Strategic Management

Chapter 2- Takeaway Question

Nike, a supplier of sports footwear and apparel, is interested in the idea that it could
increase its stock market value by creating flexibility or growth options (the choice of
whether to do something or not) for itself. What actions might Nike take that could
generate option value? Hint: See pp 52-55.

Innovation is the cornerstone of the Nike brand. Many of Nike’s management innovations for
sustainable growth started internally with the Corporate Responsibility and Considered Design
Team. Nike is now embedding sustainability into its business practice and views this as a vehicle
for growth. This new direction is viewed as a business imperative and their organizational
capabilities can allow them to refine this innovative opportunity into a potential competitive
advantage. This move requires Nike to be in alignment with their customers, also finance and
product teams to take integral roles alongside VP and Corporate Responsibility. Extending this
option externally to reinvent its supplier, industry and business relationships is perusing a long
term agenda for systematic change and innovation.

The vast outcry of negative public opinion regarding past unfavorable labor practices in
factories from which they sourced production, highlighted potential vulnerabilities across the
business. Focusing on ensuring that their external supply chain has transparency and reflect a
more responsible labor and environment strategy, is a key step towards embedding
sustainability as a business driver for future growth. Embedding sustainability thinking in their
strategy and promulgating this to both internal and external stakeholders requires time, an
unerring commitment and continual reassessment. Fortunately for Nike, innovation in their
cultural DNA and this will serve as a strong foundation in the implementation of this strategy.
This path is extolled with creating enterprises value over the long term. Corporate
Responsibility for Nike is now viewed as a core driver and a valuable market opportunity. Nike’s
focus is now on designing the future as opposed to retrofit the past.