This document analyzes Nike, a major athletic footwear and apparel company. It discusses Nike's history and founding, its organizational structure, general business environment, resources, value chain, and Porter's five forces analysis. Criticisms around labor practices and recommendations for improving sustainability are also mentioned. The document considers alternatives for Nike such as partnerships, vertical integration, or using a balanced scorecard approach. It ultimately recommends the balanced scorecard as providing competitive advantage while maintaining control and flexibility.

1. Dima Jennifer Nicolas Saadia Sergiu Group 3:

2. What they show you What they don’t

3. Who costs them money Who make them save money

4. Seller of athletic footwear and apparel Produces in 45 countries worldwide Headquarters in Oregon, USA Founded in 1964 Brand name created in 1971 Just do It campaign in 1988 INDUSTRIAL ANALYSIS RECOMMENDATIONS

5. Criticism started in early 90’s: -child labour -safety and health problems -physical harming of employees Review of Labour Practices in 1995 Nike’s response to growing criticism INDUSTRIAL ANALYSIS RECOMMENDATIONS

6. Matrix Structure Each department overlapped by geographic divisions and product categories Overlap in managerial responsibilities Fluid leadership structure No formal communication link between regional and product heads INDUSTRIAL ANALYSIS RECOMMENDATIONS Organizational Structure

7. Labor-intensive: -Manufacturing location -Outsourcing production -Reassess production methods Rising crude oil prices: 65% increase in one year -Transportation, raw materials and energy -Consumer’s disposable income Change of consumer taste: -Athletic shoes  Brown shoes INDUSTRIAL ANALYSIS RECOMMENDATIONS General Environment

8. Globalization Opportunity: -Lower import tariffs/duties -Access to cheap labor and raw materials Threat: -Increased competition from Asia INDUSTRIAL ANALYSIS RECOMMENDATIONS General Environment

9. Consumer Demographics Sales : -Ages 30 – 34 -Teenagers & Men (early 40s) -Men (20s) INDUSTRIAL ANALYSIS RECOMMENDATIONS General Environment

10. INDUSTRIAL ANALYSIS RECOMMENDATIONS Financial Outlook

11. INDUSTRIAL ANALYSIS RECOMMENDATIONS Infringement statistics

12. Operations: -Footwear, apparel, equipment -Other businesses: Business-Level Strategy: -Integrated cost-leadership and differentiation strategy INDUSTRIAL ANALYSIS RECOMMENDATIONS Business Model

13. INDUSTRIAL ANALYSIS RECOMMENDATIONS Resources: -Tangible: Fit, Sphere, Air, Shox technologies -Intangible: brand name / reputation for innovation Core Competency: -Distribution and subcontractors’ networks -Mass marketing Competitive advantage: -Brand name and celebrity endorsements Value Chain

14. Bargaining Power of Suppliers: -Subcontracts to more than 500 small scale factories -Low bargaining power due to Nike’s big volume Bargaining Power of Buyers: -Competitive products all compete on differentiation -Low switching costs Porter’s Five Forces Model INDUSTRIAL ANALYSIS RECOMMENDATIONS

15. Threat of Substitute Products: -Non-existent Threat of Potential New Entrants: -Economies of Scale -Strong and Well Established Brand Name -High Capital requirements -Low threat Porter’s Five Forces Model INDUSTRIAL ANALYSIS RECOMMENDATIONS

16. Intensity of Rivalry between Firms in the Industry: -High competitive in an Oligopoly (other leading firms include Adidas, Puma, Fila, New Balance) -Strong brand identity and product differentiation -Intensity of Rivalry is moderate Porter’s Five Forces Model INDUSTRIAL ANALYSIS RECOMMENDATIONS

17. Porter’s Five Forces Model INDUSTRIAL ANALYSIS RECOMMENDATIONS High Moderate Low Bargaining Power of Suppliers Bargaining Power of Buyers Threat of Substitutes Threat of New Entry Intensity of Rivalry Between Firms

18. Partnership / independent organization Benefits: -Knowledge -Credibility Drawbacks: -Control surrender: -Information leakage Alternatives INDUSTRIAL ANALYSIS RECOMMENDATIONS

19. Vertical Integration benefits: -Full control -More profits -Drawbacks -Very costly -Less flexible Alternatives INDUSTRIAL ANALYSIS RECOMMENDATIONS

20. Balanced scorecard Benefits: -Control -Competitive advantage Drawbacks: -Commitment INDUSTRIAL ANALYSIS RECOMMENDATIONS Alternatives

21. INDUSTRIAL ANALYSIS RECOMMENDATIONS Alternatives

22. Balanced scorecard: -Competitive advantage -Less expensive -Preservation of control -Preservation of flexibility INDUSTRIAL ANALYSIS RECOMMENDATIONS Conclusion

23. We are one step ahead Thank you for your attention. Feel free to ask if you have any question.