Case Study 2 (2)

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Erika Manche Strategic Management 479 Professor Morris August 12, 2023 Case Study 2 Nike Inc. Resources  Manufacturing facilities  Brand and trademarks  Financial resources  Supply chain  Athlete and celebrity endorsements  Intellectual property  Sustainability resources  Retail stores Capabilities  Innovative product design  Strong brand management  Supply-chain management  Global sourcing  Network of retail stores and E-commerce  Athlete and celebrity relationships  Customization and personalization options  Global presence  Innovative retail concepts such as NikeTown Core Concepts

Erika Manche Strategic Management 479 Professor Morris August 12, 2023  Innovative products that focus on performance and comfort  Design excellence, creating products that perform and look well  Athlete-centered approach. Nike prioritizes the needs of athletes for product development  Market and branding. Nike’s brand is probably its most valuable asset.  Sustainability; the company is committed to environmental responsibility  Global reach. Nike operates with an understanding of diverse market needs globally.  Inclusivity Nike promotes diversity by offering products that would appeal to consumers of all backgrounds.

Erika Manche Strategic Management 479 Professor Morris August 12, 2023 Business Strategy Nike Incorporated’s business strategy focuses mainly on digital transformation, sustainability, innovation, and a commitment to inclusivity and community engagement. Nike’s commitment to innovation is their leading business strategy. The company is continuously coming out with new product designs to enhance athletic apparel with style and functionality. One of Nike’s leading innovations is the waffle style sole on its running shoes, which offers more traction and lighter weight than a traditional running shoe (pg. 87). Nike has also increasingly focused on digital transformation efforts. This movement enhances consumers’ experience for a seamless shopping experience through apps and online shopping. Nike is very focused on sustainability. This is one of their core values. Nike pledged in 2019 to head towards 100% renewable energy in their operating facilities by the year 2025 (Fashion Trends, 2023). The company signed an agreement with a Texan windfarm to accomplish vast amounts of clean power. With consumers more and more concerned with how companies’ sustainability efforts, this is a good move for the company’s financial future. Nike strives through marketing campaigns to promote and celebrate inclusivity and diversity. In 2019, Nike took the initiative to make changes within the company after experiencing some cultural issues (p. 96). Women who worked for the company were expressing their aggravation in the lack of promotional opportunities, unequal pay, and inappropriate behavior in the workplace (p.96). Nike has since been working to resolve these issues and went from 34,000 employees to 73,000 and have strived to create a more diverse workforce. Management

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Erika Manche Strategic Management 479 Professor Morris August 12, 2023 In 2019, Nike made some major moves to demonstrate forward-thinking ad a comprehensive approach to support its position as a leading global company for sportswear and athletic equipment. Nike focused on global expansion, mainly working on their presence in China, and competing with Chinas largest athletic brand, Li-Ning, a household name in the country (p.93). Nike managed to bring in 5 million dollars in sales in 2019, a large increase from the revenues in 2015 of 3 billion (p.93). To continue to see growth of sales in China, Nike can focus on localization, and understanding the Chinese market tastes, trends, and cultures. They can also continue to expand their retail footprint in China, zoning in on more populated cities and high traffic retail areas. Offering customization for products to appeal to Chinese consumers, such as offering personalized shoes or apparel to drive sales. Nike could also promote their products to Chinese tech-savvy consumers and employ popular Chinese social media platforms including We-Chat and Weibo for sales and customer engagement. Nike is known for its celebrity athlete endorsements. It would be helpful for their expansion in this market to have collaborations with Chinese athletes and create exclusive collections which would resonate with their local consumers. Nike recognizes the growth rate potential in China, which is estimated to be 10 times the rate of the United States. Because of trade wars between China and the Unites States, Nike realizes that digital transformation and penetrating the online market will be key for their success in that market. Marketing

Erika Manche Strategic Management 479 Professor Morris August 12, 2023 Nike is has a long history of collaboration with professional athletes to help promote their products and bolster their brand identity. In 2019, Nike’s endorsements from professional elite athletes remained a pivotal characteristic of their marketing strategy. Some of these athletes included Serena Williams, LeBron James, Colin Kirpatrick, and Micheal Jordan. In 1984 Nike made a big move by signing Micheal Jordan to endorse their brand. This was considered an unconventional move as they spent their entire marketing budget on endorsing this one single professional athlete. This move turned out to be a big one, as the Air Jordan’s they produced became one of the most popular shoes and remain so to date. The companies celebrity endorsements have not always been a beneficial move, however. Colin Kirpatrick, who signed an endorsement deal with the brand in 2018 (pg. 95). The quarterback made a very controversial move by not standing for the national anthem before a game, as a sign of protest against “police brutality and racism in the Unites States” (p. 95). While some fans supported his protest, it contributed to the Black Lives Matter movement. Many Americans saw this acts as an unpatriotic, and it caused a lot of public controversy. Nike chose to continue to endorse the athlete, even after he was blacklisted from the NFL. Nike’s slogan for this was ““Believe in something, even if it means sacrificing everything. Just do it”. Nike later dropped the endorsement deal with Kirpatrick and pulled the limited edition shoes from stores. The situation surrounding Collin Kirpatrick caused a multifaceted impact on Nike’s business. It caused both controversy and support for the brand. Although there was some negative publicity, it still contributed to the brands position on social issues.

Erika Manche Strategic Management 479 Professor Morris August 12, 2023 Nike could avoid this type of situation again by employing special previsions within their contracts with celebrity athletes to prevent them from participating in unpatriotic acts. This would protect the brand from being the center of this type of controversy again.

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Erika Manche Strategic Management 479 Professor Morris August 12, 2023 Finance Nike has experienced continual financial growth and success from 2012 to 2019. In 2015, Nike had 30.6 billion in revenue, and by 2019 it had climbed to 39.1 billion. This represents a notable compound growth rate. Nike has had a lot more competition in the market from other brands during this time. Brands such as Adidas, Under Armor, Lululemon, and China’s well known brand, Li Ning. When Nike was founded in 1964, and since then, there has been many new brands emerging offering the same types of products. Competition with emerging brands is one of the biggest financial issues for the company in recent years. One main advantage Nike has over other companies is their brand recognition, which is one of the most well-known in the industry. New brands try to focus on cutting-edge technologies and innovative materials to make them stand out. Nike is met with the challenge of meeting consumer expectations and staying competitive with new brands who may come up with new products. Nike should focus its strategy on sustainability, which the company currently is working towards. More than ever, consumers want to buy products from companies that they know are prioritizing the environment in their production. Eco-friendly products and materials should be a center point in product development. Nike has made a pledge to use 100% renewable energy in their operating facilities by 2025. This is a good marketing strategy for the company. Consumers are willing to spend more money and be more loyal to brands who focus on sustainability.

Erika Manche Strategic Management 479 Professor Morris August 12, 2023 Business Ethics Nike has faced criticism and controversy in the past with allegations for fostering a ‘boys club’ culture within its brand. Some of the allegations include gender discrimination, lack of diversity and inclusion, and unequal pay. Some employees have claimed that the company is run by a group of men who are “hostile towards women” (p. 86). With the ongoing feminist movement, the company has worked towards taking step to improve their workplace culture and address these issues. Nike has made a point to put effort into promoting diversity, inclusion, and equality within the company. They have started initiatives to rectify this situation. Nike now has pay equity reviews, measures to create a more inclusive workplace, and now has a larger representation of both minorities and women in their leadership roles. The company has publicly acknowledged the challenges and made a commitment to positive changes. Nike can continue on the right path by continuing to appoint women and minorities into leadership roles. I think this is the most important aspect to clear public perception of the brand. Hiring competent women and minorities and giving them equal pay. Another way to improve this area within the company would be to implement mandatory training for diversity and inclusivity training for employees. This would help encourage more empathy, create awareness, and create a more inclusive workplace culture. Nike could also publish diversity and inclusion reports which detail how the company is progressing towards these goals. Transparency is important to many consumers. Public perception is important to Nike and they have made changes to move in the right direction.

Erika Manche Strategic Management 479 Professor Morris August 12, 2023 Resources ([2019]). MGMT 479 5th ed. Case Studies. McGraw-Hill Create. https://ccis.vitalsource.com/books/9781307604412 Fashion Network. 2023. “Nike Heads Towards 100% Renewables in North America; Signs Major Clean Power Agreement”. Retrieved on September 13, 2023 from Nike heads towards 100% renewables in North America; signs major clean power agreement (fashionnetwork.com) Hi-Com. (2023). “Top 24 Chinese Social Media apps of 2023”. Retrieved on September 14, 2023 from Most popular Chinese Social Media Apps and Platforms 2023 (hicom-asia.com) his is your second case study assignment out of four. For this assignment, you will need to access the full-length case study you have been assigned at the top of this page within your Case Studies eText. You are required to read and analyze this case study. Your analysis must:  List in bullet format: o Resources o Capabilities o Core Competencies  Discuss and describe the business strategy currently being used by the company (minimum of 1 page)  Provide a total of four findings of fact; 1 from the following four functional areas of business: o Management o Marketing o Finance or Accounting o Business Ethics

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Erika Manche Strategic Management 479 Professor Morris August 12, 2023  Provide a full justification and recommendation for each finding of fact (minimum of 1 page each)

Case Study 2 (2)

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