Consider the corporation you have selected to use in your first three assignments.

Research the company on its own website, the public filings on the Securities and Exchange Commission EDGAR database, the University’s online databases, the Nexis Uni database, and any other sources you can find. The annual report will often provide insights that can help address some of these questions.

You will do a 15-minute presentation to the Board of Directors of the corporation. Develop an eight- to twelve-slide PowerPoint presentation with speaker notes based upon Assignments 1 through 3.

Requirements

Determine the impact of the company’s mission, vision, and primary stakeholders on its overall success as a competitive employer in the industry.

• Create a SWOT analysis for the company to determine its major strengths, weaknesses, opportunities, and threats.
• Based on the SWOT analysis, outline a strategy for the company to capitalize on its strengths and opportunities, and minimize its weaknesses and threats.
• Discuss the various levels and types of strategies the firm may use to maximize its competitiveness and profitability.
• Outline a communications plan the company could use to make the strategies you recommend above known to all stakeholders.
• Assess efforts by this corporation to be a responsible (ethical) corporate citizen and determine the impact these efforts (or lack thereof) have on the company’s bottom line. Provide specific examples to support your response.
• Develop an executive-level PowerPoint presentation with 8–12 slides with speaker notes and appropriate graphics or professional video.
• Go to Basic Search: Strayer University Online Library and locate at least three quality references. Note: Wikipedia and similar Websites do not quality as academic resources.
• References must be submitted on a Works Cited page using SWS format.

Nike Inc. Business Strategy

Student’s Full Name

Strayer University

BUS499 Business Administration Capstone

Professor’s Name

Date

Nike Inc. Business Strategy

Nike is one of the largest companies in the United States dealing with design, development, manufacturing, marketing, and sales of accessories, footwear, equipment, apparel, and services. Nike is an American multinational corporation whose headquarter is in Oregon, Portland. According to a report issued by Forbes news in 2015, Nike is the top leading supplier and manufacturer of sports apparel with over 50 billion dollars in revenue (Walker & Yemer). The company has more than 1.5 million employees worldwide. The company’s brand is worth 30 billion dollars, making it one of the most valuable brands in sports in sports business. The company was ranked position 89 in the 2018 Fortune 500 list (Walker & Yemer). The company’s success is linked to its mission and vision, as well as its strategic approach to globalization and technology in its operations. This paper aims at investigating essential aspects behind the success of Nike Company.

Globalization

Nike is the pioneer in outsourcing to the developing world. Currently, it has more than 1.5 employees distributed across its 42 countries of operation. More than 29 percent of the company’s products are made in China, while 44 percent are manufactured in Vietnam. Global expansion is one of the competitive advantages that Nike has over its competitors. Besides, the company’s success in globalization is faced with challenges of new policies imposed on taxation by the current U.S administration (Dadzie, Winston & Dadzie, 2012). The company now faces an average of 11 percent tariffs on shoes imported into the U.S with another threat of increasing the tax to 45 percent for goods exported from China.

The company’s global expansion has effects on the political system, environment, economic development, culture, and the physical well-being of human beings in society around the globe. Through globalization, the company has managed to connect to its customers through the internet and even increase its customer base. The company can quickly sell its products to its customers from another country successfully. Besides, the company has also enhanced its operations by improving its transportation and telecommunication systems. The company can make goods and distribute them all over the world to all its customers. The company’s transition from regional to global organizations has forced its leaders to manage people from diverse backgrounds, values, and work ethics.

Technology

Adopting the use of new technological innovations is essential in coordinating operational activities in Nike Company. The company uses advanced technology for various reasons, including increment in product complexity and heightening customer demands. The company also engages in the adoption of technological changes to transform its supply chain from a pure operations hub to an epicenter of business innovations (Dadzie, Winston & Dadzie, 2012). The company uses new technology in the management of its supply chain. Some of the latest technological changes that the company has introduced in its supply chain include the use of sensors and advanced internet connectivity, which are used in gathering information by the forward-thinking organizations at every checkpoint.

Through the use of advanced technology in operational activities, the company can check the status of its raw materials and the status of the finished products’ location.

For instance, the company uses artificial intelligence in machine learning and other advanced analytics to drive automation and deliver insights that enhance efficiencies that accelerate product delivery. The use of artificial intelligence is applied by the company be by swapping out materials for the advantage of better availability and pricing. The use of 3D printing technology enables the company to localize goods nearer to consumers, allowing for quicker turnaround, greater personalization, and low transport costs.

Apart from using new technology in supply chain management, the company also uses technology in workforce communication. In Nike Company, technology and communication play a vital role. The use of new technology determines how employees behave in the company. The use of technology ensures that there is a more efficient way to disseminate information in the organization. Nike Company provides workforce diversity, and there have been concerns over the use of technology in nearly all the company’s daily operations.

Industrial organization model

There are various ways in which Nike Company can use an industrial-organizational model approach to maintain a significant stake in the highly segmented market. Through this approach, Nike Company will be able to peg its products against its competitors using advertising information, production and transaction costs, and government alliances (Dadzie, Winston & Dadzie, 2012). The advantage of this approach is that it keeps a pool of competition small, creates entry barriers, and at the same time, will enable the company to assess the next step of its few rivals. Given that Nike is a multinational corporation with over 30 billion dollars revenue, it will dominate the industry and become more potent than its key competitors such as Adidas, Puma, and Gucci. Nike Company will be able to increase its revenue in that few firms operate in this model so the company will be able to control the market. The company will have control over research, information, price, and development.

Resource-based model

Apart from using the industrial organization model, Nike Company can also use a resource-based model to make its business unique. Resource-based model (RBV) is a model that views resources as key to superior firm performance. In other words, this model enables a company to see a competitive advantage over looking for a competitive advantage for the resource.

This model will allow Nike Company to exploit its external opportunities with the available resources in a new way instead of acquiring new skills for different occasions. With this model, the company will give its resources a significant role in achieving its organizational performance. The two resources that the company will focus on in this case include tangible assets and intangible assets (Dadzie, Winston & Dadzie, 2012). The company will be able to bring its physical assets to the market as soon as possible before its rivals duplicate it. Besides, the company can improve its brand to gain more customers because when the company brand becomes more popular, it will increase its customer segment and thereby increasing its sales volume.

Vision

Nike Inc. The corporate vision statement represents the company’s position as the leading supplier of sports apparel globally. The company objectives and purpose in business are well explained through its vision statement. The company’s corporate vision is to provide a picture of the future target conditions of the business. The company’s vision mainly focuses on strengthening the company’s brand. The company strengthens its brand by advocating for leadership in the international market while counteracting competition (Dadzie, Winston & Dadzie, 2012). The company’s vision also propels the company’s strategic management to develop policies to ensure competitiveness against its rivals, such as Gucci, Adidas, Puma, Under Amour, and ASICS. The company’s vision is built on three pillars: authentic, connected, and distinctive. The company’s vision is to remain the most unique, connected, and trustworthy brand. The vision statement’s genuine components show that the company focuses on making its products deliver high performance to its consumers. The second pillar, “connected,” indicates that the company is focused on connecting its customers to its products. The last component, “distinct,” shows that the company is focused on delivering high-quality products.

Mission

The company’s mission statement prompts the business in meeting and exceeding the expectations of athletes. The mission statement of Nike Inc. guides it for the evolution of its business. The implementation of the company’s mission helps it to support its market position as the leading producer of athletic apparel. The company’s mission is to bring inspiration and innovation to every athlete in the world. The company claims in its mission statement that everyone is an athlete provided that they have a body. The main components of the company’s mission include “inspiration, innovation, and every athlete in the world.” the company is focused on informing its customers to develop the mindset of a winner through its inspiration component. The company’s slogan is straightforward. It states, “Just do it.” Besides, the company is also focusing on using technology and innovation in its products to ensure that they are of high quality and affordable (Walker & Yemer). Finally, the company targets every customer in the world through its mission of “every athlete in the world.”

Stakeholders

The stakeholders of Nike Inc influence its stakeholders through maintaining a corporate social responsibility program. The stakeholders of Nike Inc. include employees, community, customers, and government agencies. Each of the company’s stakeholders has a significant stake in what the company does (Hitt, Ireland & Hoskisson, 2016). In Nike Inc, there are mutual benefits in the company’s influence on its stakeholders and vice versa. The company works towards ensuring its stakeholders’ well-being while the stakeholders of the company are also working towards developing the company’s brand.

Customers: Nike’s CSR program gives priority to its customers as the stakeholder’s group. Nike values its customers because customers are affected by the company’s revenue directly from its products. The company ensures that it provides high-quality products to its customers at reasonable prices (Walker & Yemer). For instance, the company utilizes technology in producing high-quality products to its customers. In return, the company obtains high sales volumes from its customers.

Communities: since many consumers tend to buy products that have a positive impact on the town, Nike ensures that it provides interest to the community by supporting development programs in the city. The company supports the community through its foundation known as Nike Foundation. For instance, in 2015, the company started an initiative in its program that focuses on empowering girls. Besides, the company has other CSR programs such as Active Schools and Youth Sports Program, which donate sportswear and funds to promote physical activity among students (Walker & Yemer).

Employees: Nike recognizes employees’ importance as members of the stakeholder group who are entitled to organizational effectiveness. The employee performance in Nike Company directly translates to organization performance. The interest that Nike gives its employees includes fair compensation, career development opportunities, and a sense of purpose.

Conclusion

This paper has addressed and recommended various aspects behind the success of Nike Inc and has suggested other models that the company can adopt to ensure an increase in its revenue, such as the use of industrial organization model and resource-based model. This paper has also found that the company follows its mission and vision statements in designing its products and in approaching the market and competition challenges.

Sources

Dadzie, C. A., Winston, E. M., & Dadzie, K. Q. (2012). Organizational culture, competitive strategy, and performance in Ghana. Journal of African Business, 13(3), 172-182.

Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2016). Strategic management: Concepts and cases: Competitiveness and globalization. Cengage Learning.

Walker, C., & Yemer, H. NIKE INC. BUSINESS STRATEGIES 8.

Running Head: NIKE INC. CORP

NIKE INC. CORP 2

Nike Inc. Corp

Name

Institution

Date

Nike Inc. Corp

Many external and internal factors influence the growth and success of an organization. Many organizations collapse due to the negative influences of these forces, while others thrive due to the establishment of strategic measures towards these forces, thus enabling them to remain competitive. Nike is one of the companies that have continued to stay competitive despite its robust competing forces in the market segment (Henderson, Locke & Lyddy, 2009). The analysis of the company’s general environment and the competing forces are among the strategies that the company has adopted to remain competitive. This paper aims at discussing the general environment, competing effects associated with Nike Company. Besides, this paper has also analyzed the internal environment of Nike by identifying and addressing its strengths, weaknesses, opportunities, and threats.

General Environment

Various factors contribute to the success or unsuccessfulness of a company’s brand. The Nike Company’s environment includes both factors that it can readily control and others beyond its influence. The company’s factors exist from the general environment. The company’s general environment has a significant influence on its level of success. Therefore its executive members are mandated by tracking the trends of these factors as they evolve by trying to anticipate the implications of such trends and events (Henderson, Locke & Lyddy, 2009). The company conducts PESTEL analysis to organize elements within its global environment to identify how these factors influence firms. PESTEL is a name that recognizes all the six segments of the general environment: political, economic, socio-cultural, technological, environmental, and legal segment. The two segments that would rank highest on Nike Company that will be assessed in this section include technological and demographic segments

Demographic segment

As far as Nike is concerned, demographics are its main concern. There has been a shift in Nike products’ purchasing trends as many people have shifted to other products, especially when they grow old. Nike is rarely serving the elderly population because older adults prefer other comfortable brands such as New Balance to Nike’s apparel. The study conducted by N.Y. times previously revealed that a greater percentage of the elderly population in the U.S. prefer New Balance to other brands of apparel from other companies (Hitt, Ireland, & Hoskisson, 2020). The study reported that it is widespread to spot an older person wearing new balance shoes. The buying tendencies of the company’s products also are based on how its customers are located geographically. There are claims that the company products are not universal, which makes them differentiated to specific groups, thereby making it difficult for the company to attract many customers like farmers. Other reports claim that it is rare to spot a farmer wearing Nike’s products in the ranch. This is one of the gaps that the company needs to fill by manufacturing products that suit everyone regardless of their workplace or age (Hitt, Ireland, & Hoskisson, 2020). Although the company does not regard farmers as their target customers, this does play a significant role in where and how often the company’s products are purchased.

Technological segment

Nike has made tremendous steps in giving its products natural exposure. The companies takes part in computer-aided design, computer-aided manufacturing systems, and have shown the emergence of internet technology. The company has succeeded in making its products accessible through the utilization of all social media platforms, websites, and other marketing channels (Hitt, Ireland, & Hoskisson, 2020). On the company’s website, the customer can design their shoes and purchase them within a short while. The company allows its customers to choose the colors that please them through their websites, buying its products favorable among its consumers.

Five forces of competing

The five forces of competition include competition rivalry, bargaining power of buyers, bargaining power of buyers, threats of new entry, bargaining power of suppliers, and threats of substitute products. The two forces of competing which are significant to Nike include competing rivalry and threats of new entrants.

Competitive rivalry

The following are the critical company rivals: Puma, Adidas, Gucci, Under Amour, and ASICS. These companies are well established in the market, and they also control more revenue by occupying a large market share. These companies limit the company’s full exploitation of the market. However, through technological innovation, Nike has managed to modify its products, which suits most of its customers, thereby making it to continue thriving alongside these competing forces (Mahdi, Abbas, Mazar & George, 2015). Nike has also made improvements to its customer services by providing excellent services by hiring skilled employees, thus making it competitive against its competitors.

Threats of new entry

Several companies are venturing into the sports and apparel industry in the U.S. however; these companies are associated with many challenges of operational costs as the business requires a high level of investment capital. This makes the industry to be unbreakable by other companies (Mahdi, Abbas, Mazar & George, 2015). The few companies, therefore, stand a better chance of enjoying good returns since there is no stiff competition as also there is less pressure by other companies in lowering prices. Apart from the high cost of entry, strict government regulations discourage other investors from venturing into this business.

Future improvements

The two competing forces have posed a significant threat to the company’s success by occupying other regions that the company operates, thus leading to the sharing of the market. There are many strategies that Nike can put in place to cope up with these forces. For instance, the company should put more emphasis on attracting internet customers. Today, the internet market is one of the largest platforms that successful organizations such as Apple, Amazon, and Wall-mart obtain most of their customers (Mahdi, Abbas, Mazar & George, 2015). When the company dominates the online market, it will be able to have a competitive advantage against its rivals. Besides, the company should also focus on global expansion as a strategy to obtain customers from areas where its competitor’s brand neither neither is nor recognized.

Greatest external threat

One of the most significant external threats that the company faces is unfavorable government regulations, especially in areas of its expansion. The company currently operates in over 40 countries, and some of the threats that it faces are the government policies in these countries. Some regions such as New York have also remained hesitant in registering company operations due to the availability of other companies such as NY&C, which operates in similar products (Paine, Hsieh & Adamsons, 2013). The company has too faced various challenges in its attempt to break into other markets despite being registered due to the availability of well-established companies operating in the same line of products. Besides, the company has also faced an economic downturn due to the current Covid 19 pandemic, which has greatly impacted its spending power.

Greatest opportunity

The greatest opportunity is that several large companies in this industry cannot provide adequate service and high-quality products that satisfy the needs of the clients. This is an opportunity that is being exploited by this organization since Nike is a standard and a well-positioned company that uses all the opportunities within its means to attract customers throughout the world (Paine, Hsieh & Adamsons, 2013). Some of the strategies that Nike deploys in exploiting this opportunity include the use of advanced technology, hiring experienced workforce, ensuring the strategic location of its stores across the world, ensuring affordable prices and accessibility of its products.

Strengths and weaknesses

Nike regularly engages other professionals in this area of specialization to seek enough critical information useful in identifying its weaknesses and strengths to allow it to compete favorably in the market. The main organizational advantages rest on the power of its workforce. The company has a team of highly qualified consultants and subordinate staff that are ready to take the company beyond the limits and make the customers obtain what they require (Schipper, & Bojé, 2008). The team is skilled and trained to listen and pay attention to customers’ concerns and deliver excellent services. The company is also well-positioned, which gives the company the advantage of attracting many customers at a quicker rate. Despite these strengths, the company has also recorded some weaknesses resulting from a lack of enough funds to market the company and make it get the publicity it deserves. Despite the company being the first mover, there are other brands such as Puma, Gucci, and Adidas that have gained a lot of popularity and are today highly preferred than the company’s products.

Strategy or Tactic

For the existence of many competitive organizations, the company should adopt a cost leadership strategy. Cost leadership strategy focuses on producing goods and services that are desirable to customers but at a lower cost to that of competitors. Specific factors that initiate this strategy’s success include process innovation, which entails newly designed distribution and production techniques. In this case, the company’s purchases and materials must contain competitive differentiation levels that create value for customers (Walker & Yemer, 2002). The effective use of this strategy will enable Nike to enjoy good returns, which are slightly above average despite operating under stiff competitive forces. Nike also considers government regulations as one of its main threats, especially in regions where it is expanding its operations. The strategy that the company should adopt in dealing with this threat should entail conducting thorough analysis regarding taxation, labor market, equal opportunity Act, sex discrimination Act, and labor Act, economic stability, and political stability before investing in any region.

Resources, Capabilities, and Core Competencies

Nike is a well-established company, and the country’s previous financial years showed that it has more than 30 billion profit. The company operates in more than 50 countries. Besides, the company also has more than 1000 stores, and it also maintains five distribution centers located in the U.S and eleven manufacturing plants producing sports and apparel and other accessories. Furthermore, the company currently has over 1.5 million employees distributed globally (Walker & Yemer, 2002). The availability of these resources makes the company in a better position of being incapable of acquiring any technology, employee, or breaking into any market. Nike’s core competencies include excellent customer service, advanced technology, availability of skilled workforce, and standardized products.

References

Henderson, R., Locke, R. M., & Lyddy, C. (2009). Nike considered: Getting traction on sustainability.

Hitt, Ireland, & Hoskisson. 2020. Strategic management: Concepts and cases: Competitiveness and globalization (13th ed.). Mason, OH: South-Western Cengage Learning

Mahdi, H. A. A., Abbas, M., Mazar, T. I., & George, S. (2015). A Comparative Analysis of Strategies and Business Models of Nike, Inc. and Adidas Group with special reference to Competitive Advantage in the context of a Dynamic and Competitive Environment. International Journal of Business Management and Economic Research, 6(3), 167-177.

Paine, L. S., Hsieh, N. H., & Adamsons, L. (2013). Governance and sustainability at Nike (A).

Schipper, F., & Bojé, D. M. (2008). 22 Transparency, integrity and openness: the Nike example. Handbook of research on global corporate citizenship, 501.

Walker, C., & Yemer, H. (2002) NIKE INC. BUSINESS STRATEGIES 8.