Case Study – Nike: Spreading Out to Stay Together

Case Study amazon Nike Spreading Out to Stay unneurotic Nike, Inc. is an Americanmultinational corporationthat is industrious in the design, development and human beingwide market and selling of footwear, app arl, equipment, devilories and services. The family is headquartered nearBeaverton, Oregon, in thePortland metropolitan bea. It is the initiations leading supplier of athletic shoesandappargonland a study manufacturer ofsports equipment, with revenue in superfluity of US$24. 1billion in its fiscal year 2012 (ending May 31, 2012). As of 2012, it employed more than 44,000 people worldwide. The check alone is valued at $10. zillion making it the most valuable soft touch among sports businesses. Nike andPrecision Castpartsargon the only draw 500companies headquartered in the state of Oregon, harmonise toThe Oregonian. The comp some(prenominal) was founded on January 25, 1964 as dour Ribbon SportsbyBill BowermanandPhil Knight,and formally became Nike, Inc. on May 30, 1 978. The play along takes its shape fromNikethe Greek goddess of victory. Nike markets its products under its own brand, as well as Nike Golf, Nike Pro,Nike+,Air Jordan,Nike Skateboarding, and subsidiaries includingcabbage Haan,Hurley International,UmbroandConverse.Nike also owned Bauer Hockey (later renamedNike Bauer) betwixt 1995 and 2008. In addition to manufacturing sportswear and equipment, the company operates retail stores under the Niketown name. Nike sponsors many an(prenominal) high-profile athletes and sports teams or so the world, with the highly recognized trademarks of Just Do It and theSwooshlogo. Discussion Questions 1. When Nike CEO Phil Knight stepped low and handed his job to Bill Perez, he abideed on as chairman of the board. In what ways could Knights move presence on the board take on created an informal structure that prevented Perez from achieving full and transact leadership of Nike?Answer Informal structures argon the shadow organization that repr esents the actual operative and communication relationships that may not agree the formal organizational chart. When knight remained on the board, old communication relationships may bring survived his departure from the CEO position, cutting Perez off-key from valuable information. Knights access to the informal communication internet may throw off worked to spread rumors to Knight and linchpin down the communication chain. These rumors may have contained inaccurate information, ca purposed resistance to metamorphose and confuse members from their work.This may have reinforced Perezs position as an out-of-doorr. 2. How can Nike use two traditional and newer organization structures to champion the firms heavy strategical commitment to outsourcing? Answer Network structures use information technology (IT) to link with networks of outside suppliers and service contractors. This outlines Nikes efforts to outsource many nonexecutive responsibilities to reduce overhead. I n addition to outsourcing production, the search and marketing business centers listed in the deterrent example could be part of a network structure.Other functions may include design, advertizing, licensing, compliance sports and sport marketing. 3. Given the problems Nike has had with sweatshop labour being utilise in some of its foreign contractors, are there subsystems of the firm that need to be run with a mechanistic preferably than original design? Give examples to admit your answer. Answers Mechanistic designs are highly modify and bureaucratic with an emphasis on bidding and control. This might suggest that mechanistic designs are appropriate for manufacturing in foreign countries.Organic designs are adaptive, decentralized and tend to respond to change more quickly. This would probably be a good fit for an organization that has utmost flung operations in various countries with diametric cultures that try to respond to rapidly ever-changing technology, fashion, customer demands and economic conditions. Nikes manufacturing subsystem should be run with mechanistic rather than organic so as to protect the part brand and its original designs. The design should be utmost unique and further differentiated, not conforming to culture.Design is could be one competitory advantage so it is important that the manufacturing of the products are conformed to the original ideas of the maker, uninfluenced by any early(a) factors involved in its manufacturing process. mannequin of this idea is the use of differentiation strategy of companies to gain competitive advantage. 4. Further lookGather information on Nikes recent moves and accomplishments, and those of its rival Adidas. Are both firms by-line the aforesaid(prenominal) strategies and using the same structures to support them? Or, is one doing something quite different from the some other?Based on what you learn, what do you predict for the future? Will Nike stay on top, or is Adidas the ne xt exertion leader? The advertising strategy differs from company to company. Generally, Nike believes in spending 5-7% of its revenues in advertising and endorsement. Nike has planned to spend $4. 2 million until 2014 for endorsements alone. With the huge size of Nike, it is tough for other companies to allocate a big standard for their marketing expenses. Moreover, Nike has always an edge when it comes to advertising and marketing. The table below shows the advertising strategy for the major players in the industry.Company Strategy Nike * Endorsing Athletes * Sponsoring Sports events * city based advertisements * Banners Billboards * Themes on bringing ambition and launching to any athlete in world Adidas, Reebok * Sponsoring Sports events * Endorsing Athletes * Themes on improving work of every athlete in the world cougar * Mixing influence of sports, life style fashion * Puma concept retail stores * Puma fashion shows * New hale advertising campaigns * Building sea sonal impulsion during holiday seasons Other companies * Minimal or less advertising based on storesNike has invested a circumstances so furthermost in developing a allowance brand that implies high quality and wangle for the customer. Nike has a wide range of products ranging from athletic contest to life style and also in different price ranges. Therefore, it is always a challenge to fight against brand dilution deep down Nike. The following gives an idea of the customers perception of the brands. Company Branding content and strategy Nike Athletic, Influential, Outgoing, Aggressive, hi tech, futuristic, retro chill out American way of living Associated with Athletes at top of their sportTo bring inspiration and innovation to every athlete in world Adidas, Reebok Clear, orderly, Practical, hi tech, Sophisticated, Sincere Conservative European style To improve mathematical operation of every athlete in the world Associated with selected soccer players/teams, NBA stars, Hi p hop artists Puma Elegant, colorful, fresh, spontaneous, individual, metropolitan, international Mixing influence of sports, life style fashion Fashion brand, performance cursory footwear, fringe, extreme sports Other companies Based on their product lines. Generally not a strong brand messageIn general, Nikes shoes are associated to be of high quality and stylish. Reeboks are comfortable and casual, and the Adidas brand boasts superior performance and is perceived as a professional, technically orientated brand with strong European roots. Nike fields some of the best in class technological practices and has a fewer patents to its credit. Nike emphasizes on these and has developed a lot of new products with use of high technology and sophistication. An example of that is the microprocessor shoe to give prominent experience and comfort to the customer.However, Adidas is also work on high tech innovations to return high quality shoes. Lately, Adidas and Nike have been doing pleasure based marketing campaign by forming alliances with technology/entertainment companies. Nike had an alliance with orchard apple tree to sell Nike shoes with Apple iPods sequence Adidas tied up with Microsoft to sell Adidas goods with Microsoft Xbox shimmer systems. So far the success of these alliances is insofar to be quantified. Nike follows a 100% outsourcing strategy. approximately competitors follow the outsourcing strategy.Exceptions to this are New counterweight and other smaller players. New sense of balance claims that 75% of its production is from the US and other small companies produce in the US as well. In general, Nike might cool off be the industry leader if it compensates its weaknesses in organizational structures with different strategies such as focusing on innovation and development, following differentiation and pricing-based strategies, and investing on sustainability research. References http//www. nike. com/ph http//en. wikipedia. org/wiki/Nike ,_Inc. http//www. scribd. com/doc/91701683/Case-Study