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Nike Strategy 2010


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Nike Strategy 2010

  1. 1. Nike Corporation Strategy - 2010 Nike’s 2010 -2015 Roadmap
  2. 2. Recommendation Recommendations were formulated linking all Key Perspectives of Nike’s Strategy Financial Growth Strategy Productivity Strategy Perspective • Focus on Emerging Markets (i.e. BRIC) • Increase Asset Utilisation – increase • Products in new niche activities (martial arts, yoga and swimming) rev/employee by 5% • New customer segments • Reduce Operational Cost Customer •Maintain Product Leadership - •Improve Customer Relationship and •Improve Image - “Nike Perspective provide high quality & innovative Service Community” for welfare products catering to customers’ •Launch 250-300 Nike retail outlets in manufacturing workers needs and changing preferences next 3 years •Align incentives of workers by 2012 Internal •Follow “Cost Out” strategy •Integrate New •Improve Innovation Cycle •Implement CSR - Perspective • Reduce marketing spent – Segments & Markets - with smarter and more expand its alliance 11% of revenue only, focus on and their attributes intelligent customer with other non-profit local sport heroes with current processes feedback mechanisms organisations to work like customer mgmt through e-channels together Learning & •Retain and Train key •Improve IT Assets - enhance CRM, •Create a customer centric culture Growth employees - ensure attrition e-channel, social media platform, •Executive team to provide a strong rate is between 2-3% Sales Force Automation systems and visionary leadership Perspective •Invests 2-2.5 % of Rev in IT Systems
  3. 3. Key Challenges & Opportunities Growth • has slowed in existing markets (slow in US and negative in Europe) • Increased competition in emerging markets (with new and existing competitors: New Balance, Adidas, Li Ning) Operational Efficiency •Revenue per employee has decreased in last 2 years (Li Ning has got a healthy ratio 25.35%) •Revenue has gone down in last year •Less power and control over larger retailers like Walmart •Operational challenge to integrate cross functional business units to produce bundling and complimentary products Brand Image •Brand Perception is of an unethical organisation given worker’s conditions in manufacturing plants • Improve its involvement in environment and CSR in developing nations • Maintain its innovation brand image in front of increased competition (e.g. Adidas, New Balance)
  4. 4. Static View - SWOT Strength Weakness •Excellent Supply Chain • High risk of brand tarnish - driven by sports •Low cost manufacturing stars like Tiger Woods •Innovative Productive design •Collaboration within units is weak •Good Marketing focus •Retail focus is missing - high reliance on •First mover advantage in e-commerce distribution •Perceived growth stock -Good financial •-ve image portrayed by poor working position with low LTD conditions in overseas factories Opportunities Threats •Growth through emerging markets •Rapid changes in customer tastes •Capture Women and Children market •Slowing growth in U.S. economy •Niche Sports Market - equipment, shoes, •Competitors like Li Ning are entering the US apparel and other emerging markets •Pipeline of products through innovation •Revenue per employee is decreasing •Fluctuation in currency rates
  5. 5. Dynamic Analysis - RVIO Resource/Capability Rare? Valuable? Costly to Difficult to Competitive Consequence Imitate? Organise Strong Marketing Yes Yes Yes Yes Sustainable Comp Advg Brand equity Yes Yes Yes Yes Sustainable Comp Adg R&D No Yes Yes Yes Temporary Comp Advg Product variety Yes Yes Yes Yes Sustainable Comp Advg Internet sales No Yes No No Competitive Parity Working Culture Yes Yes Yes Yes Sustainable Comp Advg Strong leadership Yes Yes Yes Yes Sustainable Comp Advg Distribution No Yes No Yes Temporary Comp Advg Global presence No Yes Yes Yes Temporary Comp Advg Diverse Skill set Yes Yes Yes Yes Sustainable Comp Advg Outsourced No Yes No Yes Temporary Comp Advg Manufacturing