Nike case analysis


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Nike case analysis

  2. 2. (1) Short Company Introduction Nike is an American multinational company that is engaged in the design, development and worldwide marketing and selling of footwear, apparel, equipment, accessories and services. The company is headquartered in Washington in the Portland metropolitan area. It is one of the world's largest suppliers of athletic shoes and apparel and a major manufacturer of sports equipment, with revenue in excess of US$24.1 billion in its fiscal year 2012. As of 2012, it employed more than 44,000 people worldwide. The brand alone is valued at $10.7 billion, making it the most valuable brand among sports businesses. The company was founded on January 25, 1964 as Blue Ribbon Sports by Bill Bowerman and Phil Knight and officially became Nike, Inc. on May 30, 1971. The company takes its name from Nike the Greek goddess of victory. Nike markets its products under its own brand, as well as Nike Golf, Nike Pro, Nike+, Air Jordan, Nike Skateboarding, and subsidiaries including Hurley International and Converse. Nike sponsors many high-profile athletes and sports teams around the world, with the highly recognized trademarks of "Just Do It" and the Swoosh logo. Mission Nike’s mission is to bring inspiration and innovation to every athlete and in the world. Customer service mission : to represent the highest service standard within and beyond the company’s industy, building loyal consumer relationships around the world. Vision Nike’s vision is for every team to be high performing, diverse and inclusive. (2) What is meant by strategy in this case? When first founded in 1962 under the name of Blue Ribbon Sports, the strategy was “to distribute low-cost, high-quality Japanese athletic shoes to American consumers in an attempt to break Germany’s domination of the domestic industry.”
  3. 3. The generic business strategy for NIKE is a product differentiation strategy. Nike emphasizes on the key strategy elements of branding advertising, design of products, exclusive customer service, high quality products and new product development. Today Nike offers athletic shoes at every marketable price point to a global market. Nike sustains its leading position through emphasizing quality products, constant innovation, and aggressive marketing. Nike sells its products in more than 180 countries under not only its namesake brand but brands such as Cole Haan, Converse, Hurley International, and Umbro Inc. It uses distribution channels such as company-owned stores and websites or sports retailers, such as Foot Locker. (3) Who are involved in crafting and executing strategy ? the Board of Directors (the Board) The Board of Directors (the “Board”) of NIKE, Inc. (the “Company”) has adopted the following Corporate Governance Guidelines to assist the Board in the exercise of its responsibilities. These Guidelines reflect the Board’s commitment to monitor the effectiveness of policy and decision making both at the Board and senior management level, with a view to enhancing long-term shareholder value. These Guidelines will be reviewed annually by the Nominating and Corporate Governance Committee and the Board, and are subject to modification from time to time by the Board. Waivers of these Guidelines may be made only by the Nominating and Corporate Governance Committee or the Board. Chairman of the Board of Directors Mr. Knight, 75, a director since 1968, is Chairman of the Board of Directors of NIKE. Mr. Knight is a co-founder of the Company and, except for the period from June 1983 through September 1984, served as its President from 1968 to 1990, and from June 2000 to 2004. Prior to 1968, Mr. Knight was a certified public accountant with Price Waterhouse and Coopers & Lybrand and was an Assistant Professor of Business Administration at Portland State University. Mr. Knight led
  4. 4. NIKE from a small partnership founded on a handshake to the world’s largest footwear, apparel, and equipment company. Role of Directors Normally it is management’s duty to formalize, propose and implement strategic choices, and the Board’s role to approve strategic direction and evaluate strategic results. To accomplish this, the Board engages in a regular dialogue with the Company’s Chief Executive Officer (“CEO”) and other members of the senior management team. The Board regularly reviews with the senior management team the Company’s long-term strategic business plans and other significant issues affecting the business of the Company. Directors are expected to spend the time and effort necessary to properly discharge their responsibilities. Accordingly, directors are expected to regularly attend meetings of the Board and committees on which he or she sits, and to review material distributed in advance for the meetings. It is expected that a director who is unable to attend a Board or committee meeting (which, is understood will occur on occasion) will notify Chairman of the Board or the Chair of the relevant committee. Executive committee The purpose of the Executive Committee of the Board of Directors of NIKE, Inc. (the "Committee") shall be to support the efficient functioning of the Board of Directors by taking actions on behalf of the Board of Directors between regular meetings of the Board of Directors as the Committee deems appropriate or advisable, and as the Board may delegate to the Committee from time to time. The Committee will consist of at least two directors, including the Chairman of the Board, appointed by the Board from time to time. The Chairman of the Board shall be the Chair of the Committee.
  5. 5. (4) Proactive or reactive ? Nike sustains its leading position through emphasizing quality products, constant innovation,and aggressive marketing. Nike’s proactive strategies are : Marketing strategies: Nike lures clients with a marketing strategy centering on the brand image Nike promotes its products by support agreements with celebrity athletes Innovative product design: Focusing one of its corporate values on technology and innovation Providing diversity to customers by customization system (5) What was their business model ? Operations : Footwear, apparel, equipment … Other businesses: Converse , Hurley, Jordan brand, Nike Golf.. Business Level Strategy: Integrated cost leadership and differentiation strategy. (6) Their intent and objectives? Their intent and objectives are to bring inspiration and innovation to every athlete in the world. The co-founder Bill Bowerman said “If you have a body, you are an athlete” Their mix marketing can be analyzed as:
  6. 6. Product: Sports apparel and Athletic shoes Price: Premium pricing Promotion: Famous athletes, Sponsporshipetc Place: More than 180 countries with different distribution channels (7) What were their core competences? Their core competencies are: Marketing strategies Nike lures clients with a marketing strategy centering on the brand image • Distinctive ‘Swoosh’ logo • Advertising slogan ‘Just do it’ Nike promotes its products by support agreements with celebrity athletes • Celebrities athletes including from professional teams to college teams Innovative product design Focusing one of its corporate values on technology and innovation • Technology including shoe-cushioning system, reducing shock, distribute pressure, and etc. Providing diversity to customers by customization system • Turning customer to a designer, it provides fun and diverse choice on their product (8) What were the driving force for industry change? The driving forces for industry change were: Criticism of Nike’s manufacturing practices Environmental problems related to the textile industry
  7. 7. (9) SWOT analysis • Strength Recognizable brand Philanthropy • Weakness Labor practices Consumer Cost Global community and outsourcing • Opportunity WideRange of products Foreign Market Website • Threats Competition Management UniversityCampusGroups