Nikes Case

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Iona College *

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385

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Marketing

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Feb 20, 2024

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Uploaded by AgentFerretMaster623

Dimarie Pagoada MKT 385A Professor Hamerman Question 1 Nike has taken a number of actions to improve the sustainability of their supply chain. To increase their commitment to sustainability and lower their ecological footprint, Nike has collaborated with their suppliers. For instance, Nike's "Considered Index" program offers suppliers a set of sustainability principles and resources to aid in waste reduction, energy conservation, and the use of more eco-friendly materials. By making information about their manufacturers, suppliers, and labor policies public, Nike has improved the transparency of their whole supply chain. Nike is subtle when it comes to their sustainability efforts, but it is completely transparent when it comes to their methods, as was discussed in the case in several areas. It is said in the section under "Relations with Customers" that Parker, the CEO at the time, stated that offering education, transparency, and data to customers will help them make more informed decisions. This is also expressed in the article "A More Sustainable Supply Chain" which focuses on the importance of transparency about their environmental impact. To make sure that their suppliers are adhering to their labor and sustainability requirements, Nike has also done routine audits and reviews of them. According to what was said in the case, Nike's aim for FY20 includes sourcing solely from factories that had at least a bronze grade on the Manufacturing Index, which indicates that they fulfill basic criteria. Also talked about in the article "A More Sustainable Supply Chain", it talks about first-tier and second-tier suppliers and essentially keeping them

accountable for their environmental footprint as these companies are choosing to work with these specific suppliers and would like their environmental goals to align. Question 2 The increased customer demand for products that are sustainable and environmentally friendly is one mediating factor for profitability that Nike tackles in the case's Green Products section. Nike understands that consumers are consistently looking for products and companies that care about the environment and are practicing customs to have less of a negative environmental impact. This shift has the chance to increase sales and income for Nike. As a result, Nike has created a line of green items that are intended to appeal to buyers who are concerned about the environment. For instance, the business created a line of shoes using recycled materials that were favorably welcomed by customers and increased Nike's sales. This fits with the "How to talk with your CFO" article, which stresses how sustainability may improve market share and foster consumer loyalty, “Sustainable products and services can help a brand stand out from the crowd and increase market share and sales”. Innovation is another mediating factor for profitability that Nike tackles in the case's Nike Flyknit section. Nike acknowledges that they constantly need to be innovative, creative, and conscientious of what is trending when developing their products to keep customers happy if they want to retain their leading position in the athletic footwear sector. A prime instance of this is because it was an important development that helped set Nike apart from their rivals. The innovation, which involves knitting together thin materials to make a seamless top for shoes, has proven very effective in boosting Nike's sales and financial performance. Nike has also been able to decrease waste and increase supply chain efficiency by utilizing this cutting-edge technology, which has further boosted company profitability. This is consistent with the "How to talk with

your CFO" article, which emphasizes how sustainability projects may result in cost reductions and process enhancements that have a beneficial effect on a business, “A sustainability strategy can improve operational efficiency, and thus cut costs, by reducing waste and the use of natural resources”. Question 3 Nike notes that consumers are increasingly taking sustainability into account when making buying choices in the case's Relationship with Customers section. As said by Nike in this case, brand loyalty is increasingly driven by sustainability, and consumers are prepared to pay more money for brands and products that are more environmentally friendly. Additionally, Nike recognizes that consumers are becoming more and more aware of ecological problems and are showing an increased level of interest in the effects these products and brands are making on the environment which in turn affects their decision on whether to purchase the product or from the brand. In the article "The Elusive Green Consumer" there are three strategies marketers can employ to help clients' clients comprehend the importance of sustainability. One of them is to focus on concrete gains. Consumers are more likely to be inspired by sustainability's direct advantages, such as cost savings or enhanced health, than just by guilt-tripping them and saying they are making the world a better place. When promoting products that are environmentally friendly, marketers should concentrate on these specific advantages. Another one is to focus on the personal impact of things. When consumers perceive that their activities have a personal impact, they are more likely to be encouraged to behave environmentally responsibly. The human connection of environmental sustainability such as how a product may improve a customer's life or how it can assist their society, should be emphasized by marketers. A final

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strategy is to make it simple for the consumer. When sustainable practices are simple and convenient, consumers are more likely to practice them. By giving customers accurate details and making environmentally friendly options widely available, it makes it simpler for them to follow. In the article, it talks about prompts and in turn states, “Prompts work best when they are easy to understand and received where the behavior will take place, and when people are motivated to engage in the behavior. In one study just placing prompts near recycling bins increased recycling by 54%”. This is an example of how making it simpler for the consumers makes it simpler for the marketer. Therefore, a marketer could focus on concrete gains, focus on the personal impact of things, and make it simple for the consumer in order to help them understand the value of environmental sustainability. Question 4 Nike is dedicated to ensuring that people in their supply chain receive fair salaries and enjoy good working conditions. Nike believes that Decent work and economic growth go hand in hand. In order to make this work they implemented a program called the Fair Labor Association (FLA) monitoring program, which makes sure that the manufacturers in their supply chain adhere to labor laws. Nike is dedicated to decreasing waste and using more sustainable materials in their products, both in terms of the UN pillar of responsible consumption and production. They are aiming to utilize more sustainable materials in their products and have created an index of sustainable materials that classify items according to their impact on the environment. Labor practices are another UN pillar Nike dedicates their time and energy towards. Nike has improved working conditions in their outsourced factories by developing a code of conduct for suppliers and putting in place audits and compliance monitoring procedures. Reduced inequalities is a UN

pillar Nike is proud to participate in. Nike has put programs in place to deal with imbalances in their supply chain. These include opportunities for educational and professional development as well as ensuring equal pay for equal work not just in terms of environmental knowledge but in other areas as well. Lastly, sustainable cities and cities is a UN pillar Nike is involved in. Nike has put in place efforts aimed at enhancing the sustainability of the towns and cities where their suppliers conduct business. These include programs with a focus on water conservation, waste reduction, and energy efficiency. Question 5 The reporting framework for Nike's sustainability strategy is displayed in Exhibit 3. The display gives the impression that the reporting structure will help a sustainability strategy succeed. The exhibit demonstrates how Nike has set up a Corporate Responsibility governance structure that comprises a Corporate Responsibility team. This organizational structure makes sure that there is clear accountability for sustainability activities across the board and that there are personnel and resources available to support sustainability objectives. The display also demonstrates how Nike has created cross-functional teams and alliances to solve sustainability concerns, including collaborating with suppliers and companies. This strategy demonstrates Nike's understanding of the value of stakeholder involvement and cooperation in accomplishing sustainability goals. Nike includes their stakeholders from across the supply chain, including suppliers, workers, consumers, and investors, in sustainability initiatives to ensure broad participation and buy-in. In order to ensure that sustainability is incorporated into the business operations and that there is common knowledge and commitment to sustainability goals and objectives, everyone in the supply chain has a responsibility to do so. Nike has adopted a thorough approach to incorporating sustainability into their operations and decision-making processes, as seen by the

reporting structure shown in Exhibit 3. Nike is positioning itself for success in attaining their sustainability goals by creating clear responsibilities, allocating resources, and working with stakeholders. Question 6 Nike has achieved progress toward their sustainability targets, particularly those pertaining to lowering the production of waste and energy use, as seen in the case study's Exhibit 5. The display shows Nike has advanced significantly in these areas, with a consistent decline in waste and energy use over time. Exhibit 5 is beneficial for Nike in achieving their sustainability objectives, in my opinion, since it offers a clear approach to monitoring progress and pinpointing areas that require improvement. Nike can pinpoint areas where it needs to focus their efforts and make adjustments to enhance their environmental effect by monitoring and reporting on their sustainability performance. Additionally, it enables Nike to hold itself accountable and show stakeholders their dedication to sustainability. Exhibit 5 is useful for measuring advancement, but it's also crucial for Nike to take into account a variety of metrics and indicators in order to fully assess their sustainability performance. Question 7 Throughout the years, Nike has made major attempts to improve labor practices and sustainability in their supply chain. Nike's sustainable strategy entails working with partners to advance sustainability in the sector and implementing sustainable practices across the whole supply chain. Nike has also established challenging sustainability goals and regularly updates the public on their development. Nike's global supply chain and the requirement to collaborate with suppliers to guarantee compliance with labor and environmental standards are only two of the difficulties that Nike has encountered while executing their sustainability plan that are

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highlighted in the case study. In addition, Nike has faced backlash in the past for their labor policies as well as the success of their environmental initiatives.

Nikes Case

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