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Nike’s CSR vision statement includes the company and its consumers as major participants
in the desired future goal of sustainability. The corresponding strategic objectives are implied in the
“sustainable economy” component of the vision statement. The third component of Nike’s CSR vision
statement reinforces sustainability by stating, “people, profit and planet are in balance.” This CSR
vision statement shows that, aside from being a manufacturer of athletic shoes and related products,
Nike is also concerned with the sustainability and balance needed to ensure that everyone benefits
from the business.
Nike Inc.’s official mission statement is “to bring inspiration and innovation to every athlete
in the world.” The company furthers that everybody is an athlete, based on Nike founder Bill
Bowerman’s statement, “If you have a body, you are an athlete.” This mission statement represents
the company’s strategic goal of reaching out to the global sports shoes, apparel and equipment
market. The following main components are in Nike’s mission statement:
Inspiration
Innovation
Every athlete in the world
As a leading manufacturer of sports shoes, apparel and equipment, Nike Inc. inspires people
to adopt a winner mindset, which is covered in the “inspiration” component of the mission
statement. The company’s slogan “Just Do It” represents this inspirational goal. Also, Nike’s mission
statement emphasizes innovation. This component is applied through the company’s strategy of
continuous improvement of products through new technologies. The “every athlete in the world”
component indicates that Nike’s mission statement pushes the company to target every consumer
around the world. Thus, the company’s athletic shoes are designed to attract and satisfy a wide
variety of market segments.
Nike, Inc. lacks a suitable corporate vision statement. However, the company’s vision
statement for corporate social responsibility is a good start. This vision statement offers considerable
information about Nike’s business activities and strategic objectives. However, it does not address all
areas of the business as a whole. Thus, the company needs to develop and publish an appropriate
vision statement for the corporation to inform employees and investors about what the entire
business aims to become in the future, with reference to the global market for athletic shoes,
apparel, and equipment.
Nike’s mission statement adequately outlines the general strategic directions of the business.
This mission statement also remains relevant to the current situation of the company. It is expected
to continue its relevance even in the years to come, considering that the components “inspiration”
and “innovation” are essential for Nike to maintain its competitiveness amid tough global
competition. Thus, Nike can keep using its current mission statement to guide its strategies as a
global sports shoes, apparel and equipment company.
STRATEGY
Nike's Generic Strategies:
Nike Inc.’s generic strategy for competitive advantage emphasizes product mix diversity. A
generic strategy, according to Michael Porter, defines how a business achieves and maintains its
competitiveness. On the other hand, Nike’s intensive growth strategy reflects the company’s focus on
innovation to develop the business. An intensive strategy shows how a company grows. Founded in
1964, Nike Inc. has grown to become one of the biggest players in the global athletic shoes, apparel
and equipment market. To keep its position and competitive advantage, Nike must ensure that its
generic strategy and intensive growth strategies are always suited to current business conditions.
Nike Inc.’s generic strategy (based on Michael Porter’s model) is appropriate for its diverse
product lines, ensuring competitive advantage. The corresponding intensive strategies grow Nike’s
global sports shoes, apparel and equipment business.
Nike Inc. uses a combination strategy for its competitive advantage. This type of strategy
includes two or more of the generic strategies from Porter’s model.
The following are the generic competitive strategies implemented in Nike’s combination
strategy:
2. Differentiation Strategy:
2. Market Penetration:
3. Market Development:
4. Diversification:
2. Quality Management:
Nike emphasizes quality in its processes and products. The objective in this strategic decision area is
to satisfy consumers’ expectations about product quality. The company’s operations management
addresses this concern through high quality standards and the application of total quality
management (TQM) in the production of sports shoes, equipment and apparel.
4. Location Strategy:
Physical location is the typical concern in this strategic decision area of operations management. The
objective is to optimize costs and efficiency through proximity to employees, suppliers and the target
market. In the case of Nike Inc., the operations managers apply a corporate strategy that chooses
production facility locations based on costs and nearness to the most significant markets. For
example, Nike Inc. has sports shoe suppliers in Southeast Asia because of the cost advantage based
on cheaper labor in the region.
8. Inventory Management:
The objective in this strategic decision area is to maintain operations management that minimizes
inventory costs while maximizing its effectiveness and efficiency. Nike’s operations managers apply
the perpetual method of inventory management, which involves continuous monitoring and
movement of inventory from the supply chain to the distributors and retailers.
9. Scheduling:
Nike’s scheduling approach is primarily concerned with corporate operations and the coordination of
the supply chain with distribution and retail operations. In this strategic decision area of operations
management, the aim is to maximize resource utilization. Nike Inc. managers satisfy this aim through
automation. Corporate office schedules are standardized, while supply chain schedules are adjusted
according to the conditions of the market. Nike applies changes to the supply chain based on market
demand for its athletic footwear, equipment and apparel.
10. Maintenance:
Nike’s maintenance strategy considers adequacy of all resources. Adequacy of human resources,
facilities and capacity is the objective in this strategic decision area. Nike’s operations management
implements continuous recruitment programs to support HR needs, as well as reward programs and
career development strategies for maximum retention of employees. For facilities, the company has
dedicated teams to regularly evaluate facility and equipment integrity and requirements. The
companies that manufacture Nike shoes, apparel and equipment are responsible for their own
maintenance.
Nike Inc.’s organizational culture
Talented
Diverse
Inclusive
Talented:
Nike Inc. understands that talent and innovation go hand-in-hand. This feature of the organizational
culture emphasizes the need to provide human resource support for product development and
internal services in the corporation. As such, Nike uses training programs to maintain employee
talent. The company also has coaching and mentoring programs. These approaches are based on the
strategy that develops and enables leaders within the organization for Nike’s global growth. The
purpose of this characteristic of Nike’s corporate culture is to sustain talent and infrastructure
necessary for producing some of the world’s most popular athletic shoes, equipment and apparel.
Diverse:
Diversity is continually developed in Nike’s organizational culture. The company believes that this
feature of the corporate culture leads to a dynamic workforce. Diversity promotes Nike’s creativity,
innovation, brand image and, consequently, competitive advantage. The company maintains diversity
through HR programs, such as the Speak Up! program which facilitates sharing of ideas among
workers. This feature of the corporate culture maximizes Nike’s product development cycles,
especially in creating new designs for its sports shoes, apparel and equipment.
Inclusive:
Nike Inc. emphasizes inclusiveness in its organizational culture. The purpose of this cultural
characteristic is to minimize barriers to employee performance. Nike’s strategy uses inclusiveness as a
tool for optimal performance, diversity and talent development. The company supports this feature
of the corporate culture through a team-based approach to management. In addition, Nike employs a
number of programs, such as Bias to Breakthrough (a program for removing barriers to creativity) and
NCourage (a set of employee networks for cultural awareness and community building). This feature
of the organizational culture minimizes problems in Nike’s workforce and supports streamlining
athletic shoes, apparel and equipment design and production processes.
An advantage of Nike’s organizational culture is its support for new product development. The
characteristics of this culture ensure that the company continues its competitive advantage in the
global sports shoes, equipment and apparel market. Also, the diversity and inclusiveness features of
Nike’s corporate culture help develop employee morale. However, a disadvantage is the potential
reduction in managerial efficiency. The organizational culture facilitates employee involvement,
although it also increases the workload of Nike’s managers. A suitable recommendation is for Nike to
increase its investment in managerial personnel to balance the effects of its corporate culture.
Nike Inc.’s organizational structure
o High prices
o Labour controversies
Labour cotroversies:
It wasn’t long ago that Nike was facing intense criticism of its labor practices and work conditions.
However, over the past 20 years, it has undertaken efforts to improve conditions for its roughly one
million contract workers. While conditions have improved, many of its factories in developing
countries still do not meet Nike’s own standards. The company itself has acknowledged that the low
wages for some of its workers remains a concern. Safety issues at certain locations are also an issue.
If some type of disaster were to occur at one of its facilities, this would no doubt hurt the company’s
image.
High Prices: Due to its strong brand, Nike can typically command a premium on the products it sells,
which in turn supports higher margins and profitability. However, the cost of its footwear is higher
than most of its competitors, which make its products out of reach for many customers around the
globe, particularly in emerging markets. There is also the risk of declining demand when an economy
falls into recession, as consumers have lower discretionary spending for non-essential items.
o Tough competition
o Currency volatility
Competition:
The athletic footwear, apparel, and equipment industry is highly competitive, both in the United
States and around the globe. There are several significant athletic and leisure footwear companies
and sports equipment firms that produce similar products. Some of the primary ones are Puma and
adidas. Other large companies have diversified their product lines to include athletic and leisure
footwear, sports and lifestyle apparel, and equipment, including Under Armour (UA) and lululemon
(LULU). The rapid changes in technology and consumer preferences constitute significant risk factors
for Nike. Too, demand for Nike’s products depends on the relative popularity of various sports and
fitness activities, as well as changing design trends, so any major shifts in these trends could temper
business results. If competitors have more success attracting customers with more appealing
footwear or apparel, this would also hurt business prospects.
Currency Volatility:
Since the majority of Nike’s sales are generated outside of the United States, the company is exposed
to significant currency fluctuations. The recent strengthening of the U.S. dollar has hurt reported
results, due to the foreign amounts being translated into U.S. dollars for reporting purposes. While
the company does have certain hedges in place, they are designed to lessen the impact of
unfavorable exchange rates, not fully eliminate the risk. The dollar is expected to continue to
strengthen in the coming months, so this will remain a concern for the near term
This SWOT Analysis of Nike Inc. shows that the company has the strengths needed to support its
global leadership in the sports footwear, equipment and apparel market. However, the company
must address concerns regarding competition, labor practices, imitation and patent protection. Thus,
it is recommended that Nike Inc. must reform its strategies in these areas. The company must also
collaborate with government units to address patent protection issues.