Category: Nike

Introduction

Nike is a multinational corporation that has been one of the leaders in the market for many consecutive years in a row. This company is considered the most notorious supplier of athletic footwear and clothing. Nike was founded in 1964 by Phil Knight and Bill Bowerman. The target market the company initially focused on consisted of athletes and the general public interested in sports. Over the years, the market has changed, and sports clothes had become an everyday style for most individuals since the 1980s when the Nike brand became a symbol of urban fashion. The switch from purely athletic apparel to sports clothes with a twist of hip-hop fashion that Nike was experiencing was the most significant change that allowed the company to become one of the most famous retailers worldwide.

Nike is a public company, which means that the owner is directly related to stock shares that are freely traded. The key people who manage Nikes market strategies, decisions, and solutions are John Donahoe (CEO), Mark Parker (executive chairman), and Phil Knight (chairman emeritus). Mark Parker used to be the CEO between 2006 till January 13, 2020, but stepped down and was replaced by John Donahoe. The latter implemented an effective strategy in combating the difficulties that came along with the COVID-19 restrictions.

Current Conditions

COVID-19 had a significant influence on all industries, and the fashion field is definitely among those that had to suffer. Since all stores and factories closed at the beginning of the outbreak, manufacturers could not continue with the same production and manufacturing practices. Other issues included the lack of fabric, retail stores canceling orders, and the lack of staff. Certain manufacturers had strategies that helped combat some of the problems. Nike is among them, and one of the things that saved them from long delays and lack of fabric was preordering materials and keeping them at safehouses ahead of time.

Fashion brands primarily known for in-store sales had the most prominent issues during the pandemic. Since most countries tried to manage the outbreak by preventing people from interacting, unessential businesses such as clothing stores closed down. Moreover, companies had to continue spending money on renting the spaces, paying wages, and other costly procedures. This was a devastating turn of events that caused irreparable damages even for some of the biggest corporations in the world.

There are two different positions when it comes to COVID and its impact on the clothing industry. While the closing of the stores and factories had adverse effects on the revenue, digital commerce has been keeping the businesses relevant. Most companies that are related to fashion are trying to switch to online retailing. This is a more efficient way of interacting with customers, it cuts down on expenses, and it is more convenient for both the buyer and the seller. During the COVID-19 restrictions, consumers could stay at home, avoid the risks of being infected, and receive the goods they have ordered online from their favorite retailers.

Reasons for Company Struggling

Nikes primary revenue consisted of in-store purchases. The biggest economic challenge was keeping the percentage of sales high despite the inability to advertise and display the items in physical stores. The companys CEO stated that the strategies of this company are focused on longevity, and the plan for keeping the company stable during the pandemic proved that these words were truthful. While the stores were closed and Nike had no revenue from such sales, the digital sales have increased by more than 30%. The brands main representatives primary goal was to improve the e-commerce aspect, which was not a technological challenge for Nike since this policy was applied long before the COVID-19 outbreak.

This plan was implemented back in 2017 when Mark Parker announced that the brand would decline collaboration with most of its distribution partners. Over the last five years, Nike has become a brand that partners with 40 distributors, a significant change from previously having more than 30,000 partners. COVID-19 affected Nikes in-store sales, but it is a step in the right direction when it comes to e-commerce.

From a legal standpoint, the governments of most countries did not allow retailers to sell goods at physical stores due to the possibility of spreading the virus. Everyone from small businesses to big corporations would suffer from legal consequences such as fines and other inconveniences if they were to continue their activity. The legality of in-store sales differed from country to country, but the majority of them had a policy regarding crowding people and not wearing protective measures.

There is also the aspect of competitive challenges. Most brands were already focused on online commerce, so Nike was not the only company on the market providing such services. The most significant competitors (Adidas, Puma, Reebok, Asics, and Under Armour) remained unchanged during the pandemic. However, Nike was the only corporation that was so fast and aggressive in promoting its online services. The long-term plan of developing an efficient e-commerce strategy kept Nike the most successful retailer during the quarantine.

Nikes marketing promotions also suffered during the COVID pandemic. It became impossible to advertise during sports events and other activities that implied the gathering of people. However, Nike was an early adopter of online marketing. Besides having advertisements on social media platforms and other popular websites, Nike is known for having contracts with celebrities and athletes who are promoting their products. The pandemic did not stop them from posting pictures of themselves in Nike apparel, writing posts about it, and recommending the items to their subscribers.

The pandemic definitely had an impact on the world economy. It affected the prices of stocks for many companies, consumer preferences, and how companies chose to conduct their business. From a consumer standpoint, restrictions due to COVID-19 made e-commerce the primary way of shopping. This also applies to Nike since the physical stores were closed, and online stores were the only ways consumers could still make purchases. The online retail number has increased, and online purchases now consist of around 30% of all Nike sales. This is proof that consumer preference shifted toward online shopping.

Even though COVID-19 negatively impacted all clothing brands, including Nike, their strategy is nowhere near causing financial failure. The brands leadership made the right call when they decided to focus on online sales, making Nike a profitable corporation even during hard times. The COVID crisis surely affected the way Nike conducts business and deals with retailers. Still, the shifting in policies and strategies diminished the harmful effects the pandemic would have had on the brand.

Possible Solutions

Nike is a brand that keeps its leading position due to customer demand. A possible solution that would help minimize the effects of COVID has partnerships with as many retail stores as possible. Expanding the list of partners allows the consumers to have available Nike products no matter what platform they use to make purchases. It will also be beneficial in terms of competition with other brands. Another solution is continuing to develop the e-commerce aspect of the company.

This means displaying the items more favorably, having more online advertisements, and restocking with new items as fast as possible. Moreover, Nike should focus on having a reputation of being a conscious brand. This will impress the customer who would want to support such a charitable company. Being conscious of the workforce is also an aspect that builds the brands reputation. A company that is focused on keeping its workers safe, taken care of from a financial standpoint, and satisfied will always be more efficient and highly supported by consumers, which will minimize the competition difficulties.

Recommended Solution

Nike has done a great job maintaining a good reputation by manufacturing face masks, face shields, and shoes for medical professionals. A solution would be including the public in donations towards such causes by implementing a 5-10% charity donation from each purchase of certain items. It would be an excellent idea if Nike would advertise some of their classic items, such as Nike Air Force 1 or Nike Blazer, with an additional message that some amount of the revenue will go towards medical facilities, patients, and vaccines for third world countries. This implementation would not need longer than a few weeks to develop. It is the best solution since it involves keeping the brands charitable reputation intact, promoting classical items that most people are familiar with, and letting consumers know their purchase will contribute to a good cause.

Conclusion

Although COVID-19 had a negative implication for most companies, Nike managed to keep the situation stable and strive in certain aspects such as online commerce. The inability to sell products in physical stores caused the biggest problem, but it was diminished by upgrading the e-commerce system. The remaining problems can be solved by continuing to develop online solutions, advertising the brands charitable agenda, and implementing a donation system that would involve the general public.

Nike is a world-famous American company, mainly known for the production of high-quality, comfortable, and stylish sneakers. It is no secret that the corporation has its own goals, plans, strategies, and methods of solving problems, as well as both positive and negative sides that need to be properly eradicated. Moreover, various external and internal conditions can directly affect the further success and prosperity of the entire firm. Therefore, like any company, Nike requires a comprehensive analysis that could allow one to see a holistic picture of the situation and determine further steps in a positive direction. Thus, this paper focuses on the preparation of a marketing plan and thorough investigation in order to determine further actions for the formation of a sustainable business.

Marketing Plan: Nike

Table 1. SWOT Analysis

Strengths

Primarily, Nike has a fairly good reputation and brand awareness; the company has a wide range of high-quality and fashionable sneakers that can be purchased in almost every corner of the world. Furthermore, research shows good consumer loyalty to the brand and many people have been buying Nike sneakers for a long period (Liu, 2021). In addition, the firm actively cooperates with some celebrities from the world of sports, such as Michael Jordan (Liu, 2021). In fact, effective cooperation with the stars sometimes has the power to affect the influence of the brand.

Weaknesses

As practice shows, Nikes activities, in particular, depend on the weather, natural conditions, and policies within the countries of production, which could affect the entire industry. Additionally, in this situation, it is also necessary to recognize that the company has such a tendency as a high percentage of the ratio of liabilities to assets (Liu, 2021). Nike has a certain debt structure that requires thorough systematization and optimization. Otherwise, the weakness of the firm may develop into a special threat.

Opportunities

In general, Nike has good opportunities to expand its business in regions that could allow for greater profits. The company also has a chance to transfer the procedure for selling sneakers to the Internet space due to the unfavorable global situation, such as the spread of coronavirus. As a rule, online marketing shows more improved and stable results compared to retail indicators (Liu, 2021). Consequently, Nike needs to adjust and improve the online sales area to keep up with the progress.

Threats

Fluctuations in the economy, uncertainty, and instability both within countries and around the globe can create certain troubles for Nike, especially affecting its financial performance. In particular, the threat comes from a wide range of competitors, such as Adidas and many other famous firms (Liu, 2021). Moreover, one should mention the COVID-19 pandemic, which dealt a blow to many enterprises, including the Nike business model, and required rapid adjustment to new conditions.

Competitive Analysis

Goals

The goals of this marketing plan should include the desire to realize a balance in price offers, improved customer service quality, advanced client loyalty, increased product value, and growth of the companys market share. Thus, knowing the goals, Nike will be able to quickly focus on such objectives as identifying the right consumer, conducting effective campaigns, increasing profitability from sales, and prioritizing the allocation of resources. The author of this plan seeks to achieve systematization of marketing processes and activities, simplification of the system of control, and evaluation of results. Such a project will help to predict sales results and the success of Nikes activities, make the work of the marketing department transparent, as well as find growth points and weaknesses, as this will help to build up from competitors.

Corporate Social Responsibility, Sustainability, and Ethics Strategy

In order to be socially responsible and ethical towards people, nature, and the companys activities, it is essential to refer to the corporate social responsibility policy within the framework of economic responsibility. According to Stobierski (2021), this policy allows Nikes leaders to support financial actions and decisions while striving to do good in the environmental, ethical, and philanthropic fields. It should be remembered that the intended result is not only earnings maximization, but also a positive impact on the environment, the state, and the people. Accordingly, the aspects of the business model that will allow for more sustainable activities should include customer orientation (needs), product value (advantages), and internal elements (approaches). Thus, this approach will create the necessary conditions to improve peoples lives and help the planet, while maintaining a decent profit.

Conclusion

Summarizing the above, it should be stated that the designated goals and objectives were successfully fulfilled, and the marketing plan was implemented positively. In this paper, it was possible to identify the strengths and weaknesses of Nike, as well as business growth opportunities and external threats. The comparative characteristics of Nike with two competitors demonstrated the areas that need to be further strengthened and refined for the firm to remain a leader in the industry. The marketing plans purpose is to place special emphasis on increasing profits and improving the customer-oriented approach. In order to do this, it is important to turn to the corporate social responsibility policy, which could help both people and nature, while maintaining good incomes.

References

Liu, X. (2021). Nikes general company analysis based on it 2020 annual report.Advances in Economics, Business and Management Research, 166, pp. 799-803.

Nike competitors. (n.d.). Comparably.

Stobierski, T. (2021).Types of corporate social responsibility to be aware of. Harvard Business School Online.

Nike is a world-famous brand and company for the production of sportswear and footwear. Nike has gradually developed into a giant in the sports world and has several equally well-known subsidiaries: Hurley International, Converse, Cole Haan, Umbro, and Air Jordan, with about 1150 stores worldwide. In 2021, Nikes revenue grew by 19% to $44.5 billion. Nikes success results from constant innovation and timely investments that bring hundreds of millions of dollars to the brand every year. According to the official website, at the moment, the company adheres to three main priorities.

People: Ensuring diversity, equity, and inclusiveness, responsible sourcing, and community building.

Planet: reduce carbon emissions, waste and water consumption, and use chemicals more efficiently.

Children: Through the Made to Play program, the company aims to provide more opportunities for all younger generation members to play sports.

Thanks to high-profile advertising campaigns and stylish designs, Nike has a prominent place in the footwear industry today.

Results: Days in Inventory = Inventory / Daily COGS.

Nike calculations:

2019 Days of inventory = Inventory / Daily COGS = 19.3 / 5.06 = 3.83 B

2020 Days of inventory = Inventory / Daily COGS = 2.75 / 1.06 = 2.37 B

Analysis: The companys performance dropped in 2019 due to canceling sporting events, mass marketing promotions, and other holidays. Q4 results were significantly impacted by store closures worldwide, with 90% of Nike stores closed for approximately eight weeks due to the coronavirus (quote). As you can see from the table, in 2020, Nikes performance has increased significantly (by 62%) when the world has already adapted enough to online life.

Improvement opportunity: In 2019, Nike retained a significant amount of inventory, which helped the company make up for lost profits and maintain it. Since there was an increase in stock in 2019 due to the global crisis, Nike did not need to spend on storing inventory.

• New Inventory Level = 2019 Days in Inventory X 2020 daily COGS 95.3 x 2.37 = 225.861
• Reduction in inventory = 2020 Inventory  New Inventory Level calculated above 1.16  225.861 = 1.159
• Annual savings = Inventory reduction calculated above x carrying cost rate (assuming a 25% carrying cost) 1.159 x 0.25 = 0.29

Nike is a multinational design company whose headquarters are situated in Oregon, United States.

The company is a popular international brand that engages in the design, manufacturing, and marketing of all kind of stuff in the sporting world (Ramaswamy 2008).

Ethical Issues in Nike

Low wages and poor working conditions in some regions.

More working hours with no day offs and public holidays.

Use of child labor is some of their manufacturing points across the world.

Unethical business practices through sweatshops in some countries.

Impact of Ethical issues in Nike

Existing ethical issues acted as barriers to marketing planning of the corporation in the following ways.

This discouraged marketing of the companys various products in some regions.

This also led to weak audiences in emerging markets.

Low product demand and unending criticism.

This dealt a real blow to the companys reputable social responsibility.

How Nike Responded to the Issues

A contractors code of conduct was formulated to respond to increasing criticisms.

The company moved fast to address the issue of sweatshops.

Improved human resource management practices were established to address high employee turnover rate.

A campaign aimed at addressing negative allegations against the company was initiated through newspaper advertisement, among other effective mediums of communication (DeTienne & Lewis 2005).

Consumer Ethics

Examples of unethical consumer behavior include the following:

• Warranty deception.
• False insurance claims.
• Returns of merchandise.
• Misredeeming coupons.

All the above are deceptive approaches used by consumers to wrongfully access relevant business services or compensations.

Effects on Consumer Ethics on Marketing Planning

Unethical consumer behavior has serious implications on marketing planning as follows:

• While ethical consumer behavior promotes businesses, non-ethical consumer habits serve as an obstacle to business success (Hawkins & Mothersbaugh 2009).
• Unethical consummation contributes to poor economy.
• There is also a big threat to brands due to piracy and other illegal market practices perpetrated by unethical consumer behavior.

References

DeTienne, K & Lewis, L 2005, The pragmatic and ethical barriers to corporate social responsibility disclosure: The Nike case, Journal of Business Ethics, vol. 60, no. 4, pp. 359-376.

Hawkins, D & Mothersbaugh, D 2009, Consumer behavior building marketing strategy, McGraw-Hill, New York.

Ramaswamy, V 2008, Co-creating value through customers experiences: the Nike case, Strategy & Leadership, vol. 36, no. 5, pp. 9-14.

Social networks are an excellent platform for various activities. In addition to daily communication and exchange of thoughts in responses, many companies use it to promote their products or services. This step helps bring greater awareness about the company and attract a younger audience, which will improve and build the company for a new generation. The Nike Twitter account was selected and analyzed for this post, and options were proposed to increase retweets to increase the brands customer base.

With the development of the social network Twitter, the classification of posts that companies and ordinary users post have been developed. Among them may be classic responses that convey information about the users activities, opinions tweets that convey a particular point of view, or entertainment tweets in which users share something entertaining. The tweets posted on the page of the famous manufacturer of sneakers and sportswear Nike at are more similar to picture tweets, where the company constantly shares new products and their release date, that is, shows the result of its activities.

The company is already using some recommendations to increase the number of retweets. One of these is using a visual element in the form of pictures. However, this aspect is not enough, and to increase the coverage, Nike should use more hashtags, which will help them get into the main feed (Barker et al., 2013). Moreover, a valuable aspect can be more significant interaction with the audience through various surveys and interaction with responses, which will increase the engagement and loyalty of users of the social network.

I agree with the opinion of this discussion post that an excess of information can only scare away consumers. Simultaneous posting of multiple data and thoughts can lead to confusion in the responses of subscribers. In addition, a valuable aspect of this answer is that sticking to one topic a day can also prevent misunderstandings. You can diversify the content with the help of various articles, links to websites.

Reference

Barker, M., Barker, D. I., Bormann, N. F., & Neher, K. E. (2012). Social media marketing: A strategic approach. CENGAGE Learning.

Executive Summary

This report is supposed to explore how organizations manage their multiple relationships with key suppliers and business customers which is a critical strategic issue that faces all organizations. This is to be achieved by identifying one organization that is involved in such business-to business transactions and use it as an example on how it is involved in the various organization buying situations as well as what strategic relationships it can use on its suppliers and customers.

The report identified Nike Inc. an American company which was founded in 1962 by Philip H. as an importer of Japanese shoes, then known as Blue Ribbon Sports (BRS). It has over the years grown to have over 20, 000 outlets in 110 countries worldwide.

The company deals in designing and marketing of sports footwear and apparels as well as selling its branded items. Most of its raw materials are imported from other firms outside the US which the company has contracted to provide the goods and services. As a result the company is involved in various buying situations with its suppliers. These include: Straight rebuy situation, which involves purchasing with the same specifications as the previous ones.

Modified rebuy situation, which refers to purchases made but with adjustments compared to the previous one. Lastly there is new buy situation, which involves, purchasing which has new specifications meaning that no such purchase has been made by the organization. Nike Inc. is involved in all these buying situations either with its upstream business suppliers or with down stream business customers.

Nike Inc. has a business model that describes how information flows between the company and its customers, suppliers and competitors. The model also shows how physical goods and services move between the parties involved. The business model makes the suppliers and customers visible and as a result, it enables Nike Inc. to come up with measures that it can use to secure more value from customers and suppliers compared to its competitors.

In order for Nike to be competitive it needs to identify attract and retain strategic suppliers and customers that will ensure that it realizes continuous growth in profits. Therefore this brings out the need for the company to formulate and implement supplier relationship management strategies and customer relation ship management strategies.

Introduction

Business-to-business relationships refer to transaction, collaboration other interactions trade between business ventures, whereby goods are exchanged not for consumption but for production of other goods and services or for the buyer to pass them to the end consumer.

Such businesses include transactions between a raw material supplier and a manufacturer, manufacturer and a whole-seller and lastly a whole-seller and a retailer. Nike Inc. features as one of those entities that are involved in business-to business transactions (Hutt & Speh, 2010).

The founder of the company was Philip K. Knights back in 1962. From then, the company has experienced tremendous growth to the level of becoming a market leader in athletic footwear. This is evidenced by its more than 20,000 stores in approximately 110 countries. These outlets are either wholly owned by the company, with a mix of independent distributors and some are licensees (Wikinvest, n.d).

The manufacturing system of Nike products is done by independent contractors who are distributed globally. Nike is therefore involved in design, development and marketing. The company acquires raw materials such as Pet fiber used for making shoe material, shoe insole, shoe heel and shoe outer sole from Hsu Jenn Enterprise Co.,Ltd. Sojitz corporation has provided import-export financing services to Nike since 1972 (Sojitz Corporation, n.d). Huang Jiang Nan Pao Resins supplies Nike with glue.

Nike Inc. also supplies its products to other businesses downstream which include footwear designed for athletics, aquatic activities, football, golf and other sports. Nike gets logos from colleges and sports teams and markets its products using the customized logos. Using Nike brand name, the company also sells a line of performance equipments such electronic equipment bags, socks and many others.

Some of the school teams provided for uniforms include base ball teams of University of Alabama, West Virginia, Oregon State, Florida and Virginia Tech. Also among the schools that have used Nikes products is the Jesuti High school (Zimber, 2010)

Buying Situation

The components of organizational buying behavior include making a decision to buy goods from one of the many available supplier and then proceeding with the purchase. This buying process is characterized by various buying situations which include: Straight rebuy situation, whereby the purchasing department is mostly involved and it reorders the material based on information from the inventory control department.

Here they look at the quotations from vendors in the approved list and the buyers seek the same specifications as for previous purchase. In Nikes case the schools that have contracted to purchase team uniforms fall in this category, particularly because many a times they only need to renew their contracts with the company to continue with the product as previously specified (Hutt & Speh, 2010).

There is Modified rebuy situation whereby the organization seeks to buy the same products but with adjustments compared to the previous specifications. The modifications can be on the actual products and services or the delivery system. In this buying situation the executive as well as the purchasing department are involved.

Nike also has the ability to enhance its inclusion by seeking for more suppliers as well as enhancing the available vendors in terms of their delivery systems among other technical issues. This buying situation applies to Nike Company when it wants to reorder materials it has been using, however it wants that adjustments be made on the supplies.

For instance if Nike orders for Pet fiber from Hsu Jenn Enterprise Co. Ltd, however with a different delivery system for example through air as opposed to previous means of water transport. The supplying company may consider if it can meet the new requirements if not, then Nike Inc. will be forced to seek services of other suppliers (Hutt & Speh, 2010).

This situation can also apply to licensees retail stores in different countries who can bargain for adjustments in delivery methods or packaging methods. If the purchase of a product is a first time situation, then it is referred to as new task buying scenario.

This situation is characterized by stages which include; awareness, interest for offerings of each potential supplier, and subsequently they are evaluated, tried and finally adopted. Suppliers are then approved in to the list based on price competitiveness. A products cost as well as its value of consumption may influence the number of executives thereof to be higher.

This buying situation can apply to a new professional team that wants to buy sports wear whereby it will consider suppliers of such products that include Nike and its competitors. It will then evaluate them and eventually sign a contract with the company that meets its requirements who will start supplying them with the sports wear (Hutt & Speh, 2010).

Nike can also be in a new task buy situation, whereby it might need a new type of glue products therefore it will identify suppliers of such products including Huang Jiang Nan Pao Resins. On evaluation and trial of their products it will settle on one supplier and hence enter into a contract with that supplier to deliver that product (Hutt & Speh, 2010).

Source: Tompkin (2001)

Business model showing the relationship between Nike Inc. and its suppliers, customers and competitors.

Note:

The broken lines indicate the supply of physical products and services

The continuous lines indicate the flow of information between parties (Tompkin, 2001 )

Business models

There are two main information systems in the business model. The first one labeled A represents an information system shared between Nike Inc. its competitors and their suppliers. Therefore if Nike wants to get information about its suppliers, then it contacts that system and the same case applies to its competitors.

On the other hand the suppliers can also get information about the organizations they are to supply through the same information system. Likewise Nike can order products and make payment communications to its suppliers through the same system. There is another information system labeled B, which represents the flow of information between the focal firm (Nike Inc.), its competitors and their customers both current and potential. Through the system Nike can obtain information about its customers.

Likewise its competitors such as Adidas can also obtain information amount customers it is serving or those it intends to serve as well as those served by its competitors. It is also important to note that information flow can to any direction, showing that all that al the organizations in the model can share information between each other (Geunes, Pardalos & Romeijn, 2002).

Customers in this market can also obtain information about Nike and other organizations that supply them. At the same time Nike and its competitors can exchange information with their customers such as order reports from customers and payment reports to the customers.

In addition, Nike and its competitors can share information between them on how to form strategic partnerships. The model also shows how organizations can supply each other with goods and services. The suppliers can either supply their raw materials and other products to the focal firm (Nike Inc.) or to its competitors.

This means that Nike and its competitors have access to these suppliers. For example Sojitz Corporation of America can either provide import-export financing services to Nike Inc. through channel labeled 2 or to Adidas (Nikes competitor) through channel labeled 1. The same case applies to the second supplier whereby it can supply to Nike through channel labeled 3 and to Reebok through channel labeled 4 (Geunes, Pardalos & Romeijn, 2002).

On the other hand, Nike and its competitors can also supply products and services to their customers, Nike can supply sports wear to Jesuit high school through channel labeled 7 and to the Oregon State University through channel labeled 6. On the same note Nikes competitors can also supply to their customers whereby if Adidas had Jesuit high school as its customer then it can supply it through channel 8 while Reebok can supply Oregon State University through channel labeled 5.

Therefore Nike Inc. can form strategic partnerships with its competitors that will maximize the value they obtain from their suppliers. On the other hand the same firms can still make strategic partnerships that will enable them to serve their customers effectively.

On the contrary they information systems also present potential threats to Nike from its competitors. Particularly because through the shared system both Nike Inc. and its competitors can have access to the same suppliers and customers. Therefore this calls on Nike to put up strategic measures that ensures that it maintains valuable relations with its suppliers and customers.

The information system also presents Nike with a vast of information about the market. For instance when it intends to make purchases the company can get information about the various suppliers from the system. For example if Nike is in a new task buy situation, it can obtain information about the qualities available from each supplier, the prices they each charge for the product or service even before it contacts them.

All these information can be obtained from information system labeled A. The suppliers also can evaluate the qualities of Nike and this will help them to consider whether they will accept an order from Nike. In addition when Nike Identifies one of the suppliers as the most preferred suppliers, then they will communicate between each other and share information on technical capacity, quality standards price offers and period of contract before signing supply contracts and agreeing on payment.

Therefore the above business model is effective because it makes use of the whole supply chain and the web. This model provides a platform for a company to share or use procurement data directly as well as simultaneously all along the supply chain. In addition each company can react to information independently hence enabling free flow of material.

On the other hand the model offers visibility to each company in the supply chain and therefore each of them can opt for independent action or they can as a group collectively takes action. As a result suppliers are not squeezed to offer the lowest prices as there can be independent transactions between two companies (Tompkin, 2001).

Customer Relationship Management strategies

In a business-to-business relationship, customers who are organizations go through a process to get a supplier who will provide them with products and services. Therefore companies that want to serve such organizational customers should invest in relationship management strategies in order to identify, attract as well as retain the most valuable customers that enable the business to maintain a profitable growth.

Particularly because in the current competitive world, such customers are hard to secure and competitive advantage through improved performance in service delivery as well as responsiveness to customer needs. These relationship strategies can either be positive in that they reward loyalty or they can be positive whereby, they penalize customers who want to shift (Buttle, 2008).

First, there is customer value proposition, whereby Nike determines the products and services that Jesuit high school athletes needs today and in the future. As a result Nike should offer some value that will be beyond what the school expects, hence this will act as an incentive as the school will compare what it gets from the relationship.

Secondly, differentiation can also be a key strategy that Nike Inc. can use to attract and retain customers, whereby the company asses the products and services offered by competitors and what the company needs to be providing hence develops products that have clear different and beneficial attributes from competitors.

The two above strategies while determining the products and needs of customers should put in to consideration the markets that these customers serve as this is their main objective. Thirdly Nike should strive to have to increase the profitability of its customers, like for Jesuit high school whereby Nike can strive to increase the amount of supplies it provides to the school. This will make it hard for the school to change to another supplier as it will involve a lot of costs (Hutt & Speh, 2010).

Fourthly, Nike can personalize the relationship whereby it provides customized services and products. This includes providing a whole set of performance equipments to Jesuit high school that fit specifically to their needs. They can also seek information from the school on its requirements and seek to meet them. For instance, if it provides sports equipments that can only be used with products from Nike Inc. only and have the schools name and colors displayed company.

The company can also give special offers to the customers during the low seasons so that in the high season when competitors are seeking for customers, Nikes loyal customers will be under its control as a result of contracts signed during the low season. For example Nike Inc. can give a discount to Jesuit high school to order for sports wear way before the season starts. As a result when the season starts and all other competitors are seeking customers, the high school will have been tied to the company (Buttle, 2008).

Supplier Relationship Management strategies

Supply relationship management refers to a comprehensive way of managing entities interactions with those companies that provide it with goods and services it uses. Its main objective is to streamline and make attain effectiveness in the processes between an entity and its suppliers. Any company that wants to be competitive in the current business world should therefore put in place strategies that ensure the company identify, attracts and retains suppliers that provide maximum value.

Just like the customer relationship management strategies, the suppliers relationship management strategies can also have positive and negative measures. Positive strategies refers to those strategies that reward the suppliers for being loyal while negative ones refer to those that penalize suppliers if they choose to stop supplying(Sandra & Ala, 2009).

First, Nike Company can seek to have increased share of business with its supplier, hence in the event that the company wants to stop supplying then it will risk losing a significantly large amount of business. For instance if Huang Jiang Nan Pao Resins Ltd that supplies glue to Nike Inc. has half of its revenue sales from Nike then it will be hard for the company to change loyalty as it will end up losing a lot of business.

Secondly, there is promotion of long-term relationships with the supplier, which involves dropping the less valuable suppliers and concentrating on the most valuable. It involves signing a long-term contract that ensures that the supplier is tied to the company hence guaranteed loyalty. For example Nike can sign a five year contract to be supplied with glue products from Huang Jiang Nan Pao Resins Ltd, therefore for those five years the suppliers loyalty will be guaranteed (Sandra & Ala, 2009).

Thirdly, provisions of supporting services to the supplier, whereby Nike can provide services to the glue supplier to help them easen their supply work.

For example the supplier can be supported with research services whereby Nike does research on its products use and effectiveness and hence provides its supplier with information that will promote its effective production and help in risk mitigation for mutual gain of both parties. Another strategy is for the company to enhance the process of getting goods and services.

This result in reduction of costs and a subsequent increase in profits for the supplier, hence the supplier will be attracted to stick to customers that he is receiving extra value.

The efficiency can be achieved by implementing Supplier Relationship Management technology. Lastly, Nike Inc. can form a partnership with its glue supplier, whereby they can create a community for the SRMs consisting of employees from both parties who include supplier performance managers, account Managers and Supply Chain Consultants who can contribute knowledge and come up with ways of generating revenue for both organizations by venturing in to out of contract business opportunities (Sandra & Ala, 2009).

Conclusion

It is apparent that Nike Inc has implemented effective relationship management strategies with its customers who have supplied its products around the world hence enabling it to secure and maintain the position of a global leader in sports footwear. In addition its strategies with the suppliers seem to be effective as some of them have dealt with the company for over ten years. The buying behavior of an organization is a process that has different stages.

Each buying situation will involve different numbers of the executive members depending on the cost involved, furthermore there are various buying situations based on whether there are variations from the previous purchase. It also comes out that there are different models for businesses to use, however each organization has an appropriate model that befits it. But also the introduction of business-to-business e-commerce has greatly revolutionized the traditional paradigms.

Bibliography

Buttle, F. (2008) Customer relationship management. Burlington, MA: Butterworth-Heinemann.

Geunes, J. Pardalos, P. M. and Romeijn, H. E. (2002). Supply chain management: models, applications, and research directions. Dordrecht, Netherlands: Khluwer Academic Publishers.

Hutt, M. D and Speh, T. W. (2009). Business marketing management: B2B. Mason, OH: Cengage Learning.

Sandra, P. and Ala, M. (2009). Supply Chain Development within Volvo Penta Chain  Development through Supplier Relationship Improvement. Web.

Sojitz Corporation (n.d.). Consumer Lifestyle Business Division: Major Business Activities (n.d). Web.

Tompkins, J. A. (2001). Future Ca pable Company: What Manufacturing Leaders Need to Do Today to Succeed Tomorrow. Tompkins Press.

Wikinvest, NIKE. (n.d). Web.

Zimber, K. (n.d.). University corporate sponsorship becomes a business objective. April, 16 2010. Web.

Brief Introduction

Business area, mission, key marketing objectives, fascinating facts

NIKE was founded in the 1960s and began mainly dealing with footwear. The company dealt mainly with footwear that bore its trademark swooshes. The company quickly expanded and began running advertisement campaigns, which would soon see the company own more than 50% of the market share in the US.

The primary advertising agent that NIKE has used since it began advertising is Wieden Kennedy. This company has continuously devised print and television advertisements for Nike. Over the years since its establishments Nike has expanded its product line to include many sports products. It has also grown production to many regions over the world.

Nike has acquired many of its competitors such as Umbro. This has strengthened its market position. Marketing is a very elaborate process of communicating the products of the company to prospective consumers (Richard, Wilson, & Gilligan, 2012). Nike has adopted many marketing strategies and methods to grow as it has. The company has used the just do it slogan to advertise its products.

Products/Services

What is the client selling?

The company has specialized in producing a wide array of sports equipment. A company that began with production of shoes for running track has expanded widely. They produce sports equipment for track, ice hockey, baseball, tennis, soccer, basketball, lacrosse, cricket, hockey, and American football.

In the design of their shoes, Nike always wants to outdo its competitors by producing shoes which will provide an added advantage to the athlete. Nike sells shoes for outdoor activities such as racing, skateboarding, cycling, golf, wrestling, and car racing. Shoes for recreational activities are also produced.

What is the market buying?

The market for Nike products buys them due to the agility provided by these shoes and equipment. Many people choose Nike products due to their comfort ability and convenience they provide when carrying out sporting activities. The Nike air, which is a well used shoe in basketball, is loved because of its flexibility and light nature. Feedback gotten from the market segment enables the company to improve on its products and produce better ones too.

According to Doyle, Stern, Stern (2006) the market expects

1. Reliability from the products
2. Comfort when using the shoes
3. Lightweight and agile equipment

The company is able to deliver these requirements to the sports men and women who are the target market.

Role of Communication

Why does the client want to advertise?

Nike carries out advertising to attain the following objectives:

• To promote the companys brand and products among existing clientele. The firm runs rigorous adverts to ensure that the consumers of its products are always aware of its new products. This ensures the companys products remain relevant to the consumers.
• To introduce its products to new consumers who are not aware of its products. This creation of awareness improves the market base the company has by recruiting new customers.
• To communicate new products and improvements in its equipment to the customers. This helps all customers to associate with the new and improved products (Wilson, 2000).

What do we want people to do?

1. Existing customers: most customers use Nike products in their sporting activities. Many also use Nike products for recreational purposes. We want people to compare our products with those of our competitors and see we have covered all the angles involved in producing the shoes and equipment at Nike. A majority of our customers are athletes who use the products to achieve greatness, so we always want them to achieve greatness using our products.
2. New customers: through our adverts we expect new customers to become aware of our products and begin using them. Our products are suited for many purposes and new customers will appreciate the measures we have taken in producing state of the art equipment and shoes.

How will we know that it has worked? Action standard?

• There will be an increase in the sale of products because as more people become aware of the products they will buy more.
• Increased usage of Nike products among the market population. This impulse in the use of Nike products will strengthen the brand image due to the reliable products we have.
• There will be an improvement in the amount of feedback given by the many customers.
• People will be more readily available to integrate the products from Nike in their life and provide a platform for development of better products.

Target Audience

Nike uses various strategies to reach its target market. The target market is mainly athletes and sports men. The target is mainly people who are active in sporting activities. Nike reaches its target audience through sponsorships. The company sponsors various celebrity athletes, college teams, and athletic teams.

This strategy of sponsorship is successful because it reaches the desired target audience which is the athletes (Ranchhod, Gurau & Guru, 2007). A specific athletic team may opt to use Nike products prompting the whole team to buy the product used so they can be one.

When using celebrity athletes in their advertising and publicity Nike usually shows the relation between the success of that athlete due to using their shoes and other products. This is a psychological method because it prompts those who want to achieve success like the athlete to buy the products.

On an overall scale, Nike targets the audience who will develop an intimacy with the product and always use it due to its reliability. The products brought to the market by Nike will accommodate a huge segment of the market and the largest number of consumers will find the products suiting their needs. (Adcock, Bradfield, Al Halborg & Ross, 2001, p 57-70)

Competitive Frame

What is the competition-direct or indirect? How are competitors positioned or different?

Nike faces stiff competition from other firms which deal with the same products. Reebok and Adidas which have recently merged are now the greatest threat to Nikes market dominance. The merging of the two companies will see the competition become a bit stiff for Nike.

The positioning of these companies in the market is such that they are able to outsource their manufacturing so they can concentrate on dealing with the market. This strategy of outsourcing has seen them utilize most of the available marketing and advertising strategies so they can always have a competitive advantage over Nike. (Kotler, Keller, Brady, Goodman, & Hansen, 2009, p.36).

What is the prospect currently thinking?

Nike is a dominant force in the production and market of sports gear and equipment all over the world. With the vast competition Nike has been prompted to always stay on top of its game in the industry. They have continually developed products to suit the market and the growing needs of the new clientele.

Nike has adopted a combination of strategies in order to continue soaring high in the market. They have used product development and improvement to acquire new market segments. They have adopted pricing strategies, advertisements and other promotional activities. These fierce competitive strategies will see the company remain relevant in the industry (Kotler, & Armstrong, 2009).

Social responsibility adopted by the company also improves the companys image and makes people view it as a very positive addition in society hence buy its products. Nike has also sought to venture into the international market to improve its distribution all over the world. Through market segmentation the company will prevail in new markets and remain a force to be reckoned with (Rakesh, 2005).

Single Minded Position

What is the single most motivating and differentiating thing we can say about the brand?

With the slogan just do it the company believes that anyone can be an athlete. In their recent advert which features a boy and the caption in the advert is that anyone can achieve greatness through using Nike products.

Why should we believe it?

Nike produces quality products which meet the customers requirements. This provides a high degree of customer loyalty and this attracts a lot of customers to embrace the brand. Most of the athletes who are contracted to advertise Nike products have achieved success through using these products in their areas. The pricing strategy that Nike has employed has made their products very affordable to a wide network of their customers.

This technique ensures a huge marketing and competitive advantage in the market (Mortimer, 2002). The company has also done a lot in its research and development division. This has caused a lot of developments in its products and also used the customer suggestions in developing new products for its market. (Jensen & Boles, 1994, p 76).

Other significant benefits /factors

Include practical considerations and mandatory inclusions

• There is an increase in brand recognition due to many people using the products.
• Products from Nike are of a high quality hence entice the consumers
• The company employs effective marketing strategies to cover all the demographic areas
• Nike has a huge capacity for innovative technologies which will enhance their products hence the competitive advantages the company has.
• A strong distribution chain the company uses enables the many numbers of customers it has to get its products effectively.
• The company uses very effective techniques in developing their research and development unit in order to develop state of the art products.
• Strong customer relations department and feedback centre have enabled the company gain an edge in using the customers feedbacks.

Tone and mood

What are the values of the brand?

The brand is bold and uses some of the most captivating adverts. They believe that anybody can make it to greatness and always advocate for people to do it because they can. The brand promotes many friendly natures of their shoes and equipment.

Candidate media

Give a view of the media we might use

The company has employed a vast advertising network using print advertising, outdoor advertising, mailing, online, radio and television advertising. Nike uses celebrities to carry out its various sports adverts. Many advertising channels the company employs are audio-visual and these ensure maximum success in their campaigns. This strategy has worked for a long time because people associate the success of those athletes with the Nike products they are using.

Reference List

Adcock, D, Bradfield, R, Al Halborg & Ross, C 2001, Common marketing activities, Pearson Education, New Jersey.

Doyle, P & Stern, P 2006, Marketing Management and Strategy, Pearson Education, New York.

Jensenl, YA & Boles, MA 1994, Introduction to marketing strategies, 2nd edn, McGraw Hill, London.

Kotler, Ph & Armstrong, G 2009, Marketing Principles, Pearson Education, New Jersey.

Kotler, Ph, Keller, K L, Brady, M, Goodman, M & Hansen, T 2009, Marketing Management: European Edition, Pearson Education, New Jersey.

Mortimer, G M 2002, Marketing Management: Principles and Strategies, Queensland, Brisbane.

Rakesh, M J 2005, International Marketing, Oxford University Press, Oxford.

Ranchhod, A, Gurau, C & Guru, C 2007, Marketing Strategies: A Contemporary Approach, Pearson Education, New Jersey.

Richard, MS, Wilson, MS & Gilligan, C 2012, Strategic Marketing Management, Routledge, London.

Wilson, D F 2000, Why divide consumer and organizational buyer behavior? European Journal of Marketing, vol. 34, iss. 7, pp.780  796.

Introduction

Nike should integrate information systems to improve efficiency and effectiveness of its operations.

Information technology leverages primary and secondary activities of an organization.

Manual systems have proved to have retrospective effective on the performance of organizations.

The adoption of information systems enhance value chain activities of diverse departments.

Focus of the Study

To focus on information value chain between numerous departments in Nike.

To examine the importance of value addition on each of the business processes in the four departments.

To enhance competitive advantage of Nike through the improvement of value chain and business processes.

To view the essence of information value chain in synchronisation of activities.

Value Chain Activities

Comparative analysis of traditional and modern approaches in each department elucidates value chain activities.

Primary activities such as research, development, design of products, marketing, and accounting happen in respective departments.

The concept of information value chain bestows strategic advantage in competitive markets.

Supplier, distribution, disposal, buyer, and firm value chain activities are core activities in business cycle.

A Ten Step Traditional Method

1. The application of manual system in coordinating primary and secondary activities among departments.
2. Separation of primary activities according to the respective departments.
3. Establishment of the products needed in the market based on manual research and development.
4. Collection of primary data using old method such as postal services.
5. Manual analysis of primary data collected.
6. Expensive and cumbersome way of generating invoices created massive inconsistencies.
7. Poor synchronisation of activities made preceding activities influence subsequent activities.
8. To enhance functions of the finance and sales and marketing departments, employment of many staff was a necessary strategy.
9. Reduction in cost-effectiveness of operations significantly increase operation costs.
10. The shipment of products took long because of the manual processes involved .

Problems of the Manual System

Lack of real-time communication between departments delayed delivery of products.

Manual accounting system caused massive errors and did not provide real-time information.

The sales and marketing department did not present the right information about marketing environment.

The processes of generating order was inefficient owing to poor communications between departments.

Improving the Business Chain

The manufacturing and production department and the sales and marketing department are areas that require improvement.

The manual system has problems in aspects such as research and development, design, production, sales, and marketing.

Improvement of the manual system requires integration of the information value chain and business processes.

The improvement of the functions in each department enhances competitive advantage of Nike.

Steps to Modernise the Manual System

Modernise operations of manufacturing and marketing departments.

Marketing department require real-time information for it to keep abreast with market trends.

Real-time provision of information aids sales and marketing department perform its core functions.

The core functions include collection of data, analysis of current market trends, and examination market variables.

Integration of management information system into the Internet enhance real-time analysis of data.

Requirements

Hardware devices such as mobile phones, laptops, and computers amongst others.

Networking system, which allows the transmission of high speed data.

Software such as Microsoft windows and Linux operating systems.

Customer relationship management software, which promotes real-time communication.

The Internet and website, which allow real-time communication between departments.

Importance of Professional MIS

Management information system (MIS) promotes efficiency of manual processes.

Enterprise resource planning (ERP) promotes execution of business operations.

Transaction processing system (TPS) is able to process, store, organise, and share the processed data for business decision-making.

Decisions support system (DSS) enable managers to make critical decisions.

The Knowledge Management Systems (KMS)

• Integration of MISs such as ERP, TPS, and DSS constitute knowledge management system.
• KMS helps management to make decisions at the strategic level, the tactical level, and the operational level of:

References

Arnott, D., & Pervan, G. (2008). Eight key issues for the decision support systems discipline. Decision Support Systems, 44(3), 657-672.

Barua, A., Konana, P., Whinston, A. B., & Yin, F. (2004). An empirical investigation of net-enabled business value. Mis Quarterly, 28(4), 585-620.

Dennis, A., Wixom, B. H., & Tegarden, D. (2005). Systems analysis and design with UML version 2.0. New York: Wiley & Sons.

Evans, J. R., & Berman, B. (2001). Conceptualizing and operationalising the business-to-business value chain. Industrial Marketing Management, 30(2), 135-148.

Goldschmidt, P. G. (2005). HIT and MIS: implications of health information technology and medical information systems. Communications of the ACM, 48(10), 68-74.

Jasperson, J. S., Carter, P. E., & Zmud, R. W. (2005). A comprehensive conceptualization of post-adoptive behaviors associated with information technology enabled work systems. MIS Quarterly, 29(3), 525-557.

Lee, C. C., & Yang, J. (2000). Knowledge value chain. Journal of management development, 19(9), 783-794.

Lewis, B. R., Templeton, G. F., & Byrd, T. A. (2005). A methodology for construct development in MIS research. European Journal of Information Systems, 14(4), 388-400.

Luftman, J., Kempaiah, R., & Nash, E. (2006). Key issues for IT executives 2005. MIS Quarterly Executive, 5(2). 1-23.

Marakas, G. M. (2003). Decision support systems in the 21st century. New Jersey New Jersey: Prentice Hall.

March, S. T., & Hevner, A. R. (2007). Integrated decision support systems: A data warehousing perspective. Decision Support Systems, 43(3), 1031-1043.

Melville, N. P. (2010). Information systems innovation for environmental sustainability. MIS Quarterly, 34(1), 1-21.

Shim, J. P., Warkentin, M., Courtney, J. F., Power, D. J., Sharda, R., & Carlsson, C. (2002). Past, present, and future of decision support technology. Decision support systems, 33(2), 111-126.

Tallon, P., Kraemer, K. L., & Gurbaxani, V. (2001). Executives perceptions of the business value of information technology: a process-oriented approach. Journal of Management Information Systems, 16(4), 145-173.

Turban, E., Aronson, J., & Liang, T. P. (2005). Decision Support Systems and Intelligent Systems. Pearson Prentice Hall.

Introduction

Nike is the biggest sports apparel brand and company in the world, reaching unprecedented popularity and profitability in recent years. Nike reported net revenue of $39.1 billion in the fiscal year 2019. It also holds a 27.4% market share in the athletic footwear segment, which is its main product, as well as significant shares in sportswear, being ahead of all competitors in every space (Nike, 2019). Nikes success has come largely due to its active, creative, and targeted marketing strategy that has taken advantage of the industrys trends and the companys own positioning.

External Analysis

PESTLE Analysis

External industry analysis demonstrates that Nike is facing largely the same influences and challenges of major international corporations. Due to its global presence and stretched-out supply and production chains, it relies heavily on international trade and regulations, forces that may impact this mechanism such as trade, treaties, currency rates, and even weather. It must abide by local regulations, such as financial and tax laws in the United States where it is based and manufacturing laws in its production countries. Legal elements apply to individual country approaches regarding labor and intellectual property. As a company reliant on retail sales for profit, Nike is heavily dependent on economic conditions that stimulate consumer sales, particularly of premium products.

In economic downturns, consumers may choose cheaper alternatives from competitors. As a brand that is more than just apparel but embraces technology in its products and marketing, technological development plays an important role for Nike. It can improve the quality and performance of its products as well as enhance the manufacturing process through the use of new materials or techniques. It is possible that technology will allow to shift production towards more eco-friendly methods as it is a major concern for the company due to the economies of scale and impact it has on the environment.

Porters Five Forces

The Porters 5 Forces analysis presents an opportunity to examine the state of competition in the industry and can be used to reduce competitive pressure. The bargaining power of suppliers for Nike is weak. Nike utilizes suppliers in over 40 countries across hundreds of factories. Many of these are individual suppliers that are small and have no forward integration. Nike sets the order and standards and can easily switch to another supplier if necessary. Meanwhile, few suppliers are willing to lose lucrative contracts from Nike. Despite Nike being reliant on consumer retail sales, buyers have low to moderate force impact. Customers have low switching costs due to the availability of international and local competitors. However, the high quality of Nike products and brand name recognition socially is difficult to find, particularly from unique products that have no alternatives such as Air Jordans. Substitute threats are moderate for Nike. Lower-priced substitutes in athletic apparel are common due to the wide availability of some technologies while other brands such as ASICS offer high-performance sneakers that can compete with Nike in the hi-tech segment. There are almost no threats of new entrants to the market, not at the international level where Nike could be challenged. The industry is extremely competitive and barriers to entry are enormous from a cost standpoint. Most known brands have been established for decades, while newer ones are being acquired by larger companies. Overall, the level of competition in the industry is very strong due to major competitors and similar products offered by all brands. Nike holds a strong brand name power, but other brands are catching up and top competitors in the industry are rapidly targeting consumers.

Competitors

Nike has a wide range of products and competes into distinct segments of sports apparel, athletic footwear, and sports clothing and accessories. Nike relies on footwear for over half of its profits. In this segment, it goes against established footwear companies such as ASICS, New Balance, and Reebok, as well as similar multi-range sports apparel brands the likes of Adidas and Puma. In recent years, ASICS and Puma that specialize in running shoes have been directly challenging Nike in terms of technology and design, for a lower price at the same or better quality, also having unique offerings that match Nikes Air Jordan or Converse brands. Meanwhile, New Balance is a premium segment shoe manufacturer that is also a popular choice and sponsor of numerous sports while offering innovative designs that challenge Nike (Russell, 2017). In athletic sportswear, Nike competes with brands such as Adidas which has a respectable market share and similar market capitalization, a close second to Nike in the world of professional sports attire and retail sales. Smaller but rapidly growing firms in the segment such as Puma and Under Armour are competing with Nike at similar quality and price points (Danziger, 2017).

Internal Analysis

SWOT Analysis

SWOT analysis is a technique that combines internal and external analysis to identify the internal strengths and weaknesses of an organization from the viewpoint of resources, management, and risks while highlighting external opportunities and threats (Heldman, 2018). The SWOT analysis as seen in Appendix A demonstrates a clear image of Nikes strategic approaches in its business model. Nike emphasizes a global brand image that it builds around its range of products, with footwear being the major segment. It positions itself as a luxury brand with high quality of products and newest technologies, but that is also a weakness as the company relies on its footwear segment for profitability and ultimately depends on tight retail margins that can be volatile (Green, 2017). Economic disruptions, such as one currently going on in the world, represent a threat since supply chains are disrupted and retail sales have crashed.

High prices reduce the volume of sales as many customers are locked out by the entry and allow competitors to take advantage of these target markets, which is a major threat. Nike can take advantage of the opportunity to enter new target markets by making more affordable products, further diversifying its product offerings, and entering niche markets (Russell, 2019). Another context that SWOT highlights are the manufacturing process for Nike products. Nike uses outsourcing to independent contractors, usually in the Asia-Pacific region due to cheap labor which increases its profit margins. However, there have been numerous accusations of poor working conditions and use of forced labor by the contractors that Nike has largely ignored, this can be a significant threat to the companys reputation, but also an opportunity if the company addresses these controversies (Nisen, 2013).

Internal Resources

The above VRIO analysis of Nikes internal resources highlights the dominant position of the company which creates a competitive advantage. It is evident that in areas of brand equity and marketing, Nike holds a competitive advantage simply due to the massive scale of its marketing efforts and global brand recognition that few other brands in any sector will experience. However, some of its marketing efforts are imitable, which competitors can take advantage of. Nike also holds a competitive advantage in research and development and product innovation, producing highly technological athletic goods from advanced materials, as well as setting new trends in the industry constantly forcing competitors to catch up. The company holds the temporary or relative advantage in elements such as supply chain management and customer loyalty, which are in a strong state but are also utilized by competitors.

Strategic Marketing Activities

Target Market

As an active sportswear company, Nike targets younger demographics, starting from teenagers and up to 45 years old. Young athletes and stylish athletic wear are a key focus for the brand. Nike does not only offer performance apparel but numerous products in the sport-casual category, including its sub-brand Converse. Due to the companys push into technology, digital sports, and e-commerce, many Nike marketing efforts are targeted towards the digital space that is appealing among the teen and young adult demographic. The company caters to athletes of both genders, with an emphasis on empowering women and young girls around the world as evident by its popular commercials and sponsorship of the Womens FIFA World Cup. While approximately 20% of Nikes revenue comes from womens lines of clothing, the market segment is rapidly growing and expected to increase (Childs and Jin, 2018).

Nike often uses geographic segmentation of its target market, based on popular sports in the region. While North America may see more American football and basketball-focused marketing, Europe is targeted with soccer advertisements. Behavioral and psychographic segmentation is utilized in a precise manner to identify target individuals with specific lifestyles and personalities as the brand targets those who actively engage in sports as well as those who exercise recreationally. Nike utilizes some targeting of consumers based on race or religion in its advertisements, but not in a discriminatory manner, but rather inspiring and inclusive. However, the high prices of its products essentially target the medium class and higher, so income can be considered a targeting factor (Childs and Jin, 2018).

Marketing Mix  4Ps

• Product  a wide range of products are available from Nike including footwear, equipment, apparel, and accessories. Footwear is the primary product offered by Nike as the company invests significant resources into the technology, design, and promotion of its shoes, particularly the luxury brands such as Nike Air Jordans.
• Pricing  Nikes pricing strategy is that of a luxury or premium segment. Pricing strategy utilizes vertical integration where participants at differing channel levels take roles in operation to control cost. The premium approach allows Nike to use the value-based pricing approach with offering niche, high-quality products to a consumer who has the capability of purchasing them and continues to return. The high equity of the brand establishes a relationship with the consumers that are willing to pay more to receive high-quality products.
• Place/Distribution  Nike distributes its products primarily through retail through its own stores as well as numerous multi-brand and athletic sports worldwide. Nike sells in more than 200 countries and has manufacturing facilities globally as well. Nike continuously maintains distributor and licensing deals. Significant distribution of Nike products occurs online as the company pushes its direct-to-consumer digital sales, through Nikes marketplace (NikeID) or similar multi-brand platforms.
• Promotion  the company uses a wide variety of effective communication mixes and strategies (discussed in the next section). It is a major strength of Nike as a company as it is has been able to adapt its marketing promotions well in accordance to social trends and geographic locations. Nike utilizes traditional and digital advertisements, social media participation, as well as a heavy emphasis on endorsements where famous athletes, teams, and celebrities support the Nike brand, driving brand awareness tremendously that convert directly into sales (Bhutto et al., 2016).

Marketing Strategy

Nike utilizes its marketing mix to target its key demographics in a similar manner that many companies do, through advertisement and connection. However, the company can do this better than most due to their long-running campaign of Just Do It, a slogan to their marketing material that is also the foundation to their success. Nike sells more than products, but an idea and aspirations, highly capitalizing on emotional branding. Few of their advertisements directly mention new products but focus on the narrative. Through this, in combination with smart utilization of traditional media, social media, and endorsements, Nike is appealing to consumers, leading people to discuss and believe in the brand. Furthermore, when highly respected athletes endorse or wear the brand, many want to mimic such actions, further emphasizing the status quo changing elements of the brand messaging (Golubeva, 2019). It has taken many decades for Nike to build this narrative and cultural zeitgeist impact of its brand, using nothing but a traditional marketing mix and offering high-quality products with a few unique signature elements.

Nike utilizes an integrated marketing communication strategy. Advertising is the primary method, intending to achieve the largest possible impact. Advertisement, particularly in the visual media, is used to form the attitude towards the brand through storytelling and positive emotional links. Social media is a leading IMC strategy for Nike which perceives itself as a modern and technological company. Nike has launched various social media projects where people share media of themselves posing or performing in Nike gear. Direct marketing is utilized in combination with advertisements and social media marketing to promote new products to target markets. Specific products are heavily advertised to target markets that would benefit from them for the biggest impact. Although rarely, Nike does hold promotions by offering consumers special offers on products to attract new customers and improve demand. Finally, Nike utilizes the sponsorship marketing strategy, being one of the main corporate sponsors in the world for both teams and individual stars (Mahdi et al., 2015). This approach usually contributes positively to the brand image and popularity which Nike closely monitors, viewing public relations as one of the essential elements of its marketing communications mix.

Conclusion

Nike is the largest company in the athletic apparel industry in the world, eclipsing competitors in both exposure and sales. Nike built a strong competitive advantage by capitalizing on its business model of outsourcing, distribution, and creating a relatively strong product portfolio, as well as utilizing a powerful marketing mix that involves sponsorship, endorsements, and emotional or social elements to its brand. As a brand, Nike represents innovation and persistence, seen in its founding and continuing in its growth not just as a sports apparel company, but as a company that realizes the importance of technology. At the same time, the company has invested significantly to formulate a brand mentality that supports resistance and differentiation from the status quo. It is controversial, but it is appealing, particularly to the younger generations that it seeks to appeal to. By creating the brand centered around Just Do It, an idea rather than a product or image, Nike resonated with everyone since all humans inherently strive for greatness and inspiration. Nike continuously uses its marketing mix to push new boundaries and enhance its visibility, ranging from the use of social media to endorsements and revolutionary technology. It can do so by taking advantage of its large internal resources and capitalizing on marketing positioning and strategies that formulate its successful brand.

Reference List

Bhutto, A. et al. (2016) Strategic marketing plan of Nike.

Masters Thesis. Institute of Science and Technology (SZABIST). Web.

Childs M. and Jin B. (2018) Nike: An Innovation Journey. in: Jin B. and Cedrola E. (eds) Product Innovation in the Global Fashion Industry. Palgrave Studies in Practice: Global Fashion Brand Management. New York: Palgrave Pivot, pp. 79-111.

Danziger, P. (2017) Winning the Sports Retail Race: Under Armour and Nike Hit the Wall, Forbes.

Golubeva, H. (2019) Just Do It: What We Can Learn from Nikes $39B Marketing Strategy.

Green, D. (2017) Nike turned into a luxury brand when no one was looking, Business Insider.

Heldman, K. (2018) PMP Project Management Professional Exam. 9th edn. California: Sybex.

Springborn, M. (2015) A Comparative Analysis of Strategies and Business Models of Nike, Inc. and Adidas Group with special reference to Competitive Advantage in the context of a Dynamic and Competitive Environment , International Journal of Business Management and Economic Research, 6(3).

Nike. (2019) NIKE, Inc. Reports Fiscal 2019 Fourth Quarter and Full Year Results.

Nisen, M. (2013) How Nike Solved Its Sweatshop Problem, Business Insider.

Russell, C. (2019) Adidas or Nike? Which Retail Giant is Winning The Sneakers War?, Forbes.

Russell, C. (2019) Nike Just Made A Big Move In The Wholesale Market, Forbes.

Appendix A  SWOT Analysis

Executive Summary

This term paper focused challenges, which Nike experience in developing countries. Specifically, three challenges were identified, namely maintaining a low-tech, low-cost product, high tariff rates and marketing and promotional strategies. First, Nike only offers premium products for the high-end markets. These products are beyond many potential consumers in developing countries. It was recommended that the company should develop low-tech, low-cost products for such consumer segments.

Second, the company must grapple with high tax rates in developing countries, which affect its profitability. It was recommended that Nike should negotiate taxation regime with various jurisdictions and adhere to tax laws to avoid lawsuits and fines. Finally, Nike marketing strategies have failed to focus on local markets.

It was recommended that the company should hire local people who understand consumer behaviors and seek for local sports celebrities to endorse products in different countries. It is expected that these solutions will offer opportunities for further growth, brand awareness and profitability.

Situational Analysis

Nike is a global athletic company that has branches all over the world in different regions. Its mission statement reads, Our mission is to bring inspiration and innovation to every athlete in the world (Larson 1). The company is currently the world leader in athletic footwear, apparel, equipment, accessories and services.

Nikes vision is to remain the leading company in the industry by continuing to produce the high quality products that have long been provided in the past (Nike, Inc. 1). Most importantly, Nike hopes to continue to meet the ever-changing demands and needs of their customers through product innovation (Nike, Inc. 6). Nike uses the advertising campaign strategy to help it dominate the industry.

Internally, the company strives to embrace technology, improves its promotional strategies and takes up social responsibilities. For instance, it employed Michael Jordan to be its brand ambassador and built a company logo around him, with the cache phrase just do it with the objective of attracting young and middle aged people.

Nike has struggled to overcome the allegation of exploiting workers in sweatshops located in Vietnam. Today, the company places a lot of emphasis on its  (Nike, Inc. 6)research and development, design departments and production and marketing in order to maintain its competitive edge.

SWOT analysis shows that the company can leverage its position as a world leader and develop products, accessories and services that meet the needs of various athletes. Besides, the company has greater opportunities to expand in the emerging markets such as the Middle East and maintain its leading brand.

Moreover, most of its consumers do not necessarily wear sportswear products to participate in sports (Lussier and Kimball 20). Hence, Nike could cultivate on this and sell the products as a fashion brand especially to the young generation (Lussier and Kimball 20).

The analysis, however, reveals that Nike has two major competitors in the market, Adidas and Under Armor. Adidas recently purchased Reebok in 2005 for $3.8 billion dollars whereas Under Armor registered a $2 billion rise in sales revenue growth contributing to about 20% (Cendrowski 80). Under armor has been very vigilant in innovation and recently, it introduced a new shoe design known as spine cage that has a lot of similarities to the Nike shoes but an improved design pattern.

Despite its growth in the international markets, the company faces some obstacles in developing countries such as Dubai. These challenges are mainly associated with the external environments, which Nike may not be able to control to some extent.

Problem Analysis and Description

Nike operations in the developing countries are currently facing many issues and the three problems for review in this research are discussed.

Maintaining a low-tech, low cost product

Nike manufactures high quality products with premium pricing. Hence, it is difficult to stock low tech, low cost products for these markets. In addition, many potential consumers in Dubai and other developing countries have other competing low-cost products to buy other than Nike premium products. For example, there are direct competitors of the company in these developing markets. These competitors have low cost products.

Therefore, it is imperative for Nike avoid the use of products that increase the cost of products faster to cut on costs on making their final products. The company must also look for cheaper ways to cut costs of making its products, for example, searching for cheaper labor and better working conditions for the workers. As noted previously, it had issues in China where there was cheap labor, but bad working conditions that many critics did not support.

As a result, it affected Nikes business image as the leading company in sports for developing countries. According to the business insider problems started in 1991 when an activist Jeff Ballinger publishes a report documenting low wages and poor working conditions in Indonesia. That is, when problems escalated and people began to see the company trying to change and adapt to the mistake it made for the poor working conditions.

Adidas provides products for a better price and it is technically the same thing. Consumers also do not have to choose only one product because of many choices and different products in the country. Many companies are choosing developing countries for global expansion because of the number of rising middle class consumers.

Consequently, consumers have many similar products over the brands that competing. Furthermore, Nike should maintain a competitive price to increase sales in developing countries by reducing costs of making the product to sell more in developing countries.

High tariff rates

Tariff rates in developing countries are extremely high. Therefore, high tariff rates have affected the companys profitability. For instance, the UAE (Dubai) and other emerging economies have high tariff rates. According to the trade commissioner, the import duties on most goods entering the UAE are 5%. In addition, foreigners cannot own more than 49 percent of the company in several industries in the UAE. Although these tariffs and ownership issues are not barriers to entry, they affect the companys profitability, revenues and overall growth.

Nike recognizes that a substantial amount of its revenues originate from foreign markets. Current economic and political conditions in developing countries have created unfavorable tax regimes, which have significant impacts. There have been proposals to review foreign tax regimes for the US multinational corporations.

Nevertheless, the company is unable to predict potential changes in foreign countries. These changes affect the income tax rate in the US as well. Moreover, Nike has to consider different statutory tax rates, requirements on deferred tax, changes in tax laws and other liabilities in all jurisdictions that could impacts its profitability.

The company performs several intercompany transactions with its distributors and subsidiaries related to tax issues in various jurisdictions. These are complex transactions. Nevertheless, Nike believes that they are accurate and capture economic realities on the ground. However, when local tax authorities scrutinize such transactions and detect any anomalies, they can adverse affect incomes, particularly in countries with high different tax rates (Nike, Inc. 7).

Nike believes that its tax audits and provisions are adequate. However, results from tax audits and other disputes could be different from its normal provisions and accruals. Any audit disputes could result in major financial implications for the periods affected.

Change of marketing strategy

Based on Nikes under performance in many foreign markets, it is likely that its marketing strategy in different regions may not include teams or individuals native to those regions and this has resulted into a crisis (Deng 102). Nike should employee locals for its marketing departments for various countries in which it operates because people from those countries understand consumer behaviors and how they make choices on products.

Consequently, the company must review its marketing strategies to target locals based upon the best needs that fit that specific country. Moreover, the company relies on expensive, sports celebrities to endorse its products.

Nike acknowledges its relationships with professional athletes, sports teams, and leagues to develop, evaluate and promote its products, as well as establish product authenticity with consumers (Nike, Inc. 6). It is possible that Nike has not found suitable endorsers in certain developing countries.

Consequently, its marketing activities have been adversely affected in such regions. Moreover, any changes with the current endorsers could result in losses to the company. There are also possibilities that its promotional associates may use products in manners that hurt the reputation of the brand and its image. Such actions could adversely affect the companys sales, operations and revenues from its subsidiaries.

In some instances, Nike has cited poor performances by product endorsers or inability to identify the most promising athletes to promote its products globally. Moreover, Nike has failed to get endorsement at fair rates that make economic sense. All these expensive endorsements and other related challenges have affected the companys sales, revenue growth and profitability as well as shareholders returns.

Solutions, Evaluations and Recommendations

Three critical challenges affecting Nike in developing economies have been identified as maintaining a low-tech, low cost product, high tariff rates, and marketing and promotional strategies. Consequently, the company requires effective solutions to overcome these challenges. However, it is imperative to note that Nike may find it difficult to control tax regimes in different jurisdictions because these are external conditions resulting from governments actions.

Although there are large numbers of rising middle class in developing countries such as the UAE, Nike apparels are exclusively expensive and meant for high-end consumers. Therefore, Nike should make specific products that will appeal to its targets markets in developing countries. The company must also note that many consumers of its products are not necessarily sports personalities.

This is an opportunity for Nike to introduce streetwear for such consumers. It would drive the brand sales and image. These products do not necessarily have to incorporate high-tech designs and expensive fabrics meant for athletes. The approach is likely to be successful because of popularity of Nike products despite their premium pricing.

Tariff rates have affected the companys earnings and profitability. For instance, in the UAE, the company can only own 49 percent stake in the investment. In addition, the UAE commercial law favors agents from foreign investors. It would be difficult for Nike to get favorable taxation systems in developing countries because of red tape in policy change. Nevertheless, the company must stick to the law in order to avoid expensive lawsuits and subsequent fines associated with failures to adhere to tax regimes.

Nike must review its marketing and promotional team in different countries. The marketing department requires a different staff set up to deal with the changing times. Currently, Adidas has embarked on fierce marketing campaigns to outdo Nike. A quality staff engagement relates to the qualitative adjustment in the marketing performance. New marketing officials will come up with a different approach in addressing the related market conditions that are irrelevant now.

The head of the department should be encouraged to understand the need to outdo the companys competitors such as Adidas in retaining the market leader position (Bergen 49). A different marketing approach will determine the rate at which Nike products are selling under normal marketing operations.

The use of print media is currently not doing the company well. They should reconsider a qualitative approach in addressing the television media and event promotions that will improve the reception that the companys products get in the market. The change in the marketing strategies will facilitate the making of an evaluation that is useful in addressing the relevant adjustment in meeting the right market specifications.

Nike must conduct market research in developing countries to understand advertisement messages that appeal to consumers. Nikes quality solution to the completion crisis relates to their understanding of the market functioning as per the right market attributes that play an important role in creating more customer loyalty.

The right research relates to the fundamental marketing principles that improve the general aspects of the marketing methodology with respect to the existing issues that advance the relevant understanding of the marketing mix (Seymour 50). The deep issues are a part of the market outreach programs determine through the evaluation of the existing conditions in dealing with deep market segments as part of the right development of the marketing strategies.

The changed approach in the marketing strategy requires a consideration of the benefits that it brings about. The news marketing campaigns should not have a high cost to the company.

Unmatchable advertising costs interfere with the rate of gains in paying back to the entrepreneur (Gromer 50). The choice of the marketing channels should have matching revenue. It is important for the marketing department to come up with a cost and benefit analysis that appreciates the role played by each of the different methodologies in increasing the sales volumes.

Implementation Plan

The relevant stakeholders in the marketing of the companys products are engaged in determining the change in plan. Each of the players in the success of the marketing strategy requires an attention so that they can give their opinions as per their experiences (Samuels 20).

The parties to the new marketing strategy believe in the success of their operations with the objective of increasing the companys profitability. Different responsibilities and accountability levels are allocated to each of the related parties with the goal of executing the relevant work formula.

Nike will require the following resources to implement these solutions.

Staff: Hire local staff for marketing departments, if not available.

Training: The company will train its marketing departments to understand local consumer behaviors in order to develop marketing tools specific to noted behaviors.

Assessment tools: Nike will develop market survey instruments to assess impacts of marketing strategies on consumer awareness and sales. In addition, assessment tools will be used to assess change in knowledge and skills in marketing departments.

Funds: Funds and other resources for additional staff, product endorsers, assessment tools, technologies, external adult trainers and training will be required to support the implementation of new solutions and strategies.

Success Metrics

The success of the new marketing operations has a direct proportion to the incremental sales volume. The change in the sales figure is compared to the incremental marketing cost on the income statement. Success for Nike is evident in the profitability levels that are an indication of the improved performance (Bergen 52).

Changes in profit margins determine the immediate effect regarding the new approaches with respect to the implemented plan. Ratio analysis for Nike evaluates the rate at which the business is capable of dealing with the completion from Adidas, which is a competitor in the same industry.

Increased product awareness and sales will also reflect effectiveness of the new marketing and promotional strategies.

The company will note increased changes in tax regime if negotiations are successful. In addition, adherence to tax laws will eliminate potential lawsuits and fines. Nike must review these solutions every quarter based on the financial calendar.

Works Cited

Bergen, J. Sneak Peek. 64.4 (2012): 47-54. Print.

Cendrowski, S. Nikes New Marketing Mojo. Fortune 165.3 (2012): 80-88. Print.

Deng, Tianbai. Just done it- Nikes new advertising plan facing global economic crisis. International Journal of Business and Management 4.3 (2009): 102-105. Print.

Gromer, C. Inside Nikes Secret Sports Lab. Popular Mechanics 178.7 (n.d): 44-51. Print.

Larson, D. Global Brand Management  Nikes Global Brand. ISM Journal of International Business 1.3 (2011): 1-14. Print.

Lussier, Robert and David Kimball. Applied Sport Management Skills. Massachusetts: Human Kinetics, 2012. Print.

Nike, Inc. FORM 10-K Annual Report for the Period Ending 05/31/13. Beaverton, OR: EDGAR Online, Inc, 2013. Print.

. FORM 10-K Annual Report for the Period Ending 05/31/14. Beaverton, OR: EDGAR Online, Inc, 2014. Print.

Samuels, A. Maybe it Is the Shoes. 148.20 (n.d): 14-20. Print.

Seymour, R. Sporting design goes trendy. 1.424 (2005): 50-60. Print.