CaseStudyAnalysisonNikeCorporation

1.Introduction
History
NikeisamajorUSfootwear,clothingandsportswearsupplier
basedinBeaverton,Oregon.Thecompanyoperatesinmorethan
160countriesandemploysover44000peopleacrosssix
continents.Nikesrevenuetotalof$20.862billionin2011with
totalequityof$9.843billion.TodayNikeisconsideredtheworlds
leadingsupplierofathleticshoesandapparelandoneofthe
worldsmostfamousandstrongestbrands.
Thecompanywasfoundedin1964asafootweardistributorBlue
RibbonSportsbyBillBowermanandPhilKnight(middle
distancerunnerfromPortland).Initially,thecompanyoperatedas
adistributorforOnitsukaTiger,theJapaneseshoemaker.Mostof
thesalesweremadeoutofKnightsautomobile.In1967thefirst
retailstorewasopened.
In1972thejumpwasmadetomanufacturingcompanysown
brandofathleticshoesandtheSwooshbrandmarkwascreated.
ThefirstselfmanufacturedcompanysshoesusedBowermans
waffledesign.Theybecameextremelypopularamongthe
runners:theyhadspecialwaffletypenubsfortractionandatthe
sametimetheywerelighterthantraditionalathleticshoes.In1979
NikeAirtechnologywassuccessfullylaunchedandby1980the
companyalreadyattained50%ofnationalathleticshoemarket.In
1982NikestartedtocooperatewithPortlandbasedadvertising
agencyWieden+Kennedy.Manysuccessfuladvertisingcampaigns
weremutuallylaunchedandagencyscofounderDandesigned
evenNikesfamoussloganJustDoIt

ThePurposeofThisanalysis
Thepurposeofthispaperistoresearchandanalyzethetheoriesof
managementthatapplytoNikeCorporation.Theemphasisismade
oncompanysstrategicplanning,organizationpeculiarities,
leadership,management,innovationandchange.Amongthemain
tasksare:definingcompanyscorecompetencies,innerstrengths
andweaknesses,opportunitiesandthreatsthatthecompanys
environmentposes;identifyinghowthecompanyisorganized,
showingitsstructureanddecisionmakingprocess;definingthe
companysleadershipstyleandcommunicationenvironment;
analyzingmanagerialcontrolsandtheroleofInformation
Technologywithinthecompany;describinginnovative
managementprocessesandcorporateresponsibilityissues.

2.StrategicPlanning
ThemissionofNikecorporationis:tobringinspirationand
innovationtoeveryathleteintheworld.
Companysmaingoal(vision)istocarryonitsfounderslegacyof
innovativethinking,whethertodevelopproductsthathelpathletes
ofeverylevelofabilityreachtheirpotential,ortocreatebusiness
opportunitiesthatsetNikeapartfromthecompetitionandprovide
valueforitsshareholders.Thecompanyscurrentfinancialgoalis
togrowsalesto$27billionuptotheyear2015.

SWOTanalysis
SWOTanalysisisanestablishedinstrumentthathelpstoanalyze
companysinternalandexternalenvironment.Accordingtothis
method,companysstrategyisformulatedonthebasisofinternal
strengthsandweaknessesandexternalopportunitiesandthreats.
SWOTanalysisisanextremelypowerfultoolbecauseithelpsto
identifyprioritiesandcreateacommonvisionofachievingthe
goalsset.Also,onlybytakingintoconsiderationthecomponents
ofgeneralenvironment:economicenvironment,social
environment,politicalenvironment,legislationandpressure
groups,acompanywillbeabletoadopttheparticularwayof
action,whichwillassureitsperformanceandadvantageson
presentandpotentialcompetitors(Gasparotti,2009).
BelowistheSWOTanalysisforNikeCorporation:
Strengths:
Nikeisaveryprofessionalandcompetitivecompanywithstrong
management;
Itpossessesnophysicalfactoriesandcanmoveitsproductionto
anylocationthatismorecosteffective;
Verystrongbrandandgenerallygoodpublicity;Itisaglobal
brandthatsellsitsproductsworldwide;Nikeusesspecial
materialslikeLunarLightfoamtomakeshoesofhighqualityand
withgoodcharacteristicsforsportsmen.
Weaknesses:
Mostoftheincomecomesfromthefootwearmarketandthe

companyishighlydependentonthissegment.Otherbranded
productsarenotsostrong;
Spoiledpublicitybecauseofaccusationsofpoorworking
conditionsandworkforceexploitinginthedevelopingandnewly
industrializedcountries.
Opportunities:
Usageofwastefromregularproductiontomanufactureother
goods;Diversificationintoadjacentmarketslikejewelleryor
sunglassesproduction;Furthergeographicalexpansion;Threats:
Currencyvaluefluctuationscanseriouslyinfluencerealcompanys
profits;Growingcompetitionbecomesmoreaggressiveand
alternativebrandssteal
Nikesmarketshare;Nikesproductsareveryexpensiveandits
consumersoftenprefercheaperbrands.Growingpricesensitivity
cannegativelyinfluencecompanysprofitsinfuture.
StrategyandPlanning
Nikescorecompetenciesareinnovation,researchand
development,marketingandeffectiveexploitationofglobalization
processes.Companystargetaudiencearemalesandfemales
between18and35yearsoldwhopreferactivelifestyleandgoods
ofhighquality.
NikesmaincompetitorsinthefootwearindustryareReebokand
Adidas.Thesecompaniesalsouseinternationalapproachto
managementandbusiness;theyareveryprofitableandhave
similarproblemswithpublicity.AtthesametimeNikeremainsthe
marketleaderduetoitscostefficientmarketing,effective
advertisingandresearchanddevelopment.Nikescompetitorsare
lesssuccessfulinthesekeyfactors.

Nikeusesstrategicplanningandvariousplanningtechniquesinits
activity.Themainpeculiarityofcompanysstrategyistostarttheir
marketingandpromotionwithsellinginnovativeitemsto
professionalathletesandteamsandbythismeansdeliverthenews
andfashionofnewproductstoparticularcustomers.Nikes
strategyalsofocusesondiversityintheworkplace.Thisstrategy
correspondstocompanysvisionandmissionstatement.Among
theplanningtechniquesthatNikeusesare:contingencyplanning,
benchmarking,scenarioplanningandothers.
3.OrganizingforAction
Nikesorganizationalstructureisdivisionalbutithasfunctional
departments.ConverseandJordanbrandsareexamplesof
divisionscreatedaroundspecificproductswhileNikedesignisa
functionaldepartment.Eachdepartmenthassubdepartments,
responsibleforhandlingparticulartasks.Onthetopofcompanys
hierarchyareCEOMarkParkerandaboardofdirectorschairedby
PhilKnight.InNike,employeesreporttodivisionalmanagersand
divisionalmanagersreporttotheCEO.Operationsdepartmentis
usedtoprovidepropercommunicationbetweendivisions.
Nikeisaninnovativecompanyandsuchorganizationalstructure
helpsittohandleresearchanddevelopmentmeasures.Also,
becauseoftheglobalcompetitionNikehastoreacttochanges
quicklyandmakerapiddecisions.Carryingmostofthefeaturesof
matrixstructure,Nikesorganizationalstructurefacilitatestimely
andqualitydecisionmaking.
4.Leadership
Leadershipinvolvesasocialinfluenceprocesswherebyintentional
influenceisexertedbyonepersonorgroupoverotherpeopleor
groupstostructuretheactivitiesandrelationshipsinagroupor

organisation(Yukl,2002,p3).Leadershipandmanagementare
differentcategoriesandnotalwayscanasinglepersoncarrytwo
oftherolessimultaneously.Aleadercanbeanyoneontheteam
whohasaparticulartalent,whoiscreativelythinkingoutofthe
boxandhasagreatidea,whohasexperienceinacertainaspectof
thebusinessorprojectthatcanproveusefultothemanagerandthe
team(Benincasa,2012).
Leadershipstyleisacertainmannerofimplementingplans,
influencingandmotivatingpeople.From4to6leadershipstyles
areusuallydifferentiatedbythescientists.Mostwidespread
classificationincludes:democratic,authoritarian,laissezfaireand
transactionalleadershipstyles.OnthetoplevelsofNike
Corporationlaissezfaireleadershipstyleisappliedasseparate
departmentsgetrelativelymuchfreedomintheirdecisionmaking
processwhiletopmanagementmotivatesandtransfersthevision
ofthecompanytoensurekeepingtomissionandgoals.Atlowers
levelsoftheorganizationvariousleadershipstylesareused
dependingontheculturalpeculiaritiesofthepopulationthatlives
onaparticularterritory.
Nikescommunicationenvironmentisveryeffective.AllNike
managersarerequiredtocommunicateinasimilarstyleacrossthe
company.Thecompanyhasapowerfuldigitalintranettoprovide
effectivecommunicationbetweenNikeheadquartersinBeaverton
andtheinternationaloffices.Togetrelevantfeedbackfromthe
customersNikeactivelyusessocialmediameans.Tocommunicate
itsvaluestothetargetaudienceNikeusesdesignated
spokespersonsthatoftenbasetheirspeechesoninspirational
storiesandmotivatethelisteners.
5.ManagerialControls
ManagementisrelativelydecentralizedinNike.Itmeansthat
muchfreedomindecisionmakingisdelegatedtolowerlevelsof

management.Thebenefitsofsuchapproachare:lowerlevel
managersproviderelevantinformationconcerninglocal
conditions,theyarebettermotivatedandstrongleadershipis
ensuredthroughoutthecompany.Nikesmanagerialcontrolsare
tightlyconnectedwiththeusageofInformationaltechnologies.
Feedforward,concurrentandfeedbackcontrolsaremadeusingthe
speciallydesignedsoftware.
Nikehasapowerfuldigitalintranettoensureproper
communicationbetweenheadquartersandinternationaloffices.At
fistNikehadadevelopedERP(EnterpriseResourcePlanning)
System,SupplyChainandCRM(CustomerRelationship
Management)SoftwareimplementedintoasingleSAPPlatform.
Lateri2ssoftwarewasimplementedthathelpedtogetcontrol
overstrategicplanning,demandmanagement,supplyplanningand
production.In1998NikepurchasedSAPApparelandFootwear
Solutions(AFS)thatprovidedbetterfinancialmanagement,helped
todecreaseinventorylevel,improveddecisionmakingand
providedaholisticviewonthewholebusiness.TodayNikesAFS
andRetailmodulestogetherwithotherSAPapplicationsincluding
SupplyChainmanagement(SCM)andBusinessInformation
Warehouse(B/W)areimplementedglobally.
Forexample,SAPAFSSolutionprovidestherighttoolstomanage
theentiresupplychainfromtheinitialpurchasingofrawmaterial
tothefinaldeliveryofthefinishedproduct(Suren,2007).Provided
withsuchsoftware,Nikesmanagerscanmaintaincoordination
withlocalsuppliersandcustomersandcontrolwhetherthe
financialgoalsaremet.TheFundsManagement/BudgetControl
solutionintheBusinessWarehousesoftwarethatNikeuseshelps
tocheckrevenuesandexpenditures,holdbudgetarycontrolandto
controlthefinancialequilibriumofbusiness.
AlsoNikeactivelyusessocialmedia(socialnetworks,blogs,and

mediaportals)topromotetheirmarketingeffortsandgetfeedback
fromtheircustomers.
6.InnovatingandChange
Nikeimplementsalotofinnovativeapproachestohandling
business.Historically,Nikeshoesbecamesuccessfuldueto
innovativedesign,createdspeciallyforathletes.Sincethenthe
companycontinuestoinventnewthingsandsurprisetheworld
communitywithnonstandardapproachestobusiness.
Firstofall,thecompanywasoneofthefirsttosellthetrademark
only,havingnophysicalproductionfacilitiesandconcentratingon
marketingandpromotiononly.ThisallowedNiketominimize
risksandmaximizeprofits.Amongotherinnovativeideasofthe
companyare:225Forest(storefrontinCaliforniawhere
wakeboarders,BMXers,andskaterscancustomizeChuckTaylor
AllStarsandHurleyboardshortswiththeirfavouriteartwork);
Women'sNikeTrainingClub(Possibilityforwomentocreatea
personalvirtualtrainerusinganiPhoneapp);Total90LaserIII
Boot(Soccerplayerssubmitauniqueusercodethatcomeswith
thebootintoNike'sSoccer+Websitetoreceiveanonline
coachingsessionfromItaly'sJuventusFC).AlsoNikebecame
famousforitsopensourceapproachallowingthemtocollaborate
withvirtuallyeveryone.Forexample,specialNikesR&D
laboratoryprovidesthegreentechnologiesthatcanbeaccessedby
varioussocialentrepreneursandmanufacturers.WithNikes
decentralizedmanagementandencouragedinnovation,innovative
ideascomefromvariousinternationaloffices.Theseandother
innovationsallowedFastCompanyjournaltocallNike#13of
mostinnovativecompaniesintheworld(Sacks,2012).Atthe
sametime,technologicalinnovationsarenomoresonecessaryin
thecaseofNikeCorporation.

Nikesorganizationalstructureandpeculiaritiesofmanagement
allowthecompanytoremainsensitivetochangingconsumerand
socialtrends.Nikeisalwaysreadyforchangeandchangesthe
worlditselfsimultaneously.AgoodexamplefromNikeshistory
isthetimewhenthecompany,feelingtheshiftingconsumer
trends,decidedtogetinvolvedintoworldsmostpopularsports
soccer.WhilesoccerwasnotparticularlypopularintheUSA,for
Nikeitbecameawonderfulopportunitytogoglobalandbecomea
leaderinthismarket.
Nikeisasocialresponsiblecompany.InitsCSRreporttheysay:
Nikeseescorporateresponsibilityasacatalystforgrowthand
innovation,anintegralpartofhowwecanusethepowerofour
brand,theenergyandpassionofourpeople,andthescaleofour
businesstocreatemeaningfulchange.Thecompanyfocusesits
effortsoncoreimpactareastiedtoitslongtermgrowthand
innovationstrategies:improvingconditionsincontractfactories,
designingforabetterworld,achievingclimateneutralityand
unleashingpotentialthroughsport.AtthesametimeNikeisoften
accusedofviolatingthehumanrightsofitsworkforceinthe
developingcountriesandprovidingunsatisfactoryworking
conditions.Thisethicalissuenegativelyinfluencescompanys
publicityandforcesNiketoconstantlylookforthesolutionsto
thisproblem.

7.Summary
Nikeisagoodexampleofaninnovativecontemporarycompany
thatIwouldreallyliketojoin.Nikeprovidesclearcareerpaths
andwonderfulopportunitytoexposeyourpotential.Companys
managementisextremelyeffectiveandbecauseofdecentralized
approachcombinedwithencouragingallsortsofinnovation,
innovativeideascomefromeverywhere,allowinglowlevel
managerstobecomeapartofthehistory.
Nikeisaverysuccessfulcompany,atruemarketleader.
Companysapproachtomarketing,advertisingandgetting
feedbackfromthecustomersprovidesaneffectivemodelonwhich
otherscanlearn.Also,Nikeisaveryflexiblecompanythatfeels
andreactstoallshiftingtrendsinitsmarket.Thoughthecompany
hascertainethicalissuestoresolve,itisstillasociallyresponsible
companywithstrongimage.

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