Stakeholder Management Nike Inc. NYSE: Term Paper
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More recent surveys have seen Nike continue to trail the industry average, indicating a long-term trend of only somewhat meeting customer expectations (ASCI, 2009).
Wholesale and retail channels are a critical external stakeholder because of the role that they play in the company's route to market. Without support of wholesalers and retailers, Nike could only rely on its own-branded stores to bring its shoes and apparel to consumers. Nike's distribution is strong, and the company's merchandise enjoys relative ubiquity. This implies a general degree of satisfaction on the part of retailers with the support that Nike provides them. By the same token, there is no evidence of superior rates of satisfaction among Nike's wholesalers or retailers relative to other firms in the industry.
Nike has few obligations to competitors. In general, the company has a high degree of rivalry with its competitors. While the competitors are impacted by the actions that Nike takes, Nike has no obligation to them. For its part, Nike does contribute to maintaining high margins in the industry and seldom engages in price wars that could destabilize other firms in the business. Nike utilizes a differentiated strategy and in doing so keeps its prices high. Margins are historically lower than those of competitors (MSN Moneycentral, 2010) but not to a degree that constitutes dangerous price warfare.
The community and governments also work with Nike. The company's obligation to the community rests on it being a good corporate citizen. Nike is more transparent than most firms in the industry with respect to its corporate citizenship. The company publishes as corporate social responsibility report that outlines its human resources policies in particular, as that is one of the footwear and apparel industry's biggest hot button issues for the community. Nike contributes to the promotion of healthy lifestyles, which is also a positive contribution. Governments expect Nike to pay taxes and to help improve standards of living for their citizens. Nike's tax expense last year amounted to 24.2% of its pre-tax income, an indication that the company is meeting its tax obligations (MSN Moneycentral, 2010). In Malaysia, the company has worked with the local government to improve working and living standards at its factories there (Nikebiz.com, 2010).
In general, Nike performs...
...The world's most respected companies, the most successful and the largest tend to become that way by understanding and meeting stakeholder needs. To an extent, these needs are often supportive of each other rather than being mutually exclusive. Shareholders have seen their needs met by Nike on the basis of strong financial performance even in the face of adverse economic conditions. Yet this performance derives from a number of decisions that the company has made over years with respect to its treatment of athlete endorsers, supporting its channels and addressing potential ethical breaches in its supply chain.
The company does score slightly below the industry average with respect to customer satisfaction, and has for many years. But this is a rare instance of Nike underperforming with respect to the needs of a key stakeholder. The evidence suggests that the company's success owes largely to its ability to meet the needs of nearly all of its other key stakeholders. To the extent that Nike continues to meet the needs of its stakeholders, it can expect to see continued success. If the company can improve its customer satisfaction rating, even greater success can be expected.
ACSI. (2009). November 2009 and historical ACSI scores. American Customer Satisfaction Index. Retrieved October 26, 2010 from http://www.theacsi.org/index.php?option=com_content&task=view&id=208&Itemid=224
ACSI. (2006). Third quarter 2006. American Customer Satisfaction Index Retrieved October 26, 2010 from http://www.theacsi.org/index.php?option=com_content&task=view&id=145&Itemid=149
Back, B. (2002). Nike's salary/bonus packages relatively modest. Portland Business Journal. Retrieved October 26, 2010 from http://www.bizjournals.com/portland/stories/2002/05/06/focus7.html
Fazl-e-Haider, S. (2007). Nike bounces back in Pakistan. Asia Times. Retrieved October 26, 2010 from http://www.atimes.com/atimes/South_Asia/IE31Df02.html
MSN Moneycentral: NKE. (2010). Retrieved October 26, 2010 from http://moneycentral.msn.com/detail/stock_quote?Symbol=U.S.%3ANKE
Nikebiz.com (2010). Hytex, Malaysia. Nike Inc. Retrieved October 26, 2010 from http://www.nikebiz.com/crreport/content/workers-and-factories/3-14-0-case-study-hytex.php
Nikebiz.com. (2010). Worker survey. Nike Inc. Retrieved October 26, 2010 from http://www.nikebiz.com/crreport/content/charts/chart-4-27.php
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