Nike: The World's Largest Sportswear, Apparel & Equipment Producer - Essay Sample

Introduction

Nike is one of the major United States (US) companies dealing with sportswear, apparel, and equipment. The company is located in Beaverton, Oregon, with branches in 160 countries worldwide (Bakshi, 2015). The company has a labor force of more than 44,000, with its revenue rising to over $20 billion in 2011. Nike is deemed to be the largest producer and supplier of athletic shoes, with World Marathoners preferring its brand over any other competition. In 2019, the company made the shoes that the Marathon Record Holder Eliud Kipchoge used to run in under two hours, boosting the brand preference.

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Nike was founded in 1964 as a footwear supplier by Phil Knight (an athlete from Portland) and Bill Bowerman as Blue-Ribbon Sport. The company operated as the distributor for Onitsuka Tiger, with a majority of the sales being from Knight automobile. The first store was opened in 1967, and 1972 witnessed the company manufacturing its brand and creating the swoosh logo (Bakshi, 2015). The product's quality, such as being light, and the unique waffle type nubs for traction made it very popular among athletes. Preceding years saw it transform to Nike air technology, after which it achieved over 50 percent of athletic shoe sales (Bakshi, 2015).

Mission Statement

An organization's mission statement should define its key fundamental objectives around its activities, especially the terms of its purpose. Nike Inc.'s mission and vision statement evolve to characterize its position as the leading sportswear and apparel supplier in the world market. In the case analysis of its Mission Statement, it goads the organization to support the sporting population endeavors. Simultaneously, the vision statement depicts a picture of the futuristic conditions and targets of Nike’s business.

The vision statement concentrates on product growth and strength. The use of these two statements acts as the guiding aspect for business growth and evolution, which has led to Nike creating the world's leading brand. The implementation of the mission and the vision statement has enabled the corporation to support its market position as the global prominent supplier of athlete shoes, equipment, and apparel.

Nike Corporate Mission Statement is, “To bring inspiration and innovation to every athlete in the world." At the same time, co-founder Bill Bowerman's statement is, "If you have a body, you are an athlete." The statement depicts characteristics such as; Inspiration, Innovation and can identify with athletes in the world. The brand inspires people to have the champion's mindset, shown in the inspiration section of the mission statement.

Nike Corporate Vision Statement is "to remain the most authentic, connected, and distinctive brand." The term "remain" indicates the company already considers its products the most original, distinctive, and connected in the market for the athlete goods and associated products.

External Scanning

The external scanning examines the environment the industry operates from, including aspects like the competitive structure, dynamics, competitive situation, and history. On the macro scale, it comprises the macroeconomics, political, demographics, social, and technological analysis (Rowland, 2017). The best tool to use in analyzing the external factors is the PESTEL/PESTLE Analysis, which is an acronym for political, economic, social, technological, legal, and environmental factors.

Political Factors

Political factors mainly deal with the government's influence on the external business environment. They include political stability, where a stable political environment presents an opportunity. Favorable trade policies also offer an opportunity. Additionally, improving government support on areas like infrastructure presents opportunities for Nike to expand.

Economic Factors

In this element, the PESTLE analysis identifies all the fiscal concerns affecting the macroeconomic aspects of Nike. Overall financial stability presents opportunities for Nike business. Additionally, the rapid development of the growing market might serve as both an opportunity or a threat since it increases Nike’s operation. At the same time, other associated costs such as labor increases posing a threat. The slowdown in major economy giants such as China is a threat.

Sociocultural Factors

The effects of social conditions affect the remote business environment in that increasing the population wealth distribution, especially in developing countries, is an opportunity for expansion. A society that emphasizes product safety also presents an opportunity for Nike since it can produce safer products. A community that is inclined to leisure also offers an opportunity for Nike.

Technological Factors

The following technological aspects affect Nike Inc.: increasing research and development poses an opportunity and threat since the company can develop its product further. However, other competitors may be doing the same and investing more, thus presenting a risk. Rapid technological changes also offer opportunities and threats since the company may integrate newer technologies on their product, but at the same time, obsolescence of the same poses a threat.

Ecological/Environmental Factors

Expanding various environmental laws presents an opportunity as Nike will be able to develop its sustainability programs. Increasing the sustainability programs is also a threat as it causes the company to experience pressure to accommodate such.

Legal Factors

Legal factors also play a vital part in the Nike operation. Aspects such as improving the employment laws pose a threat and an opportunity, as the labor costs will rise and improve the quality of the output. Other factors include consumer laws and health, and safety regulations.

Internal Scanning

Nike is faced with a few internal factors that can be scanned using the SWOT analysis tool. SWOT analysis is an acronym for strengths, weaknesses, opportunities, and threats analysis of the internal factors ‌(Kissinger, 2017).

Strengths

The strengths are the main drivers of Nike's success. They include a strong brand image, which progresses based on the product's quality and robust marketing campaign. Secondly, the company has rapid innovative processes, which are the primary factors of its ability to develop cutting edge sportswear and equipment. The company has extensive global production and distribution, which enables it to meet global needs.

Weaknesses

The weaknesses threaten the company's development strategy. These include labor controversies, especially in developing countries, which is impacts its brand image. Limitation of the product mix, limit the company from reaching a more extensive market share. Lastly, the company faces a limited presence in the unindustrialized markets because of the pricing, imitations, and lack of patent protection.

Opportunities

Product development offers an excellent opportunity for the company. Though the owners have continually defended it, saying it’s not a fashion brand, a majority of Nike consumers do not wear them to participate in athletics, rather like a fashion brand, which is an opportunity. There are other opportunities like developing items such as sunglasses and jewelry associated with sports, whose high value will earn them big profits.

Threats

Nike is exposed to the international trade nature as it trades its products in numerous currencies meaning the costs and margin may not be stable in the long run. These exposures may translate to Nike buying products expensively or at selling products at a loss. Secondly, the market of sportswear, apparel, and equipment is very competitive, with the company's competitors developing quality alternative brands to take away Nike's market share.

Strategy Formulation

The strategy formulation process denotes the method Nike could use to select the most suitable course of action to realize the best organizational goals and objectives (Juneja, 2019). It involves numerous steps and does not have to follow a chronological order. However, the stages have been well thought and can follow this order.

Setting Organizations’ Objectives

Setting the objective forms a critical component as they stress what needs to be achieved upon the implementation of a strategy. In objective formulation, it is important to consider all the aspects that could inform or influence the objectives. Upon setting the objectives, and the associated factors, strategic decision can be taken.

Evaluating the Organizational Environment

Strategic managers need to assess the numerous economic and industrial settings the corporation operates from. These are the internal scanning and the external scanning using tools such as PESTLE analysis, SWOT analysis, and Porter's five forces model. It is also essential to conduct both the quantitative and qualitative reviews of the existing sportswear, apparel, and equipment. The review will ensure that all the factors that can lead to competitive success are determined for the Nike management to recognize all the company's strengths and weaknesses and those facing its competitors.

Setting Quantitative Targets

Nike must fix the quantitative target value for numerous administrative goals and objectives. The main idea behind this is to relate with the long-run clientele to determine and gauge their influence, which may be made by numerous product sectors or the operational divisions.

Aiming in Context with the Divisional Plans

In this phase, the input made by every department, division, or product type in Nike Inc. is identified. Thus, strategic planning in every sub-unit is completed accordingly. It requires a detailed and careful analysis of the remote factors to determine the trends.

Performance Analysis

The performance investigation involves discovering and studying the limitations, weaknesses, and gaps in the desired performance. A careful analysis and evaluation of Nike's past performance, present situation, and the expected future should be done. The research recognizes the degree of persistent gaps between reality and the long-term aim of the company. Nike can estimate the possible future situation based on the persistence of the present trends.

Choice of Strategy

This forms the eventual phase in the Nike strategy development. The superlative course of action is then selected after considering all the organizational objectives, goals, organizational strengths, limitations, potential, and external opportunities.

Strategy Implementation

Following the strategy formulation, the plan must be executed. The real action takes place here as the plans are transformed into action (Juneja, 2019). It is the most rigorous and demanding stage of the whole strategic management process and involves numerous steps.

Evaluation and Communication

This revolves around aligning the strategies with the initiatives by analyzing whether the plans relate with the mission's ad vision of the Corporation. It also comprises of aligning the set strategy with the annual budgets. Lastly, communication and clarification of all the proposed plans to the key stakeholders should be done.

Development of an Implementation Structure

The strategic managers establish a linkage and coordination mechanism among the various Nike departments and their subunits. They create the work plans to be followed in the execution of the set strategies. The critical managerial responsibilities to be performed are determined as well as the individuals responsible for the implementation.

Budgeting and Allocation of Resources

At this stage, resources are allocated depending on the assessments of their budgetary requirements. Upon the fiscal allocation, everything should be documented, followed by regular checks and balances to determine whether...