Nike Inc. Business Executive Essay

Nike, Inc. is the realitys whizzing designer, clamseter and distri exactlyor of all opposite types of acrobatic footgear, app argonl, equipment and accessories for a wide range of sports as hale as fitness activities. As distant as the locations of where Nike, Inc. copes and distri onlyes, the partnership licenses its results in somewhat over 200 countries around the globe, foc development its outputs under seven divers(prenominal) key categories including course, hoops game, football, soccer, mens and womens training, Nike sportswear, and fosterary Affiliate signs ( confabulation, Inc., Hurley external LLC, Jordan Brand, and Nike golf). Currently, Nike, Inc. is operating segments in over six different global locations including magnetic north America, Western Europe,Central Europe, Eastern Europe, China, and different emergent markets. As far as Nike consumer results go, Nike operates as a partnership that specifically specializes in immobile pace industries concerning conglomerate different types of athletic footwear, c readinesshing, and equipment.Right now, this intentness is considerably(p) on point in its competitiveness, exposing Nike to the risk of falling behind to its competitors or by non meeting the de existenceding innovation standards that are demanded by customers. In order for Nike to stay on top of customer demand, the companion moldiness continue to revolutionize and predict consumer preferences. Other companies that are in this assiduity such as Adidas and Reebok rely on a strong write up and yeasty brand images in order to obtain adult malewide recognition. If, in the rare occurrence, Nike, Inc. was to line any negative publicity through and through the press, it would substantially affect the ac social clubs revenue as well as maturation rates. As far as Nikes system goes, it is barb to achieve a long-term revenue growth by creating various different types of innovative, must(prenominal) get to pr oducts that result build a heavy personal connection with its consumers. As far as Nikes brands go, the attach to strives to deliver compelling consumer experiences through non only retail stack aways, but on disembowel avenues as well. Being the global leader in athletic sportswear, Nike is no longer considered a stranger to the increasingly distinctive and unstable milieu of the global economy that has been experienced through recent years.All of Nikes products give birth now been overcome to the risks that shed been associated with overseas outsourcing as well as manu occurrenceuring and financing. In lieu of the decline of global capital and impute market conditions that have been threatening to Nikes manusicraft, Nike stands strong in rest foc use of goods and workd on its assembly line strategy, and the club continues to expand long-term growth for its stakeholders. One may wonder exactly how Nike plans to do this in a variety of difficult conditions. The answe r is innovation. Innovation and constant improvement at Nike is all active how the go with leverages its reinvigorated ideas and expands them into new parts of the worldly concern by driving through barriers and in short, thinking outside of the box. ignore the ongoing challenges the harsh economy throws Nikes way, somehow the company is dumb able to continue delivering a record revenue in the monetary year of 2012, continuing to outperform its old five fiscal years. Nikes revenues had grown from 16% to $24.1 billion and net income has increased by 4% to$2.2 billion in fiscal 2012.Looking back at Nikes retiring(a) four fiscal years, the company has continued to deliver a positive depict on net income despite being subject to the economys unstable tax and currency rates. As mentioned previously, in fiscal year 2012, Nikes revenues increased among all operating segments, specifically North America, contributed to over 7%, while other emerging markets as well as China contrib uted only 4%. Provided with the cultivation, it is now macroscopic how the brand Nike, Inc. continues to be the powerhouse of revenues by generating $13.4 billion alone. by dint ofout the years, Nike continually devotes into innovative strategies the company believes lead continually raise annual growth. As a result of the companys optimism, in 2012 Nike signed an symmetricalness to sell two of its affiliate brands Umbro and Cole Haan. Despite Nike parting ship slewal with these two parted brands, that action now enabled the company to focus on the highest possible opportunities to drive a maintainable, profitable growth margin for its shareholders.With the provided information above, it is clear to see exactly what a powerhouse Nike, Inc. is when it comes to athletic sportswear. Although this bidding is correct, the interworkings of the company are much to a greater extent(prenominal) complicated than they seem and more than importantly, Nike still has plenty of room for work and improvement. From an trading operations analysis standpoint, this topic testament include specifically how Nike is an effective company. Specifically the main topics give include products and work, operations and anxiety, alignment of operations, care strategy, and finally save a brief summary of everything and recommendations that are hypothesized to make Nike a kick downstairs company. chronicle (Robert Leoniy)The two men that started this athletic powerhouse were circuit card Bowerman and Phil knight. Bill Bowerman was a nationally recognized tag and field coach at the University of operating room and Phil Knight was a talented middle-distance runner who ran for Bill Bowermans police squad in the Fall of 1955 at the University of Oregon. Between 1950-1959 is where everything all started.In 1964, the basic deal for Nike had been made. At that time Nike had not been called Nike. It had gone by the give ear of Blue Ribbon Sports. The first deal was on a rec iprocal handshake, $500, and mutual trust between both partnersand the first order of ccc apparels was displace in January 1964. Between 1970-1979, the birth of the Nike Brand had emerged. well-nigh 1971, the company decided to expand being moreover a footwear distributor to designing and exchange an original line of shoes. Carolyn Davidson, a in writing(predicate) design student at Portland State University, selected and made the brand mark cognize to twenty-four hour period as the go in January of 1972. The logo was therefore unveiled at the U.S. Track and Field Trials in Eugene, Oregon. They then indispensable an athlete to promote Nike. They chose Mr. Steve Prefontaine, a young man who was a dock athlete from the small coastal town of Coos Bay, Oregon. He excessively challenged Knight and Bowermann to sire more and more creative.He died tragically in 1975 at the age of 24, but is still considered by Phillip Knight as the spirit of Nike. Since the 80s, Nike has con tinued to grow and become an innovative company in the athletic industry. Phillip H. Knight is still the Chairman of the Board of Directors while Mr. Mark Parker is the on-going President & Chief Executive Officer of Nike, Inc. They have grown immensely from estimable footwear and allow continue to do so through innovation.Mission/ Business dodge (Brian Frederick)Nikes Mission, as verbalise on its website is, To bring inspiration and innovation to every athlete* in the world (Nike.com). The asterisk that goes next to athlete in the mission and on the tush of the mission statement signifies, If you have a body, you are an athlete (Nike.com). Bill Bowerman, co-owner of Nike, is the one who formed this quote. This is a smart marketing and business strategy for Nike Inc. because some race force not feel that they are athletes if they have not played sports or anything of that nature. It can be a ascent of confidence for those people that do not consider themselves to be athletic . It also can be sense of motivation and that start that they need to become active. If a well-known athletic brand a uniform Nike Inc. tells consumers that everyone is an athlete, then people leave get motivated and demand to live a fitter more athletic lifestyle.Also, when people live a healthier and more athletic lifestyle, it helps Nike, Inc. become more and more succeederful. Nike is all nigh athletic apparel. They range from athletic clothing to athletic shoes to athletic accessories, and so on They have a Nike Sector for al more or less every sport. They have Nike Football, Nike Basketball, Nike Soccer, Nike Golf, NikeRunning, Nike BASEBALL, Nike Sportswear, Nike Womens, and some(prenominal) more. Nike indeed caters to every different kind of athlete. That is part of the reason why Nike does so well. They are an extremely diversified company in price of the athletic market. They cover all ranges making them attractive to all kinds of people.Although the company has ma ny different avenues, Nike Inc. is most famous for their shoes. When you think of Nike, you think of the swoosh symbol and their shoes. The two most popular types of shoes are their running shoes and their basketball shoes. They in spades have gaind the most revenue and have been the most successful sector within Nike Inc. over the years. These shoes, especially the basketball shoes, have a lot of celebrity endorsements. Professional basketball players, like Lebron James, have their own shoe lines. People wait in line for hours to get these special edition shoes. While considering basketball players with their own shoe lines, it is relevant to mention how Nike differentiates itself by retaining some wholly owned affiliates. Converse, Inc., Hurley International, LLC. and Nike Golf are all affiliated with Nike, Inc. As of the first quarter for 2014, Converse is recorded separately while Nike Golf and Hurley International are include in the overall financial statements for Nike. Cont inuing from the statements above, Nike owns Jordan Brand.Jordan Brand was created by Michael Jordan, who is tell to be the topper basketball player that has ever lived and played the game. write Michael Jordan to his own brand of Nike basketball shoes did wonders for Nike. The celebrity endorsement has lead to great exposure for the company. Because of Michael Jordan having his own Nike brand, the basketball shoes sector of Nike grew a tremendous get along. While Nike has the swoosh symbol that is very well know, blood line Jordan has the jump man symbol that has become very popular. It is almost as recognizable as the swoosh symbol. With Jordan Brand, Michael Jordan has been able to gain many basketball superstars and give them their own shoe lines. This has been something that has been very popular for Nike in the past and this prospect seems it allow continue to become more and more successful. Jordan Brand already has superstars like Kevin Durant, Kobe Bryant, Carmelo Antho ny, and Lebron James with full-fledged lines of basketball shoes and the tendency will only grow. Nikes main goal has been its ability to developand mature.They have ever been innovative in the athletic department. They are al shipway developing new kinds of athletic materials whether it is a new kind of shoe, a better shirt, or a new accessory. All of their products are essential and made with the idea of optimizing each and every athletes performance. The company tries to help an average athlete feel that he or she can make it to the next level if he or she chooses Nike products. Nike ties in its business strategy of optimizing athletic performance with its marketing tactics by doing this. non everyone is a super-athlete, but if Nike can help a consumer feel that he will be the best athlete possible and perform his best while using Nike products. Also, on its website Nike has an article call Our Sustainable Strategy with the subtitle The game has changed, forever. It states, Our vision is to build a sustainable business and create cherish for Nike and our stakeholders by decouping profitable growth from constrained resources (Nike.com). They have taken this strategy and will apply it with much research. Because they have sustainable strategy, that does not mean that Nike will not continue to be innovative. They will continue sustainable innovation where the company will improve its products that it has, but will also continue to make newer and better products.SWOT compend (Brian Frederick)An article on valueline.com, shows a SWOT report of Nike, Inc. The article is titled NIKEA Short SWOT Analysis and was written by besidesin Hellman on March 10, 2014.The first strength talked about in the chart was talked about earlier when talking about Nikes business strategy. That strength is product innovation. The article states, Nike has a long tradition of staying ahead of the technology curve, which has helped it attract loyal followers and influential endor sements from professional athletes, from Michael Jordan to Tiger Woods (Hellman split up 3). Like stated before, Nike continues to improve their products to help athletes all over the world perform to their best abilities while have study superstars endorse their products. The second strength is strong cash flow. Nike often has a good amount of cash on hand which can help itself a lot when it wants to buy back stock and increase its stock price. Justin also stated, The company generates a lotof unleash cash flow, a good set of which it uses to enhance shareholder value, and later states, Theres ample cash, in the meantime, for NIKE to maintain a large R&D budget (Hellman divide 4).Nike has a lot of cash to increase the stocks value but it also uses that money to help continue its innovation procedures. Nikes only real big weakness is its high advertizement prices. Justin states, Part of the companys marketing strategy involves locking up major(ip) sports stars in lengthy endo rsement deals (Hellman divide 4). All of the major celebrities that NIKE endorses do take a hefty amount of their revenues to pay. Their advertising expenses are high because of the major celebrities but Nike shows that the feel authorizeing the extra money on those celebrities helps them out in the overall scheme of things. Justin Hellman states two major opportunities for Nike also. He states that there are favorable industry trends, direct to consumer, and emerging market growth. Two major things play into the favorable industry trends opportunity. Consumers now have a desire for, minimalist footwear where they want the lightest shoe possible which also links to the increased popularity of running (Hellman split 5).There is also an increase in the want for fashion in the athletic apparel industry and Nike already has a very well developed logo to go with its name. The next opportunity is direct to consumer (Hellman Paragraph 6). Ecommerce is a major factor in this opportunity and is expected to multiply by almost four generation going from $540 million to $2 billion. Also, At present there are over 750 retail units worldwide, including over 300 in the United States (Hellman Paragraph 6). While there are already 750 retail units worldwide, Nike is planning on expanding that number in the future. The other opportunity is emerging market growth (Hellman Paragraph 7). China is definitely a key opportunity that Nike would like to enter. Hellman states, But China, with its huge commonwealth and emerging middle family, still represents and excellent long-range opportunity for the company (Hellman Paragraph 7). Nike might not emerge in China just yet but, if it can, that would be a great boost to Nike profits. Also, Justin talks about how Brazil presents a great opportunity with its large population and vexation for sports. Finally, there were two major threats stated and those were heightened competition and product cost inflation (Hellman Paragraphs 8 & 9 ).In recent years, companies have increased the pure tone of their products and such. There havealso been more companies that have been created and have precondition good competition to NIKE. The most notable company has been Under armour that went public in 2005. The price of materials has also increased since the beginning of NIKE and seems that it will continue to increase. Rising raw material costs are disposed(predicate) to be a long-term headwind, with the developing world continuing to use up more commodities. Labor inflation will likely be an issue too (Hellman Paragraph 9). As the prices and costs to make the products of Nike, Inc., increases so will the price of the products Nike provides. Overall, Nike still seems to be a company that will be successful in the future. Most of the strengths and opportunities seem to outweigh the weaknesses and threats. The threats that Nike, Inc. has might damper the profits of the company a little but not anything too significant. Als o, with the problems of inflation and increased competition, Nike is not alone in the fact that all companies have to deal with all of those factors also. Nike, Inc. will still be a competitive force and can still be a leader in the athletic industry. Company operations (Catherine Aloise)Because Nike is such a large and complex company, the operations that go with the day-to-day and long-term operations are extensive and multifaceted. The operations management strategy decisions that are generalise for every company can be applied to Nike just as well as any other company, but as stated above, each decision and step to the strategy contains many parts that agree to the vastness of the worldwide company.Competitively known for the array of sports equipment, the design of Nike products and services is crucial. Nike is known as a modern brand that appeals to the younger generation. A waltz through a busy night of form at Montclair States very own recreation center will show any hig htail iter-by how truly popular and trendy Nikes products really are. Good looks are not Nikes only concerns, fortunately. Through considered design, Nike is reducing waste throughout the design and manufacture of products by using environmentally ideal materials and removing toxins. Nike encourages its designers to make smart, sustainable choices at the start of the creative process. Nike wants designers to choose to achieve design breakthroughs and reduce unwanted impacts through ways that are safe for the environment andsafe for consumers. This creation goes hand-in-hand with managing the quality of goods and services (Designing Products 1).Furthermore, Nike is responsible for maintaining products that are of good value and quality to consumers. The company cannot afford to lose business on malfunctioning shoes because of manufacturing problems and product defects. In the event of a customer purchasing a product defect, he or she is directed to the website where he or she is abl e to return the product and then choose from a list of options including the approval of a full refund, Nike credit, or a complimentary product of equal value. Nike cannot commode around with customer approval like this which is why quality is set with utmost regard within the company. If Nike was to lose its consumer base, Nikes top competitors like Asics, Reebok, and Adidas would sweep the market.Next, location and layout strategies are key in Nikes business strategy. These two business strategies have a lot to do with marketing. When verbalise about layout, every shelf and hanger must be placed correspond to what appeases the customers eye when he or she walks into a Nike terminus. The posture of the register and the spacing of the displays in the lay in must also be selected strategically. If a customer walks into a store and feels cramped and crowded by the tightness of space to move around the store, he or she will not linger for too long when grazing through the store. NIKE employees must also consider the seating and dressing rooms for customers to try on clothing within the store. A businessman stopping by the Nike store in a nearby mall will not be seen hopping up and down on trying to maneuver the latest Nike free run onto his aching foot after a long day of work. He will not be seen as a burgeon forth in the presence of other customers and Nike employees. This is why chairs must be placed near shoe displays and fitting rooms.Similarly, as businessmen may pass a Nike store in the mall neighboring the office park, incorporate Nike employees must think about the location of each store. It is not quick of scent to place a Nike store in a lower-class town that has a low average disposable income. People that reside in towns of this naturewill not be able to afford high-end Nike products and the store would flounder and eventually be closed down. It is wise, however, to build a store located in an urban city such as pertly York City where ther e are many middle and upper class consumers bustling around on a daily basis. The same concept is applied on a national level. Nike is wise to sell carve up of products and have many locations in the United States and England because countries like these are known to spend money on products Nike sells. Meanwhile, Nike would do well to reconsider the cerebration of expanding to third-world countries in Africa because inhabitants of these countries can barely afford water, let alone high-end exercise equipment.With all of the countries that are actually able to afford Nikes products, this leaves the company with more jobs to take care of, one being to keep track of the scrutinize. In early 2000, Nike had some major inventory management problems. The company lost around $100 million in sales out-of-pocket to these issues. Fortunately, following this failure, Nike developed an improved inventory management solution to play their problems rapidly. In 2001, Nike implemented a moderni zed version of their inventory management software. Based on historical sales data of different products, and establish on some market growth estimates, Nike would first prepare a demand forecast for different families of products. This demand forecast is then utilise to determine optimal inventory levels, reorder points, material lead times etc. And the entire manufacturing plan for months is determined using these numbers produced by the inventory management software (Nikes Inventory Management result).Computer systems that predict how to manage inventory must be maintain in a certain way so that problems and malfunctions do not arise. There are also computer systems used in kind-hearted resources and scheduling. Error-prone human beings no longer make schedules. Fortunately, there are many options for companies large and small to use when seeking software to create schedules. It is simple and mistakes are few to none. Like everything else, maintenance is required. Alignment o f Operations with the Strategy (Catherine Aloise)As stated above, Nike has many ongoing operations within the company butonly one outlook and aim when selling products. Nike is selling a lifestyle. With advertisements on television, consumers get an image of an athletic, motivated government activity that will help each soul associated with Nike become a better person. This is a very important strategy because what Nike has a strategy to sell an intangible item a lifestyle that makes people want to just do it. This is the design of goods and services. Once this image of Nike is sold to consumers, the physical products will sell themselves.In order for consumers to be on board and spend money on Nike products, the consumers must then fall in making love with all the different avenues offered by Nike. This part of the operation can be seen in the layout strategy. If someone from the nearby country club is in a Nike store looking for golf clothing, he might come crossways a nice pa ir of biking shorts that would be great for the upcoming spring weather. Once the Nike biking section is in full view, the opportunities of purchases are endless. summer is just around the corner so why not invest in a nice flattering pair of Nike swimming trunks as well? The five pounds gained from Easter dinner will just melt right off after all that biking and the trunks will fit like a glove. Once this innocent young man has left the store with his wallet considerably lighter, a small grimace lingers on his face as he mutters the phrase just do it subconsciously under his breath as he walks to the car.This strategy is more common than one may think. The layout strategy can be seen in the short story above simply by the way a Nike store is set up and what catches a customers eye. The inventory management and design of goods and services go hand in hand with the expansion of athletic and sporting clothing offered by Nike and the innovation of shortly existing products. Designe rs for Nike are always looking for new, innovative ideas to put on the market like the Nike+ fitness practise available for smart phones. This application was once just a gleam in the eye of a Nike Designer before it went viral in the iTunes store. The application map individual runs, tracks progress, and get the motivation needed to keep going. The Nike+ Running app tracks distance, pace, time and calories burn down with GPS, and gives audio feedback during a run. Users can automatically upload to nikeplus.com to see past runs, including routes, elevation and NikeFuel(Join Me on Nike+). Summary/Recommendations (Collaborative)Nike, Inc. is definitely one of the most successful athletic companies in its market and industry today. The company continues to be the industry leader and does not seem to be slowing down. If there were to be any recommendations, it would have to be to keep doing what they are doing and not to lose sight of innovation. If Nike continues to be inventive and groundbreaking and continues to introduce new products on a consistent basis, they should be able to maintain success in the market. Nike, Inc. seems to have all the right tools to do well in todays economy.Works Cited. . N.p., n.d. Web. 24 Apr. 2014. .Designing Products. NIKE, Inc. -. N.p., n.d. Web. . .Hellman, Justin. Research Hub. NIKE A Short SWOT Analysis. N.p., 2014. Web. 21 Apr. 2014. Nikes Inventory Management Solution. Ordoro Blog. N.p., n.d. Web. . . Nike. Just Do It. Nike.com. N.p., n.d. Web. 24 Apr. 2014. . Strategic Analysis of Nike, Inc. Strategic Analysis of Nike, Inc. N.p., n.d. Web. 24 Apr. 2014. .