Current Mission, Objectives, and Strategies of Nike - Case Study Example

Management Case Study Number Department Introduction One of the most outstanding and respected organisations is Nike Inc. Nike Inc. dates back to 1964 when it was founded by Bill Bowerman and Phil Knight, under the name Blue Ribbon Sports. It was only in 1978 that the company had its name changed to Nike Inc. although the company started off in Oregon, Beaverton which serves as its headquarter, it has grown into one of the world’s leading multinationals, with a chapter of it being in the UK. Again, apart from the company’s robust personnel base, Nike Inc. in 2012 was valued at 10.7 billion US dollars, thereby making it the most valuable sports business brand, worldwide. The reason Nike Inc. has succeeded is underpinned by a myriad of factors, as shall be seen in the discussion which ensues forthwith. 1) Determining: The Organization’s Current Mission, Objectives and Strategies One of the factors that has guided Nike Inc. into success is its radical mission which currently is to lead in corporate citizenship and life, through proactive programmes that are reflective of care for the world family of Nike Inc. family, its teammates, consumers and those extend services to Nike Inc. In a closely related wavelength, Nike enjoys its chief position in corporate performance because of its objectives. Presently, Nike Inc.’s objective is to keep the cost of manufacturing down through intense competition of the industry in which Nike operates. The feasibility of this objective is underscored by the fact that many other companies that are in athletics industry use the cost of investments and operations in countries before going to a foreign market. Nike Inc.’s strategy has also helped propound it into the world’s leading sports business brand. Particularly, Nike Inc. has used partnering in import-export trade. This is seen in the instance where Nike entered into partnership with Onitsuka Tiger in 1964, to help it import Onitsuka Tiger running shoes in Japan. It is for this reason that as the 1970s came to a close, Nike Inc. had shot from 10 million dollars sales to 270 million dollar sales. It is because of this that by 1996, the company had registered revenue of 6.74 billion dollars. In 2000, the sales had reached 12 billion dollars (Goldman and Papson, 1998, 22). Another prime strategy which Nike Inc. uses is the selling of its performance equipment. Nike’s performance equipment include footwear, balls, socks, bags, bats, gloves, eyewear, electronic sports devices, time pieces and protective equipment. Alongside this, Nike also provides apparels for legitimate or licensed sports teams. To execute this strategy well, Nike Inc. uses proper selling strategies and techniques. Nike sells its merchandise to retail accounts and outlets through a mix of independent licensees, retail stores, distributors and its own Internet website, nikestore.com. Nike Inc. also uses its four major subsidiaries to sell its merchandise. Nike has also gone a long way in designing brand image websites which are used to specify and determine customer preferences. The same company has used the 4Ps for marketing, particularly, the Place, Product, Price, and Promotion. In a nutshell, it is safer to observe that Nike’s strategies are multipronged enough to touch every sphere of organisational existence, circumstance and operation. Thus, Nike may expend its strategies depending on the situation and the department being faced with a specific situation. Management Style According to Drexler (2007, 34), following the entrance of Philip Knight as Nike Inc.’s CEO, Nike Inc. has had more refined and dynamic strategic management styles, since Knight believes that management styles has to be synchronised with strategic planning. The company uses planned risks and conservative decisions to execute management style. These decisions are made after internal and external environmental analyses. Nike Inc. also uses consultative forms of decision making since Knight firmly believes that before any decision is made, the entire management team will have to be consulted for views, which are drawn from experience and skills. The company’s power distribution is seen to be bureaucratic since its top management comprises the dedicated executive officers who have appropriate skills, experience and managerial acumen. Nonetheless, however the large room that Nike Inc.’s management leaves for dynamism and consultations, the management decisions are similarly made to ensure that Nike products are supplied solely by employees of organisations that belong to independent contract companies. These contract companies are independent of Nike Inc.’s ownership, though being components of supply chain network. In a way that shows Nike Inc.’s commitment to and high esteem for its employees, Nike’s management is made indirectly accountable for its employees’ working conditions. This indirect accountability to employees’ working conditions affects management style since it gives the management a berth wide enough to enjoy arbitrariness in decision-making. This ensures flexibility in operations. Secondly, the use of bureaucratic management style has successfully inculcated the culture of accountability and transparency in Nike Inc., given that every office has specific roles and responsibilities to discharge and shoulder. By this same virtue, every office holder is made aware that his office is answerable. Again, Knight’s penchant for dialogue among Nike Inc.’s management helps also entrench more feasible and effective ideas, and thus saving the company from losses that are incurred from inchoate policies. The use of management consultations as the source of policy framework also knits the company together and to further the company’s goals, since the entire organisation’s ideas are incorporated into Nike Inc.’s work plan, policies and target. Rothacher (2004, 45) divulges that the competitive advantages that Nike Inc. enjoys include its large pool of financial resources. In the fiscal year 2012, Nike had revenue of 24 US billion dollars in excess. This serves as a source of (plough back) capital for the company’s greater investment exploits. Nike Inc. also enjoys the notoriety for being the world’s chief manufacturer of sportswear and sports equipment. That Nike Inc. is valued at 10.7 billion US dollars is a matter that both makes it the most valuable brand in sports business and earns it a positive corporate image. Nike mix consultative forms of decision making, delegation of roles (through bureaucracy), supervision and workshop training programmes to manage products and its employees. 2) Comparing and contrasting theory and practice Identifying the main theories in relation to: Management styles As already mentioned, Nike’s management style is a hybrid of consultative and democratic models. This involves holding meetings so as to help determine the best interests of Nike Inc. employees and that of Nike’s interests. This is because, in every decision that Nike has to make, employee and the company’s interests have to be factored. Given that employees are allowed to take part in Nike’s decision making processes to determine employee welfare, some elements of democracy are incorporated herein. The fact that organisational interests have to be factored into policy frameworks, the views of the top decision makers have to be fussed with those of the employees and thereby bringing about the aspect of being hybrid. There are other forms of management styles such as the persuasive, chaotic, autocratic, laissez faire paternalistic and MBWA (management by walking around) which are nevertheless not used by Nike. Competitive advantages There are several factors that serve as competitive advantages for Nike. For one, Nike is known to sell sports attire and accessories which are relevant to specific forms of sports. This has given Nike bags, eyewear, socks, sports ball and protective equipment publicity as quality products. This translates into a very strong brand image which readily attracts both potential and prospective clients. Additionally, Costick and Elton (2007, 98) observe that Nike has effective marketing strategies which ensure comprehensive penetration of the global market. Nike’s products and accessories receive special arrangements which enable them to be sold under other brand names. This is a strong advantage to Nike since it ensures that Nike products can penetrate markets wherein Nike’s corporate presence is inexistent. Again, Nike is a sports business which is totally committed to innovation. In fact, it is only Nike as a clothing and sports company which has design your-own-shoes programme. This programme involves the invitation of members of the public to participate in designing their own shoes. This is done online in Nike’s website and after the exercise, Nike may finalise or moderate client’s suggestions. Nike also has a large pool of financial resources. Presently, Nike has 24.1 billion US dollars in excess. Nike as a brand is worth 10.7 billion US dollars, and thereby being the world’s richest sports brand. This serves as competitive advantage over others since finances provide an organisation with capital. Managing projects and people According to Harold (2011, 132), there are several ways by which Nike manages projects. One of the ways Nike has done this includes contracting. Presently, Nike has contracted with over 700 shops which are distributed around the world. These shops are also distributed in more than 45 countries outside the US. Nike has also used acquisitions to manage its programmes. Some of the companies that Nike has acquired include Cole Haan (1988), Bauer Hockey (1994), Hurley International (2002), Converse (2003, at a cost of 309 million US dollars), Starter (2004) and Umbro (2008). Nike manages its employees through supervision. Because of the bureaucratic approach to management, every office or docket of Nike Inc. is answerable to a higher office. Thus, Nike Inc. ensures accountability and transparency in all its dealings. Likewise, Nike’s management of its people depends on the situation at hand. For instance, during decision making, Nike uses consultations and democratic means to manage its clients (Sandberg, 2004, 204). In comparison to the company’s practice, Nike can be said to be consistent with its organisational culture. 3) Proposing a Series of Recommendations to Correct Any Areas of Concern That You Have Identified With the Company So far, the only problem that Nike has had only touches on corporate social responsibility. A particular situation that provides an occasion for case-related analysis include accusations that Nike abandons some countries in favour of other countries such as China where operational costs are minimal. Others charge that working conditions in Nike remain enshrouded in mystery since Nike has never publicised its industrial premises. There are also accusations that Nike does not extend fair living wage. It is best that Nike Inc. carries out consistent and periodical distribution of its statements of intentions, profile, goals, projects and developments in the countries it operates in. this will help demystify Nike to the public. The usefulness of this approach is that it will alleviate these forms of false accusations since Nike Inc. will have divulged information on its hiring and human relations practices. The company should also make its recruitment programmes as open and competitive as possible. Nike should also stick to labour laws of its market. If a market’s labour law stipulates that at least 40% of a multinational’s workforce must be locals, then Nike should heed this mandate. This measure will extirpate the claims that Nike practices unfair labour relations. References Costick, A. & Elton C. 2007. Carrot-phobia: Are You Afraid to Recognize? Sales and Marketing Management, 5 (4), 98. Drexler, K. 2007. Icons of Business: Jeff Bezos. London: Greenwood Publishing Press. Goldman, R. and Papson, S. 1998. Nike Culture: The Sign of Swoosh. London/ New York: Sage. Harold, P. 2011. Nike: A Case Study of Business Success. Journal of International Business, 2 (6), 132. Rothacher, A. 2004. Three Corporate and Global Brands. London: World Publishing Co. Sandberg, J. 2004. Been Here 25 Years and All I Got Was This Lousy T-Shirt. Wall Street Journal, 1 (2), 204. Read More