Verified Document

Nike's Strategic And Financial Position Analysis Capstone Project

Nike's Strategic And Financial Position Analysis Nike is a globally recognized multinational corporation founded by the Stanford Graduate School of Business graduate, Phil Knight, and Bill Bowerman who was the track and field coach at the University of Oregon. The two appear to be a natural fit as each hailed from a background that would appreciate the underlying design that goes into creating a quality running shoe.

Nike's global operations in aggregate employ a number greater than 30,000 employees throughout a range of services and job functions. A fraction of that aggregate is employed at the company headquarters in Beaverton, Oregon. According to www.nikebiz.com, "Nike employes more than 36,000 people globally. Our Nike World Headquarters located in Beaverton, Oregon is home to more than 7,000 employees. For the fiscal year ending May 31, 2010, we reported revenues of $19.0 billion." (www.nikebiz.com/company_overview/facts.html)

The Nike Mission Statement

"To bring inspiration and innovation to ever athlete in the world. If you have a body, you are an athlete." -- Bill Bowerman

According to www.nikebiz.com, "Bill Bowerman was a nationally respected track and field coach at the University of Oregon, who was constantly seeking ways to give his athletes a competitive advantage. He experimented with different track surfaces, re-hydration drinks and most importantly -- innovations in running shoes. But the established footwear manufacturers of the 1950s ignored the ideas he tried to offer them, so Bowerman began cobbling shoes for his runners." (www.nikebiz.com/company_overview/history/1950s.html)

The mission statement is clearly reflective of Bowerman's past as a track & field coach. This innate ability to see the athlete in all humans is what came naturally to Bowerman. To see an ability where others would consider no ability exists, or perhaps not as much as what Bowerman sees. Tiger Woods is an example of the talent Bowerman saw in an unproven individual prior to Tiger's opportunity to 'wow' the world in his first Masters Tournament.

Additionally, according to www.nikebiz.com, "Phil Knight was a talented middle-distance runner from Portland, who enrolled at Oregon in the fall of 1955 and competed for Bowerman's track program. Upon graduating from Oregon, Knight earned his MBA in finance from Stanford University, where he wrote a paper that proposed quality running shoes could be manufactured in Japan that would compete with more established German brands." (www.nikebiz.com/company_overview/history/1950s.html)

In accordance to the mission statement, the background of Knight and Bowerman would be critical to the emergence and subsequent dominance of the Nike brand in the running shoe industry. The sneaker design set Nike apart early on to the point where a brilliant marketing scheme would catapult the brand beyond the popular Converse and Puma brands.

The strategy of Nike ostensibly may be summed up on one word, innovation. Nike's inherent success is attributable to its ability to innovate at every corner to create a strategic advantage between its operations and that of the competition. Although some of its innovative ideas and advertising promotions did not work to the successes of previous ideas, the Nike strategy remained geared toward innovation.

According to www.nikebiz.com, "Innovation is at the heart of NIKE, Inc.'s business growth strategy. Our relentless focus to be better helps us create the world's most innovative products for consumers across the globe. This same philosophy and determination is driving change in how we approach corporate responsibility in today's marketplace. Years ago, when we started working to improve the labor, environmental and social impacts of our business model, we were largely driven by a need to manage risk. Today, our corporate responsibility approach has evolved from focusing on risk management, philanthropy and compliance to one that utilizes our natural focus on innovation to transition NIKE, Inc. into a business that is more sustainable, by which we mean that it brings people, planet and profits into balance for lasting success." (www.nikebiz.com/crreport/content/strategy/2-1-1-corporate-responsibility-strategy-overview.php?cat=cr-strategy)

Additionally, according to www.nikebiz.com, "To fulfill these demands, we must succeed in a world where natural and human resources are constrained. In the future, issues ranging from peaking oil prices, climate change mitigation and population growth to the decreasing availability of natural resources could impact our consumers and our business. As the world moves to a low-carbon economy, we see potential impact to labor forces, working conditions, communities, development, youth, sport, supply chains, products and more." (www.nikebiz.com/crreport/content/strategy/2-1-1corporate-responsibility-strategy-overview.php?cat=cr-strategy)

Nike has "defined three core strategic questions." (www.nikebiz.com/crreport/content/strategy/2-1-2-changing-world-urgent-challenges.php?cat=cr-strategy These three questions are...

To thrive in a sustainable economy?
2.) How do we create a road map for evolving to a future state and solve the challenges preventing us from getting there?

3.) How do we continue to evolve and improve our current model during the transition?

Ideas such as clean running and efficiently operating factories that harness renewable energy resources to generate power not only for their facility, but for the surrounding community perhaps provides the most 'bang for the buck' in terms of investment and the creation of Goodwill.

According to Sroufe, Liebowitz & Sivasubramaniam (2010), "One of the biggest blunders in leading change toward sustainability is the failure to institutionalize sustainability within the firm (Doppelt, 2003). If the internal policies and practices are inconsistent with the needed sustainability culture, "the risks are high that old thinking and behavioral patterns will eventually rise up and overwhelm efforts to adopt more environmentally and socially responsible paths" (Doppelt, 2003, p. 36). We recommend an active and early role for HR to help create the systems and processes (for example, selection, training and reward systems) to reinforce the wide range off sustainability initiatives and institutionalize the change." (Sroufe, Liebowitz, Sivasurbamaniam, 2010)

A road map for the organization to facilitate a future state for the organization is inherently challenged by its access to resources and to human capital that can propel the organization forward to achieve its goals. Nike seeks to establish a rather ubiquitous goal of inspiring and innovation to every 'athlete' around the world. Therefore, the idea is that every human on the planet must have a pair of Nikes.

During the transition to this future state of enabling the future athlete by providing free or low cost sneakers to populations that would normally not be able to afford a pair of the relatively expensive sneaker, Nike is likely to increase R&D expenditure relative to the new markets to which further sustainability and market engagement is occurring. The evolution and improvement of the current business model is a function of the inputs received from the external environment to the organization.

Nike's strategy and impact in future affairs is an indirect function of the company history as written by Knight and Bowerman. Nike was originally and officially named Blue Ribbon Sports as this was the company that originally sold the first orders of the brand of Knight and Bowerman. According to www.nikebiz.com, "They shook hands to form Blue Ribbon Sports, pledged $500 each and placed their first order of 300 pairs of shoes in January 1964. Knight sol the shoes out of the trunk of his green Plymouth Valiant, while Bowerman began ripping apart Tiger shoes to see how he could make them lighter and better, and enlisted his University of Oregon runners to wear-test his creations. In essence, the foundation for what would become Nike had been established." (www.nikebiz.com/company_overview/history/1960s.html)

The beginnings of the company essentially led to what later became known as Nike. The pair of Knight and Bowerman wanted to move beyond distributorship to create their own brand. According to www.nikebiz.com, "They selected a brand mark today known internationally as the "Swoosh," which was created by a graphic design student at Portland State University named Carolyn Davidson. The new Nike line of footwear debuted in 1972, in time for the U.S. Track & Field Trials, which were held in Eugene, Ore." (www.nikebiz.com/company_overview/history/1970s.html)

Indeed, the famed 'Swoosh' was not an original idea of the founders. This is important as many businesses whose founders profited from the venture had a direct idea with regard to a logo or a methodology of performing an operation that led to the highly profitable business model. The focus on the performance of the athletic shoe was an important innovation to the founding group that is a function of understanding the needs of various types of athletes and the type of athletic footwear the athlete do require.

By the 1980s, the company had espoused itself as a formidable presence in the athletic shoe market. According to www.nikebiz.com, "Nike entered the 1980s on a roll, thanks to the successful launch of Nike Air technology in the Tailwind running shoe in 1979. By the end of 1980, Nike completed its IPO and became a publicly traded company. This began a period of transition, where several of Nike's early pioneers decided to move on to other pursuits. Even Phil Knight stepped down as president for more than a year in 1983-1984, although the remained the chairman of the board and CEO." (www.nikebiz.com/company_overview/history/1980s.html)

The obvious success of the Nike brand was still in a nascent phase of its eventual peak within its cycle of growth, peak, and trough. According to www.nikebiz.com, "By the mid-1980s, Nike had slipped from its position as the industry leader.…

Sources used in this document:
References

Enderle, Hirsch, Micka, Saving, Shah, Szerwinsky (2000) "Strategic Analysis of Nike, Inc." http://condor.depaul.edu/aalmaney/StrategicAnalysisofNike.htm

Grundy, Tony. "Strategy and Financial Management in the Football Industry." Strategic Change 13.8 (2004): 405,405-422. ProQuest. Web. 17 July 2011.

Hoovers. "NIKE, Inc." http://www.hoovers.com/company/NIKE_Inc/rcthci-1.html

Kevin, Lane Keller, and Donald R. Lehmann. "Brands and Branding: Research Findings and Future Priorities."Marketing Science 25.6 (2006): 740,740-759. ProQuest. Web. 17 July 2011.
Seeking Alpha. "Can Nike Keep Up With The Competition?" June, 2007. http://seekingalpha.com/article/38776-can-nike-keep-up-with-the-competition
The Manufacturing Practices of the Footwear Industry: Nike vs. The Competition. http://www.unc.edu/~andrewsr/ints092/vandu.html
http://seekingalpha.com/article/38776-can-nike-keep-up-with-the-competition http://www.hoovers.com/company/NIKE_Inc/rcthci-1.html
Nike Financials. http://www.investorguide.com/stock-fundamentals.php?ticker=NKE
Cite this Document:
Copy Bibliography Citation

Related Documents

Nike Strategic Analysis Nike's Strategic
Words: 3959 Length: 12 Document Type: Term Paper

For any strategic planning activity to be effective there must be the ability to quickly define process-level changes to increase competitive advantage. Mintzberg's critique of the strategic planning process is illustrated in the shortcomings of the Ashoff Matrix in this regard. Lack of strategic prioritization of projects within the context of the Ansoff Matrix - the Ansoff Matrix does not provide for strategic criteria to be applied to specific projects.

Nike Company Profile Analyzing the
Words: 3132 Length: 12 Document Type: Term Paper

This strategy of customization increases sales and profits per pair of shoes produced. Successful Acquisitions and Partnerships Nike acquired Official Starter Properties and Official Starter in later 2004. These two entities were the sole owners and licensors of the Starter, Team Starter and Asphalt brand names as well as master licensee of the Shaq and Dunkman brands (a line of athletic apparel, footwear and accessory products for the value retail channel).

Nike Case Study Nike's Global Women's Fitness Business Driving Strategic...
Words: 1482 Length: 5 Document Type: Case Study

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

Nike Women Sporty Jeans Marketing
Words: 5060 Length: 16 Document Type: Marketing Plan

Customer Analysis The customers to which Nike will be marketing its new product are women who are interested in the skinny jeans look and also who are interested in being athletic. Not all women are athletes, but many of them are interested in looking fit and trim. Because they want to maintain a healthy weight and look nice for themselves and others, and because they wish to remain hip and trendy,

Nike the Nerd Globetrotting Elite the Nike
Words: 2521 Length: 9 Document Type: Essay

NIKE The nerd globetrotting elite The NIKE Corporation website targets a new global movement in mind-body synergy through artificial intelligence, 'thinks for your feet.' In the last twenty years the multi-billion dollar corporation has mobilized its methodology in sales on the wings of a Greek goddess. Since 1988, when NIKE's 'Just Do It' slogan came on the scene, the company has been selling performance and style at a pace exceeding all competitors.

Financial Management in Multinational Organizations
Words: 2234 Length: 8 Document Type: Essay

Aside the attraction of customers, the money invested in marketing have created the desired outcome of a strong and reputable brand. Another pivotal element in the financial strategies has been that of maximizing the efficiency of managing inventories. This was necessary in order to continually strengthen the brand as well as achieve the profitability goals. Alongside with operating principles, supply-chain renovation and inventory management, financial management represents the pillar

Sign Up for Unlimited Study Help

Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.

Get Started Now