Nike Business Essay

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Analyse their strategic choices with their options- why they made the choices that they did and recommendations. Has their strategic focus changed?

Look for critical success factors, matches and mismatches. Identify any key areas that have affected Nike.

Look at tools of analysis e.g. swot analysis, pestle, value chain, porter’s 5 forces, shareholder matrix, resource view, 4 p’s, BCG matrix.etc and others to come to your answer.

Introduction

Nike operates within the sports footwear and apparel market. Originally designing and producing running shoes, their portfolio has broadened to include a wide range of sports and leisure wear. This is all endorsed by top sporting personalities.

This environment is fairly stable although terrorism and Sars has affected consumer confidence and supply networks.

Mission Statement

In its mission statement Nike expresses that it requires doing business in a responsible way, leading to sustainable financial growth. With the advances in technology, HR practices, the well informed and trained work force, there is very little left to differentiate organisations. Being seen to go further than the minimum required on social issues can attract and retain customers. This green cleansing attracts attention to the organisation; they are viewed as caring and social responsible (Mullins, L. 2005).

A report, on the business practices of Nike through its supply chain accused the organisation of being involved in poor working conditions, violations of labour rights, low wages and harassment of its workforce. Nike takes these reports seriously. On the basis of the research findings the company has intensified the monitoring of its suppliers (Hummels, H and Timmer, D.2004)

Past options

To build its business with all of its partners based on trust, teamwork, honesty and mutual respect; this is expected to be returned, expecting business partners to operate on the same principles.

Rationale

Nike does not want to only do what is required by law, but also do what is expected of a leader

Future Options

Review and monitor closer the actions of business partners

Rationale

To prevent bad publicity, which can damage the organisation

Critical Success Factor

To demonstrate to consumers the high value within the organisation to CSR.

Change of Focus

Theorist

Hummels, H and Timmer, D.2004 agreed that these reports were needed, Although Mullin, L. 2005 stated that it could be just green washing

Nikes Function

Past options

the company focus on design and development

Rationale

This reduces long term debt has the benefit of not tying capital up in plant and equipment

Future Options

Rationale

Critical Success Factor

Reduced size of premises therefore reduced costs. Vital to have innovative employees. Products are viewed as innovative

Change of Focus

Theorist

Johnson, G & Scholes J 2004 agreed that this was a cost effective method of production

Production Within several of these countries there have been problems with production, distribution and political problems. With the change in relationship between the USA and Vietnam and China, these are new production venues that Nike could explore.

Past options

Produce goods in the Far east

Rationale

Keeps costs down

Future Options

Vietnam and China

Rationale

New trade agreements, present sites are switching manufacturing to electrical goods

Critical Success Factor

Maintaining current standards, closer working relationships, retaining customer loyalty by guaranteed standard of product

Change of Focus

A shift to a more managed production

Theorist

All organisation need to watch changes in political and economical factors in their outsourcing. Johnson, G & Scholes J 2004,

Shareholder Matrix

Surrounding all organisations are stakeholders, all with varied levels of authority, power and interest towards the organisation Mendelow (1991)...
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