Nike Case Study Nike\'s Global Women\'s Fitness Business Driving Strategic Integration

Nike Women's Case

Nike's Global Women's Fitness Business: Driving Strategic Integration Case Study

Need for Organizational Change

Business Case

Kotter's 8 Step Model for Change

Create Urgency

Build the Change Team

Create a Vision for the Change

Communicate the Vision

Remove Obstacles

Create Short-Term Wins

Build on the Change and Anchor the Changes in the Corporate Culture

Other conditions for change.

Need for Organizational Change

It became evident to many executives at Nike that women had evolving needs that were not being met under their traditional model. Previously the company was more focused on the in male dominated segments and was said to cater to testosterone. The products that were offered women were generally modified versions of the men's line despite women having significantly different biophysical and usage needs than men. For example, running shoes are not practical for practicing yoga. Furthermore, Nike realized that women in the U.S. alone spend nearly seven trillion dollars annually and the products in the women's fitness category needed to work together both functionally and stylistically to fit the specific needs of women.

This new strategy gives women's fitness its own category of focus, instead of the focus being on product divisions such as footwear and apparel. Thus the vertical integration of all products within the women's segment will allow the company to better position themselves for this market. However, this will require a significant amount of cross-functional collaboration and reorganization of the company. This will require a great deal of organizational change and will likely lead to employee resistance in many areas of the restructuring. Furthermore, the company will have to integrate a new culture or sub-culture within the primary organization that could also be met with some resistance.

Business Case

In years prior to the current period, many women viewed exercise and fitness as a way get or remain skinny. However in the past five years there's been a cultural shift where skinny is no longer the primary objective for female exercise (IBIS World, 2012). Many women are beginning to value strength as they are increasingly becoming more competitive in roles that were previously reserved for men. Other market segments include specialty different activities such as yoga, Zoomba, dance, aerobics, and many other unique and differentiated market segments that are increasingly becoming more demanded by women. The women's fitness industry has exploded over the course of the last 30 years through an evolution of different socio-cultural factors.

The new organizational strategy being introduced by Nike will position the company to capture significant market shares domestically, as well as in emerging markets. In many of the emerging markets, many women had traditionally have not been allowed to participate in sports or were actively engaged in exercise are actively becoming a part of the fitness trend. As a result, the U.S. constitutes the world's single largest and most developed regional market for sports and fitness clothing however Europe and Asia-Pacific trail close behind as the other significant markets, with the three regions garnering a gigantic consolidated share of the world market (PR Web, 2008). With respect to fastest growth potential, the Asia-Pacific is fueled by rapidly expanding markets of India, China, Hong Kong and Australia among others is forecast to race ahead at the highest growth markets predicted through 2015.

The case mentions that it was calculated that the total market segment for the women's division is estimated at thirteen billion dollar market which a majority of sales would come from the U.S. market. Of this roughly twenty five percent of the market would come from footwear while seventy percent would be derived from the apparel and equipment. Furthermore, this market is expected to grow at a rate of between five and eight percent per year. Within this niche Nike will face a great deal of established competition from companies such as Reebok, Adidas, New Balance, Athletica, and many more. However, Nike is well positioned to be an industry leader in most of the product categories with the potential to dominate in many more. Therefore the organizational change will represent a repositioning of the company in order to better fulfill the needs of the women's athletic segment worldwide.

Kotter's 8 Step Model for Change

Figure 1 - Kotter's Change Management Model (Klein, 2011)

1. Create Urgency

Creating a sense of urgency in developing this organizational change will represent one of the most important steps in ensuring success. Although the business case makes clear sense, a sense of urgency should be implemented with the great care to ensure other message resonates as well. For example, it is not only that profitability that can drive this effort, the empowerment of women is another related cause that could be heavily promoted as a congruent objective. Therefore multiple methods of communication and messages will need to be developed in order to ensure that a sense of urgency is created. Involving as many employees as possible during this phase can also foster a sense of urgency. Such tactics might include group sessions in which a consensus is attempted to be reached, brainstorming sessions, best practice development and knowledge sharing, among other items can help facilitate these objectives.

2. Build the Change Team

Building the change team is also a vital component of the organizations initial effort for the new women's division design. The change team should be composed of leading experts from an array of cross-functional specializations. The change team, sometimes known as a steering committee, can be an invaluable asset for the initiative because it can help guide and collaborate to lead the project.

3. Create a Vision for the Change

The vision for change needs to be specific enough to embody the underlying motivations for the reorganization however is broad enough not to limit the organization to a single approach to achieving their objectives. The vision is important because it can act as the central tool in which synergy can be derived from in the organizational change.

4. Communicate the Vision

The change team will have to communicate the vision to the employees to create employee buy-in through its communication efforts. The vision must be reinforced through a variety of ways so that the messages are well-received.

5. Remove Obstacles

Any obstacles that arise in regards to the project must be mitigated in some fashion. The first step of this process involves identifying all of the looming obstacles that may present themselves. This process should involve as many people from different functional areas as possible to ensure that potential risks are identified.

6. Create Short-Term Wins

The step involves setting realistic and attainable goals and milestones so that the group can be empowered by short-term goal achievement. Creating short-term wins can offer a group a sense of accomplishment that can bring synergy and higher performances to a group.