Company Description
Nike Incorporation is one of the leading multinational companies in the apparel and fashion industries. Headquartered in Beaverton, Oregon, the company designs, manufactures, and develops a wide range of products, including footwear, accessories, and clothes. Its sports equipment segment is one of the most successful. The company’s total workforce stands at 74,000 employees. Nike is believed to be the most expensive or valuable brand in the sporting world.
This brand is currently valued at around 30 billion US dollars. The corporation was started in 1964 by Phil Knight and Bill Bowerman (Sage, 2016). Its original name was Blue Ribbon Sports. It would acquire its current name in the year 1971. On top of its superior equipment and sportswear, Nike is known for its retail outlets and stores that operate under the name Niketown.
Over the years, Nike has acquired several companies in the footwear and apparel industries. For example, the company purchased Cole Haan, a successful footwear company, in the year 1988 (Sage, 2016). In 1994, the corporation acquired Bauer Hockey. Nike also purchased a company by the name Starter in 2004. However, this company was sold in the year 2007 in an attempt to streamline its core segments or business lines.
The corporation sponsors high-profile sportspeople, teams, and athletes from every corner of the world. Through the use of its powerful business model, this company continues to support and fulfill the emerging needs of many customers from every part of the world (Mahdi, Abbas, Mazar, & George, 2014). The concept of research and development (R&D) is taken seriously to come up with superior products and sports equipment that can meet the expectations of every customer. These attributes explain why Nike remains a top brand in its industry. That being the case, the decision to introduce its Multi-Purpose shoe (Nike MPx) is a revolutionary idea that will transform the nature of competition, attract more customers, and improve the company’s competitive advantage.
Strategic Focus and Plan
The success of Nike Incorporation can be attributed to its powerful business model and strategy. The managers engage in continuous performance measurement to examine how different operations and processes can be streamlined to support its objectives. Employees and stakeholders are engaged in an attempt to add value to various processes and maximize performance. The concept of organizational change is taken seriously at Nike depending on the issues affecting its models such as emerging technologies, consumer needs and expectations, and increasing levels of competition in its key segments.
These attributes will be used to support NikeMPx in the global market. Mahdi et al. (2014) acknowledge that such attributes make it easier for the company’s top management to focus on superior or revolutionary products that resonate with the demands of its customers. These strategic focus and planning approaches will be reshaped to ensure that NikeMPx is produced and marketed successfully.
Mission Statement
To achieve its goals and remain competitive, Nike has developed a powerful mission and vision statements. These act as guidelines to convey adequate or appropriate information to different stakeholders, customers, and employees. The organization’s mission statement is “bringing innovation and inspiration to every athlete in the world” (Sage, 2016, p. 34). According to this statement, every potential customer is described as an athlete. The concept behind the idea has been borrowed from the company’s founder, Bowerman, who believed that every person with a body was capable of engaging in exercises (Alexander, 2015).
NikeMPx combines the major components of the company’s mission statement. For instance, new shoes can be used to achieve a wide range of goals. This means that the new product delivers inspiration and innovation to the user. The fact that the shoe sole is changeable makes it useful in different sporting activities.
Vision Statement
Although Nike Incorporation does not have an official vision statement, it has managed to develop a powerful corporate social responsibility (CSR) model that focuses on “a sustainable economy whereby profits, the planet, and all people are in balance” (Sage, 2016, p. 35). The production of NikeMPx is a decision that is informed by the company’s vision statement. The introduction of a superior shoe for different sporting activities is a powerful strategy that can make Nike successful.
Goals
The corporation’s goals can be deduced from its mission and vision statements. The first goal is to become an innovative company whose products support the diverse needs of every customer. This is achieved through the use of powerful R&D processes. The second one is to support or empower individuals who use their products. This is achieved using powerful or competitive products that resonate with their needs (Mahdi et al., 2014). The third goal is to make the planet sustainable and ensure that the issue of posterity is taken seriously. Finally, the company focuses on a wide range of efforts and initiatives to maximize its profits.
Core Competency
NikeMPx is associated with several core competencies. The first one is that the product is superior and of the highest quality. This means that it is informed by the expectations of every global customer. On top of that, the company has operations across the globe. This strategy makes it easier for Nike to attract more customers and fulfill their needs using its products. The company also hires trains and empowers its employees accordingly (Shen, Li, Dong, & Perry, 2017). With these attributes and strengths, NikeMPx will be marketed successfully in different parts of the world.
Sustainable Competitive Advantage
NikeMPx is a product whose competitive advantage is unquestionable. In the recent past, many people have been concerned about the importance of safeguarding the natural environment. This shoe is an innovative idea that is capable of making the surrounding environment sustainable (Paiva, Marques, da Silva, Antonio, & Aran-Ais, 2015). This is the case because users do not have to purchase several shoes.
Additionally, the company minimizes its environmental impact or footprint through the production and marketing of NikeMPx (Shen et al., 2017). This product will be marketed to different customers since they are user-friendly. After introducing this shoe in different markets, every business process will be monitored and improved continuously depending on the nature of emerging technologies, market environments, and changing consumer needs.
Business Model
NikeMPx is a product that requires a powerful business model. Shen et al. (2017) indicate that Nike is one of the corporations that understand the importance of mass marketing. This business model creates a situation whereby the company does not produce specific products for different customers. The organization will, therefore, continue to produce targeted shoes and deliver them to every potential customer. This model is expected to succeed because it will be targeting individuals who are interested in protecting the environment, saving money, and minimizing his/her ecological footprint.
Situation Analysis
The strengths of NikeMPx make it a competitive product that has the potential to support the company’s growth and profitability strategies. This shoe will be supported by the strategic models associated with Nike for many years. The fact that the shoe’s sole is changed makes it easier for the potential customer to use it in several ways. It is also evident that the shoe seeks to address the needs of many people (Sage, 2016). This strategy is, therefore, expected to attract more customers, thereby making the company profitable. Detailed situation analysis can reveal the unique aspects that will make Nike’s NikeMPx successful in the market.
SWOT Analysis
Nike remains one of the most successful companies in the global footwear. This achievement is attributable to several strengths that have been taken into consideration at the corporation since 1964 (Shen et al., 2017). The SWOT Analysis presented below summarizes NikeMPx’s strengths, opportunities, weaknesses, and potential threats.
Strengths
The first driver for NikeMPx is the company’s powerful brand name or image. NikeMPx is expected the support the needs of many people across the world. The company will use modern technologies to produce and improve this product (“Nike mission statement,” n.d.). Nike has one of the most established distributions and production networks across the world. These aspects explain why this company has the potential to support the performance of NikeMPx in the market. The sole is changeable, thereby making it admirable and appropriate for many people.
Weaknesses
There are specific weaknesses that have the potential to affect NikeMPx’s marketing plan. The first one is that the company has been associated with different controversies arising from labor issues. The second one is that the organization does not have diverse products (Paiva et al., 2015). This limitation might discourage some people from associating themselves with the brand. Nike has also failed to invest and expand its operations in the developing world.
Opportunities
Despite the existence of the above obstacles, there are specific opportunities that can be taken seriously by the leaders at Nike to support this revolutionary product. To begin with, the product’s superior attributes will satisfy the needs of more people. The fact that many developing countries are offering numerous opportunities to multinational companies is something that can support the company’s performance (Rivoli, 2015). The fact that the product seeks to support the concept of sustainability will result in increased sales for NikeMPx.
Threats
The future of NikeMPx depends on how the company is prepared for emerging threats in the industry. To begin with, the level of competition is higher than ever before. This is the case because many companies in the industry are producing shoes that promote the idea of sustainability (Lechner & Boli, 2015). Modern technologies are also transforming the business models of many corporations in this industry. Some individuals might not be happy with a shoe with a changeable sole.
Industry Analysis
Numerous forces are impacting the performance of different competitors in the athletic footwear, apparel, and equipment industries. These issues can be captured using Porter’s five forces model.
Competitive rivalry
The competition level in this industry is quite high due to the aggressiveness of different players, reduced market growth rates, and desire to use advanced technologies. This means that a powerful strategy is essential to market NikeMPx.
Bargaining power of customers
Buyers in this industry have access to different options due to the emergence of competing products (Lechner & Boli, 2015). Although many people identify themselves with specific brands, companies in the industry should be keen to meet their needs.
Bargaining power of suppliers
The industry has embraced the power of outsourcing. This means that many companies have their products designed in their respective countries and produced in foreign regions (Paiva et al., 2015). The small number of suppliers makes it hard for them to form new business partnerships.
The threat of substitutes
This force is not powerful since the idea behind NikeMPx has not been tried by any other company. Although competitors such as Puma and Adidas are focusing on the same market segments, chances are high that NikeMPx will succeed in this market segment.
New entry
The threat arising from this force is quite low since many competitors in the industry have strong brand names. However, their products cannot deliver the attributes associated with NikeMPx.
Competitor Analysis
Nike’s leading competitors include Puma and Adidas. These companies produce superior products that support the needs of different customers. However, these competitors have not developed products that are similar to NikeMPx. This strength means that Nike is capable of achieving its potential and supporting the needs of more customers. It is agreeable that different competitors have global networks and powerful marketing models. They also use emerging technologies to achieve their goals (Rivoli, 2015). The good news is that Nike’s powerful R&D techniques remain competitive in the industry. The company should, therefore, focus on the best approaches to deal with competition if it is to market NikeMPx successfully.
Company Analysis
Nike is a company whose products are strong, unique, and durable. The level of customer loyalty stands at around 82 percent (Lechner & Boli, 2015). Its distribution or market share is average. However, the company has failed to focus on emerging markets. The company uses R&D to produce superior products. Its corporate culture empowers every worker. Its business assets and capital are stable. It can also exit from a given market easily. The production of NikeMPx is a clear indication that the company focuses on the changing needs of its potential customers.
Customer Analysis
Nike’s decision to innovate and produce NikeMPx is an idea that seeks to support the needs of its three customer groups. The first one is women. This company has quality products that are appropriate for all women from diverse backgrounds (Alexander, 2015). The second category of customers is comprised of young athletes. These are individuals aged between 7 and 36 years. Professional athletes are identified to market different products or become brand ambassadors. This model supports the needs of these customers. The last group is that of runners. This category focuses on the needs of individuals who exercise regularly. People can also use Nike’s equipment to monitor distance covered, time is taken, pace, and calories.
Conclusion
The above analyses reveal that Nike’s business model is capable of supporting the performance of NikeMPx in the market. The company’s use of R&D, focus on customers’ needs, and ability to transform its strategic focus has led to improved performance. As it plans to introduce the new Multi-Purpose shoe (NikeMPx), this company must address every existing weakness and threat. The approach will make it a competitive and successful player in its industry.
References
Alexander, P. (2015). Corporate social irresponsibility. New York, NY: Routledge.
Lechner, F. J., & Boli, J. (2015). The globalization reader (4th ed.). New York, NY: Wiley.
Mahdi, H. A., Abbas, M., Mazar, T. I., & George, S. (2014). 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), 167-177.
Nike mission statement. (n.d.). Web.
Paiva, R. M., Marques, E., da Silva, L. F., Antonio, C. A., & Aran-Ais, F. (2015). Adhesives in the footwear industry. Journal of Materials: Design and Applications, 230(2), 1-13. Web.
Rivoli, P. (2015).The travels of a T-shirt in the global economy: An economist examines the markets, power, and politics of world trade (2nd ed.). New York, NY: Wiley.
Sage, G. H. (2016). Globalizing sport: How organizations, corporations, media, and politics are changing sports. New York, NY: Routledge.
Shen, B., Li, Q., Dong, C., & Perry, P. (2017). Sustainability issues in textile and apparel supply chains. Sustainability, 9(1592), 1-6. Web.