Nike Store Strategic Management Case Study
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ScribdTranslationsNIKE STORE CASE STUDY
Jefferson Alvarado Martínez 2901779
Tatiana Rodríguez Chacón 2902336
MILITARY UNIVERSITY NEW GRANADA
SCHOOL OF ENGINEERING
INDUSTRIAL ENGINEERING PROGRAM
MODERN MANAGEMENT
GROUP IND B
Bogotá D.C.
2014 - II
NIKE STORE CASE STUDY
PRESENTED BY:
Jefferson Alvarado Martínez 2901779
Tatiana Rodríguez Chacón 2902336
Case Study Analysis of Modern Management
PRESENTED TO:
Engineer Natalia Ramírez
NEW GRANADA MILITARY UNIVERSITY
FACULTY OF ENGINEERING
Industrial Engineering Program
MODERN MANAGEMENT
IND B GROUP
Bogotá D.C.
2014 - II
CONTENT
1. ADDRESSING STRATEGIC ..................................................4
1.1. HISTORY FROM THE COMPANY..............................................................................4
1.2. MISSION AND VISIONN..................................................................................................8
1.3. OBJETIVOS STRATEGIC............................................................................8
1.4. MAP STRATEGIC OF THE ORGANIZATIONN ...........................................11
1.5. STRUCTURE FROM THE COMPANY AND POWER SYSTEMS...................12
1.6. QUOTATION IN THE BAGA14
2. COMPANY PORTFOLIO ...........................................................17
2.1. DESCRIPTION FROM THE PRODUCT LINES.......................................17
2.2. FIELDS The company can venture into.......................................18
2.3. COMPETENCE FROM THE COMPANY. MARKET ANALYSIS................21
3. COMPANY ANALYSIS ..................................................................25
3.1. STRENGTHS AND WEAKNESSS.
3.2. MATRIX OF COMPETITIVE PROFILE...............................................................32
3.3. MATRIX BCG........................................................................................................34
3.4. CYCLE OF THE PRODUCT...................................................................................36
4. STATEMENT FROM THE STRATEGY ..............................................37
4.1. DIRECTING STRATEGIC..........................................................37
4.2. REFORM TO THE MISSION AND VISIONN .................................................................37
4.3. DESIGN NEW STRATEGIC MAP39
4.4. JUSTIFICACIÓN FROM THE PROPOSAL FOR THE COMPANY....................43
4.5. MATRIX ON COMPETITIVE DIVERSIFICATION44
4.6. COSTO FROM THE PROPOSALA ............................................................................45
4.7. BENEFICIOS FROM THE PROPOSALA 46
4.8. RISKS FROM THE PROPOSALA 46
4.9. POLICIES AND OBJECTIVES TO APPLY48
BIBLIOGRAPHYA .50
1. STRATEGIC ADDRESSING
1.1. COMPANY HISTORY
1950-1959: WHEN NIKE TOOK ITS FIRST BREATH, INHALES THE
SPIRIT OF TWO MEN
Before the Swoosh existed, before Nike existed, there were two men.
visionaries who started a revolution in athletic footwear that redefined the
industry.
Bill Bowerman was a nationally respected coach in
the University of Oregon, which was constantly
looking for ways to give their athletes an advantage
competitive. He experimented with different track surfaces,
rehydration drinks and most importantly innovations
in running shoes. But shoe manufacturers
establecidos de la década de 1950 ignoraron las ideas que
he tried to offer them, so they started to improvise
"Bowerman" shoes for its runners.
Phil Knight was a talented middle-distance runner from Portland, who
enrolled in Oregon in the fall of 1955 and competed for the program of
Bowerman's follow-up. Upon graduating from Oregon, he obtained his MBA in Finance.
from Stanford University, where he wrote a paper proposing shoes
for quality running, which could be manufactured in Japan and which could
compete with the more established German brands. But their letters to the
manufacturers from Japan and Asia were left unanswered, so Knight
risked.
He made a call to Onitsuka Co. in Kobe, Japan, and convinced the manufacturers of
Tiger shoes make the distributor, to run in the United States. When
the first set of sample shoes arrived, Knight sent several pairs of
shoes to Bowerman, hoping to make a sale. Instead,
Bowerman surprised Knight by offering to become his partner and provide
your shoe design ideas for Tiger.
1960 - 1969: FOUNDED ON A HANDSHAKE, WITH $500 AND THE
Mutual Trust
They shook hands to form Blue Ribbon
Sports, they promised $500 each and put their
first order of 300 pairs of shoes in January of
1964. Knight sold shoes from the trunk of his car
green Plymouth Valiant, while Bowerman started destroying Tiger shoes
to see how he could make them lighter and better, and prepared at his University
from Oregon wear test runners to try out their creations. Essentially, it
he had established the foundations of what would become Nike.
But Bowerman and Knight each had full-time jobs, Bowerman
Oregon coach and Knight to an accounting firm in Portland, so that
they needed someone to manage the growing requirements of Blue Ribbon
It's when Jeff Johnson enters the business, whom he had...
known to Knight at Stanford. A self-runner, Johnson became
the first full-time employee of Blue Ribbon Sports in 1965, and
he quickly became an invaluable man for the company
new creation.
1970 - 1979: THE BIRTH OF THE NIKE BRAND AND THE COMPANY
Johnson created the first product brochures,
printed advertisements and marketing materials, and
he even took the photos for the catalogs of the
company. Established an ordering system by
email, opened the first BRS retail store
(located in Santa Monica, CA). He also designed
various first-rate Nike shoes, and even evoked the name Nike in 1971.
Around this same time, the relationship between BRS and Onitsuka was falling apart.
pieces. Knight and Bowerman were ready to make the leap from being a distributor
of design footwear and manufacturing of its own brand of sports shoes.
They selected a brand from the brand that is now internationally known.
like the "Swoosh," which was created by a graphic design student in the
Portland State University called Carolyn Davidson. The new Nike line
Footwear debuted in 1972, in time for the Athletics Trials of the States.
United, which were held in Eugene, Oregon
With a new logo, a new name, and a new innovation in design, it
What BRS now needed was an athlete to approve and elevate to the new line of
Nike. As befits the company founded by the residents of Oregon,
they found a young man from the small coastal town of Coos Bay,
Oregon His name: Steve Prefontaine.
1980 - 1989: A DECADE OF TRANSITION AND THE NEW DEDICATION
Nike entered the 1980s on a good streak,
thanks to the success of the launch of Nike Air technology in
the Tailwind sneaker in 1979. By the end of 1980, Nike has
completed its initial public offering and became a
publicly traded company. This began a period of
transition, where several of the early pioneers of Nike
they decided to move on to other activities. Even Phil Knight
resignation from the presidency for more than a year in 1983-1984,
despite still being the chairman and CEO.
By the mid-1980s, Nike had slipped from its position as
industry leader, partly because the company had miscalculated during the boom of
aerobics, giving novice competitors almost complete access
open to developing the business. Fortunately, the debut of a new firm
of footwear for a novice in the NBA by the name of Michael Jordan in 1985,
helped strengthen Nike's final balance.
In 1987, Nike prepared a major product and marketing campaign.
designed to regain industry leadership and differentiate itself from its
Nike competitors. The focal point was the Air Max, Nike's first footwear for
offering visible Nike Air bags. The campaign was supported by a
memorable television commercial whose soundtrack was 'recording of' Revolution
from the original Beatles.
A year later, Nike built at the time of the 'Revolution' campaign.
con el lanzamiento de una amplia serie todavía empoderamiento de los anuncios
with the slogan 'Just do it.' The series includes three ads with a young athlete in two.
sports called Bo Jackson, who embraced the benefits of a new shoe
cross-training.
In 1989, Nike's cross-training business exploded, in part thanks to
the incredibly popular "Bo Knows" advertising campaign. At the end of the
in the decade, Nike had regained its position as the leader of the industry, the first
and the only time a company in the athletic footwear industry has achieved such
feat. Nike has never renounced that position again.
1990 - 1999: NIKE EXTENDS ITS REACH
Driven by a series of product launches
successful and marketing campaigns, Nike entered the decade
since 1990 for the inauguration of its beautiful worldwide headquarters in the
suburbs of Portland, Oregon. In November 1990,
Portland became the first host of a new
retail experience called Niketown.
While Nike had designed footwear and clothing for golf and soccer for a
number of years, in the mid-1990s marked a commitment
deepening the ability to truly excel in these sports. In 1994, Nike signed
several individual players based on what would be the one that won the World Cup
Brazilian National Team. In 1995, Nike signed the entire team and began to design the
distinctive team uniform. Nike also signed the decade of the United States
of the men and the women's national soccer teams, as well as
dozens of national teams from around the world.
In 1996, Nike Golf signed a very talented but still unproven young player.
golfer named Eldrick "Tiger" Woods for about $5 million per year. The
competitors laughed and shouted at Nike's critics "madness," until Tiger
he won the 1997 Masters by a record margin of 12 strokes.
2000 - PRESENT: LEADING A NEW GENERATION
Nike made a splash in the new millennium with a new cushioning system, Nike Shox.
footwear called, which debuted during Sydney in 2000. The
the development of Nike Shox culminated more than 15 years of
perseverance and dedication, as the designers of Nike
trapped with their idea until technology could
getting up to date. The result was a cushioning and stability system worthy
to join Nike Air as the gold standard of the industry.
Just as Nike products have evolved, so has the
Nike's approach to marketing. The 2002 campaign 'Secret Tournament'.
It was Nike's first truly integrated, global marketing effort. Starting
from the traditional 'great athlete, big ad, great product' formula, Nike created
a multifaceted consumer experience in support of the Cup
World.
Secret Tournament advertising integrated, Internet, public relations, commercial and
of consumer events to create excitement for the products and the athletes of
Nike football in a way that an advertisement could never reach. This new
integrated approach has become the cornerstone for Nike's marketing
and communications.
Nowadays, Nike continues to seek new and innovative ways to develop
superior athletic products and creative methods to communicate directly
with our consumers. The company has continued its expansion into new
forms, including strong growth in China and an agreement to become
as the official sponsor of the National Football League (NFL) starting from
2012.
President and CEO, Mark Parker said: "At NIKE, Inc. we commit a full offense, and
se basa en un compromiso fundamental con la innovación. Así es como nos
we remain opportunistic, we serve the athlete, we reward our shareholders,
and we continue to lead our industry.
1.2. MISIÓN Y VISIÓN
The following information is found on the official page of the organization:
MISSION
Bring inspiration and innovation from athletes around the world. If you have a
body, is an athlete" Nike works to succeed in this mission, by carrying the
Sport to everyone, athletes and non-athletes as the number 1 manufacturer in the world.
Nike's mission is reflected in the way its products are marketed, and
in the social responsibility that Nike feels in the world
VISION
Nike's vision is how Nike wants to achieve its mission.
Ahora, nosotros como ingenieros industriales según los conocimientos que hemos
acquired in the degree, we propose improvements and additions to the information
found in the following way:
1.3. STRATEGIC OBJECTIVES
NIKE bases its strategy on three principles: pursuing the greatest opportunities
growth, leverage the resources and capabilities of NIKE and serve the
clients with quality products and experiences
In the long term, the strategic vision of Nike Store is to dissociate growth from the
limited resources that are highlighted by new goals and challenges, including
a commitment from the entire company to further integrate the principles of
sustainability in its innovation processes, corporate governance, and in all
their wallets. The challenge for the new year is structured on two levels:
Continue with improvement objectives in key impact areas to 'Make
from today a better day.
Expand commitments to innovation to 'design the future'.
These two levels establish how Nike is working for changes to
long term.
Nike has continually invested in reducing environmental and social impact.
from the business and supply chain, and has made substantial progress in the
last decade.
1.4. STRATEGIC MAP OF THE ORGANIZATION
MISSION: To bring inspiration and innovation from athletes around the world. If you have a body, you are an athlete.
VISION: The Vision of Nike as Nike achieves its mission.
PRODUCTIVE STRATEGIES GROWTH STRATEGIES
Deliver a portfolio of Establish models of
Explore new sources of
products and services prototypes and supply
income that is not based on
sustainable, that improves the sustainable at scale
limited resources.
offer performance manufacturing.
Diversification of Improve the
Income Volatility of the
resource costs
Increase Increase
income by client Volumes of
sales
Generation of base Obtaining
from more suppliers new clients
sustainable and stable
Strengthening of
Loyalty corporate image
Sustainable Manufacturing and Integration of
Sourcing Manufacturing Index
Sustainability index Business simulator
Nike Clothing and Footwear Nike 2021
Sustainability Index
Improvement of Conditions
Development of tools of work within
access to information Supply chain
Global
Involve the Continuously changing
participants of the system in Establishment of information about the
a process of common standards materials
selective transformation
Source: Authors [1]
1.5. COMPANY STRUCTURE AND POWER SYSTEMS
The president of the Nike board is Phil H. Knight, 70 years old. This
Caballero has been with the company since its beginnings in the decade of
1960. He holds an MBA from Stanford University and has been a
certified public accountant and an assistant professor of management
companies at Portland State University.
As indicated in the organizational chart, the executive director (CEO) of Nike is
Mark G. Parker, 52 years old. Parker has been with the company since 1979.
and was appointed CEO in January 2006. Before being appointed director
In general, Parker had been president of the Nike brand from 2001 to 2006.
The president of the Nike brand is D. Charles Denson, 52 years old.
it has also been used by the company since 1979 and had been and
Assistant manager of Nike's first store in Portland, Oregon. Denson accredited.
was a pioneer in the expansion of Nike sneakers in China, India, and Brazil.
The Chief Financial Officer (CFO) of Nike is Donald W. Blair, 50 years old. Blair
joined Nike in November 1999. Before joining Nike, he held several
positions at Pepsico Inc., and had been a certified public accountant in
Deloitte, Haskins and Sells.
Nike characterizes its organizations as a parent organization of
collaboration. Executives are often reported in various areas, such as
by region of the world, by product or by global function. Next
A company organizational chart and key executives are presented.
Philip H. Knight
PresidPhillip
entoftheH. Knight
Board
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Mark
President [Link]
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CEOandPresident
Trevor Edwards John Slusher Philip H. Knight
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David H. J.
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oftheBoardChief Chairman
President ofthe
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President
Vice President and CFO
GlobalOperations Human Resources Administrative CorporateController Category World Cup World Footwear
Phillip H. Knight
Philip H. Knight
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Committee
Operations and Technology Nike Affiliates
1.6. QUOTATION ON THE STOCK EXCHANGE
Eight years after its creation, Nike Store begins to list its shares on
the stock market has been doing so since December 2, 1980, and up to this date has
had a good growth in the price at which it sells its shares, as
you can appreciate in the illustration:
Source: [Link]
However, it has also had the following subdivisions:
-Oct 8, 1990 [2:1]
-Oct 9, 1990 [1:1]
-Oct 31, 1995 [2:1]
-Oct 24, 1996 [2:1]
-Abr 3, 2007 [2:1]
-Dic 26, 2012 [2:1]
Source: [Link]
The following lists the opening and closing prices for the period in which
Nike Store has been on the stock market:
START
Date: January 1981
Volumen de acciones: 1.624.990
Precio: 0,3008 Dólares
Source: [Link]
ACTUAL
Fecha: Octubre 2014
Volumen de acciones: 5.159.872
Precio: 89,20 Dólares
Source:[Link]
ASCENTS AND DESCENTS
RELATED NEWS:
Nike shoots up on the stock market after earning 23% more in its first fiscal quarter
(26 sept 2014):
The sports brand, one of the thirty members of the Dow Jones Industrial Average,
achieved sales of 7.982 billion dollars (a 15% increase) between the 31st of
mayor and on August 31, its earnings per share stood at 1.09 dollars (a
27% more). Nike's shares on Wall Street have appreciated in the last
twelve months at 14.96% but only 1.41% so far this year. On the day of
Today, Nike's shares traded on Wall Street with an increase of around 12%
thanks to the good results of the company.
2. COMPANY PORTFOLIO
2.1. DESCRIPTION OF PRODUCT LINES
Within Nike's production lines, it markets and sells products in
three main categories: Footwear, clothing, and equipment.
Regarding footwear, Nike sells products that are primarily designed
for sports use, although a significant percentage of Nike customers use them
for pleasure or as a fashion accessory, Nike places great emphasis on Design
of footwear, as well as high-quality construction and footwear for men,
women and children: Running, training, basketball, soccer, casual shoes.
We also sell footwear designed for water activities, baseball,
cheerleaders, soccer, golf, or for outdoor activities such as: skateboarding, tennis,
volleyball etc.
FOOTWEAR LINE
SOCCER BASKETBALL GOLT SKATE
RUNNING YOGA AMERICAN FOOTBALL TRAINING
Source: [Link]
Regarding clothing, it is designed with respect to sports and for
to complement the use of sports footwear, it is often sold through the
same channel of marketing and distribution, the typical clothing products
includes shirts with licensed logos of professional teams.
CLOTHING LINE
RUNNING JACKET RUNNING CROP PANTS BASKETBALL SHIRT SOCCER SHIRT
GOLT DRESS Tennis skirt RUNNING SHORTS Tank top
Source: [Link]
Regarding sports equipment, we sell a line of equipment with the brand
Nike, including bags, socks, sports balls, glasses, watches, devices
electronics, bats, gloves, protective equipment, golf clubs, and other equipment
designed for sports activities.
EQUIPMENT AND ACCESSORIES LINE
SOCKS FOR FOOTBALL SOCCER BALL SPORTS BAG FOOTBALL GLOVES
WATER BOTTLE BASKETBALL ADJUSTABLE CAP TOWEL
Source: [Link]
2.2. FIELDS MAY INCUR THE COMPANY
Considering both the mission of Nike Store and the product lines that
maneja es claro que los nuevos campos de acción en los que la empresa puede
Those entering should initially have a strict relation to the activity.
physics, meet the needs of professional athletes, such as those of
anyone who has a taste for this activity.
The company has a line of accessories, focused on
only to certain sports, some of them: Soccer, Basketball, Skateboard,
therefore it is considered to have as an option:
Sports Centers:
Esta línea puede contar con algunos de los siguientes productos, que son usados
as performance monitoring teams of the athlete, within a center of
development
Gym equipment
Toning Accessories
This product line could have a corporate focus, targeting sales through
mayor, and in detail, for anyone who wishes to use this line in their own
space.
Dance
Although dance is not officially considered a sport, much less
Olympic, its connotation is highly influenced by physical activity, the
force that is exerted when performing it, for this reason Nike Store can provide comfort to
the users. Among the products that could be offered are:
Sneakers
Specialized Orthopedics
2.3. COMPANY COMPETENCE. MARKET ANALYSIS
Footwear, clothing, and the athletic equipment industry is highly competitive.
in the United States and around the world. We compete internationally with
a significant number of sports and leisure footwear companies, sports and
leisure clothing companies, sports equipment companies, and large companies
that the lines of athletics and leisure diversified, footwear, clothing, and
teams, including Adidas, V.F. Corp., Puma, Li Ning, and Under Armour, among others.
We also compete with a number of vertical retailers such as Lululemon and
Uniqlo. The intense competition and the rapid changes in technology and the
consumer preferences in the athletics and leisure footwear markets
clothing and sports equipment are significant risk factors
in our operations.
NIKE is the largest seller of footwear, apparel, and equipment in the world.
Important aspects of competition in this sector are:
The quality of the product; performance and reliability; innovation of new
products and development; and the consumer prices / value.
Consumer connection and affinity for brands and products,
developed through marketing and promotion; support and service
to the customer; identification with prominent and influential athletes,
coaches, teams, schools, and sports leagues that support our
brands and use our products; and active participation through
sponsored sports events and clinics.
The effective distribution of products, with attractive merchandising and
presentation in stores, in the store and online.
We believe we are competitive in all these areas.
Nike Store's biggest competitors are the following brands:
Adidas
The number two competitor in adidas sports footwear is estimated at 22.
percent of global sales. Adidas, based in Herzogenaurach,
Germany was founded in 1924 by brothers Adolf and Rudolf Dassler.
the foundation of what would become the adidas group began with the
equipment of various athletes for the Olympic Games of 1925, and that is
consolidated with quadruple gold medal of Jesse Owen at the Olympic Games
From Summer 1936 wearing Adidas footwear.
Today, the Adidas group is a world-class supplier of footwear, clothing and
sports equipment. Its mission is 'to be the leading sports brand in the world.'
Led by its flagship Adidas brand, the company reported revenues
in 2008 of 10.8 million euros, an improvement of 4.9 percent over its
result of 2007. Worldwide, the company employs more than 23,000.
employees and recorded a record operating profit of 3.8 billion euros, with
a gross margin of 48.7 percent.
Adidas was the Official Sports Partner for the Beijing 2008 Olympic Games,
the supply of more than 3 million products to the participants and
organizers of the games. The company also has a contract with the
Chinese basketball superstar Yao Ming to launch a line of sneakers.
Reebok basketball, which contributes to Adidas's position as a leader in the
market in Europe and China.
The company is organized into three main divisions: Adidas, Reebok,
TaylorMade and Golf. Its core division Adidas sells athletic footwear, clothing and
team under the Adidas brand. Net sales in this division were 7.8
millions of euros, a 10 percent improvement over the performance of 2007.
Reebok was acquired by Adidas in 2006. With roots in slender women,
this division sells sports footwear, clothing, and equipment under the names of salvado
Hockey Reebok, Rockport and Reebok-CCM. The net sales of the Reebok division
There were 2.1 million euros, a net decrease of 8 percent compared to 2007.
results. When commenting on the Reebok division results, Herbert Hainer,
Adidas CEO said, '2008 was a year of challenges and I am starting from the year.'
TaylorMade Golf division was acquired by Adidas in 1997; this division sells
golf clubs, balls, footwear, and clothing under TaylorMade, Adidas
Golf, and the brand names Ashworth. The net sales for this division were €
812 million in 2008, an improvement of one hundred over their results from 2007.
Recently, the company has issued a profit warning, the announcement
that net earnings for the first quarter of 2009 will decrease by 97 percent
one hundred, and the global recession was blamed for these results. Hainer, CEO of Adidas,
he also cited the rise in raw material prices, the decline in sales
instead of Adidas profits. Hainer also warned that the business for the rest
From 2009 it would be difficult, with margins expect it to continue decreasing.
Puma
Puma is the number three competitor in the global athletic footwear market.
Puma develops and markets a wide range of sports goods and
lifestyle, including footwear, clothing, and accessories. Its sales in 2008 were 2.5
millions of euros. The sale of Products under the brands Puma and Tretorn, the
the company employs more than 10,000 employees and distributes its products in more
from 130 countries around the world. The company was founded in 1948 when Rudolf
"Rudi" Dassler separates his business from his brother Adolfo. Rudi moved his business.
TI on the other side of the Aurach River from the Adidas company in Herzogenaurach, Germany.
Puma has the long-term mission of becoming the lifestyle company.
most desirable sports team. Not a single one of being surpassed by its competitors.
Great, Puma caused a sensation in 2008 at the Beijing Olympics.
Before a stunned Olympic crowd, and the use of gold spikes Puma Teseo II, Usain
Bolt broke the world record in the men's 100 meters.
200 meters of board, and 4x100 meters of relays.
Other competitors
The sports footwear industry contains numerous competitors.
small ones around the world, such as K-Swiss, Ind. In the shoes of the
United States and Li Ling in China. Sports shoe companies also
they compete with other shoe companies for sales because consumers
they usually wear sports shoes for leisure and fashion. The companies that
competed in footwear and leisure fashion include Crocs, Inc., Deckers
Outdoor, Skechers USA Inc. and Timberland Company.
Additionally, an analysis of the current state of the company was conducted, for which...
proceed to conduct a SWOT analysis.
The SWOT analysis is a subjective evaluation of data organized in the format,
that places them in a logical order that helps to understand, present, discuss and
make decisions. It can be used in any type of decision making, already
that the template encourages proactive thinking, instead of the common ones
instinctive reactions.
The four dimensions are an extension of the simple headers of Pro and
Against. The SWOT analysis template is generally presented as a
matrix of four sections, one for each of the elements: Weaknesses,
Opportunities, Strengths, and Threats.
It is important to clearly identify and describe the topic analyzed through SWOT.
which in this case is an analysis against its competition.
SWOT Matrix
STRENGTHS WEAKNESSES
Portfolio Diversification. Lack of HR in the factories
2. Comfort in their products. internationals.
3. Positioned logo. 2. Recognition of the
4. Well-known slogan. competition.
5. Word of mouth customer. 3. Diffusion of comments not
6. Market leadership. favorable from their side
7. Capital to invest. employees.
8. Creativity.
9. Social Responsibility.
10. Advertising.
11. Cutting-Edge Technology.
12. Product quality
13. Infrastructure
OPPORTUNITIES THREATS
Good Suppliers. The economy of each country.
Good distribution channels. 2. Globalization.
3. Number of clients. 3. Possible Union.
4. Event sponsorships. 4. Competition innovation.
Weaknesses attack of the 5. Imitation of the product.
competition.
Wide range of sports.
7. Creation of new idols.
8. New trends that emerge.
3. COMPANY ANALYSIS
3.1. STRENGTHS AND WEAKNESSES
For the identification of these two factors, we have considered the help of the
PCI tool (Internal Capabilities Profile), and its EFI rating matrix
(Matrix of evaluation of Internal factors), all in order to understand how it
Nike Inc. is found today.
Internal Capability Profile
The internal capacity profile (ICP) is a means to assess strengths and
weaknesses of the company in relation to the opportunities and threats it faces
presents the external environment. It is a way to make strategic diagnoses of
a company involving all the factors that affect its operation
corporate.
To facilitate the analysis, they are grouped into:
Managerial capacity
Competitive capacity
Financial capacity
Technological capacity
Human talent capacity
In NIKE INC, the different factors were searched for, evaluated, and identified.
impact, in order to diagnose these factors, the PCI matrix was carried out, as
show below:
CLASSIFICATION FORTRESS WEAKNESS IMPACT
DIRECTIVE CAPACITY High Medium Low High Medium Low High Medium Low
Corporate Image X X
Ability to respond to the
X X
changing technology
Response speed in
X X
changing conditions
Control in services of the
X X
organization
Timely care management
of complaints and claims
X X
2. COMPETITIVE CAPACITY High Medium Low High Medium Low High Medium Low
Quality exclusivity in the
X X
product
Customer satisfaction X X
Market participation X X
Product portfolio X X
New competencies X X
Unfair Competition X X
FINANCIAL CAPACITY High Medium Low High Medium Low High Medium Low
Access to capital when it
X X
wants
Return on Investment X X
Availability of funds
X X
interns
Ease of exiting the
X X
market
Cost stability X X
Ability to compete with
X X
prices
4. TECHNOLOGICAL CAPACITY High Medium Low High Medium Low High Medium Low
Technical and skill of
manufacture X X
Technological level X X
Innovation capacity X X
Added value X X
Labor intensity
in the product X X
5. TT HH CAPACITY High Medium Low High Medium Low High Medium Low
Academic level of talent
X X
human
Cost stability X X
Unemployment rate X X
Motivation X X
Dissemination of comments X X
Absenteeism X X
Accidentalness X X
Source: Authors
For the analysis of the matrix, the following factors have been considered, within
its internal capabilities:
Management Capacity: According to the rating obtained in the matrix we see that
the corporate image represents a Strength, and in turn, this factor is of
great importance, Nike Inc. has managed to position itself in the minds of its
consumers, and all thanks to an Isotope, called 'Swoosh', that
for Phil Knight it meant the logo that conveyed movement, the brand
it is composed of a verbal art (Nike) and an iconic one, that is
image logo, which gives it representativeness and prevents confusion with
another brand, so all the public that sees the Swoosh will quickly end up
associating it with the Nike brand. [1]
Competitive Capacity: According to the score obtained in the matrix, Nike
Inc. presents three major strengths, the first of which is quality.
exclusive in the product, the level of quality of Nike products is
they apply the same standard across all their products, and they also base themselves
in a very high quality either through the incorporation of advancements and by a
high resistance of its materials, buyers compare its quality
with that of other brands and they choose Nike, that is why it is a leader in the market
sports
The second strength is market participation, as is already known.
Nike is the leader in the sports market with a market share
from 37% worldwide, sells its products to about 17,000 accounts
retailers in the United States and around 140 countries worldwide.
The third strength identified was its wide product portfolio, Nike
offers a variety of products in footwear and sports clothing, all for the purpose
to adapt to the changing consumer and the world of sports, thus
example offers products for traditional sports such as (Basketball and
Soccer) and the non-traditional ones like (Golf and Tennis), but regarding this it applies
a technique of Differentiated Marketing Mix, which is carried out within
the different segments, and in turn applies concentrated marketing, everything
in order that when seeing any Nike advertisement, the sport is observed,
the sneakers, but their intention is really to showcase their brand image,
which has become a global icon.
In addition, despite this, his first new weakness appears.
competencies, by the end of 1999, Nike Inc. is sued for the treatment
obtained from its employees, it stimulated bad rumors, Adidas for example,
that adopted the same business model appeared, around 2002
Adidas controlled 80% of the global market for its equipment.
in the football market, Nike had to implement big strategies to
to move towards this sector, however it continues to be one of its
main competitors.
Its second competition is unfair competition, which still today
maintains, and with this we refer more precisely to companies that
they have dedicated themselves to making imitations of the brand, which affect their
sales, and worse still, they affect the market in which it has already positioned itself.
Financial Capacity: According to the rating obtained in the matrix, Nike Inc.,
I present three great strengths, the first of which was profitability of the
Investment, Nike Inc., has managed to establish economies of scale, both
So given their high production volumes, Nike can rely on
very low costs that would allow him to offer the lowest prices in the
market, but they don't do it to avoid devaluing the brand's value, since
At this point, we see that the profitability obtained is good,
regardless of the product.
Its second strength is the ease of exiting the market, Nike Inc.
finds itself in a monopolistic competition, which makes its products
to be easy to enter and exit the market, allowing you to obtain
long-term benefits.
The third strength found is its ability to compete on prices,
As mentioned in the previous Fortress, Nike Inc. is located in
una competencia monopolista, a su vez Nike Inc., produce economía a
scale, with which she sets her prices according to her strategy of
marketing, which as mentioned earlier, is Marketing Mix, in
where they set the price of their product based on its quality and
Considering the competitors' prices, this strategy is important.
since it allows increasing its market share, the above is
done in such a way that it does not damage the price quality relationship.
Technological capacity: According to what was rated in the matrix, Nike Inc. presented
two great strengths in this capacity, the first of which is its
innovation capacity, based on the information obtained, starting from
corporate responsibility report of Nike, and considering the
strategic objectives proposed in its strategic map, Nike Inc. Seeks
innovation strategies in the manufacturing of their products from the
use of natural resources, in the need to move towards a
ecological economy, according to Mark Parker, president and CEO of
Nike, Inc. "Making our business more sustainable benefits
our customers, who expect our products and experiences
have a low environmental impact, to the workers of our factories,
who will benefit from more sustainable manufacturing, and to
our employees and shareholders who will be rewarded by a
"company that is prepared for the future" this way products will be achieved with
reduction or elimination of toxins and waste, the implementation of a
GreenXchange, which is a web-based marketplace for sharing the
intellectual property, efficient management.
The second strength found was the added value that Nike Inc.
Incorporates in its products, in addition to quality and design of its
products, Nike Inc. has implemented another value-added strategy,
for example, one of the most representative is the Nike Plus App: Which
it is an application that allows you to measure your heart rate, set a
exercise routine, indicate how many calories have been burned, how much
distance has been covered and an infinity of benefits, only if you are
buyer of sneakers, watches, or monitors, this is an example of delivery
more value in exchange for consumption.
This rating also reveals the second weakness of Nike Inc. Which
it is the intensity of labor in the product, Nike currently is
accused of labor and child exploitation in underdeveloped countries
where it has factories that subcontract for the production of its items.
Human Talent Capacity: According to the evaluation in the matrix, Nike Inc.
The following weaknesses were presented, Motivation, this is consequential.
with working conditions in third world countries, with salaries
insufficient, and as mentioned earlier the supposed exploitation
of children for manufacturing tasks. In this regard, a report from
Nike Inc.'s marketing revealed the following results accordingly to
this evaluated factor: "In Indonesia, for example, the following was concluded:
30.2% of workers had experienced it firsthand (and a
56.8% had witnessed verbal abuse. An average of 7.8% of
the workers admitted to having received sexual comments not
desired and 3.3% reported having suffered physical abuse.
Additionally, two workers demonstrated sexual harassment at the time.
to negotiate incorporations and promotions, although the investigation does not
could confirm these accusations. 73.4% of the workers are
satisfied with the relationship they have with their line supervisors and
67.8% are satisfied with the relationship they maintain with the
management.
The second weakness that arose from this is the dissemination of comments,
for example due to these problems in the past, for example according to
this report, the dissatisfaction with the salary of its workers based on
price set in the market, the salary was lower compared to the
sales, these third world societies talked about it, which
I lead to consequences in sales and their profits began to be affected
this was towards the end of 1999, a point at which it began its recovery.
After completing the Internal Competitive Profile matrix, we move on to
evaluate these internal factors with the help of the evaluation matrix
Internal Factors, this tool evaluates the main strengths and weaknesses
in the functional areas of the company, in this case Nike Inc. Just like
provides a basis for identifying and evaluating the relationships between these areas.
Next, we present the EFI matrix that was made for Nike Inc., in order to
determine the greatest strengths and weaknesses of it:
INTERNAL DIAGNOSIS EFI MATRIX
TOTAL
CRITICAL FACTORS FOR SUCCESS WEIGHT RATING
Weighted
Corporate Image 0.09 4 0.36
Quality exclusivity in the product 0.08 4 0.32
Market participation 0.08 4 0.32
Product portfolio 0.08 4 0.32
Return on investment 0.08 3 0.24
Ease of exit from the market 0.08 3 0.24
Ability to compete with prices 0.08 4 0.32
Added value 0.09 4 0.36
New competencies 0.07 1 0.07
Unfair Competition 0.07 1 0.07
Labor intensity in the product 0.07 1 0.07
Motivation 0.08 1 0.08
Dissemination of comments 0.05 2 0,1
SUMMATION 1 N/A 2.87
Source: Authors
The total weighted grade was 2.87, which is above the average of 2.5, this
indicates a good internal position of the company, while not being very far
above average, it also indicates that one must work on weaknesses
stronger and of greater significance of risk.
We finally concluded that the greatest strengths of Nike Inc. are:
Corporate Image
Quality, exclusivity in the product
Market participation
Product portfolio
Ability to compete on prices
Added value
And that their greatest weaknesses are:
. New competencies
. Unfair Competition
. Labor intensity in the product
. Motivation
To improve these weaknesses, Nike Inc. constantly publishes its Report of
Corporate Responsibility, which details the upcoming evolution of its strategy
from a philanthropic risk management and compliance model to
a long-term strategy focused on innovation, collaboration,
transparency and the support that prepares the company to prosper in a
sustainable economy.
A more intense company focus on innovation and business
sustainable (Sustainable Business and Innovation, SB&I) will be integrated in a
homogeneous with Nike's commercial strategies in order to generate a
more sustainable methodology aimed at providing greater remuneration to
business, to the communities, to the factory workers, to the consumers
and to the planet.
3.2. COMPETITIVE PROFILE MATRIX
For the realization of the competitive profile matrix, as we have previously...
mentioned, the main competitors of Nike Inc. are Adidas and Puma.
What companies are also dedicated to the production of footwear?
sportswear, however they have a smaller share in the
global market.
The proposed matrix is as follows:
FACTORS POND. ADIDAS PUMA NIKE
CALF. POND. CALF. POND. CALF. POND.
Price. 0.3 3 0.9 4 1,2 3 0.9
2. Quality 0.25 4 1 3 0.75 4 1
3. Tecnología 0.05 2 0,1 2 0.1 4 0.2
4. Competitiveness 0.15 4 0.6 2 0.3 4 0.6
5. Range of 0.25 3 0.75 3 0.75 4 1
products
SUMMATION 1 3,35 3.1 3.7
Source: Authors
As can be seen in the matrix, Nike's main competitor is Adidas.
now we will analyze each of the evaluated factors in order to know
background aspects in which there have been failures regarding which could be implemented
possible strategies.
Price: This factor was evaluated with a weight of 30%, as seen in
the previous matrices Nike Inc. has established economies of scale in a
monopolistic market competition, which allows it to produce its
articles at a very low cost and could be sold like that, without
embargo, their corporate image would be affected if that were the case, which is why they do not.
hace, lo importante es aclarar que estos comportamientos le dan a Nike la
ability to compete in terms of their prices, and these prices fluctuate
within marketing mix strategies.
Quality: This factor was evaluated with a weight of 25%, the power of the brand.
Nike and the recognition of its logo have established important strategies.
in the company, focused on creating superior quality products and partnering it
the most famous sports have revolutionized the field of Marketing
sports, like none before, however it is important to emphasize
that every day other brands achieve the same ideal, for example Adidas,
who offers products with the same level of quality.
Technology: This factor was evaluated at 5%, the goal that was set for it
adding this factor to the matrix was done in order to look at those new ones
innovative trends that are changing the market and bringing us closer to the future,
As we have seen, Nike is developing strategies for the
decrease and reduction of waste in their products, implementing
ecological economies, and seeking unlimited resources that do not affect the
environment, in turn innovates in its products offering greater
comfort and functionality for their clients, other competitors like
Adidas also applies innovative technologies, however, these go
more directed towards the performance obtained from its use and does not harbor
other factors that may be important not for the company but for
your clients.
Competitiveness: This factor was rated with a weight of 15%, as well as
as previously described in the competition, Nike, Adidas, and Puma are the
current competitors in the field of sports footwear and clothing, without
embargo, this competition is differentiated by the sports to which
he leads each of the companies, for example, in the past World Cup
(Brazil 2014), it is known that the German company Adidas, one of the
sponsors of the World Cup, leads the market in clothing and footwear
sportswear for football, while Nike leads other sports markets such as the
Tennis, despite this, both of them, and even Puma, have come up with.
strategies to lead these segments, here is why it is
decided to include this factor.
Product range: This factor was rated with a weight of 25%, it is a
very important factor because even though the three organizations
they dispute the leadership of the market for shoes and sportswear, it should be noted
add that some of them provide added value to the customer through the purchase
of these products, and also innovates them with the application of
new technologies, as mentioned earlier, Nike
provides its clients with a mobile app that allows measuring the rhythm
cardiac, and propose an exercise routine, among other benefits, due to the
purchase of its products, it has also proposed the use of another type
of materials that do not affect the environment, in the face of this and others
aspects where Nike surpasses many of its competitors, that
they continue to innovate the product design, but they don't do it so well
like Nike.
3.3. BCG MATRIX
The Growth-Share Matrix, known as the Boston Matrix
BCG Matrix or Consulting Group is a graphical method of portfolio analysis
business, used as a tool for strategic analysis, specifically of the
corporate strategic planning.
Below is the Nike Store, compared to its competition:
%
RATE OF
COMPAÑÍA VENTAS 2012 VENTAS 2013
Participation
GROWTH
(2013)
Nike Store 23.331 25.313 50.56% 3,96%
Adidas 14.883 14.492 28.95% -0.78%
Puma 9.834 10.258 20.49% 0.85%
TOTAL 48.048 50.063
Source: Authors
Market share
STAR UNKNOWN
Growth
from market Nike
Store
COW
HUESO
STAR: Footwear Line
The product with the highest market share is footwear; Nike Store sells
products that are primarily designed for sports use, although a
A significant percentage of Nike customers use them for pleasure or as an accessory.
in fashion, Nike places great emphasis on shoe design, as well as
high quality construction.
DILEMMA: Sportswear Line
As for the clothing, it is designed with respect to sports and for
complement the use of sports footwear, it is often sold through the
same channel of commercialization and distribution, the typical clothing products
include shirts with licensed logos of professional teams.
DAIRY COW: Sponsorship for Teams
The dairy cow product that has a lot of market share and therefore
a lot of sales growth at different times of the year is the sponsorship of many
high-level athletes and sports teams from around the world, with the famous slogan
"Just do it." and the logo, called Swoosh. Additionally, it has taken on the responsibility of sponsoring.
events or tournaments, such as the Copa Libertadores de América, the Tennis Open of
Australia, the Tour de France, Copa América, among others. And it will be the provider of
Olympic committee of the Rio 2016 Olympic Games.
HUESO: Line of Equipment and Accessories
Comparing its market share and sales growth with the
other products offered by the brand, the bone product is the line of
equipment and accessories; Nike sells a line of gear under the Nike brand,
including bags, socks, sports balls, glasses, watches, devices
electronics, bats, gloves, protective gear, golf clubs, and other equipment
designed for sports activities.
In conclusion, we have to say that with the parameters explained above, it is necessary that the
Footwear as a star product with the largest market share; Clothing
Sports as a product dilemma because more time is still needed to know
what will its actual behavior in the market be; Sponsorship of Teams is the
dairy cow product due to greater market share and greater
sales in certain months of the year and Equipment and Accessories is the product
bone since it does not have great popularity because it depends on the reputation that
the user who offers
3.4. PRODUCT CYCLE
Sponsorship
4. STATEMENT OF THE STRATEGY
4.1. STRATEGIC DIRECTING
For the strategic direction of Nike Store, the instrument will be defined
methodological by which expected achievements are established, the identified ones are
critical processes within management, approaches, and other important areas
that are in accordance with the mission, vision, and objectives established in the
strategic map.
The strategies proposed here are the fundamental base or backbone of the
business address of Nike Store:
To enter the Sports Centers market by means of expansion
from his portfolio with equipment for gyms and toning accessories
personal use.
Increase advertising in media, making known the
benefits of this new product line.
Fostering creativity in your work team through training
of personal.
Achieving commercial agreements with recognized sports centers in each
one of the countries where Nike Store distributes.
4.2. REFORMA A LA MISIÓN Y VISIÓN
CURRENT MISSION
Bring inspiration and innovation from athletes in the world. If you have a
body, is an athlete" Nike works to succeed in this mission, by carrying the
sport to everyone, athletes and non-athletes as the number 1 manufacturer in the world.
Nike's mission is recognized in the way its products are marketed.
IMPROVED MISSION
To produce and market sports clothing and footwear internationally. Offering
high-quality products, in order to meet the needs, tastes and
preferences of athletes and non-athletes clients, always with excellent quality and
comfort.
CURRENT VISION
Nike's vision is how Nike wishes to achieve its mission.
IMPROVED VISION
Nike Store aims to become the creative leaders in 2017.
manufacturing and marketing of sportswear, recognized worldwide for
our quality and good service that we offer in our products.
The vision of Nike Store will be modified every 3 years through the evaluation of the
established strategic objectives.
4.3. DESIGN OF NEW STRATEGIC MAP
CURRENT MODEL
MISSION: To bring inspiration and innovation from athletes around the world. If you have a body, you are an athlete.
VISION: The Vision of Nike is how Nike achieves its mission.
PRODUCTIVE STRATEGIES GROWTH STRATEGIES
Deliver a portfolio of Establish models of
Explore new sources of
products and services prototypes and supply
income that is not based on
sustainable, that improves the sustainable at scale
limited resources.
offer performance manufacturing.
Diversification of Improve the
Income Volatility of the
Resource costs
Increase Increase
income by customer Volumes of
sales
Base generation Obtaining
from suppliers more new clients
sustainable and stable
Strengthening of
Loyalty corporate image
Sustainable Manufacturing and Integration of
Souricing Manufacturing Index
Sustainability Index Business simulator
Nike Clothing and Footwear Nike 2021
Sustainability Index
Improvement of Conditions
Development of tools of work within
access to information Supply chain
Global
Involve the Continuously changing
participants of the system in Establishment of information about the
a process of common standards materials
selective transformation
PROPOSED MODEL
MISSION: To produce and market sports clothing and footwear at an international level, offering products
of high quality, in order to meet the needs, tastes, and preferences of sports clients
No athletes, always with excellent quality and comfort.
VISION: Nike Store aims to become a creative leader in manufacturing by the year 2017.
Marketingofsportswear,recognizedworldwideforourqualityandgoodservice.
whatweofferinourproducts.
PRODUCTIVE STRATEGIES GROWTH STRATEGIES
Establish prototype models and Explore new sources of
Deliver a portfolio of products and
services, innovative towards elements sustainable supply to income that is not based on
for personal use and sports scale and manufacturing. limited resources.
Diversification of Improve the Volatility of
Income the costs of resources
New generation
Increasing revenues IncreaseVolumes brand strategy
by client of sales towards new line of
production
Addressing towards
a new segment of
Recognition of
Market
new suppliers
Obtaining new
Generation of base of clients
more sustainable suppliers
andstable Strengthening of
corporate image
Loyalty
Implementation of
Sustainable Manufacturing and push strategies,
Sourcing attraction and hybrids, in
new product lines.
Sustainability Index Nike business simulator
Nike Clothing and Footwear 2021 Integration of
Sustainability Index Manufacturing Index
Improvement of Conditions New techniques of
Development of tools
I work within the chain of staff training
access to information
Global Supplies in all areas
Involve the participants Continuously changing
Establishment of rules
of the system in a process of information about the
common
selective transformation materials
Source: Authors
As observed in the Strategic Map proposed by the authors, it has
modified the mission and vision of the company, taking as cause a new
addressing of the company, which will be available as proposed in the
previous numerals, the implementation of new production lines,
focused on other market segments, without neglecting the principles
fundamentals of Nike Inc.
For this purpose, the new addressing proposes:
Vision: Nike Inc. aims to become the creative leaders in 2017.
the manufacturing and marketing of sportswear, recognized worldwide
for the quality and good service we offer in our products.
To achieve this vision, Nike Store has proposed 3 strategies.
main principles to follow:
1) Delivery of an innovative portfolio of products and services towards
personal and sports items: This is due to the fact that currently
There are new equipment and tools for athletes and non-athletes.
athletes who are being exploited by other organizations, such as Nike
Inc. will penetrate these areas, due to its image in the mind of
consumer will not need greater strategies to take a large part of
this market, this is achieved by increasing the income per customer, for
generate better profits, while diversifying income towards the
different groups or production lines, also considering a good
management in the supplier base and an adoption of new ones, all with the
end of loyalty to both new suppliers and also to the new
clients.
To achieve this, Nike Inc. has set out to generate a stable production of
their products controlled through indicators and implementation of
methods, for example the recently implemented, the simulator of
Nike business 2021, and by its team developing
access tools to information, through selection and
participation of different working groups in a process of
transformation, everything is achieved through the correct use of rules.
2) Establish sustainable supply and prototype models at scale
manufacturing: This is achieved just like in the previous strategy, from
from income diversification and increased sales to achieve a
economies of scale and sustainable, the sales level must increase, in order
to make the manufacturing costs of the products more economical, to their
by means of the implementation of new production lines towards
new segments, it is desired to obtain new customers that will become loyal to
the brand.
To achieve this, Nike Inc. manufactures sustainably, along with a process
strategic supplier selection that allows for the integration of
Manufacturing Index, which allows controlling production and in turn, as
as mentioned in the previous strategy, the environment allows for maintaining an index of
sustainability of the product being developed, more specifically Clothing
and Footwear; regarding its environment for growth and internal learning,
Nike Store has to implement new training techniques.
personal, in all its areas, in order to train interests
employee's personal matters with the company, strengthening of the
knowledge of it, and why not, a small but significant
reward towards oneself, allowing to see those possible opportunities
for growth, in addition to all the other strategies already implemented
and mentioned in strategy number one of this map proposal
strategic.
3) Explore new sources of income that are not based on resources
limited: This strategy is also aimed at identifying
new potential market segments, but it differs from the first
strategy in the sense that the resources for its production have
To be limited, with this Nike Inc. wants to improve cost volatility.
from the resources used for its production, generate new strategies
from brands for these lines, for example with the application of a new
a name that is based on the fundamental principles of Nike, this also
will help in strengthening the corporate image and how it has been
mentioned in the previous strategies, with obtaining and retaining
new clients, suppliers, and recognition from the latter.
To achieve this, Nike Inc. will implement promotional strategies of the type
I pushed, in order to promote the new product through trade of
product between intermediaries such as wholesalers and retailers, which
promote the product in their displays, as a point of attraction in case of
retailers do not want to promote their products and hybrids, as in the
promotion by both at the same time, this subject to the others
tools that have already been mentioned in other strategies, such as by
example of the use of sustainability indicators, manufacturing etc., by
lastly, the internal group of employees of the organization has established a
work area with the necessary standards and conditions for the
strengthening knowledge about the different product lines,
establishing, as previously mentioned, training, tools
access to information among others, which makes this factor one of
the most important towards achieving the objectives and fulfilling the
vision of Nike Inc.
4.4. JUSTIFICATION OF THE PROPOSAL FOR THE COMPANY
As we know, he is the innovative leader in the world of footwear and clothing.
equipment and accessories, we have seen during the preparation of this case of
In my study, the products that Nike Inc. sells are Footwear, Clothing,
Equipment and Accessories (Balls, Water bottles, Caps, Sports bag)
etc.). In different ranges and at the same time emphasizing sport as a way of
life, thus their products focus on the practice of different sports and in
how to develop it in the most comfortable way, obviously, and let's remember,
Bring inspiration and innovation from athletes around the world. If you have a
body, is an athlete", athlete refers to that person who has the ability
physics, agility, endurance and other characteristics that make it suitable for
physical activities.
It is from here that we propose the implementation of equipment for
gym, toning accessories, throughout the journey of what Nike is
Inc., this has been shaping the image of what athletes are, let's refer to them.
like soccer players, basketball players, coaches, etc. It has taken care of
identify the type of athlete that the person is, but now it will be proposed to train
that person, Nike Inc. already knows what the behavior of these is
people in their field of action, know how they feel most comfortable, know that
it is needed for these people to carry out their activities and above all Nike
Inc. Has been in this business for a long time, but has not
executed yet, and now is the time, for the limitations exist but are not
many.
On the other hand, we have researched and the opportunities for growth in sales,
Directed towards the Fitness market is very striking, an article from the Newspaper the
Viewer, shows us how this industry has grown in recent years:
The fitness industry is traveling across countries with the incentive of bringing people
high-end options that allow you to work your body with greater intensity, continue
specialized routines and, furthermore, be aware of the process they entail. For Sthephen
Bruner, marketing manager of the multinational Precor, dedicated to design and manufacturing of
equipment of this type, in Colombia this industry is growing rapidly, even more
than the rest of Latin America. According to a report from the International Association serving
of health and the IHRSA gyms, for its acronym in English, this market has
approximately 1,300 health centers and gyms that generate over US$220 million
a year." (Radiación Vivir, 2014)
With this, we want to make it known that by applying the correct strategies of
Nike Inc. promotion. You can be part of some of the teams that operate in
these gyms, and meet the objectives we have proposed in the new
strategic map.
4.5. COMPETITIVE DIVERSIFICATION MATRIX
Show what types of business diversification strategies are attractive for
the company under a 4-step methodology.
STEP 1: Evaluate the attractiveness of industry diversification strategies:
Market size and market growth rate
Intensity of competition
Emerging business opportunities
Presence of strategic adjustment in the industry
Resources available
Identification of cyclical factors
Growth of the industry
Assessment of social, political, and environmental aspects
Uncertainty in the industry and business risk
STEP 2: Evaluate the competitive strength of the business units:
NIKE STORE ADIDAS PUMA
ATTRACTIVE FACTORS OF THE INDUSTRY WEIGHT
RATING SCORE RATING SCORE RATING SCORE
Market size and market growth rate 0.1 10 1 6 0.6 5 0.5
Intensity of competition 0.25 8 2 7 1.75 6 1.5
Emerging business opportunities 0.1 10 1 5 0.5 4 0.4
Presence of strategic adjustment in the industry 0.2 6 1.2 6 1.2 5 1
Resources available 0.1 8 0.8 4 0.4 3 0.3
Identification of cyclical factors 0.05 9 0.45 5 0.25 4 0.2
Industrial growth 0.05 7 0.35 5 0.25 4 0.2
Assessment of social, political, and environmental aspects 0.1 9 0.9 7 0.7 6 0.6
Uncertainty in the industry and business risk 0.05 9 0.45 6 0.3 5 0.25
TOTAL 1 8.15 5.95 4.95
Escala: 1=Muy poco atractivo para la compañía; 10=Muy atractivo para la compañía
Source: Authors
STEP 3: Build the correlation matrix:
Source: Authors
STEP 4: Determine the resource allocation for the industry:
When comparing the location of Nike Store with the competition, it can be seen that
it has: "High priority for resource allocation," it is at a level
superior in the market, for which the following must be answered:
What has been done and how will it be maintained?
Nike has built its business quickly after managing to insert itself into the
football 20 years ago when the World Cup was played in the United States. The
the company generates 2 billion dollars in revenue from this sport and it
self-proclaims itself as the leading brand in football. The American company
provides the sports equipment for the teams, takes advantage of its product
dairy cow.
4.6. COST OF THE PROPOSAL
Nike Inc. considers product design and prototypes as the most important items.
important at the moment of positioning a product in the market. For the
considered proposal, (SPORTS ADJUSTMENT ARTICLES), is
it took into account an activity-based costing, considering the most
important and approximate costs that are currently incurred by the
organization.
Additionally, the projection of this investment is made for five years, with an increase
5% of this investment, in millions of dollars, these projections are made
in order to cushion it:
CLASSIFICATION ACTIVITY COSTO AÑO 1 COSTO AÑO 2 COSTO AÑO 3 COSTO AÑO 4 COSTO AÑO 5
Development research $ 980,00 $ 1.029,00 $ 1.080,45 $ 1.134,47 $ 1,191.20
Prototype Design $ 450,00 $ 472,50 $ 496,13 $ 520,93 $ 546.98
MATERIALS
Simulated tests $ 500,00 $ 525.00 $ 551,25 $ 578,81 $ 607.75
Request to Suppliers $ 100,00 $ 105,00 $ 110.25 $ 115,76 $ 121.55
Personal $ 25.00 $ 26.25 $ $27.56 28.94 $ 30,39
Technology in machinery $ 100,00 $ 105,00 $ 110,25 $ 115,76 $ 121.55
PRODUCTION
New Materials $ 3.000,00 $ 3.150,00 $ 3.307,50 $ 3,472.88 $ 3,646.52
Training $ 500.00 $ 525,00 $ 551,25 $ 578,81 $ 607.75
Organization of fairs $ 600,00 $ 630,00 $ 661,50 $ 694.58 $ 729.30
Advertising Campaigns $ 5,000.00 $ 5,250.00 $ 5.512,50 $ 5.788,13 $ 6.077,53
SALES
Client visits $ 600.00 $ 630,00 $ 661,50 $ 694,58 $ 729.30
Gestión de Pedidos $ 100,00 $ 105,00 $ 110.25 $ 115,76 $ 121.55
HR Management $ 98.00 $ 102.90 $ 108,05 $ 113,45 $ 119.12
ADMINISTRATION
Accounting and Finance 45,00 $ 47.25 $ 49,61 $ 52,09 $ 54.70
GENERAL
Logistics Management $ 580,00 $ 609.00 $ 639.45 $ 671,42 $ 704.99
TOTAL $ 12.678,00 $ 13.311,90 $ 13.977,50 $ 14.676,37 $ 15.410,19
Source: Authors
4.7. BENEFITS OF THE PROPOSAL
Nike Inc. will continue with the sales behavior that it has had so far.
has been presenting, it is a solid company that has capital to support such
investment made. This proposal allows Nike Inc. to continue with its
sports positioning and making oneself known to new clients, such as those who are
constant gym users.
The following table expresses the sales over the upcoming years expressed
in millions of dollars:
BENEFIT YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
Sales $ 26.000,00 $ 27.300,00 $ 28.665,00 $ 30.098,25 $ 31.603,16
Source: Authors
4.8. RISKS OF THE PROPOSAL
The proposal we are putting forward ventures into a new segment.
from the market, one that has been marked by the use of our products
in people and athletes, being part of the user's style, however not
they contribute to the growth and strengthening of it, these personal accessories
such as (Gloves, bows, belts, vests, etc.) are the elements
necessary and basic for the muscle growth of people, athletes and
athletes. It is a very attractive proposal since we are in a way
indirectly in the Sports Centers market, and it is intended to enter through
personal toning accessories, as was just mentioned.
However, and despite having greater opportunities to achieve it, we present
risks of not reaching the minds of our consumers for one reason or another,
these risks are categorized as:
Cost risks: When we exceed the costs of making the product,
which did not meet the client's criteria and therefore a bad
estimation of the same.
Technological risks: The implementation of new technologies is necessary.
technologies, which can present complexity issues to the
time to be used by the operators.
Operational risks: It may occur in the event that the
process planning, some macro processes have not been considered,
and there is no monitoring of it, which leads the staff to tend to
uncontrollability.
External risks: Changes in the market arise which leave the
obsolete project, or modifies the impact that the project had.
The above list represents the potential risks that could arise against
the execution of our proposal, to better understand its impact, to
starting from the following table, we will present
RISK COST
ROPE BRAIDING MACHINE $ 8.264.462,81
TEXTILE FIBERS $ 806.251,20
ADVERTISING
Brand creation 6,000,000.00
*Slogan para el producto $ 6.500.000,00
Story Board or TV commercial script $1,500,000.00
(30" 8 squares)
Campaign $ 2.000.000,00
PERSONAL $ 616.000,00
TOTAL $ 24.881.134,69
Source: Authors
The table above shows the costs that would be incurred by implementing only
links in the production of personal toning items, we see the cost of the
technology to apply (CORD BRAIDER), from the raw material to be used
(TEXTILE FIBERS), the minimum personnel cost (legal minimum wage), and expenses
associated with advertising (Taken from the Aggora page 'Association)
Colombian Advertising Industry”), totaling $25,686,714.01
millones de pesos colombianos, siendo este valor, el costo mínimo para comenzar
with the production of this article on a minimal scale.
RISK COST MAINTENANCE
BRAIDER OF
$ 8.264.462,81 $ 6,000,000.00
STRINGS
TEXTILE FIBERS $ 806,251.20 $ 96.750.144,00
ADVERTISING
Brand creation 6,000,000.00
*Slogan para el producto $ 6.500.000,00
Story Board or script
TV commercial (30" 8 1,500,000.00 $ 18,000,000.00
frames)
Campaign $ 2.000.000,00 $ 6.000.000,00
PERSONAL $ 616.000,00 $ 7,392,000.00
TOTAL $ 25.686.714,01 $ 134,142.144.00
Source: Authors
If we assume that the production will be carried out over a year, this totaled cost.
increases to approximately $134,142,144 million pesos (64,924.79
millions of Dollars), this in just one production plant, Nike Inc. has
with more than 744 production plants, assuming this value at each center
production, the purely basic investment will generally be $99,801,755,136
millions of pesos (48,304,049.5 million Dollars). Therefore, it is necessary to
project evaluation where market studies and analysis are expressed
of demands and offers, marketing plans, market segmentations,
technical studies, production plans, purchasing plans, financial studies
etc. That they ground the true value of a project like this and demonstrate that
the true form of the performance and the additional utility that this project offers.
4.9. POLICIES AND OBJECTIVES TO APPLY
Policies for complaints, claims, comments, and opinions:
To effectively and efficiently follow up on customer feedback
From the implemented proposal, it is advisable to carry out a scope of the
consumer satisfaction level, Nike Inc. has a policy of
digital privacy, which controls the data collection process,
to use the information, later to improve and analyze products,
as well as to provide and carry out marketing and promotions of the
same.
Environmental Policies:
As we have seen and established in the strategic map, within the
Nike Inc.'s strategic objectives aim at sustainable development.
starting from the use of raw materials from unlimited resources
found in the environment, also this commitment to the environment
the environment is included in the group's Corporate Responsibility,
where some actions to be taken within the framework have already been established
environmental commitment, for example, energy saving, the
reduction and reuse of waste, raising awareness among staff.
Quality Policies:
Basically starts from the mission of Nike Inc, along with the map.
strategic, where you want to develop products that meet the needs
and expectations of their clients, such as Comfort, durability, safety
etc. Starting from strategies aimed at the staff and the model of
production to follow, always innovating processes, procedures and
technologies.
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J. J. Díaz Olazábal, R. A. Leyton Vidarte, P. J. Malla Castro and S. F. Salazar Paima, 'THE CULTURE'
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[2] N. k. Malhotra, Marketing Research, Fourth ed., Mexico: Pearson Education, 2004, pp.
380-381.
EDUCAMARKETING2005, "NIKE, ADVANTAGES AND RISKS OF A SUPERBRAND," 2005.
[4] NIKE INC, «Informe de responsabilidad corporativa de Nike detalla el progreso y los desafíos
regarding public goals and objectives," BEAVERTON, Oregon, 2010.
A. Rattinger, 'Marketing and the Science of Value Added,' MERCA2.0, 2011.
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