This study analyzed the strategies used by Nike between 1990-2000 to deal with rising criticism. It used Porter's strategic forces analysis and five forces framework to understand Nike's opportunities and threats. The findings showed Nike tried to gain cost leadership by moving production to Asia while also positioning itself as offering differentiated products. Nike employed environmental strategies to address criticism and Whittington's systematic school aligned with its strategic moves.
Project focusing on the distribution of the sports brand Nike understanding their various distribution channels and the selective paths that they choose for each country in order to benefit their business
Nike Case Study (Building a Global Brand Image)Wajid Ali
This particular presentation is based on our research, findings and recommendations regarding building the global brand image for Nike.
Hopefully this will help all interested students.
My team and I did an in-depth overview of Nike's competitive position in the sports apparel and footwear industry as well as suggested strategies to help improve their performance.
This presentation is a case study on NIKE - how it has segmented its target audience, marketing strategies adopted, pros, cons and risks of NIKE and it's competition from Adidas.
Project focusing on the distribution of the sports brand Nike understanding their various distribution channels and the selective paths that they choose for each country in order to benefit their business
Nike Case Study (Building a Global Brand Image)Wajid Ali
This particular presentation is based on our research, findings and recommendations regarding building the global brand image for Nike.
Hopefully this will help all interested students.
My team and I did an in-depth overview of Nike's competitive position in the sports apparel and footwear industry as well as suggested strategies to help improve their performance.
This presentation is a case study on NIKE - how it has segmented its target audience, marketing strategies adopted, pros, cons and risks of NIKE and it's competition from Adidas.
This case study report is detail analysis of Amazon.com. The report describes the List of areas that
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that using the strategies and model adopted by Amazon's can leads any other E-commerce site to get
successful. This case study also shows that how the different models and strategies must be
implemented with respect to the dynamic environment of the E-commerce.
Case study on amazon.com's supply chain management practices | MBAtiousaneesh p
The case study provides an overview of Amazon.com's inventory management. Jeffrey Preston Bezos the founder of Amazon.com launched the company when he realized that Internet provided immense scope for online trading. Although the site was originally launched as an online bookstore it eventually offered several other products to keep abreast of the competition. The case study takes a look at the different products and features offered on the site. The case also discusses Amazon's value propositions and its criteria for choosing strategic partners.
International strategy at Zara is defined by the combined generic strategy of cost leadership and differentiation strategy. There are considerations, however, such as when selecting the Lebanese market, labor cost and productivity, distribution cost and shipment cost of raw materials are considered. Other considerations are characteristics or behavior of consumers and income per capita. In terms of marketing approach, the considerations include the 4Ps inherent to the Lebanese consumers and business environment. Market entry considerations include economics, both macroeconomic factors which include tax, political condition and export tariff and microeconomic factors including local competitors, demand and location of store. Regulation from government and local producers protection issues are other considerations.
Running head Nike Inc. 1Nike Inc.9Nik.docxglendar3
Running head: Nike Inc. 1
Nike Inc. 9
Nike Inc.
Strayer University-BUS 499
April Monk
02/24/2019
Introduction
Nike Inc. is one the largest footwear manufacturing company across the globe that deals with designing, developing footwear, equipment, service and accessories. Nike products are sold in approximately 110 countries with about 20,000 retail accounts. By the end of 2018, the multinational company operated 1,182 stores globally with 392 of them situated in the United States. Nike has incorporated various business and corporate level strategies to ensure that it continues being one of the most successful companies in the globe. Just like any other multinational company, Nike experiences a great extent of competition from other firms thus it is very important for it to develop new business strategies which will act as a competitive advantage to address the competition from other firms.
Business level strategies
Business level strategies are plans that a company develops to describe how it aims at building a sustainable competitive advantage. The nature of competition in various industries has been changed due to these strategies which have allowed further developments in products quality and cost. Nike uses a business level strategy that is similar to a differentiation strategy. When a company incorporates the differentiation strategy it aims at being unique by providing products and services that are greatly valued by customers (Petrie, 2016). The strategy is aimed at distinguishing products and services with other similar products offered by competitors in the market. The differentiation strategy entails paying key attention to various aspects of a product such as the design, features and brand image in order to successfully come up with a unique product. Nike has been able to build the image of their brand and differentiate themselves from their competitors through product innovation, development of technology and offering high quality products.
Nike does not utilize the cost leadership strategy to a great extent because the products that it produces are higher end prices that the customers are willing to pay for due to the value and uniqueness they see in them. A cost leadership strategy is aimed at maximizing the level of profits by decreasing the production costs. Through personalization procedures such as NikeID and college sponsorships, Nike has been able to convince customers that their products are one of a kind and have been able to greatly create value for the customer. However, the company has incorporated the strategy in various instances such as in the late 1990s whereby it decreased the cost of its athletic shoes and other sporting equipment’s. Nike does not also incorporate a focus strategy to a great extent because it has a wide market segment. They have various products ranging from shoes to sporting equipment that are sold worldwide. Instead of using a focus strategy, the company aims at being the best in.
Running head: Nike Inc. 1
Nike Inc. 9
Nike Inc.
Strayer University-BUS 499
April Monk
02/24/2019
Introduction
Nike Inc. is one the largest footwear manufacturing company across the globe that deals with designing, developing footwear, equipment, service and accessories. Nike products are sold in approximately 110 countries with about 20,000 retail accounts. By the end of 2018, the multinational company operated 1,182 stores globally with 392 of them situated in the United States. Nike has incorporated various business and corporate level strategies to ensure that it continues being one of the most successful companies in the globe. Just like any other multinational company, Nike experiences a great extent of competition from other firms thus it is very important for it to develop new business strategies which will act as a competitive advantage to address the competition from other firms.
Business level strategies
Business level strategies are plans that a company develops to describe how it aims at building a sustainable competitive advantage. The nature of competition in various industries has been changed due to these strategies which have allowed further developments in products quality and cost. Nike uses a business level strategy that is similar to a differentiation strategy. When a company incorporates the differentiation strategy it aims at being unique by providing products and services that are greatly valued by customers (Petrie, 2016). The strategy is aimed at distinguishing products and services with other similar products offered by competitors in the market. The differentiation strategy entails paying key attention to various aspects of a product such as the design, features and brand image in order to successfully come up with a unique product. Nike has been able to build the image of their brand and differentiate themselves from their competitors through product innovation, development of technology and offering high quality products.
Nike does not utilize the cost leadership strategy to a great extent because the products that it produces are higher end prices that the customers are willing to pay for due to the value and uniqueness they see in them. A cost leadership strategy is aimed at maximizing the level of profits by decreasing the production costs. Through personalization procedures such as NikeID and college sponsorships, Nike has been able to convince customers that their products are one of a kind and have been able to greatly create value for the customer. However, the company has incorporated the strategy in various instances such as in the late 1990s whereby it decreased the cost of its athletic shoes and other sporting equipment’s. Nike does not also incorporate a focus strategy to a great extent because it has a wide market segment. They have various products ranging from shoes to sporting equipment that are sold worldwide. Instead of using a focus strategy, the company aims at being the best in.
Combined the attached three papers together to flow into one docum.docxdrandy1
Combined the attached three papers together to flow into one document in grammatical sense.
Running Head: NIKE INC. BUSINESS STRATEGIES
1
NIKE INC. BUSINESS STRATEGIES
8
Assignment 3: Business-Level and Corporate-Level Strategies
Chet Walker
Strayer University
Professor Hassan Yemer
BUS 499 – Business Administration Capstone
Winter 2019
Nike Inc. Business Strategies
The success of any business is influenced by planning, preparation, and execution. The success of a business starts with defining the business’s strategy at the corporate and business level. The corporate level strategy is the planning pyramid of a business which defines the main purpose of the business. The target destination influences all the strategies and decisions of the business. Business level strategies detail the actions taken to offer value to customers and gain competitive advantage through exploiting core competencies in specific product or service markets. The business level strategy is influenced by the firm’s position relative to its competitors as well as the five forces of competition. In any business organization, consumers are the foundation of its business level strategy. Nike Inc. has been continuously focusing on innovation to develop and grow its business. The paper presents Nike’s business level strategies and corporate level strategies that will help the company to gain competitive advantages in the long-term. The paper will also examine Nike’s competitive environment to determine the most significant competitors in the industry.
Business-Level Strategies
At a business-level, Nike utilizes a combination of two strategies to ensure the offered customer unique products and gain a competitive advantage in the market. Nike Inc. uses a combination of product differentiation and cost leadership to win a greater share in the market. The company differentiates its products from other competitors through product innovation, high-quality products, and technology development. Differentiation at Nike Inc. enables the company to build its brand image in the global market. In product differentiation, for example, Nike integrates its cutting-edge design for its shoes. Nike Inc. has utilized innovation and technology to offer customers high-value products (Mahdi et al., 2015). For example, customers can design their products in Nike’s website and get it within the shortest time possible. The company has also utilized research and development initiative to ensure continuous innovation and product development to maintain its competitive advantage in the market.
Nike does not utilize overall cost leadership as compared to some of its competitors and new entrants in the industry. Their products are higher end prices which customers are willing to pay because of their unique quality and value in the product. Nike ID and other personalized procedures including college and sports sponsorships help the company to enhance customer’s perceptio.
Combined the attached three papers together to flow into one docum.docxcargillfilberto
Combined the attached three papers together to flow into one document in grammatical sense.
Running Head: NIKE INC. BUSINESS STRATEGIES
1
NIKE INC. BUSINESS STRATEGIES
8
Assignment 3: Business-Level and Corporate-Level Strategies
Chet Walker
Strayer University
Professor Hassan Yemer
BUS 499 – Business Administration Capstone
Winter 2019
Nike Inc. Business Strategies
The success of any business is influenced by planning, preparation, and execution. The success of a business starts with defining the business’s strategy at the corporate and business level. The corporate level strategy is the planning pyramid of a business which defines the main purpose of the business. The target destination influences all the strategies and decisions of the business. Business level strategies detail the actions taken to offer value to customers and gain competitive advantage through exploiting core competencies in specific product or service markets. The business level strategy is influenced by the firm’s position relative to its competitors as well as the five forces of competition. In any business organization, consumers are the foundation of its business level strategy. Nike Inc. has been continuously focusing on innovation to develop and grow its business. The paper presents Nike’s business level strategies and corporate level strategies that will help the company to gain competitive advantages in the long-term. The paper will also examine Nike’s competitive environment to determine the most significant competitors in the industry.
Business-Level Strategies
At a business-level, Nike utilizes a combination of two strategies to ensure the offered customer unique products and gain a competitive advantage in the market. Nike Inc. uses a combination of product differentiation and cost leadership to win a greater share in the market. The company differentiates its products from other competitors through product innovation, high-quality products, and technology development. Differentiation at Nike Inc. enables the company to build its brand image in the global market. In product differentiation, for example, Nike integrates its cutting-edge design for its shoes. Nike Inc. has utilized innovation and technology to offer customers high-value products (Mahdi et al., 2015). For example, customers can design their products in Nike’s website and get it within the shortest time possible. The company has also utilized research and development initiative to ensure continuous innovation and product development to maintain its competitive advantage in the market.
Nike does not utilize overall cost leadership as compared to some of its competitors and new entrants in the industry. Their products are higher end prices which customers are willing to pay because of their unique quality and value in the product. Nike ID and other personalized procedures including college and sports sponsorships help the company to enhance customer’s perceptio.
Running head WEEK 3 ASSIGNMENT 1 1WEEK 3 ASSIGMENT 12We.docxrtodd599
Running head: WEEK 3 ASSIGNMENT 1
1
WEEK 3 ASSIGMENT 1
2
Week 3 Assignment 1
Strayer University
BUS499 Business Administration Capstone
Dr. Grizzell
01/20/2019
April Monk
Introduction
The Nike company is a giant multinational company whose mission is to produce and market footwear together with other accessories. Additionally, the company offers services and sells other equipment. the company is affected by both external and internal factors. Given that the company is a leading supplier in athletic apparel and footwear, it records huge revenues. The company was listed in 2018 as number 89 in the Fortune 500 category of giant companies in the United States. The list is based on how much revenue a corporation makes. Nike is the most expensive sportswear company with a net worth of approximately $29.6 billion as at 2018.the corporation supplies sportswear worldwide. additionally, the company has embraced technology which ensures that it maintains its sales. The company has more than 74,400 employees worldwide. Although the company makes huge profits, application of industrial-based model and resource-based model can increase returns to above average. The company’s vision and mission contribute to its success (Nike, 2010).
Globalization
Change in global trends has hugely affected the Nike Corporation. The company has opened a total of 45 offices all over the world excluding offices located in the United States. The company has spread it tentacles to other continents becoming a member of almost all sport events. Nike products are distributed through the contracted shops spread all over the world. In total, the company has 700 shops outside United States. Globalization has expanded the company’s net worth by increasing sales. This ensures that the company is able to compete with other similar sportswear firms. The company is able to reach its customers all over the world due to its marketing designs. Nike has embraced globalization as a marketing strategy and this ensures that its products reach all potential customers. additionally, the company has entered into marketing agreements with global marketing companies such as Amazon and Sweatshops. Globalization has also affected the way this company undertakes its advertisement campaign. The company has now embraced global trends of advertisement such as celebrities and international athletic teams. The company has also entered into official contracts with major leagues such as the National Basketball Association (NBA) to become their official uniform supplier.
Technology
Nike has incorporated new technology in its production process. The company applies new and innovative technology in manufacturing, marketing and customer services. The company was among the first global corporations to adopt marketing using the internet, managing its operations and communications via email technology and applying advanced communication technologies such as Broadcast. Application of such technologies in marketing.
8
Week 6 Assignment 2
April Monk
Strayer University
BUS499 Business Administration Capstone
Dr. Grizzell
02/10/2019
Introduction
The Nike Company is a giant company whose operation are influenced by a number of factors. The environment under which the company operates influence its level of production, sales and marketing. Additionally, the environment is an important function of the company’s human resource management. The industry which the company operates in is highly competitive due to existence of other companies. The company has come up with extensive strategies which increase its ability to compete and increase its customer base. The five forces of competition are a major ingredient of the company’s competitive design. The management in the company understand the importance of adopted a well-structured design to enhance future improvements and control external threats and opportunities. The strengths and weaknesses of the company also influence production and marketing. The available resources, capabilities and core competencies are integral in achieving a vantage position in the sports merchandise industry.
General environment
Sports merchandise industry is made up of different components which directly influence the existing company. The world of sports has grown in popularity during the last few decades. This has prompted the growth of a robust industry which focuses on manufacturing and selling sportswear and other accessories. The environment in this industry is highly competitive due to existence of many company which produce similar products. Companies such as Adidas, Puma, and Mikasa among others offer competition to Nike. Therefore, the existence of a highly competitive nature within this industry ranks as the most influential part of the environment. Technological advancement also plays a huge part in influencing this industry. The world of sports has embraced application of new and innovative technologies which improve performance. The company has to adapt to the change in customer preference in terms of the choice of technology. This is because a customer influences the company’s level of sales and production.
Five forces of competition
The five forces of competition are important to the company since they influence its operations. The factors determine how much the sportswear industry is attractive thereby influencing the strategies laid out by the company. The forces also determine the attractiveness of this industry in terms of favorable competition and likely profit margins. The factors also directly influence the company’s ability to give good services to its customers thus gaining loyalty. These microenvironment forces help the Nike Company to apply core competencies and resources to achieve high profits.
Item 1
The onset of new sportswear companies whose products are almost autonomous creates a threat to the firm. These products are a good customer substitute. Some customers go these products since they solve.
1Running head NIKE COMPANYPAGE 12NIKE COMPANYNIKE C.docxeugeniadean34240
1
Running head: NIKE COMPANY
PAGE
12
NIKE COMPANY
NIKE COMPANY
Student name
Institution
Contents
3NIKE Company
31. Executive summary
42. Problem statement
43. Company profile
43.1Introduction
53.2 Mission statement
53.3 Values Statement
63.4 Vision Statement
63.5 Strategic Alternative Slogan
63.6 Industry Size
63.7 Industry Profitability
73.8 Industry Cyclicality
74. Industry Entry and Exit Barriers
74.1 Entry Barriers
84.2 Exit Barriers
84.3. Current strategy
115. Code of ethics
116. Facts and figures in governance, accountability and reporting
116.1 Reporting Practices
126.2 The Value of Reporting
126.3 Stakeholder Engagement and Report Reviews
146.4 Feedback on reporting
147. Company analysis
147.1The Strengths/ Weaknesses for Nike Corporate
147.2 Board of Directors - Strength
157.3 Board of Directors - Weakness
157.4 Environmental Analysis
15Internal – Strength and weakness
167.5 Challenges and struggles of Nike Company
198. Competition
198.1 Competition vs. Nike
198.2 Footwear Industry –Revenues, Players, Market Share
208.3 Manufacturing options
218.4 Strategic Outsourcing
218.5 The Evolution of Manufacturing in Third World Countries
228.5 Nike
238.6 Reebok
248.7 Adidas
248.8 Talk
258.9 New Balance
259. Summary and conclusion
27References
NIKE Company
1. Executive summary
When an organization such as Nike, opts to be a global entity, often, it experience a huge profits in its final accounting. Sadly, other businesses such as Nike must be at a position of overcoming some difficult obstacles set before it establishes a successful business in the foreign countries (Frisch, 2009). Most of the issues associated with these vast industries include the child labor laws, low wages, and the outsourcing’s effects on the aggregate sales. Due to this reason, the most widely known organizations have already presented several cases in defense to their positions on conducting business in the foreign countries. One such good instance is Nike’s sweatshop labor case that stirs up some controversy over the ethical business practices. Even after Nike Company has made several attempts at recovering from the bad press that it had received from the sweatshops, the organization still struggles to defeat the negative feelings that have already been created in the people’s mind, especially across the United States.
Additionally, this company faced various challenges from the word go. With the increase in technology, the organization is facing a very high competition caused by its reluctance to use of modern advertisement platforms as well as sticking to traditional marketing approaches (Frisch, 2009). The issue has resulted in reduced total sales as well as reportedly small profits. Thus, this paper seeks to present help Nick Co. Improves the already tarnished image in legal and ethical issues, as well as competitively survives in the market. 2. Problem statement
When Nike’s company op.
Personal Brand Statement:
As an Army veteran dedicated to lifelong learning, I bring a disciplined, strategic mindset to my pursuits. I am constantly expanding my knowledge to innovate and lead effectively. My journey is driven by a commitment to excellence, and to make a meaningful impact in the world.
Implicitly or explicitly all competing businesses employ a strategy to select a mix
of marketing resources. Formulating such competitive strategies fundamentally
involves recognizing relationships between elements of the marketing mix (e.g.,
price and product quality), as well as assessing competitive and market conditions
(i.e., industry structure in the language of economics).
Cracking the Workplace Discipline Code Main.pptxWorkforce Group
Cultivating and maintaining discipline within teams is a critical differentiator for successful organisations.
Forward-thinking leaders and business managers understand the impact that discipline has on organisational success. A disciplined workforce operates with clarity, focus, and a shared understanding of expectations, ultimately driving better results, optimising productivity, and facilitating seamless collaboration.
Although discipline is not a one-size-fits-all approach, it can help create a work environment that encourages personal growth and accountability rather than solely relying on punitive measures.
In this deck, you will learn the significance of workplace discipline for organisational success. You’ll also learn
• Four (4) workplace discipline methods you should consider
• The best and most practical approach to implementing workplace discipline.
• Three (3) key tips to maintain a disciplined workplace.
Event Report - SAP Sapphire 2024 Orlando - lots of innovation and old challengesHolger Mueller
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Premium MEAN Stack Development Solutions for Modern BusinessesSynapseIndia
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Know more: https://www.synapseindia.com/technology/mean-stack-development-company.html
[Note: This is a partial preview. To download this presentation, visit:
https://www.oeconsulting.com.sg/training-presentations]
Sustainability has become an increasingly critical topic as the world recognizes the need to protect our planet and its resources for future generations. Sustainability means meeting our current needs without compromising the ability of future generations to meet theirs. It involves long-term planning and consideration of the consequences of our actions. The goal is to create strategies that ensure the long-term viability of People, Planet, and Profit.
Leading companies such as Nike, Toyota, and Siemens are prioritizing sustainable innovation in their business models, setting an example for others to follow. In this Sustainability training presentation, you will learn key concepts, principles, and practices of sustainability applicable across industries. This training aims to create awareness and educate employees, senior executives, consultants, and other key stakeholders, including investors, policymakers, and supply chain partners, on the importance and implementation of sustainability.
LEARNING OBJECTIVES
1. Develop a comprehensive understanding of the fundamental principles and concepts that form the foundation of sustainability within corporate environments.
2. Explore the sustainability implementation model, focusing on effective measures and reporting strategies to track and communicate sustainability efforts.
3. Identify and define best practices and critical success factors essential for achieving sustainability goals within organizations.
CONTENTS
1. Introduction and Key Concepts of Sustainability
2. Principles and Practices of Sustainability
3. Measures and Reporting in Sustainability
4. Sustainability Implementation & Best Practices
To download the complete presentation, visit: https://www.oeconsulting.com.sg/training-presentations
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Enterprise Excellence is a holistic approach that's aimed at achieving world-class performance across all aspects of the organization.
What might I learn?
A way to engage all in creating Inclusive Excellence. Lessons from the US military and their parallels to the story of Harry Potter. How belt systems and CI teams can destroy inclusive practices. How leadership language invites people to the party. There are three things leaders can do to engage everyone every day: maximizing psychological safety to create environments where folks learn, contribute, and challenge the status quo.
Who might benefit? Anyone and everyone leading folks from the shop floor to top floor.
Dr. William Harvey is a seasoned Operations Leader with extensive experience in chemical processing, manufacturing, and operations management. At Michelman, he currently oversees multiple sites, leading teams in strategic planning and coaching/practicing continuous improvement. William is set to start his eighth year of teaching at the University of Cincinnati where he teaches marketing, finance, and management. William holds various certifications in change management, quality, leadership, operational excellence, team building, and DiSC, among others.
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1. EXECUTIVE SUMMARY
This study was conducted to analyze the strategies selected and employed by Nike Inc
during 1990 to 2000 to deal with the rising criticism from the media and public. This study
employed Porter’s strategic forces analysis to analyze the strategies deployed by Nike in between
1990-2000. The study also used Porter’s five forces analysis to understand the opportunities and
threats faced by Nike Company during that period of time.
The study also explored which of the Whittington’s systemic and Processual schools of
thought was relevant to Nike‘s strategy during 1990 to 2000 with respect to its growing criticism.
Further, this study also identified which of Mintzberg’s cultural and environmental schools of
thoughts applied to Nike between the years 1996 and 2000 in terms of its strategy development.
The findings revealed that Nike’s decision to move to Asia had strategic implications
involved in it. The company tried to position itself as a manufacturer of differentiated products
and to gain cost leadership from its competition. The five forces analysis suggested that the
company had an edge over its competition and the suppliers had very low bargain power due to
Nike’s vast number of subcontractors. The global share of the company was more than 45% and
it enjoyed a unique position with its innovative and carefully designed products.
The findings also suggested that the Nike Company employed Mintzberg’s
environmental strategies to find a way to deal with the criticism aimed at the company. The
findings also suggested that the Whittington’s Systematic school of thought was applicable to the
strategic moves employed by Nike Inc.
2. 2
TABLE OF CONTENTS
Title Page#
Terms of Reference ……………………………………………………………..…………….5
Introduction: Nike Inc …………………………………………………………..…………….6
Porter’s Strategic Model: Nike in Asia ……………………………………………………… 7
Porter’s Five Forces Framework ……………………………………………………………...9
Going Global Benefits Nike ………………………………………………………………….11
Whittington’s Systematic and Processual schools of thoughts ………………………………13
Processual School of Thought ………………………………………………………………..14
Systematic School of Thought ………………………………………………………………..15
Nike’s Approach in 1990-2000 ……………………………………………………………….16
Mintzberg’s cultural and environmental schools of thought: a comparison ………………….18
Environmental School ………………………………………………………………………...20
Nike’s strategy in 1996-2000 ……………………………………………………………….…21
Findings …………………………………………………………………………………….….23
References…………………………………………………………………………………….. 25
Appendices …………………………………………………………………………………….26
3. 3
LIST OF APPENDICES
TITLE PAGE#
APPENDIX A NIKE CASE STUDY: NIKE’S dispute with the
University of Oregon in De Wit & Meyer
2004: 933-940 26
4. 4
LIST OF FIGURES
FIGURE NAME PAGE#
Figure 1 Business information in focus in environmental school 20
5. 5
TERMS OF REFERENCE
Derek Hardwood, Module leader at Sunderland Business School, University of Sunderland, has
requested this report on the Nike’s dispute with the University of Oregon in De Wit & Meyer, to
analyze the strategic moves employed by Nike Inc to deal with the growing criticism and public
movements against the company. The report was to be submitted to him on Monday July 11,
2011
BASIC INFORMATION
I have employed various measures to understand and analyzed the strategic moves employed by
Nike Inc during the period of 1990 to 2000. Porter’s generic strategies model was analyzed and
employed on Nike Inc to understand which strategy was adopted by Nike Inc when outsourcing
its work to Asian sub-contractors. Porter’s Five Forces model was also employed on Nike Inc for
the period of 1990-2000 to find out the opportunities and threats faced by the company during
that period.
Likewise, Whittington and Mintzberg’s strategic schools of thoughts were compared and studies
with reference to Nike Inc’s strategies during that particular period of time.
6. 6
INTRODUCTION
NIKE INC
Nike is the world leader in the manufacturing of sportswear and gear with more than 47%
market share across the globe. The company is among one of those companies who are only
Fortune 500 Company located in Oregon. The company has more than 700 shops around the
world and has offices located in 45 countries outside the United States (NikeBiz). It has most of
its factories in South East Asia including Indonesia, China, Taiwan, India, Thailand, Vietnam,
Pakistan, Philippines and Malaysia (NikeBiz).
In the year 2000, Nike had contracts in 46 countries with 565 subcontractors. The
company was enjoying 45% global market share. It had various outsourcing units in Taiwan,
Indonesia and South Korea.
The subcontractors were not offering their workers wage rates as per international
standards. The factories were divided into four main divisions; production, chemical, stitching
and Assembly section. The production goal was so extended that the workers had to work over
time, without incentives, to meet the goals. The workers were often abused physically and
verbally by their supervisors. Many people were likely to be the patients of liver cancer, kidney
disease, heart attacks, infertility and many skin related disease in future due to poor working
environment. (Nike Case: Appendix A).
In early 1990’s, many campaigns started against the company and its factories across the
globe. In October 1996, a 48 hour report was aired about Nike’s sub contractors and their factory
operations in Asia revealing its business practices and downgrading behavior of subcontractors
to their workers (Nike Case: Appendix A).
7. 7
Nike underwent various environmental and human right concerned activities to wash out
the affects of negative publicity and was very successful in its pursuance against the media and
rivals.
PORTER’S STRATEGIC MODEL: NIKE IN ASIA
Like many other organizations, Nike Inc moved its operations to South East Asia mainly
in Taiwan and South Korea. This move strategic move, as per Porter’s strategic models, was
based on the combination of cost leadership and differentiation strategy.
COST LEADERSHIP
Porter (1980, 1985) suggests that a company can become the leader of an organization
through managing its operational and other functional costs. The companies that follow this
strategy are called lowest-cost producers in the industry. According to this strategic model, if a
company adopts cost leadership strategy, it can maximize its profits at a standard market price.
The companies master cost effectiveness in all the activities of a value chain. The cost leadership
does not imply that the company will be selling its products at low price. Lynch (2003) reported
that there are many companies in the industry who are charging higher or equal to their
competitors while maintaining low cost efficiency and reinvesting the extra earning further into
the business.
DIFFERENTIATION STRATEGY
The differentiation strategy refers to the firm’s attempt to position itself unique in its
relative industry with some value ad-ons to the buyers. This strategy involves the combination of
8. 8
one or more attributes offered in the products that are valued by the buyers in the industry and
uniquely positioning itself to meet the needs and wants of the customers.
Porter (1980) argued that the firms, who engage in differentiation strategy may incur
additional costs like advertising cost, cost of posititioning itself as a differentiated product or
service based company.
Nike carefully planned its strategies to position itself in the industry. The Nike’s move to
hire Asian sub-contractor was of high importance to the company to maintain cost effectiveness
in the operations and functions. The company’s attempt to sub contract Asian contractors was
based on the strategy to master cost leadership. Nike had lot of benefits involved behind this
strategy among them the chief ones were lowest possible labor cost, direct access to the raw
material suppliers and low tariff rates.
While Nike’s attempt to employ differentiation strategy to outsource its most of
manufacturing in Asia and its aggressive marketing activities allowed it to topple its competitors
in the industry. The differentiation strategy used by Nike had three fold benefits to the company.
The benefits came from extensive research and development by the research labs in the company
to maintain innovation. The company became able to deliver high quality products at low cost.
Lastly, the effective marketing strategies and celebrity endorsements increased the awareness of
its products.
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PORTER’S FIVE FORCES FRAMEWORK
In order to understand the threats and opportunities Nike had during the time period of
1990 to 2000, we have used Porter’s five forces framework to analyze Nike’s position in the
market.
SUPPLIERS POWER
Distribution and sub-contractors mastery
Access to cheap labor and raw materials
Tariff and duties of a country
Nike had 565 contract factories in 46 countries. The bargaining power of suppliers was
relatively very low.
The number of employees fluctuated in the factories due to their strict working hours and
failure to meet the production target.
The rapid change in the production process in the factories was to cause serious issues to
the production of products to the company.
The increased allegations on the company may end up suppliers increasing the wage rates
of their workers which can ultimately increase the cost of production.
BUYERS POWER
The company was offering differentiated products to its customers
Products were carefully designed to meet the needs of athletes and fashion trends.
Competitive products all compete on differentiation
The Nike’s image was badly affected by all the negative publicity
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Many customers sent their used Nike shoes to the CEO of the company to show their
discontent towards Nike’s activities in Asia.
The biggest threat company had been that its products were charged at very high price
which could have triggered the buyers’ need to switch to the low price brands.
The buyers stopped buying its products with the perception that these are not sweatshop
free.
Many current and potential buyers, students of various institutions, started their
consortium called Workers Rights Consortium to support the workers rights in the Asian
factories, thus further affecting Nike’s image.
THREAT OF SUBSTITUTES
The company was engaged in effective marketing campaigns to diffuse the negative
impact of media exposure.
But the hate among people may have triggered the sale of substitutes in the market.
THREAT OF NEW ENTRANTS
The threat of new entrants was practically non existent at that time. Nike was a market
leader with 45% global market share. The company had strong and well established brand
name therefore it had no threat present at that time.
Another reason for no new entrants was that the cost of production was already very high
for the then present market players. So for successful penetration in the industry high
capital was required. The new entrants don’t usually have high capital in the beginning
which results in their market failure.
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INTENSITY OF RIVALRY BETWEEN FIRMS IN THE INDUSTRY
Nike had intense competition with then market players like Adidas, Puma, Fila etc.
The competitors were also engaged in aggressive differentiation strategies.
Nike, with respect to its competitors, had strong market position and brand identity
Nike was engaged in celebrity endorsements and it offered cutting edge products to its
customers
The negative publicity in 1990-2000 severely injured the company’s image and gave
edge to the competitors to rise and take part in the negative publicity.
GOING GLOBAL BENEFITS NIKE
Nike, with 41% market shares (Reuters, 2010), dominates the global market for the
athletic footwear and apparel earned the revenue of $ 19014 million in year 2010 (financial
report, 2010). The company is outsourcing all of its work without hurting the quality of its
products; Nike still is a market leader. The international sales of the company are more than 60%
of its total revenue enabling the company to receive 51% gain in the profit (business week,
2007).
Going global has benefited Nike through various aspects the chief ones among them are
increased market share and customer base. Going global offers the advantage of targeting new
group of customers whose preferences meets Nike’s products and reduced labor costs.
The company forecasts rise in its revenue up to 40% by the year 2015 by opening new
stores and penetrating new markets where the Chinese markets are of great importance (Reuters,
2011). The Nike’s Chinese business units are currently earning more than $ 2.4 billion for its
12. 12
products and the company executives expects that this rate will double within next five years
(Reuters, 2011). This athletic shoe and cloth manufacturing giant has gained substantial growth
in emerging markets by offering and marketing its non Nike brands in markets like Turkey,
Russia and Brazil (wikinvest, 2011).
The company has adopted the strategy to open small number of outlets in United States
and sell through national retail outlets. The Chinese markets have few malls available currently,
therefore, the company has formulated different strategy for Chinese markets. The Chinese
markets have more than 5000 shops that focus single sport item. The completion is very less in
china resulting in less discount rate to the consumers and higher profit margins. This strategy has
lead to more than 37% profit margin to the company in Chinese markets as compared to 23% in
Northern America (CNN money, 2011). The diverse product offerings are one of the biggest
advantages to Nike for its global expansion (business week, 2007).
The global revenue of the company has increased a lot but the business practices in U.S
markets are not very favorable as they were before the recession hit the country. The company
has to face challenges like increasing costs, freight charges and fluctuating currency rates (Nike
Inc, 2011).
The company’s success in the international markets is the collective effort to connect its
brands to the emotions, culture, and endorsement with the local celebrities. Nike joined United
Nations project to promote human rights in the year 2000 since then the global image of the
company have improved enormously and earned it more than 1.1 billion dollars revenue from its
business in Asia (Czinkota, 2008).
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WHITTINGTON’S SYSTEMATIC AND PROCESSUAL SCHOOLS OF THOUGHTS
In 1977, Whittington proposed four different approaches that were targeted to measure a
specific period of time. He provided four indicators to measure those approaches. The indicators
are: deterministic or emergent nature of people, single goal or pluralistic towards the
achievements of goals, the style of their strategies, and the influence of those approaches on the
people respectively.
Indicators Processual Systemic
Deterministic Deterministic Emergent
Single goal or Pluralistic Plural Plural
Strategy style Crafted Embedded
Influences Psychology Sociology
Period (decade of influence) 1970s 1990s
Processual school of thoughts involves deterministic nature of people with pluralistic
approach towards their goals and strategies. The strategies are crafted for the organization and
this school of thought has direct influence on the psychology of people and the factors associated
to them. This approach took fame in the late 70’s.
Systematic school of thoughts involves the emergent nature of people with the pluralistic
thoughts towards the goals and strategies. They follow embedded style of strategy formulation
and this school of thought has impact on the sociology and social lives of people and the
interlinked factors. This approach influenced late 90’s era.
14. 14
PROCESSUAL SCHOOL OF THOUGHT
In Processual school of thought, Managers assume that they can intervene in the process
and improve their chances of success in the markets in the future. This approach is based on the
situations and scenarios and the planning is done according to these scenarios.
The scenario based planning may involve the following:
Solving a current problem or giving solutions to the questions
Implement the permanent solutions
Mind opening of people
The strategy to be strengthened
To find a way out of a puzzled situation
To communicate solutions to the problems
To develop necessary skills to cope with the problem
To teach the participants about the strategic dealing of situation
Van der Heijen (2005) explains that future cannot be predicted and thus it is uncertain to
us. He further states that we can interpret the events and develop a process theory to find out the
reasons of its occurrence. According to him, we can learn from these situations and these
situations guide our strategies. He considers these events and scenarios very powerful for the
following reasons:
Reflects the uncertain situations
Allows coherence from different disciplines of the world
Findings are based on real life context
15. 15
Provides the reasons of the occurrence
SYSTEMATIC SCHOOL OF THOUGHT
Granovetter (1985) argued that the business is an economic activity which cannot be
carried out separately from our social life. The economic activates we adopt are the
amalgamation of our societal relations, family, country and profession. These societal relations
have great impact on our decisions and actions pertaining to them and these factors guide our
behavior. Therefore the personal and social factors shape our economic activities and decisions.
Huff (1990) further emphasized that these factors that guide our strategies are not related
to cognition but to the culture. Culture is a social system which effects and get affected by our
life, economic activities etc. (Gergen 1994). Whittington (1993) explained that the culture,
history and societal norms have significant impact on our growth and investment in the business.
From this it can be derived that the strategies are dependent on the culture.
Rouleau & Seguin (1995) provided four different forms of approaches based on the
organizational theories. They believed that these strategies and theories have close connection
with each other. According to them, this connection follows the same pattern to the studies
proposed by Whittington (1993).
This school of thought emphasizes on the organizations as a open system which
transforms input into outputs. This system took fame in 1960s and had a strong impact on the
managerial thinking about different techniques to relate company with external and internal
16. 16
environmental factors. This school of thought focuses on the whole organization, its involvement
in the environment and its requirements to achieve the balance.
NIKE’S APPROACH IN 1990-2000
Nike had to face lot of external criticism around the globe during 1990 and 2000. There
were lots of activities in action against the companies, particularly Nike, to educate the people
about the bad practices of the company, their working conditions and low wage rates etc. The
negative publicity had profound impact on the brand image of the company and company
management took reasonable steps to stop the impact to further destroy the brand image.
Nike considered the external and internal factors, according to systematic school of
thought, in its consideration to cope with those activities against the company and its global
image. The company took part in the Fair Labor Association (FLA) to ensure that the labor will
be given their rights, and assured the health and safety measures at work place.
The low wage rates, poor working conditions were the external factors that had
influenced the company as a whole. Nike announced the code of conduct to be followed and
made it mandatory for it and its sub contractors. The company announced that it will hire people
to monitor the activities of its sub contract factories to further ensure the code of conducts are
followed and respect is given to the workers. The company further implemented changes to
assure that the ventilation system, surgical masks, gloves, shoes, proper medication etc. to be
given to the workers working for the company.
This strategy of taking things seriously and devising a corporate social responsibility for
the company had good impact on the over all image of the company and saved a great fortune
from being ruined in terms of negative image. The company’s efforts to take action against its
17. 17
sub contractors and employing reasonable measures to create check and balance saved the
company from lot of implications imposed on the company and its operations, thus, saving the
face of the company and its revenue.
18. 18
MINTZBERG’S CULTURAL AND ENVIRONMENTAL SCHOOLS OF THOUGHT: A
COMPARISON
SR CULTURAL SCHOOL OF THOUGHT ENVIRONMENTAL SCHOOL OF
THOUGHT
The cultural school of thought involves the The environmental school of thought involves
1.
collective approach to the formation of the reactive approach towards the formation
strategy. of strategy.
2. The cultural school of thought involves The environmental school of thought involves
various groups and departments of an the reaction and response of external
organization. The strategy is formulated by environment towards the operations and
the collective and cooperative process of strategies adopted by the company. This
understanding among the various school of thought is helpful to devise
executives at an organization. The strategies in accordance of those responses.
strategies formulated under this school of This school of thought considers the
thoughts represent the views, ideas, culture environment as a prime actor towards the
of the organization. strategy formulation and implementation.
3. This school of thought is based on the
This school of thought is based on
external factors, primarily on biology.
19. 19
anthropology.
This school of thought focuses on the roles The main focus is given to the factors that can
4.
of society, the belief system, values, norm affect the strategy formulation. Those factors
and their relative importance in the process come from the external environment.
of decision making and their impact on the
strategies of an organization. This school
of thought presents the factors that are
resistant to bring the change within an
organization and plays important role when
it comes to mergers and acquisitions.
5. Cultural school of thoughts is based on the Environmental school of thoughts is based on
cultural norms and values of people, the external factors affecting the business of
therefore, it can be vague to sometimes. the organization; this may lead to vague and
The unclear views and understanding about un-clear issues that can hinder the implication
the factors of society can further lead to the of strategies within the organization. The
resistance towards the change. All the strategies formed on the basis of
information collected via this school of environmental dimensions are less useful to
thought can be used against the the company and are mostly unrealistic to the
organization, its strategies and goals. company and its requirements.
This school of thought often measures and
20. 20
6. This school of thought measures the compares the contingency theory from the
cultural dimensions of people, their cultural organizational perspective as well as the
perspectives, appreciates inquiry and situation based leadership within the
Ashridge mission model. organization.
ENVIRONMENTAL SCHOOL- strategy formation as a reactive process
The Proponents of this school of thought takes the strategy formulation process within an
organization as a reactive process initiated due to the external factors (Mintzberg, 1998). The
organizational strategists try to understand the external pressures imposed on the organization
and considers environment as a primary actor.
Figure 1- Business information in focus in environmental school
21. 21
This school of thought sees environment as a main component of strategy development
process. The organizations and their leaders consider the environmental forces before devising
their plans. This school of thought was emerged from contingency theory. The organizational
theorists suggested that the organizations are affected by these factors at large. While the
academic theorists suggested that the strategies are affected by the political powers and the
environmental factors.
This school of thought states that the environment is has the central importance in the
strategy formulation process and the organizations must respond to these factors and adapt
themselves to the environment.
NIKE’S STRATEGY IN 1996-2000
According to environmental school of thought, Nike’s strategies were greatly influenced
by the external environmental factors. The rising criticism by the media in country had led Nike
to re-formulate its strategies to meet the requirements of the people and the company. The
criticism around the country, low wage rates, activists that foster the negative publicity of the
company and various others had influenced the company’s ability to devise its strategies to
accord with these external factors and save its public image.
The company underwent various strategic changes like its participation in President
Clinton’s Apparel Industry Partnership (AIP) to develop certain measures to ensure that the
apparel and footwear are not manufactured under sweatshop conditions. The AIP aimed to
strengthen decent and humane working conditions at workplace.
22. 22
The company further launched its Corporate Social Relationship (CSR) strategy in the
public to further strengthen itself as a responsible citizen and a company. The Nike’s
management promised its commitments to environment and labor force with the public through
its CSR strategy.
Nike participated in Fair Labor Association (FLA) as a next step of its positive publicity
in the country and across the globe. FLA aimed to monitor the working conditions of the
different manufacturing companies including Nike to figure out what is happening there and
initiate reasonable measures to seize any wrong doing in the factories.
These and other environmental measures attempted by Nike were part of its
environmental strategy to strengthen its public image against all the harm done by the criticism
of the media and newspapers in 1990’s. These strategies were designed to cope with the
environmental factors that affected the organizations capabilities.
23. 23
FINDINGS
This study was conducted to study the market leader of sport gear and apparel
manufacturer in USA; Nike Inc, to understand the strategies adopted by the company to tackle
the worsening conditions it faced back in 1990 to 2000.
The findings of the study revealed that the company had faced lot of criticism during late
nineties. In order to save the face of the company the company management devised measures
and strategies to sustain the company in the market.
The company had an edge over its competitors through aggressive marketing strategies
and it was continuously trying to face its brand image from getting hurt from the campaigns
against the company. The company’s suppliers had very low bargaining power this helped the
company to formulate the business plans of its own choice. The negative perceptions were
developing in the minds of buyers and this had seriously affected the buyers’ decision to
purchase company’s products.
The findings revealed that company engaged in various environmental causes and human
rights concerns to fight against the labor right issues and environmental pollution cases. The
company’s efforts saved it a lot of fortune.
The comparison between the Mintzberg’s cultural and environmental school of thoughts
revealed that Environmental school of thought was more closely related to the Nike’s efforts to
save its face and build a positive rapport across the globe.
24. 24
Lastly, the analysis of Whittington’s systemic and Processual schools of thoughts
suggested that the Nike Inc was deploying systemic approach for the formulation of its strategies
and their implementation across its factories.
25. 25
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