2. Recommendation
Recommendations were formulated linking all Key Perspectives of Nike’s Strategy
Financial Growth Strategy Productivity Strategy
Perspective • Focus on Emerging Markets (i.e. BRIC) • Increase Asset Utilisation – increase
• Products in new niche activities (martial arts, yoga and swimming) rev/employee by 5%
• New customer segments • Reduce Operational Cost
Customer •Maintain Product Leadership - •Improve Customer Relationship and •Improve Image - “Nike
Perspective provide high quality & innovative Service Community” for welfare
products catering to customers’ •Launch 250-300 Nike retail outlets in manufacturing workers
needs and changing preferences next 3 years •Align incentives of workers by 2012
Internal •Follow “Cost Out” strategy •Integrate New •Improve Innovation Cycle •Implement CSR -
Perspective • Reduce marketing spent – Segments & Markets - with smarter and more expand its alliance
11% of revenue only, focus on and their attributes intelligent customer with other non-profit
local sport heroes with current processes feedback mechanisms organisations to work
like customer mgmt through e-channels together
Learning & •Retain and Train key •Improve IT Assets - enhance CRM, •Create a customer centric culture
Growth employees - ensure attrition e-channel, social media platform, •Executive team to provide a strong
rate is between 2-3% Sales Force Automation systems and visionary leadership
Perspective
•Invests 2-2.5 % of Rev in IT Systems
3. Key Challenges & Opportunities
Growth
• has slowed in existing markets (slow in US and negative in Europe)
• Increased competition in emerging markets (with new and existing competitors: New Balance,
Adidas, Li Ning)
Operational Efficiency
•Revenue per employee has decreased in last 2 years (Li Ning has got a healthy ratio 25.35%)
•Revenue has gone down in last year
•Less power and control over larger retailers like Walmart
•Operational challenge to integrate cross functional business units to produce bundling and
complimentary products
Brand Image
•Brand Perception is of an unethical organisation given worker’s conditions in manufacturing plants
• Improve its involvement in environment and CSR in developing nations
• Maintain its innovation brand image in front of increased competition (e.g. Adidas, New Balance)
4. Static View - SWOT
Strength Weakness
•Excellent Supply Chain • High risk of brand tarnish - driven by sports
•Low cost manufacturing stars like Tiger Woods
•Innovative Productive design •Collaboration within units is weak
•Good Marketing focus •Retail focus is missing - high reliance on
•First mover advantage in e-commerce distribution
•Perceived growth stock -Good financial •-ve image portrayed by poor working
position with low LTD conditions in overseas factories
Opportunities Threats
•Growth through emerging markets •Rapid changes in customer tastes
•Capture Women and Children market •Slowing growth in U.S. economy
•Niche Sports Market - equipment, shoes, •Competitors like Li Ning are entering the US
apparel and other emerging markets
•Pipeline of products through innovation •Revenue per employee is decreasing
•Fluctuation in currency rates
5. Dynamic Analysis - RVIO
Resource/Capability Rare? Valuable? Costly to Difficult to Competitive Consequence
Imitate? Organise
Strong Marketing Yes Yes Yes Yes Sustainable Comp Advg
Brand equity Yes Yes Yes Yes Sustainable Comp Adg
R&D No Yes Yes Yes Temporary Comp Advg
Product variety Yes Yes Yes Yes Sustainable Comp Advg
Internet sales No Yes No No Competitive Parity
Working Culture Yes Yes Yes Yes Sustainable Comp Advg
Strong leadership Yes Yes Yes Yes Sustainable Comp Advg
Distribution No Yes No Yes Temporary Comp Advg
Global presence No Yes Yes Yes Temporary Comp Advg
Diverse Skill set Yes Yes Yes Yes Sustainable Comp Advg
Outsourced No Yes No Yes Temporary Comp Advg
Manufacturing
