Innovation Management in Nike
Notably, the processes of innovation management in a company may include in any of the four elements which are active in an organization, including technology, the products that produced by the organization, the services that the organization provides, and the processes of developing and organizing businesses in an organization (Brenner, Schlegelmilch, and Ambos 2013). Nike, Inc. is a multinational organization based in the United States that manufactures and sells footwear mainly athletic shoes, sporting equipment such as balls, accessories and providing services. Porteous and Rammohan (2013) mentioned that over years, Nike has maintained a close pace with creativity and innovation and it enables the company to maintain a lead in shoes designing and manufacturing as well as production of sport equipment. The aim of the paper is based on finding an innovation development analysis by using a case study of Nike through the use of theoretical literature and application to the case study.
According to Epstein, Et al. (2010), the organization considers brainstorming as one of the key elements in production and manufacturing of the shoes to the market. Through identification of futuristic gaps, Nike, Inc. has set up a creativity team comprising of persons such as Mark Parker and Tinker Hatfield to steer creativity and innovation goals of the firm (Anderson 2014). Figure 2: Assink's theory of "Incremental- radical" innonation using a case study of Nike Disruptive technologies Eventual(Breakthrough) innovations • Nike can make large sales due to reduced capital of production • Online purchases is enabled by Nike • Speedy production of shoes enabled by Flyknit tech. Price Level Flyknit technology Traditional type of Nike shoes Maximum Full purchase price of shoes is 159 US dollars plus 25 US dollars of shipment plus drop off cost which is at 6.
74 US dollars. So total price of purchase is 190. 74 Full purchase price of the traditional shoe is 132. 50 US dollars plus 25 US dollars of shipment plus drop off cost which is at 6. 37 US dollar assuming that there is no online shopping or rather there is free shipment fee then assuming no fee for disposing the shoe when its life ends. The total cost is 95. 37 US dollars Lowest purchase price of the shoe is 79. 47 US dollar assuming that there is no online shopping or rather there is free shipment fee then assuming no fee for disposing the shoe when its life ends. The total cost is 79. The organization use the development directions Ansoff’s Product Mission Matrix as shown in the figure below to help in penetrating the market, developing the product, developing the market and encouraging diversity at the same time.
Figure 3: Ansoff's product mission matrix theory Product Mission Present New Present Market Penetration Product Development New Market Development Diversification As indicated in figure 1, the top management at Nike have the duty of delegating vital decisions about innovation to the innovation team. The process of delegating duties start from the Chief Executive Officer (CEO) of the organization streaming to the vice president assigned to the marketing division then to the innovation team of the company. Porteous and Rammohan (2013) mentions that the top management of the organization aims at delegating innovation duties to the subordinates who have been vetted to be having excellent creativity skills. The top management at Nike has come up with an innovation management structure to help in reducing the time taken to developing and introducing new innovations to the market.
Based on StoneHouse, and Minocha (2008), the matrix organizational structure has also helped in managing the focus of the consumers while it looks at the flexibility of the consumers while at the same time at considering the views of the top management since it is a Multidivisional organization. The structure has, according to Epstein, et al. (2010), proven to be efficient in handling simultaneous tasks, thus influencing efficiency and time management during decision making and implementation of the innovation. As stated by Neiderhauser (2013), using the matrix network, the product manager as seen in the figure above can be directed from headquarter to develop a given product. However, depending on the location of a given branch of Nike, the regional manager can decide to modify the design of the shoe to fit the needs of the market.
is based around the idea of innovation and creativity with the aim of providing products that match the preferences of the consumers. Considering Lewis, et al. (2012), to keep Nike on the level that it can maintain innovativeness and creativity, the organizational culture is characterized by talent, diversity, and inclusiveness. Firstly, Nike, Inc. understands that innovativeness is part of being talented and talent entails innovativeness. The program, based on Foss and Stieglitz (2014) ideology, helps in maximizing the organization’s product research and development cycle. Based on Foss and Stieglitz (2014), the culture of diversity helps in not only creating new designs for footwear and sporting equipment but also promote production of unique designs. Also, inclusivity as one of the organizational culture promoted by Nike, Inc.
helps in minimizing the challenge of performance in the organization through fostering an all-inclusive atmosphere. Nike uses the culture of inclusivity as the technique to guard other elements in the organizational culture (talent and diversity) through promotion of optimal performance in the organization. The organization also should adapted the cleaning standards required by the United States- OSHA clean air standard. Porteous and Rammohan (2013) says that the organization should form Fair Labor Association which was constituted by a combination of companies that can help in monitoring the standards of the working places of factories with the aim of protecting workers. According to Ruwanpura, (2012) the association also should include human right representatives and member from the labor commissions to monitor the minimum wage rate.
Future Challenges Likely to Face Nike, Inc. and the Recommendations Nike has always been view to be sterile to the market forces that the cause other companies to ail. However, with the small brands put together they will to be a real threat to the organization (Ruwanpura 2012). Further, the most common sport wear and apparel are gradually going out of fashion. Researchers have found out that footwear tend to be going out of fashion since the basketball trend seem to be going down as well. Notably, basketball acquires the balls and other equipment mainly from Nike. Based on Foss and Stieglitz (2014), if the importance or the position that Basketball has will go down among the fans and the prospective players, the rate at which people purchase the footwear and apparel is likely to go down too.
The organization should also seek to use the expertise of the organization in diverse thus improving the capacity of creativity in the organization. The concept of commercializing all the expertise of the organization should, therefore, include introducing an ‘open innovation’ forum that will ensure the organization has tapped its full potential and directed it to improving the performance of the organization. References Anderson, Neil, Kristina Potoocnik, and Jing Zhou. , J. “Innovation and creativity in organizations: A state-of-the-science review, prospective commentary, and guiding framework. and Yuthas, K. Why Nike Kicks butt in sustainability. Organizational Dynamics, 39(4), pp. Foss, N. and Stieglitz, N. , Liu, F. and Song, J. S. A dynamic mechanism for achieving sustainability. quality supply. E. How Nike’s Leadership affects Brand Image Internally and Externally.
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