Sustainable solution for Nike Cooperation
Thus, the paper will be focused on addressing key sections that will enhance sustainability, such sections include: the SWOT analysis, detailed value chain, dynamics witnessed on marketing, contribution from stakeholders and economics trends in the market. Executive summary In the year 1964, Nike cooperation was incorporated as Blue Ribbon Sports by Bill Bowerman in Beaverton Oregon engaging in designing, manufacturing and selling various products and equipment’s which bears the NIKE brand name. since then, the company has steadily expanded the market and diversified their line of products through acquisition and merging with different companies (Childs & Jin, 2018). In today’s market, Nike cooperation is well known for selling quality footwear and other equipment’s used by different sports personalities. Just like any other company, Nike cooperation has its eye on the economic trends in the market to enhance its competitive nature and increase profitability.
In addition, hire prices on their products makes the products out of reach to many customers specifically to the emerging markets than their competitors who offer fair prices for the same products (Valjakka, 2013). However, the company has greater opportunities to penetrate the emerging markets across the global due to quality sportswear offered. In addition, the company must continue acquiring related business as an opportunity to facilitated growth. For further growth, the brand must continue focusing on product innovation and digitalization to enhance competition, profitability and consistent growth. Stakeholders identification and value analysis Enterprise level strategy Basically, enterprise strategy also known as corporates strategy deals with the issues that affects a business organization as a whole. Employees. The company recognizes the important role played by the employees as a stakeholder group with much significant on the effectiveness of the organization.
The values of employees include enhanced career development, sense of purpose at the company and fair remuneration and compensations. The efforts translated to good performance and ability to produce quality footwear. Governments. The company should integrate more strategic levels that will enhance their competitiveness. Setting fair and friendly prices can help the company to have wide markets for customers. The company should produce footwear shoes to be used by middle families as well as poor families. In such doings, the alignments of its culture and the new strategies will enhance its innovativeness and increased revenue across the global. Evidence and Implications The company has been combining different strategies for its competitive advantages. Technology. Over the past years, Nike has been using digitization in order to enhance value through changing how they give out their experiences and products to the customer.
In the year 2006, Nike entered a digital gadget realm by introducing a small sole-invertible chip. In 2012, it created a fuel band that customers wore on their wrist to determine their fitness metrics. Nonetheless, the company has revolutionized its manufacturing through introduction of a 3D printing (Välkkynen,2017). Physical environment. Physical environment entails natural and manmade resources. In order to acquire resources for manufacturing the shoes and other products, readily availability of the resources enhances business continuity for Nike since production increases as resources are available and production decreases as raw materials decreases (Angeles, 2014). Economics. The performance of Nike depends entirely of the state of economies among different regions where they sell their products. Lastly, the government and legal factors of improving employment law in developing countries threatens Nikes performance.
The laws lead to increment in cost of labor in regions where the facilities used by Nike in are located (Angeles, 2014). Opportunities. Despite the threats generated from the General market force analysis, there are more opportunities that Nike Inc. are provided with. Barriers to entry. through there are many factors that contributes to entry in the markets. The common factors contributing to a weak threat for Nike Inc. includes: high economies of scale, reasonable cost of running the business and high brand development cost. The above analysis offers a low threat for Nike to enter into the market for sports shoes, apparel’s and equipment’s since when the investment of starting a new business is not very huge, there are more requirement which are not easy to fulfill (Mahdi et al, 2015).
Individually, each supplier is small in size hence they do not have forward integration ability thus reducing the chances of competition from suppliers. Bargaining power of buyers. The bargaining power of buyers changes from low to moderate. Apart from Adidas, there are number of brands that compete with Nike hence the switch cost becomes low (Angeles, 2014). To some extent, the force is moderate due to quality and marketing of the products. The condition leads to a strong market force since Nike and other competitors compete for a market that exhibits slow growth rate. In addition, the aggressiveness nature from Nikes competitors for bigger market share is strong hence the company is required to use more resources to meet its target. As a result of low switching costs created by the bargaining powers of the buyers, it poses a threat for Nike since customers can buy shoes and equipment’s from other brands competing with Nike.
Due to moderate availability of close substitute for Nike customers, a threat is created since customers can buy products from other brands as opposed to always buying from Nike. The availability of close substitute is a threat for Nike. The competitive nature of Nike is as a result of value chain management which leads to high productivity (Neuhausen, 2012). The value chain analysis element includes: The human resource management. Basically, the management of a multinational organization requires skilled personnel. Unlike other cooperation’s, Nike was recognized as one of the best employers for diversity in the fortunes list. This attribute has helped the company employ more than 70000 employees creating a culture and an environment that fosters diversity and inclusion (Angeles, 2014). At Oregon in north America, Nike headquarters are located there.
Nonetheless the company has offices located across the global hence catering for a larger geographical area. Due to this, the company is able to address its consumers demand hence maintain its quality and reputation a cross the global than their competitors. Outbound logistics. Outbound logistic is a critical aspect for Nike. This is attributed by the fact that the company has skilled personal in various fields such as marketing, manufacturing and production of its products (PANDEY, 2017). Nike competencies are also its capabilities that helps it have a competitive advantage against its competitors. Implications of Competitive Analysis Strength From the value chain analysis, Nike poses various strength from them. the strong marketing and sales department is a strength for the company. The department allows the company reach a large number of people across the global.
overall, the skills possessed by employees offers a competitive advantage to the company against competitors. Capabilities As compared to other competitors, Nike have a wide range of capabilities. Adoption of new technology allows Nike too be more competitive in the markets since the products produced are of high quality and they are readily available in the market. Further, the company enjoys the capability of having a strong research and development team. Thus, the capabilities can be identified as a strength to the company compared to other competitors. The strong innovation and development allows Nike to provide products with current innovation to suit the markets trends for consumers hence being more competitive. WO strategies. According to most people across the global, Nike is one of the brands that offers products at a higher price.
The perception makes customers have reach for other products competing with Nike particularly in the emerging markets. The higher prices for their products is a weakness mostly in times if recession where consumers are willing to spend less on non-essential products. Such skills allow the company have a more competitive advantage than competitors. However, such skill can be used by the company to leverage opportunities available. one key opportunity for Nike is the emerging market. Nike can use the skilled employed to enhance completion in the markets thence foster growth. ST strategies Nonetheless, the skills can be used to eliminate threats in the markets. Since the company faces tough competition for other brands, the company stands a chance to venture through since the adoption of new technology and a strong research team helps in discovering the tastes of the customers and use the opportunity to provide products that a certain market segment requires (Childs & Jin, 2018).
Key Success Factor Matrix Analysis Nike enjoys keys successful factors that are important in the market. They include: Extensive research and development: since the company understands the needs of the consumes, they use R& D to design premium concert products for athletes. This helps the company in stimulating demand by adopting a smart, R&D assets, well managed supply chain and efficient investmen tin consumers. wide range of products with extensive distribution facilities: though the company deals with production of its core quality products like footwear, equipment and footwear, the company also deals with other products products like shorts, jersey and base layers hence a wide range of products. Supporting Argument In an art shell. Generic strategy is the best for Nike company.
The strategy combines two different strategies which include the cost leadership strategy and differentiation strategy. The cost strategy helps Nike to maintain a competitive advantage based on costs incurred by the company. From this strategy, the company tries to lower the cost used in production in order to offer low selling prices and maximizing on their profits (PANDEY, 2017). The strategies have helped the company maintain its customers by providing bundled products to them and readily available resources. However, Nike has other subsidiaries such as converse, Jordan and Hurley helping the company generate more revenues. Alignment and Goals Analysis Over the year, Nike Inc. has been enjoying a growth path as the leading brand in the sport shoes and equipment market. Basically, the company uses the five forces analysis that helps it shaping it focus on the key strategies.
Industry Evolution Modeling Industrial evolution modelling is a tool used for analyzing the dynamics of an industry and how the affect the company. The model proposes that, at times, a company reacts to external events hence they determine the course of action taken by players in the inducts. Consequently, such events affect the evolution of the forms (Porteous & Rammohan, 2013). In its advertising, the company uses professional athletes to enhance demand by ensuring that the directly speak to consumers hence providing good publicity. Nike changes its targeted markets from teenagers to younger generation due to intense market competition from Adidas and rebook. Growth stage: as customers continue buying Nike products, the price of the products usually rises up and even the when the prices are relatively higher, customers are satisfied and they will do anything to ensure that they pay for the product hence the company generate more revenue.
Maturity stage; at this point, the sales of the product is relatively small than in the growth stage. Customers are still interested by the quality pf shoes and they continue enjoying the quality thus shoes stay at the shelves for some times before they are bought (Childs & Jin, 2018). Decline stage; since Nike is known for producing new shoes as times go by, the current shoes are not really bought anymore and the process will relatively go low to try to get some money for them but customers are no longer interested. Implications of Analysis Life cycle modeling is an important aspect for Nike, the analysis is used by the management to keep track of products that the company deals with. However, Nike introduced a commercially waterless textile dyeing machines after partnering with Dye Coo Textile system a company based at Nethlands.
The technology allows saving of water, energy and eliminates the likelihood for added chemicals in the process of dyeing fabric. The successful journey of Nike has strongly depended on sustainability through innovation. That makes it as a culture as the main driver of the business from the main competitors. The idea of coping with current innovation is more of an avant-gardist that pioneers the company to be a leading giant in the footwear production (Porteous & Rammohan, 2013). the question of whether the company will have met the large population is very simple for the company. Through the quality and the marketing strategies adopted, the company has maintained a great reputation in the industry. Implication of analysis. Based on the finding, Nike has a greater opportunity to maintain stability.
Engagement of the company’s stakeholders in decision making is very crucial as the company is able to market itself and meet the demand. , & Pratap, K. A. BRAND EQUITY AND CORPORATE SOCIAL RESPONSIBILITY–CONCEPTS AND CASES. INTERNATIONAL JOURNAL OF RESEARCH IN MANAGEMENT & SOCIAL SCIENCE, 70. Chandra, A. , Brown, C. , & Tarba, S. Y. Mergers, acquisitions & strategic alliances: Understanding the process. New York, NY: Palgrave Macmillan Ltd. , & George, S. 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. Neuhausen, F. Valjakka, M. CSR and Company Reputation-Case study of Nike. Välkkynen, L. Value and Risks of Athlete Endorsements: Case study on NIKE Inc.
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