Nike Case Analysis

Second, because of the current distribution network and infrastructure that Nike had in place for its high-end

- Nike should launch proper controls in order for them to monitor their operational processes.

Our criteria were given weights of .41 for availability of information, .35 for scope of improvement, .1 for familiarity of the product, .08 for complexity of the process, and .06 for personal interest. Under these criteria out alternatives returned values of .47, .4 and .125 for Dell, Herr’s, and Nike respectively with an inconsistency of .017. Prior to conducting the analysis, we felt Herr’s would be the best company for the project due to our familiarity with the company’s products, its nearby headquarters and the availability of a tour of the manufacturing process. However, Dell made a much larger amount of information more easily accessible to the general public which we determined would be more beneficial for us during this project.

Quality: Nike’s places strong emphasis on the quality of their products by reinforcing their tight measurement on their supplier’s performance. The company has long been known for their superior quality, reliability, and excellent designs. Furthermore, they capitalized on their high quality by investing heavily in marketing initiatives to increase brand loyalty and strengthen consumer confidence, which ultimately increases the consumer utility of their products. Creating a team of Nike Scientists devoted to continuously improving the quality of their products was only one part of their strategy. They also invested heavily in a quality control system known as the InfinityQS, which helps them identify areas of issue and monitor the overall quality of their products. (InfinityQS)

Unfortunately, the same factor that contributed to Nike’s exponential growth (low-cost labor and production) also contributed to hurting Nike’s public image as a leader in “athleticism, health and fitness, and innovative marketing and design” (Locke, 2002). Nike was criticized for unethical practices by their subcontractors, which included underpaid workers, poor working conditions, child labor, and abuse (Locke, 2002).

The factors that drive Nike’s decision to stick with its current organizational structure include its well-established brand name in the industry. The company positioned itself as a brand

Conclusively Nike should be held responsible for its subcontractors. They are not completely responsible for this but they should be aware of it and as a influencial company they should impose what they call basic rights to their subcontractors and make sure that their rules are followed.

For that reason, Nike decided to shift the brand in two different ways, the “Silo” and “Digital” shit. The Silo shift consisted of research that found the most important aspects to an athlete’s game were, accuracy and control. These were the type of skills players wanted

Further on the subject of customization, Nike had great difficulties balancing customization with speed-to-market. I believe the external factors of significant competition, changing market place and resulting disappointing financial performance in growth markets lead Nike to rush the implementation and interfered with normal OBB. The rushing meant that a guideline, templates and implementation methodology was discarded by Nike with the argument that the i2 provided material was too rigid. In general I would argue that Nike required technology that was not sufficiently available at the time. This pushed i2 to enter unknown software-territory and program-to-order disabling sufficient time for vendor/developer testing. The criticality of this was further boosted due to lack of testing from Nike, which clearly illustrates faults in phase 4 of the implementation as well. (Appendix 3)

Nike would have known the right factories to outsource to instead of using factories that fail to meet their standards.

Nike must cater to a large portion of the new generation that demands the latest trends and styles. Nike should take into account the changing US demographics due to the rising proportion of Hispanics, Asians, and African Americans. These groups have different preferences that Nike should be able to satisfy. Nike should identify the next generation of loyal customers and provide for their needs.

"The success of Nike was strictly fortuitous and had little to do with great decision making." Evaluate this statement.

Decreasing overhead through outsourcing is a valuable resource for Nike. Cutting costs by employing workers at a reduced rate or paying less for plant operation allows Nike to invest the additional profits into other areas of the business such as advertising, thereby increasing the potential for company growth. In addition, decreased operational costs are more likely to attract and retain company investors because more money can go into increasing business profitability.

Nike began as Phil Knight’s semester-long project to develop a small business, which included a marketing plan. This project was part of Phil Knight’s MBA course at Stanford University in the early 1960s. Phil Knight had been a runner at the University of Oregon in the late 1950s. His idea for his project was to develop high quality running shoes. He thought that high quality/low cost products could be produced in Japan and then shipped to the United States to be sold at a profit. His professor thought that Knight’s idea was interesting, but not much more than a project.

4.3 Extended Problem Solving This decision making process would be apparent on consumers who's purpose for purchasing a Nike product is controlled by whether or not it suits their needs. This type of consumer would not be as concerned with branding, but whether it meets their requirements. The making process would be longer. 4.4