards are adhered to in all of the facilities that make up our extended supply chain. By 2025, 100% of
our strategic suppliers' facilities will increase access to career possibilities and upward mobility for women employees.
EMPOWERING COMMUNITIES
They collaborate with professionals, non-profits, athletes, and workers to remove obstacles and contribute to the creation of a more active and fair future for everyone,
beginning with children.
More than 300 organizations across the world support our Made to Play commitment and investments in inclusive communities.
Employees of NIKE, Inc. distributed $21 million in donations to thousands of organizations worldwide.
NIKE, Inc. committed $97.7M in its fiscal year 2021 to promote goodwill in local communities all around the world.
The percentage of employees that give to charity and volunteer in their communities is 35%.
2% Invest 2% of the pre-tax income from the previous year to create positive social change.
50% of girls take part in the play and sport initiatives we fund.
Frequency of the meetings: they meet at least four times per year.
Additional meetings can be scheduled if necessary.
COMITEE MATTERS: and Governance Committee is tasked with, among other things,
reviewing Nike's significant strategies, activities, and policies
regarding sustainability, contract manufacturer labor practices,
community impact, and charitable activities and making
recommendations to the Board. The group directs Nike's business
strategy's tone and pace with regard to sustainability.
1. Design of goods and 2. Quality management: the 3. Process and Capacity 4. Location strategy: the 5. Layout design and
services: deals with the objective is Design: Nike´s operations objective is to optimize strategy: the objective in
design of Nike´s athletic to satisfy consumer´s management must costs and efficiency this strategic decision are is
footwear and other expectations about product prioritize scream lining and through proximity to to optimize workflow based
products. Nike focuses on quality. efficiency of production. employees, suppliers and on human resources,
designs based on advanced The objective is to ensure the target market. In the capacity requirements,
technology and current adequate, effective, and case of Nike, the operations technology and
market preferences. efficient production. managers apply inventory requirements.
a corporate strategy
that chooses production
facility locations based on
costs and nearness to the
most significant markets.
10 DECISION-MAKING AREA:
6. Job design and human 7. Supply 8. Inventory Management: 9. Scheduling: is primarily 10. Maintenance:
resources: Nike satisfies this Chain Management: has an the objective is to concerned with corporate considers adequacy of all
concern through internal excellent supply chain maintain operations manag operations and the resources. Adequacy of
leadership development, management, which ement that minimizes coordination of the supply human resources, facilities
along with coaching and facilitates efficient inventory costs chain with distribution and and capacity is the objective in
mentoring. The company production to support the while maximizing its retail operations. In this this strategic decision
also has regular evaluations global sport shoes, effectiveness and efficiency. strategic decision area of areas. Nike’s operations
of job assignments to apparel and equipment The operations managers operations management, th management implements
ensure person-job fit. business. Align the supply apply the e aim is continuous recruitment
chain with the perpetual method of to maximize resource programs to support HR
company´s overall strategic inventory utilization. needs, as well as reward
aims. management, which programs and career
involves development strategies for
continuous monitoring and maximum retention of
movement of employees.
inventory from the
supply chain to the
distributor and retailers.
4. VALUE
CHAIN
WHAT IS THE VALUE CHAIN
The value chain is one of the most fruitful and popular instruments designed for the internal diagnosis
and analysis of a firm and its proposal, and its diffusion is attributable to Porter.
The concept of value chain refers to the breakdown of the firm into the key operations that need to be
undertaken in order to sell a product or service. Each activity contains its share of the value associated
with the end product, and likewise accounts for part of the final costs of that self-same product. When
the price customers are willing to pay for the product or service exceeds the cost of the various
operations, a firm will generate a margin or profit on its business.
The purpose of analyzing the value chain is to identify the sources of competitive advantage, that is,
those aspects or parts of the firm that contribute most to the generation of the overall value
obtained.
The value chain is built by breaking the firm’s activities down according to their direct / indirect link to
its operations.
SUPPORT Procurement:
The activity of purchasing the factors to be used
ACTIVITIES:
guaranteeing the
firm’s normal Firm Infrastructure:
operations. Activities that may be grouped under the general definition of administration, and may
include planning, control, organization, information, accounting, finance, etc.
PROCUREMENT
Operations or production:
Those that are Include procedures for converting raw materials into a finished product.
Since Nike's success is built on quality and sustainability, these values inevitably translate to
the inbound logistics. To deliver high-quality products and services, Nike has a supply chain
that includes suppliers, transportation, internal delivery, and quality control. Nike items are
produced at 567 factories across 42 nations.
Worldwide. Nike also places a strong emphasis on protecting the environment and reducing
pollution. They favor vendors who share their core values and commitment to sustainability,
quality, and the environment. Independent contractors manufacture the majority of Nike's
goods. After rigorous quality inspection, the manufactured goods are sold through several
regional offices and distribution facilities.
OUTBOUND LOGISTICS
The outbound logistics at nike are all the activities that include storing and distributing the products to
customers.
Nike products are manufactured in around 567 factories and 42 countries. The biggest distribution
center is in Tennessee.
The products are delivered to the regional offices and distrubution centers so that they can send them
into the market and that way the regional distribution channeks can make sure that as soon as they are
released the products are available to the customers.
OPERATIONS OR
PRODUCTION
In addition to product manufacturing, assembly, packing, and
testing, operations often include equipment repair and
maintenance. The Nike value chain study highlights the
significance of operational operations in generating value and
establishing a competitive edge in the market.
Nike does not, however, own any of the factories where its apparel
and footwear are produced. Shoes and apparel sales account for
96% of Nike's branded income.
Nike takes care of the relationship between its customers, by means of loyalty programs.
Probably a product from the culture that the company has built.
Nike customers involved in loyalty programs expend three times more than newcomers.
This “fan club” of course is digitalized, this allows the company to track trends in the
market, level of satisfaction, engagement and how their strategies are working.
5. GENERAL ENVIRONMENT ANALYSIS (PESTEL)
WHAT IS A PESTLE ANALYSIS:
A PESTLE analysis studies the key external factors that affect a company.
It is used to analyze before taking strategic decisions.
It analyses the political, economic, sociological, legal and environment data of the company.
POLITICAL
Nike's "home nation," the United States, offers great growth-oriented policies that
are especially beneficial to this business. These consist of favorable international tax
arrangements and inexpensive interest rates.
However, because it manufactures and sells real items, Nike is constantly impacted
by modifications to tax and manufacturing legislation.
Political unrest of all kinds can always make customs procedures challenging or stop
imports and exports.
ECONOMIC
Although Nike is less susceptible to economic issues than some other companies because it
produces a well-regarded medium-range product, these are some of the economic variables:
For Nike and many other well-known brands, a market crash might be catastrophic news. If this
were to happen, consumers might decide to switch to lower-end, less expensive goods, or even
just as it gets simpler to make goods with acceptable levels of quality.
Nike's profits are partially reliant on the low cost of labor in countries in Asia. The situation is
altering, though, and it's possible that more expensive Nike products may soon be available
everywhere.
Nike has the means to pursue minor new markets because of their "deep pocket" of money.
SOCIAL
CAPITAL RESOURCES:
Nike got successful thanks to the capital invested on the company. It could be divided into factories, transportation, designing
equipment, manufacturing equipment, other equipment and money.
HUMAN RESOURCES:
The company was created by Bill Bowerman and Phil Knight with the goal of creating superior running shoes for track
competitors. Nike continues to focus heavily on improving its running shoes. While paying attention to their customers and
focusing on the Nike App, a platform for digitally driven innovation, design and personalized services. Nike, like its origin al
inventors in the HR department, is trying to create innovative product designs that specifically address athlete -related
challenges. So, what Nike differentiated itself early on, and continues to differentiate itself today, is a fully customer-centric HR.
INFRASTRUCTURE:
Nike, whose products account for around 88% of revenues, doesn't own any factories for producing its goods. Due to the cost
advantages, they outsource the production of their clothing and footwear to third-party contract manufacturers.
DEMAND CONDITIONS
1. SIZE OF THE DOMESTIC MARKET:
Nike has taken the size of the home market into account while developing its internationalization and growth strategy. There are
primarily two reasons for this. First off, firms must be aware of the dynamics that apply to larger markets in order to plan their
strategies and operations successfully because local markets and domestic consumers have risen in size.
Nike has been able to assess, pinpoint, and manage its own growth-related strengths and weaknesses as a result of the bigger
market and domestic rivals. Second, a bigger market is essential for motivating a business or brand to look into the prospects
of entering other markets.
In terms of Nike's expansion and globalization, the existence of associated sectors in domestic and foreign markets has
also been a source of growth and development. This is due to the fact that associated sectors have supported Nike's
business operations by providing the necessary ingredients for operational excellence. For instance, Nike has been
able to find raw materials and packaging locally in various consumer areas, which has assisted it in reducing prices and
expenses and achieving economies of scale.
Nike's ability to grow and extend its business is facilitated by the existence of supporting industries. This holds true for
both domestic and foreign markets that include supporting industries. Supporting industries have contributed to the
growth of the total market in domestic markets, which has helped companies like Nike advance and expand in
company operations, draw customers, and raise awareness in client markets for product awareness and recognition.
FIRM STRATEGY, STRUCTURE AND RIVARLY
STRATEGY STRUCTURE RIVARLY
Excellent Marketing The organizational structure of Nike is
Nike´s success among
largely responsible for its success. Within
Establishment of their Brand and Logo its competitors its
an organization, task delegation and the
through extensive marketing investment mainly thanks to the
development of line authority are defined
by the organizational structure. existence of its
Selling the "Emotional Benefits" of their
competitors, and they
Product The hierarchical structure of Nike is a are able to stay ahead
matrix. Different kinds of organizational of them in terms of
New Technologies
systems are assembled into a matrix
technology and
Provide a wide variety of products to a large structure.
Marketing.
number of sports to capture greater market
The authority moves both vertically and
share They also use
horizontally in a matrix system. To better
Focus on product quality and creating serve clients in various locations, Nike emotional branding as
products that help athletes perform better uses a geographical divisional structure. well as the co-branding
The product is specifically designed to with different sports
Buying out competing sport product brands meet their needs. and athlets.
7. SWOT
ANALYSIS
1. Strong Brand Image: Nike is one of the most
recognizable brands in the world. It has a powerful brand
image, which is associated with quality, performance,
innovation, and style.
SO WO
OPPORTUNITIES (O) Using strengths to capitalize Overcome weaknesses to
on available opportunities capitalize on opportunities
WT
ST
THREATS (T) Reduce weaknesses to avoid
Use strengths to avoid threats
threats
SO
Given its robust financial position, Nike is able to increase its investments in
digitization and product innovation. This will enable it to broaden its product
offering and design while also expanding its e-commerce into other nations.
Nike can achieve greater growth in the Asian markets, notably China and Asia, which
are expanding at the fastest rate in the globe thanks to excellent marketing tactics.
Nike is a financially robust brand, so I can buy new companies in adjacent industries
and also some of its supply chain to lessen its reliance on independent producers.
ST
Nike must make advantage of its marketing and innovation skills to manage the
competitive strain.
Due to its sound financial position, it can continue to spend money on marketing,
R&D, and human resources.
Utilizing internal compliance teams to manage legal and regulatory demands, it
must keep compliance as its top priority.
WO
Nike may grow more quickly in foreign markets by increasing its investment there.
New revenue streams will become available as its reliance on the US market is
lessened.
Spending on innovation and digitization will be made possible by managing
operational costs.
WT
TANGIBLES
MATERIAL
FINANCIAL
GREAT CREDIT HISTORY HIGH LOW MEDIUM LOW LOW LOW MEDIUM
INTANGIBLES
NON HUMAN
ORGANISATIONAL
TECHNOLOGICAL
HUMAN
The sales growth data has been on a saturation trajectory, which can be blamed on the
market's escalating competitiveness. Nike's growth has stalled as a result of the high market
penetration that the rival company caused and the general market saturation. It is
considerably more challenging for Nike to repeat its historical growth due to the aggression
of its rival companies. It is challenging for the brand to gain traction in the market because
the competitors have been pouring large sums of money into their marketing campaigns.
The competitive rivalry is a powerful factor in this situation even though there aren't many
direct rivals of Nike.
THREAT OF NEW ENTRANTS
Nike faces tough competition from regional brands with little influence outside of their home
market. However, due to Nike's Economies of Scale, these small businesses will be unable to
compete with Nike. By lowering its retail price and offering extra perks with its product, the
firm can always draw customers. But due of the operating expenses involved in establishing
and starting their business, the new competitors will never be able to do so. In addition, if the
new competitors want to handle their supply chain and logistics online, they will encounter
many difficulties. In comparison to the company's established sales and distribution network,
they will be completely uncomparable.
THREAT OF SUBSTITUTE PRODUCTS
Since Nike is a well-known brand with great R&D capabilities, there are no prospects for a
rival to replace it. The best research and development staff in the business has long been at
Nike. In addition, the company holds more global patents than any other sporting brand,
totaling more than 25,000. But one factor that causes issues for Nike is the increase in
imitation goods that look like genuine shoes. A new danger to the company's sales has
emerged as a result of recent improvements in the functionality supplied by the counterfeit
goods. However, when it comes to Nike, the danger of alternatives is a weak one.
BARGAINING POWER OF SUPPLIERS
There are several suppliers worldwide who provide athletic brands with materials like rubber,
cotton, Eva, synthetic leather, etc. The industry's suppliers' total ability to negotiate is
reduced as a result. Since Nike is a well-known brand, there is goodwill attached to it that the
suppliers look forward to sharing. The suppliers that Nike works with are reasonably large,
thus they don't have a stronger negotiating position with Nike. In order to lower the overall
cost of the raw materials, the company has a practice of collaborating with the local
producers. The majority of them are MSMEs with a focus on a particular region, with Nike as
their sole big customer. As they are easily replaceable, they lack the negotiating leverage.
BARGAINING POWER OF CUSTOMERS
The cheaper switching cost for customers is the main factor giving them the upper hand.
They can readily switch to the competing brand and doing so requires little expense and
effort. However, given that each customer's contribution is so negligible, this can be readily
overcome. Customers are at a disadvantage due to the small pool of suppliers; thus, it is
reasonable to infer that the force of bargaining is of moderate strength. Although some
customers are price conscious and prefer to shop for less expensive options, Nike's premium
cost is justified by the brand's reputation for quality, assurance, and goodwill. Additionally, a
rise in the number of educated people with more discretionary income helps Nike. As a
result, clients have a moderate amount of bargaining power.
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