Nike Research Paper

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  • Topic: Mark Parker, Nike, Inc., Phil Knight
  • Pages : 5 (1776 words )
  • Download(s) : 540
  • Published : March 14, 2012
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Primary Business Function(s) and Background
A primary business function or activity is the main focus or line of products that the business ventures into and the types of products that they aim to sell to the consumer market. Nike is a clothing and goods manufacturer, focusing on athletic shoes, apparel, sporting goods and accessories. Originally known as "Blue Ribbon Sports", it was founded by track athlete Philip Knight and his coach Bill Bowerman in January 1964. The company's profits grew quickly, and in 1966, “Blue Ribbon Sports” opened its first retail store. Continual growth throughout the 20th Century has seen Nike become the world leading sports manufacturer and they now provide a range of apparel, shoes and accessories amongst other products, for a wide-range of global sports. Business Structure

Nike is a global publicly traded company. As it was initially formed from a “handshake”, it was “implicit in that act was the determination that we would build our business based on trust, teamwork, honesty and mutual respect”. Nike has a matrix structure - a combination between the functional and the divisional structure. This organisational structure sees the chief executive officer sit at the top of the hierarchy and the various managers of each department report directly to him. The business consists of 5 departments: HR, Marketing & Sale, Accounting, Production, and Design & Development, that cooperate and interact effectively to strengthen the overall brand. The main company executives are: Philip H. Knight, Chairman of the Board of Directors; Mark Parker, CEO, NIKE; Charlie Denson, President, NIKE Brand and there is a board of thirteen directors which controls and oversees the operations within the Nike Brand. The importance of this organisational structure is the fact that it gives certain individuals the opportunity to recognise their roles and responsibilities and helps to facilitate communication between individuals centered in their responsibilities. This enables information sharing, problem solving, centered decision making and a balance in coordination and interaction within the company. A disadvantage of the matrix structure is its complexity. For example, if the functional manager and the project manager do not communicate well, the team members can be caught in the middle, causing confusion and a conflicting business environment. Business Goals

For Nike, as an already established and successful business, the importance of business goals are that it keeps them as a company motivated and striving to dominate a larger percentage of the global sports market. Nike’s three long-term financial goals are high single digit revenue growth; mid-teens earnings per share growth; and increased return on invested capital and accelerated cash flows. To achieve this however, the company needs to increase their net margins and market share. Currently, they occupy 38% of the global footwear market, while their biggest competitor – Adidas – holds 34%. To amplify this ascendancy in the market and, one of Nike’s strategies is to sell low-priced/market shoes through wholesalers. The problem with this goal however, is that some executives think that it will dilute the Nike brand, while other executives are of the opinion that this strategy will boost revenue and profits for years to come. Nike CEO Mike Parker announced at the beginning of the year that company is aiming to grow sales to $27-billion in five years, and increase more than 40% on sales in the latest financial year. The company says the goals would be achieved by opening more stores with a stronger emphasis on penetrating emerging markets, primarily China. More specifically, Nike is focused on increasing market share in the global apparel business (particularly in emerging markets), as that fragmented segment represents the most sales and future opportunity for the firm. Additionally, Nike is looking at expanding its Converse brand, by doubling its brand value to...
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