Strategic Audit of Nike Inc PDF Free

STRATEGIC
AUDIT OF NIKE,
INC.
Members of auditor:
 Siti Cassia 19013007
 Vincent Jonathan K. 19013011
 Vania Anindita 19013012
 Monica Adhelia 19013013
 Oswaldo Gwendy R. 19013021
 Intan Rahmatillah 19013027
 Zoraya Majid 19013037
Table of Contents
I. LIST OF TABLE.........................................................3
II. LIST OF PICTURE....................................................3
III. CASE ABSTRACT......................................................4
IV. CASE ISSUE AND SUBJECT.....................................4
V. CASE SUMMARY......................................................5
Company History
Organization
Changing the Game
Making It Happen
Integrated Spring Dance Collection
Biographies of Nike Employee
VI. I. Current Situation................................................17
A. Current Performance
B. Strategic Posture
VII. II. Corporate Governance.......................................22
A. Board of Directors
B. Top Management
VIII. III. External Environment: Opportunities and
Threats (SWOT).....................................................57
A. Natural Physical Environment:
Sustainability Issues
B. Societal Environment
C. Task Environment
D. Summary of External Factors
(EFAS)
IX. IV. Internal Environment: Strengths and Weaknesses
(SWOT)...................................................................72
A. Corporate Structure
B. Corporate Culture
C. Corporate Resources
D. Resources as Nike Strength
and Weakness (IFAS)
X. V. Analysis of Strategic Factors............................112
A. SWOT MATRIX
B. STRATEGIC FACTOR ANALYSIS
SUMMARY
XI. VI. Strategic Alternatives and Recommended
Strategy................................................................117
A. Strategic Alternatives
B. Recommended Strategy
Based on TOWS Matrix
XII. VII. Implementation.............................................122
A. Program
XIII. VIII. Evaluation and Control.................................124
XIV. References............................................................125
LIST OF TABLE
Table 0.1. Nike’s Vision for Changing the Game in the Women’s
Market
Table 0.2 Biographies of Nike Employee
Table 3.1. External Factor Analysis Summary
Table 4.1. Internal Factor Analysis Summary (IFAS)
Table 5.1. Nike’s SWOT
Table 5.2. Strategic Factor Analysis Summary Table
Table 6.1. Nike’s TOWS
Table 6.2. Nike’s Porter generic strategies
LIST OF PICTURE
Picture 4.1. Nike Organization Structure Example

Picture 4.2. Nike’s Income Statement
Picture 4.3. Nike’s third year ratio comparison
Picture 4.4. Nike’s ratio comparison with industry
STRATEGIC AUDIT OF NIKE, INC. - OCTOBER 2015

CASE ABSTRACT
This case focus on giving a strategic management auditing on Nike

Corporation at 2006 when they done a huge change on their
organization by getting from a product-oriented company into a
category-drive company. A new challenge emerged when they
decided so, because Nike was never get too focused on women’s
fitness like they did in 2006 after having women’s fitness category,
they face the problem to implement the change quickly on large
scale, unseen barrier, and what should Nike do to adapt themselves
on these changes. By learning and doing review on information
available at both the case and external case to support any idea or
statement, this strategic management audit will be focused on
giving a viable strategy option to Nike regarding their change to
enhance women’s fitness unit and show the implementation
through available framework and theory based on research to
maintain the validity of this strategic management audit.
CASE ISSUE AND SUBJECT
There are several issues and subjects which can be explored within
the research either as a problem, information, or even solution to
existing problem. However, the main issues to be discussed on the
case are what detailed and clear recommendations to be given to
Nike and help it to manage the change rapidly and globally.
Through that, some other question emerge such as what challenge
will be faced by Nike, trade-offs to be done in order to achieve it on
women’s fitness category specially and Nike generally. Also Nike
had to consider from all of the issues relating to Nike efforts in
women’s market from both internal and external perspective.

In order to make the strategic management audit to be focused and
detailed, the main issue to be discussed in this audit is Nike efforts
in women’s market from both and internal perspective and ensure
their success within this new market.
CASE SUMMARY
In summer 2006, Nike conducted a considerable corporate change

that shift the company’s focus from a product-oriented company
into a category-driven approach. The new six business categories
created through the change were running, men’s training,
basketball, soccer, women’s fitness, and sportswear. These six
areas were chosen due to their high contribution to company
growth, making 90% of the growth compared to another category.
Nike businesses are mostly concentrated in footwear, apparel, and

equipment. However, the integration between them was unsettled
and only happened based on initiative also event. The objective of
the change itself was to be more considerate toward the market
and customer, optimizing the company’s activities to give
customers a holistic collection of everything they want and need a
sport.
Darcy Winslow asgeneral manager of Nike’s global women’s fitness

businesstried to achieve the highestlevel of cross-business
integration. She tried to deliver integrated collections of footwear
and equipment to the women’s market by leaping through the
traditional limitation within Nike’s complex organization. They
want to get different business units at multiple geographic regions
to work on the same mindset toward a common goal, therefore

even with organizational barriers, leadership issues, and the need
for intense supervision and intervention. Winslow neededto think
carefullythe lesson on shaping a new organization to support the
predetermined business strategy, stimulate cross-business
cooperation, and sustain innovative thinking. After doing so, she
could rely on the her strategies and avoid common pitfalls
happening on changes.
Company History
Bill Bowerman and Pill Knight are two founder of Nike. Bowerman
was a coach at the University of Oregon and Knight was a runner
on Bowerman’s team. After graduated from MBA at Stanford,
Knight come to Oregon and asked Bowerman to be his partner on
making a brand with low-cost and high performance shoes
imported from Japan. Soon after that, they agreed and made an
initial investment of $500, their brand was Blue Ribbon Sports
(BRS) in 1964. BRS began their business by importing shoes from
Onitsuka Tiger. Along the growth, in 1972, they decided to stop the
import progress and focused on design and produce the product by
themselves. This will be the company from which Nike developed.
By 2006, Nike adapted from Greek goddess of victory had grown to

be a famous brand. Nike’s corporate mission was “to bring
inspiration and innovation toevery athlete in the world.” By
believing the mission, they achieve performance and strong believe
that “If you have a body you are an athlete.” To help them grow
even more.

Organization
In fiscal year 2006, footwear contributed 66%, apparel 28%, and
equipment 6% towards the revenue. Global brand footwear market
approximate Nike’s market share at 38%, with Adidas/Reebok
following them with 34% market share.
Nike considered to add gender on its organizational structure as a

fourth dimension in the matrix in 1997. By then footwear business
dedicated to bring women’s perspective to its running category as
more and more women were becoming active in running. At that
time, product line manager, a designer, and a developer were
dedicating themselves on developing running shoes for women.
They design it by visualizing what they really want and the
designer sketch it directly on to picture.
As the project and business on women’s market grow, another idea

came up for addressing them: that is a retail and marketing project
named Nike Goddess, which was intended to help company
reengineer the way it sold its products towards women. They
created stores named Nike Goddess stores which were meant to be
the women-only sport-shop destination.
Changing the Game

For about six months, a cross-functional team analyzed new sports
categories and geographic markets, as well as the possibility of
moving more aggressively into women’s products. From this
analysis, the five high potential opportunities (outdoor, bags, men’s
training, value footwear, and women) were chosen to be part of a
larger assessment project called “Change the Game”. Winslow was
selected to lead the women’s “Change the Game”.

Emma Minto, an external consultant, brought on to play the role of
the strategic lead, was the team’s only dedicated resource.
Phase One
First phase of the team’s work what occurred over the course for
about six weeks. The first phase started with getting a read
internally on where we had been with the women’s business:
 What had been our successes?

 What had been our challenges?
 How do we define the market?
 How do we size it?
Internally, the team confirmed that there was a great initiative to

address the women’s market but they were not integrated, so the
team wasn’t leveraging the collective power. Nike defined the
women’s fitness market as encompassing all of the fitness activities
women performed.
Apparel data was particularly challenging due to the blurry

boundaries between fitness and active wear. In the end, after a lot
of triangulation, there was about a $13 billion market. Roughly
25% of the market opportunity would be in footwear, 70% in
apparel, and the remainder was coming up from equipment. The
team estimated that the market would expand 5%-8% per year,
driven by trends in women’s participation.
They are some competitors entered the women:
 Reebok (dominating the market in women’s aerobic)

 Adidas (bringing on celebrity designer athletic wear)

 Puma (introducing its Olive brand to try to break into the
yoga market)
 New Balance (launching cause-related marketing to attract
to Race for the Cure), and
 A lot of new and smaller competitors such as Lulu Lemon,
Under Armour,and Danskin.
Nike had to figure out a new way to talk to female consumers by

creating a dialogue and emotional connection with women. So, the
team made the vision for Changing the Game in the Women’s
market.
Table 0.1. Nike’s Vision for Changing the Game in the Women’s Market
Nike’s Vision for Changing the Game in the Women’s
Market:
Accelerating Women’s Fitness to Women’s Sports
From To
“Initiative” “A sustainable, profitable, brand-
enhancing portfolio of sports
businesses where we’re the
aspirational brand of choice for
her.”
In consistent relationship with The Dominant Brand in Her Mind
consumer
Color-base Collections Integrated, Concept-based
Collections
Inconsistent Retail Experience Consistent Defining Retail
Experience Globally
Isolated Initiatives Aligned Global Strategy
Inconsistent, Inadequate Integrated, Fully Resourced Global
Commitment and Resources Team
Incremental, Isolated Business Accelerated Global Business

Opportunities Opportunities
Phase Two
During phase two, the team focused on developing an overarching
plan for approaching the women’s market. The team had challenge
to deliver its vision of presenting integrated collections to female
consumers. To face the challenge, the team used an approach that
took a 21-month view of the product creation and delivery
processes across footwear, apparel, and equipment as wells as
brand marketing. Critical activities and decisions were
synchronized through the creation of six joint milestones.
1. Seasonal Kickoff and Creative Direction

Integrated meeting to set seasonal creative direction,
confirm seasonal themes, and build key stories.
2. Design Review
Integrated creative meeting to review product design in all
fitness sport, across all business units.
3. PrototypeReview
Planning and prioritization for the brand, retail, sales, and
regions.
4. Go-to –Market Strategy
Presentation of the go-to-market plan by brand, retail, sales,
and the regions.
5. Pralines
Product groups and brand presents an integrated collection
to key accounts in multiple regions.
6. Brand Execution and Post-Season Review
Brand plans presented and evaluation of seasonal planning
and booking results.
The process was designed to culminate six months later with the
delivery of the integrated collections to retail, as well as Nike’s

other distribution channels. After working the process, Winslow
and Jamie Shierk(Head of global women’s apparel) made a decision
to initiate the development of an integrated collection of footwear,
apparel, and equipment in the women’s dance category.
Phase Three
In phase three, the team focused on two primary work streams:
 How we would organize, and

 How much money we needed.
Jim Sutton, global HR director for apparel, designed the

organization. He was brought on to the team the structure,
positions, and people would be required to enable the new group to
execute the strategy.
Minto spent estimated the amount of additional revenue the

women’s business could expect to drive through an integrated
approach, as well as how much of an incremental investment would
be required to support the vision. She went out to the region and
talkedwith representatives from footwear, apparel, and equipment
to perform the sanity check on the numbers.
The next challenge was to define the special positions that would
make up the global women’s fitness core team and then develop
high-level position description outlining the responsibilities of each
role. To address the issues associated with the collection-based
approach, Winslow and the team also proposed the global
marketplace development director, who would handle for
developing and executing the new retail and merchandising

strategy. They also created an ongoing part-time role for the
member of the operations team to work with the global women’s
fitness, helping the group get product collections to market.
Making It Happen
Grossman hired Winslow in the GM role for the global women’s
fitness on January 1, 2005. Winslow began building her team. She
had criterias for people who wanted to join with her team, the
criterion are
1. People who like her

2. Influence in the organization
3. Have solid reputations
4. Good communication skills
5. Deep passion for the women’s business
The team used a strategy of spending more time listening than

talking or trying to influence people. Because they wanted to earn
customer trust by really listening and helping them by adding
value.
The challenge to the women’s fitness team was to make believers

out of kind of supporters and skeptics alike. To solve that, Winslow
went on explaining the approach she took to crafting a
complementary strategy for women’s fitness. Simultaneously, the
team worked to define matrixes and incentives to help motivate,
drive, and track desired performance related to global women’s
fitness.

Another challenge for the women’s fitness business was that was
no longer about providing “training” products to female
consumers. To drive this mentality, the team set up virtual fitness
sports teams and named captains from the various product groups
to lead the focus in these areas through integrated teams. Winslow
and Grossman promoted the global women’s fitness concept
through a “road show” throughout the company, enthusiasm and
commitment remained high.
Integrated Spring Dance Collection

Change the Game team was not only developing dance as a
category within global women’s fitness and initiate the
development of the first integrated collection.It was built on
successes that had been realized in the EMEA region by having
EMEA started developing, delivered integrated collections, and
entered the dance market.
The global women’s fitness team started to design its first

integrated dance collection, they made fashionable and trendy
sportswear. Through the “superhuman” efforts, the integrated
product development effort moved forward, producing a holistic,
innovative collection that exceeded even the team’s expectations.
Grossman said that being able to create at the point of the

consumer touchpoint the experience that we wanted the consumer
to have was the biggest issue. Through this challenge, the team
tried to make them sure that Nike delivered complete assortments
to customers across product types.

Despite these barriers, the first integrated dance collection was
considered a success on multiple levels. It included its contribution
to Nike’s brand in the women’s fitness market, the products
themselves, and as a catalyst for driving the new, integrated
approach to the women’s fitness market.
Biographies of Nike Employee

Table 0.2 Biographies of Nike Employee
Mindy Grossman, Vice President of Apparel
30 year veteran of the retail and apparel industries
CEO of IAC Retailing in April 2006
President and CEO at Polo Jenas Company
VP of new business at Polo Ralph Lauren Corporation
President of the Chaps Ralph Lauren division of Warnaco’s
menswear division
VP of sales and merchandising at Tommy Hilfilger
Graduated from Manhattanville College and George Washington
Seana Hannah, Category Footwear Leader Women’s Training
Leading the global team of marketers designers
Developers who create exciting products for women in the gym
and girls training for sport
Retail Associate
Product line manager in kids and running
Product director of women’s running
Bachelor Degree of Sociology from Amherst College
Steve Lesnard, Global Concepts Director for Global Women’s
Fitness
Marketing director for a women’s luxury apparel brand
Join the global footwear division of Nike in 1997
Joined the EMEA regional footwear team as the apparel and
women’s regional marketing manager

U.S. senior brand manager for apparel, women’s, tennis, and
kids.
Recently, moved into the role of global concept director for
women’s fitness.
Emma Minto, Director of Strategic Planning for Nike Brand’s
U.S. Apparel Division
Specialist in business strategy, business development, and
marketing
Director of strategic planning for Nike Brand’s U.S. apparel
division
Director of strategic planning for its global women’s fitness
division
VP marketing and professional services in TeamOn Systems
Management consultant att Corporate Decisions Inc.
Mercer Management Consulting
Product marketer at Colgate-Palmolive
Graduated of MBA from Harvard Business School
Bachelor of Commerce from Queen’s University in Ontario,
Canada
Maithili Shenoy, Global Director of Supply Chain Strategy and
Development
Responsible for strategy development, process redesign,
performance management, and education for the supply chain
area
Ten years in management consulting at Deloitte Consulting and
Accenture
Receiving BS in Operations Research from Columbia University
Receiving Master in International Business from Sophia
University in Tokyo
Jodo Sittig, Marketplace Development Director, Global Women’s
Fitness

Instrumental in delivering and implementing brand, retail, and
event strategies.
Aligned retail and sales strategies around the globe for the
women’s fitness business
Women’s brand manager for the U.S. women’s business
Director of marketing and event in Nike’s retail group
Creation and execution of national strategic plans for NIKS
ETOWN and the factory Store markets
Creation and implementation of the marketing strategy for the
first Nike Goddess store
Earned BS in Fashion Merchandising from Kent State University
Mary Slayton, Director of Market Intelligence
Overseas market, consumer, and competitive information and
analysis for Nike on a global basis
General manager of the accessories business marketing director
for the Jordan Brand
Director of strategic planning for the U.S. religion
Director of strategic planning of subsidiaries
Director of consumer insights
Received BS in Economics from Colorado College
Received MBA from Northwestern’s Kellogg Schol of Business
Prior to Nike
Worked at Pillsbury, McKinsey & Company and Wilson Sporting
Goods
Barbara Summer, Creative Director for Integrated Footwear,
Apparel, and Equipment
Leads design in men’s and women’s styles across all sporst
categories and Nike’s sports culture business
Creative director for the U.S. Women’s business
Creative director for global apparel
Attended the University of Oregon and the Fashion Institute of

Technology in New York
Jim Sutton, Senior Director of Global Organization and
Leadership Development
Leads Nike’s talent management processes for leadership
development, assessment, executive coaching, succession
management, performance management, and learning/training
HR director for Nike’s global apparel and equipment business
units
Worked as senior HR generalist leadership roles at San
Fransisco-based Lesvi Strauss & Company for 25 years
HR drirectot for Levi’s the USA
Joined Nike in 1997
Has a Bachelor’s Business Administration from Texas A&M
University
Hold a coaching certification from the Hudson Institute of Santa
Barbara
Hans van Alebeek, Vice President of Global Operations &
Technology
Director operation of Europe in 1999
Vice President, operation and administration in EMEA in 2001
Vice President, global operations & technology in November
2005
Worked McKinsey & Company as a management consultant
Worked at N.V. Indivers in business development
Darcy Winslow, Global General Manager for Women’s Footwear,
Apparel, and Equipment
Overseas all aspects of the value creation chain in women’s
fitness (innovation, product creation, marketing, supply chain,
retail, and sales
Biomechanical research assistant
Director of footwear and apparel product testing

Product development manager
Core team member of Nike’s business engineering initiative
Director of advanced research and development
Global director for footwear research design and development
General manager of sustainable business strategies
Global women’s footwear director
Received her BS in Exercise Science
Received MS in Exercise Physiology and Biomechanics
Graduated of the Stanford Executive Program in 2003
Pat Zeedic, General Manager of Equipment and Women’s for the
EMA Region
General Manager of Nike Canada
Director of Sales for the Americas region
Global director of sales training and development
National development sales director for the United States,
Western regional apparel sales manager
Territory sales manager in the Nike Rocky Mountains region
Worked in retail as a buyer and general manager at Joslins
department store in Colorado
Completed her education at Indiana University of Pennsylvania

I. Current Situation
A. Current Performance
NIKE MARKET SHARE
In fiscal 2006, footwear accounted for roughly 66% of the business,
apparel 28% and equipment 6%. The company is being the market
leader in athletic footwear market, with nearly 38% market share,
with Adidas/Reebok following at 34%. The footwear competitors,
including Puma, Asics, Mizuna, and Umbro trailed significantly in
their market share. Because the apparel and equipment markets
were more fragmented than footwear, with many more competitors
of all sizes vying for share. Nike had a dominant mindshare in the
women fitness market. By this strategy, Nike can retain the same
strength.
NIKE’s ROI over the Quarter Ending May 31, 2006

Revenues = $4,005.4
Cost of investment = $2,252.2
(Revenues−Cost of Investment )
Returnon Investment=
Cost of Investment
( 4,005.4−2,252.2)
2,252.2
Returnon Investment=0.7784
Retur n on Investment =77.84

It means that the company has the ability by 77.84% of the
investment to run the company to generate profits quarterly.
NIKE’s ROI over the Year Ending May 31, 2006

Revenues = $14,954.9
Cost of investment = $8,367.9
(Revenues−Cost of Investment )
Cost of Investment
(14,954.9−8,367.9)
8,367.9
Returnon Investment=0.7872
Retur n on Investment =78.72
It means that the company has the ability by 78.72% of the

investment to run the company to generate profits annually.
PROFITABILITY
1. Gross Profit Margin
The case clearly stated that the gross profit is $1,753.4 and the
gross profit margin quarterly is 43.8%. From this percentage, it
means that the company could indicate the company’s ability to
efficiently production by 43.8%.

But the gross profit on the year ending May 31 2006 is $6,587
which the gross profit margin is 44%. Nike has a larger percentage
in the year ending, the larger percentage of the gross profit margin
is, the better company condition.
2. Net Profit Margin
Net Profit Margin Quarter Ending
Net Income= $332.8
Sales = $2,252.2
Net Income
Net Profit Margin=
Sales
332.8
Net Profit Margin=
2,252.2
Net Profit Margin=0.1478
It means that the company gets 14.78% from its sales, the higher
net profit margin, the better company is.
NIKE’s ROI over the Year Ending May 31, 2006

Net Income= $1,392.0
Sales = $8,367.9
Net Income
Net Profit Margin=
Sales

1,392
Net Profit Margin=
8,367.9
Ne t Profit Margin=0.1663
It means that the company gets 16.68% from its sales, the higher
net profit margin, and the better company is. The company has
higher profitability if the year ending May 31, 2006. If the net
profit margin for the quarter ending compared with profit margin
with the year ending, the net profit margin for the quarter ending
less than profit margin in the year ending. It means that, the last
four months, the profit margin decrease.
B. Strategic Posture
Mission
To bring inspiration and innovation to every athlete in the
world
Objectives
To get the women’s business on Nike’s leader board. Nike has
been 15 years went as initiator in women fitness industries
and nowadays, Nike objectives is to embed as one of the
biggest growth market in the global competition
Strategies
Drive strategic integration in the market, because integrated
strategy is very useful in the market and has been proved
successful by some other company.
Nike strategy from 2006 has created mass market nowadays

and Nike being one of the largest shoes production in the
world
 Initiated a study to identify the next big growth
opportunities for the company
 Hire some celebrity designer to join the design of the
new product as fashion performance has became one of
the trend in shoes world
 Expansion in consumer base
 Expansion in Nike’s locations
 Expansion in activity and demands
 Delivered some integrated campaign
Policies
Creating some new management to overcome the women
fitness market, Nike have to change from the Nike traditional
business to modern business.

II. Corporate Governance
A. Board of Directors
Board of Director’s Member

On 2007, Nike’s Board of Directors are consisting of nine persons
from various background and role. Here are the list of each current
Nike’s Board of Director and their status as Board of
Directors(Nike Inc., n.d.):
 Philip H. Knight
Mr. Knight has been becoming directors since 1968 and
currently is the Chairman of the board of directors of Nike.
He was serving as president of Nike since 1968 to 1980
except for a period between June 1983 through September
1984, and he also was serving as president from June 2000 to
December 2004. This is making him be categorized as
internal member.
 Mark G. Parker
Mr. Parker has been President, Chief Executive Officer, and a
director since 2006. He has been internal member of Nike as
employee since 1979 and currently being the other Executive
Commitee beside Mr. Knight. He has extensive knowledge
and experience in Nike’s operations, branding, research,
design, and management. He is categorized as internal board
of directors member.
 John G. Connors
Mr. Connors currently a member of the board of directors of
Splunk and privately held some others companies. He is
currently an Audit Committee and a Finance Committee to
be categorized as external members.

 Timothy D. Cook
Mr. Cook is Chief Executive Officer of Apple and currently
the Chair of Compensation Committe and Nomination and
Corporate Governance Committee at Nike board of directors.
He is also a member of the board of directors of the National
Football Foundation and Apple, Inc. This way he can be
categorized as external member.
 Alan B. Graf, Jr.
He isExecutive VP and the Head of Financeat FedEx
Corporation, other than FedEx he is also serving under three
other board memberships. In the Nike board he served as
Chair of Audit Committee and Chair of Nominating and
Corporate Governance Committee. He is an external
member.
 Douglas G. Houser
Mr. Houser has been a partner in the Portland making him an
external member. He is Corporate Responsiblity and
Sustainability Committee, Executive Committee, and
Nominating and Corporate Governance Committee.
 Jonathan A. Rodgers
Mr. Rodgers is retired broadcast and cable television Chief
Executive Officer and founding President making him an
external member. He is a Corporate Responsibility
Committee and Compensation Committee.
 Orin C. Smith
Mr. Smith was President and Chief Executive Officer at
Starbucks Corporations from 2000 to 2005 and currently
becoming Chief Financial Officer to two transportation
company making him an external member. He is a Audit
Committee and Chair of Finance Committee.
 John R. Thompson, Jr.

Mr. Thompson was head coach of the Georgetown University
men’s basketball team from 1972 until 1998. He is an
external member and is Corporate Responsibility Committee.
Board of Director’s Stock and Share

According to Nike Corporate Governance Guidelines, there are
certain significant Nike Stock Ownership needed by the board
members, those is five times of each’s board members cash
retainer for each member with the maximum time to achieve it is
by five years of membership. In this exception, Chief Executive
Officer is bound to have stock valued six times of his annual base
salary (in this case is Mr. Parker who also Executive Committee).
(Nike Inc., n.d.)
Classes / Kind of Stock Owned by Board of Directors

The stocks owned by board of directors are publicly traded even
though there are two kind of common stocks available that is
Common Stock A and Common Stock B. Both have no differences
in the dividend and liquidation preferences or participation rights
of the Class A and Class B common shareholders. It just stated that
voting rights of Class B Common Stock are limited in certain
circumstances with respect to the election of directors.
Board of Directors Contribution and International-

Environment Concerns
There are many factors which a board members can contribute,
especially in representing the desire and interest of all
shareholders. In Nike, there are several main contribution needed
from each member of the board, those are:

Nike was expecting a well-diversified and high skill board of
director to ensure them execute their responsibilities to overseer
in optimally. Specifically, each member are expected to have a
strong backgrounds in finance, operations, technology,
management, marketing, the professions, sports, and education,
depending on the needs of the board.
It is highly expected that all of the board member are for the least
is having a bachelor degree from a well-known college. This
criteria is not meant to undervalued one with a high intelligence
through university background, however it is just as a proxy to
show the expectation of how good the members should be. And
also it is of course didn’t mean to close the chance of a person with
high achievement and no college background to join the board.
And as Nike is an international-wide business, 7 out of 9 members

on the board are all having their own respective unique
international experience, which, of course could support Nike
International business.
In addition, Nike themselves through the code of ethics organized

and created by the board of directors are having environment as
their first code of ethics concern. Other than that, there are several
more code of ethics which could support the environment concern
such as health and safety, but this already enough to show the Nike
concern towards environment.
Board of Directors Serving Periods

Each and every member in board of directors are having their own
serving period as below with after several criteria is failed to be

met by the individual member, he/she will be asked to be resigned
and new election to be started and done by board of director and
shareholders as the voters, below is the member list along with
each’s serving period:
 Philip H. Knight
A director from 1968 until 2007 – 39 years of serving.
 Mark G. Parker
A director from 2006 until 2007 – 1year of serving.
 John G. Connors
 Timothy D. Cook
 Alan B. Graf, Jr.
 Douglas G. Houser
 Johnathan A. Rodgers
A director from 2006 until 2007 – 1 year of serving
 Orin C. Smith
 John R. Thompson Jr.
Board of Directors Involvement Degree

As the website and information available suggest, Nike’s board of
director involvement degree is could be said as Active Participation
where the board of director approves, question, and doing regular
meeting with the top management along with active board
committees meeting and available fiscal and management audits.
(Nike Inc., n.d.)
Board of director are having their own Corporate Responsibility

Committee, in which the committee need to review and evaluate
management decision toward company sustainability and

responsibility as stated on amended code of ethics. This means
environment is always being one of the consideration on every
board of director management’s proposal evaluation. (Nike Inc.,
n.d.)

Global Women Fitness Organizational Structure
Global VP
Global Director Marketplace Development

Global Director Strategic Planning
Global Director Women’s Footwear

VP Footwear Women’s Creative Director
Business Unit Director
Global Director Women’s Apparel

Global Apparel Director Women’s Innovation Director
Business Unit Director
Global Director Women’s Equipment Women’s Merchandising Director

VP Equipment Business Unit Director
Director Brand Marketing

Director Women’s Brand Initiatives Director Operations and Supply Chain
VP Operations
Regional Management USA EMEA Asia-Pacific

TOP MANAGEMENT
1. Mindy Grossman, Vice President of Apparel
2. Darcy Winslow, Global General Manager for Women’s

Footwear, Apparel and Equipment
3. Jim Sutton, Senior Director of Global Organization and

4. Emma Minto, Director of Strategic Planning for Nike Brands

U.S Apparel Division
5. Barbara Sumner, Creative Director fir Integrated Footwear,

Apparel and Equipment
6. Steve Lesnard, Global Concept Director for Global Women’s

Fitness
7. Maithili Shenoy, Global Director of Supply Chain Strategy

and Development
8. Jodi Sittig, Marketplace Development Director Global

Women’s Fitness
9. Mary Slayton, Director of Market Intelligence
10. Hans Van Alebeek, Vice President Global Operation and

Technology
11. Pat Zeedick, General Manager of Equipment and Women’s

for the EMEA Region

TOP MANAGEMENT CHIEF’s CHARACTERISTICS
• Knowledge : Apparel industry, retail and

merchandising, branding concept & strategy, e-
commerce business, fashion, global apparel
manufacturing, operations, sourcing, quality
assurance, innovation and product development.
• Skill :Leadership, managerial, business development,
e-commerce business, strategic planning.
• Background : Manhattan Ville College and George
Washington University.
• Style : Innovative, emphatic, aggressive, confidence,
visionary, certainly, strong passion of fashion,
charismatic, inspiring, entrepreneurial.
• International experiences:
1977-1991 : Assistant president of the international
division in menswear apparel industry at
Manhattan International Company.
1978-1980 : Executive at Jeffrey Banks menswear.
1980-1981 : Executive at Ron Chereskin menswear.
1981-1985 : Regional Sales Manager at Merona, Vice
President of Sales at Jeffrey Banks, Oxford
Industries.
1985-1988 : Vice President of Sales of Menswear, at
Wlliwear by Will Smith.
1981-1991 : Vice President of Sales and Merchandising
at Tommy Hilfiger.
1991-1994 : President of Chaps Ralph Lauren, Senior
Vice President of menswear division at Warnaco,
Inc.
1994-1995 : Vice President of New Business
Development at Polo Ralph Lauren Corp.

1991-2000 : Vice President Ralph Lauren Corp.
1995-2000 : President and CEO of Polo Jeans Company.
2000-2006 : Vice president of Global Apparel at Nike,
Inc.
2006- Present : CEO HSN, CEO IAC International
retailing.
• Executive part of top management: Yes, she is. She has
serving Nike, Inc. as a Vice President of Global Apparel
from 2000-2006.

• Knowledge : Business strategic, innovation, business

development, re-engineering process, retail,
sales, supply chain, sustainability business,
product creation, biomechanical engineering, and
product development.
• Skill : Leadership, Management, Sustainability,
Executive Coaching, Entrepreneurship, Strategic
Planning, Business Strategy
• Background :
1973-1977:BS, Exercise Science at Murray State University
1985-1985:MS, Sports Medicine at Southern Connecticut
State University
1986-1988:MS, Exercise Physiology & Biomechanics at
Portland State University
2003-2003: SEP, Business at Stanford University Graduate
School of Business
• Style :Professional, enthusiasm, detail, openness,
dedication, inspirational leader, strong leader,
good communication skill, solid reputation, deep
passion, visionary.

1988-2008: General Manager at Nike, Inc.
Biomechanical Research Assistant Director
Director of Product Testing Manager
Product Development Manager
Process Business Re-engineering Team Manager
Director of Advanced Research & Development
Footwear
Director of Global Research, Design &
Development Footwear
General Manager Sustainable Business
Strategies
General Manager of Global Women’s Fitness
(FW, APP, EQP)
Nike Brand Process Re-engineering Director
Senior Advisor Nike Foundation
2010-2012: Senior Strategist at Brightworks Sustainability

Advisor
2008- Present : Executives in Residence at MIT Sloan

School of Management
2008- Present : Founder Designs for a Sustainable World

Collective, LLC
• Executive part of top management: Yes, she is. She was

working in Nike, Inc. for 18 years and held many positions.

• Knowledge :Performance management, human

resource management, organizational design,
strategic planning, business process, career

development, training, employee management,
and talent management process.
• Skill :Leadership, managerial, executive coaching, HR
consulting, HRM
•Background : Bachelor Business Administration from
Texas A&M University.
Coaching Certification from Hudson Institute of
Santa Barbara.
• Style : Professional, insightful,
1972-1997:HR Director, Levi’s USA.
1997- 2008 :Senior Director Global Organization and
Leadership at Nike, Inc.
2009- Present :Business Advisor and Executive Coach at
Bois D’Arc Leadership.
• Executive part of top management: Yes, he is. He has held
senior HR leadership roles in Nike, Inc.

• Knowledge : Apparel, product development, business

development, merchandising, marketing strategy,
business strategy, consumer goods, sports goods,
and cross functional team.
• Skill : Leadership, managerial, specialist business
strategy, strategic planning, marketer
•Background:
1987-1991: Bachelor of Commerce at Queen’s University
1994- 1996 : MBA at Harvard Business School
• Style: tactical, realist, professional, creative, marketer
1991- 1994 : Associate Product Manager at Colgate
Palmolive Toronto, Canada.
1996- 1997 : Associate at Corporate Decisions Inc.

1997- 1998 : Senior Associate at Mercer Management
Consulting
2000- 2002 : VP Marketing &Prof’l Services at TeamOn
Systems.
2000- 2006 : Strategic Planning Director Global
Women’s fitness at Nike, Inc.
2006- 2008 : Business Development Director US
Apparel at Nike, Inc.
2008- 2009 : Merchandising Director US Kids Apparel
at Nike, Inc.
2009- 2013 : Global Category Apparel Lead- Young
Athletes at Nike, Inc.
2013- 2013 : Senior Director Apparel Process
Innovation at Nike, Inc.
2013-Present : GM Nike Sportswear Central & Eastern
Europe at Nike, Inc.
• Executive part of top management: Yes, she is.

• Knowledge : Product design, fashion design, creative

textiles, trend forecasting, project management,
apparel design, concept boards.
• Skill : Leadership, managerial, product design,
creative planning
• Background : 1988-1990, BS, Fashion Design, Fashion
Institute of Technology, University of Oregon
• Style : genuine, creative, inspirational, listener,
cooperative, trustworthy
1990- 2006 : Creative Director Nike, Inc.
1990-2008: Global Creative Director Women’s Footwear,
Apparel and Equipment Nike, Inc.

2009- Present : Creative Director Interior and Product
Design Self Employee Consultant

Fitness
• Knowledge : Brand development, marketing strategy,

sports goods, strategic planning
• Skill : Leadership, managerial, marketer,
branding concept
• Background:
September 1995 – December 1996 MBA, Business &
entrepreneurshipBabson college
MBA Babson College – Franklin W. Olin Graduate School of
Business
• Style : professional, creative, inspiring, initiatives
2015–Present : VP/GM Running North America Nike, Inc.
2008–Present : Running Global Brand Director & London

2012 Olympics, Nike, Inc.
2012 –2015 : VP Brand Management Western Europe

Nike, Inc.
2006 – 2008 : Global Brand Director. Beijing Olympics

Nike, Inc.
2005 – 2006 : Global brand concept director Nike, Inc.
2004 2005: US Brand Marketing Director Nike, Inc.

2001 – 2004 : Regional Brand Manager Nike EMEA
• Executive part of top management: Yes, he is.

and Development
• Knowledge : operations strategy, retail strategy,

business development, purchasing, inventory
planning and management, supply chain
performance management.
• Skill : supply chain strategy consulting, engineering
process management
• Background:
1991 – 1993 : MBA, International Business, Sophia
University
1987 – 1991 : B.S., Operations Research/ Industrial
Engineering, Columbia Engineering
2003 : Certifications APICS: American Production and
Inventory Control Society, APICS
• Style : genius, tactical, out of the box thinker, business
speak, deep in technology knowledge
2012–Present:Senior Director, Emerging Markets Demand
Planning & Inventory Management Nike, Inc.
2011 –2012 : Senior Director: Sales and Operations
Planning Nike, Inc.
2007 –2011 : Senior Director, Global Replenishment
Nike, Inc.
2003 –2007 : Global Sr. Director of Supply Chain
Strategy & Development Nike, Inc.
2000 – 2001 : Vice President, Business
DevelopmentSupplycahinge.
1996 – 2000 : ManagerDeloitte Consulting

1993 – 1996 :AccentureSenior Consultant

Women’s Fitness
• Knowledge : Marketing strategy, marketing

management, marketing integration, sports
goods, brand development, sales strategies, retail
and merchandising.
• Skill : Marketing strategy, brand development,
marketing specialist
• Background:
1986 – 1990, Bachelor of Science (BS), Fashion
Merchandising, Kent State University
• Style : Professional, serve the best
2011–Present: Senior Global Brand Director- Access to
Sport Nike, Inc.
2009 –2011 : Global Brand Director Nike, Inc.
2007 –2011 : Brand Marketing DirectorNike, Inc.
2003 – 2005 : Brand ManagerNike, Inc.
• Knowledge : Brand development, sports goods, market

consumer,
• Skill : Business Strategic, Marketing
• Background : B.S in Economics from Colorado College
and MBA from Northwestern Kellogg School of
Business.
• Style : Humorist, professional, learner
• International experiences: Director of Market Intelligence,
GM of Accessories Business, Marketing Director for the

Jordan Brand, Director of Strategic Planning for the U.S
Region, Director of Strategic Planning for Subsidiaries, and
Director of Consumer Insights. Before join with Nike, She
worked at Pillsbury McKinsey & Company and Wilson
Sporting Goods.

Technology
• Knowledge : Operations management, supply chain,

strategic planning, forecasting, product
development, operational excellence, E-
commerce, logistics, and
• Skill : OPM consultant, business strategy, business
development, and process improvement.
• Background :
1990 – 1992 : MBA, UCLA Anderson School of
Management
1983 – 1988 : Drs. Econometrics, VU University
Amsterdam
• Style : creative, professional
1999–Present : VP operations and administrations, VP
global operations and technology, Corporate VP,
Executive, Nike, Inc.
1992 – 1998 : CPO, Shared Services, EVP Supply Chain,
Technology, COO EMEA, Consultant, McKinsey &
Company
1988 – 1990 : Business Analyst, NV Indivers

for the EMEA Region
• Knowledge : Business development, marketing, sports

goods, sales management, sales strategy, retail,
product innovation, brand leadership and sales
development.
• Skill : sales strategy, business strategic
planning.
• Background : Indiana University of Pennsylvania.
• Style : competitive, perfectionist, speak to the point,
walk the talk, critical thinker.
• International experiences: 2007, Nike appointed Zeedick as
GM of Equipment for the Nike Brand. 1984-2006, GM of
Equipment and women’s for EMEA, GM of Nike Canada,
Director of Sales for America, Global Director of sales and
training development, National development sales director
for the U.S, Western Regional Apparel Sales Manager,
Territory Sales Manager in the Rocky Mountains Region,
Nike, Inc. Prior worked at Nike, Pat has joined as GM at
Joslin’s Department Store in Colorado.

B. Top Management
Global Women Fitness Organizational Structure
Global VP Global GM Women’s Fitness

Senior Administrative Assistant
Global Director Marketplace Development

Global Director Strategic Planning
Global Director Women’s Footwear

VP Footwear Women’s Creative Director
Business Unit Directo
Global Director Women’s Apparel

Global Apparel Director Women’s Innovation Director
Business Unit Directo
Global Director Women’s Equipment Women’s Merchandising Director

VP Equipment Business Unit Directo
Director Brand Marketing

Director Women’s Brand Initiatives Director Operations and Supply Chain
VP Operations
Regional Management USA EMEA Asia-Pacific

TOP MANAGEMENT



16. Barbara Sumner, Creative Director for Integrated Footwear,


Fitness

and Development

Women’s Fitness

Technology

for the EMEA Region

TOP MANAGEMENT CHIEF’s CHARACTERISTICS
• Knowledge : Apparel industry, retail and

merchandising, branding concept & strategy, e-
commerce business, fashion, global apparel
manufacturing, operations, sourcing, quality
assurance, innovation and product development.
• Skill : Leadership, managerial, business development,
e-commerce business, strategic planning.
• Background : Manhattan Ville College and George
Washington University.
• Style :Innovative, emphatic, aggressive, confidence,
visionary, certainly, strong passion of fashion,
charismatic, inspiring, entrepreneurial.
1977-1991: Assistant president of the international division
in menswear apparel industry at Manhattan
International Company.
1978-1980: Executive at Jeffrey Banks menswear.
1980-1981: Executive at Ron Chereskin menswear.
1981-1985: Regional Sales Manager at Merona, Vice
President of Sales at Jeffrey Banks, Oxford
Industries.
1985-1988: Vice President of Sales of Menswear, at
Wlliwear by Will Smith.
1981-1991: Vice President of Sales and Merchandising at
Tommy Hilfiger.
1991-1994: President of Chaps Ralph Lauren, Senior Vice
President of menswear division at Warnaco, Inc.
1994-1995: Vice President of New Business Development at
Polo Ralph Lauren Corp.
1991-2000: Vice President Ralph Lauren Corp.
1995-2000: President and CEO of Polo Jeans Company.
2000-2006: Vice president of Global Apparel at Nike, Inc.

2006- Present : CEO HSN, CEO IAC International
retailing.
• Executive part of top management: Yes, she is. She has
serving Nike, Inc. as a Vice President of Global Apparel
from 2000-2006.

• Knowledge : Business strategic, innovation, business

development, re-engineering process, retail,
sales, supply chain, sustainability business,
product creation, biomechanical engineering, and
product development.
• Skill : Leadership, Management, Sustainability,
Executive Coaching, Entrepreneurship, Strategic
Planning, Business Strategy
• Background :
1973-1977: BS, Exercise Science at Murray State University
1985-1985: MS, Sports Medicine at Southern Connecticut
State University
1986-1988: MS, Exercise Physiology & Biomechanics at
Portland State University
2003-2003: SEP, Business at Stanford University Graduate
School of Business
• Style : Professional, enthusiasm, detail, openness,
dedication, inspirational leader, strong leader,
good communication skill, solid reputation, deep
passion, visionary.
1988-2008: General Manager at Nike, Inc.
Biomechanical Research Assistant Director
Director of Product Testing Manager
Product Development Manager

Process Business Re-engineering Team Manager
Director of Advanced Research & Development
Footwear
Director of Global Research, Design &
Development Footwear
General Manager Sustainable Business
Strategies
General Manager of Global Women’s Fitness
(FW, APP, EQP)
Nike Brand Process Re-engineering Director
Senior Advisor Nike Foundation
2010-2012: Senior Strategist at Brightworks Sustainability

Advisor
2008- Present : Executives in Residence at MIT Sloan

School of Management
2008- Present : Founder Designs for a Sustainable World

Collective, LLC
• Executive part of top management: Yes, she is. She was

working in Nike, Inc. for 18 years and held many positions.

• Knowledge : Performance management, human

resource management, organizational design,
strategic planning, business process, career
development, training, employee management,
and talent management process.

• Skill : Leadership, managerial, executive coaching, HR
consulting, HRM
•Background : Bachelor Business Administration from
Texas A&M University.
Coaching Certification from Hudson Institute of
Santa Barbara.
• Style : Professional, insightful,
1972-1997: HR Director, Levi’s USA.
1997- 2008 : Senior Director Global Organization and
Leadership at Nike, Inc.
2009- Present : Business Advisor and Executive Coach at
Bois D’Arc Leadership.
• Executive part of top management: Yes, he is. He has held
senior HR leadership roles in Nike, Inc.

• Knowledge : Apparel, product development, business

development, merchandising, marketing strategy,
business strategy, consumer goods, sports goods,
and cross functional team.
• Skill : Leadership, managerial, specialist business
strategy, strategic planning, marketer
•Background:
1987-1991: Bachelor of Commerce at Queen’s University
1994- 1996 : MBA at Harvard Business School
• Style: tactical, realist, professional, creative, marketer
1991- 1994 : Associate Product Manager at Colgate
Palmolive Toronto, Canada.
1996- 1997 : Associate at Corporate Decisions Inc.
1997- 1998 : Senior Associate at Mercer Management
Consulting

2000- 2002 : VP Marketing &Prof’l Services at TeamOn
Systems.
2000- 2006 : Strategic Planning Director Global
Women’s fitness at Nike, Inc.
2006- 2008 : Business Development Director US
Apparel at Nike, Inc.
2008- 2009 : Merchandising Director US Kids Apparel
at Nike, Inc.
2009- 2013 : Global Category Apparel Lead- Young
Athletes at Nike, Inc.
2013- 2013 : Senior Director Apparel Process
Innovation at Nike, Inc.
2013- Present : GM Nike Sportswear Central & Eastern
Europe at Nike, Inc.

• Knowledge :Product design, fashion design, creative

textiles, trend forecasting, project management,
apparel design, concept boards.
• Skill : Leadership, managerial, product design,
creative planning
• Background :1988-1990, BS, Fashion Design, Fashion
Institute of Technology, University of Oregon
• Style : genuine, creative, inspirational, listener,
cooperative, trustworthy
1990- 2006 : Creative Director Nike, Inc.
1990-2008: Global Creative Director Women’s Footwear,
Apparel and Equipment Nike, Inc.
2009- Present : Creative Director Interior and Product
Design Self Employee Consultant

Fitness
• Knowledge : Brand development, marketing strategy,

sports goods, strategic planning
• Skill : Leadership, managerial, marketer,
branding concept
• Background :
September 1995 – December 1996 MBA, Business &
entrepreneurship Babson college
MBA Babson College – Franklin W. Olin Graduate School of
Business
• Style : professional, creative, inspiring, initiatives
2015–Present : VP/GM Running North America Nike, Inc.
2008–Present : Running Global Brand Director & London

2012 Olympics, Nike, Inc.
2012 –2015 : VP Brand Management Western Europe

Nike, Inc.
2006 – 2008 : Global Brand Director. Beijing Olympics

Nike, Inc.
2005 – 2006 : Global brand concept director Nike, Inc.
2004 2005: US Brand Marketing Director Nike, Inc.
2001 – 2004 : Regional Brand Manager Nike EMEA


and Development
• Knowledge :operations strategy, retail strategy,

business development, purchasing, inventory
planning and management, supply chain
performance management.
• Skill :supply chain strategy consulting, engineering
process management
• Background :
1991 – 1993 : MBA, International Business, Sophia
University
1987 – 1991 : B.S., Operations Research/ Industrial
Engineering, Columbia Engineering
2003 : Certifications APICS: American Production and
Inventory Control Society, APICS
• Style : genius, tactical, out of the box thinker, business
speak, deep in technology knowledge
2012–Present : Senior Director, Emerging Markets
Demand Planning & Inventory Management Nike,
Inc.
2011 –2012 : Senior Director: Sales and Operations
Planning Nike, Inc.
2007 –2011 : Senior Director, Global Replenishment
Nike, Inc.
2003 –2007 : Global Sr. Director of Supply Chain
Strategy & Development Nike, Inc.
2000 – 2001 : Vice President, Business
DevelopmentSupplycahinge.
1996 – 2000 : ManagerDeloitte Consulting
1993 – 1996 :AccentureSenior Consultant

Women’s Fitness
• Knowledge :Marketing strategy, marketing

management, marketing integration, sports
goods, brand development, sales strategies, retail
and merchandising.
• Skill : Marketing strategy, brand development,
marketing specialist
• Background :
1986 – 1990, Bachelor of Science (BS), Fashion
Merchandising, Kent State University
• Style : Professional, serve the best
2011–Present : Senior Global Brand Director- Access to
Sport Nike, Inc.
2009 –2011 : Global Brand Director Nike, Inc.
2007 –2011 : Brand Marketing DirectorNike, Inc.
2003 – 2005 : Brand ManagerNike, Inc.
• Knowledge : Brand development, sports goods, market

consumer,
• Skill : Business Strategic, Marketing
• Background : B.S in Economics from Colorado College
and MBA from Northwestern Kellogg School of
Business.
• Style : Humorist, professional, learner
• International experiences: Director of Market Intelligence,
GM of Accessories Business, Marketing Director for the
Jordan Brand, Director of Strategic Planning for the U.S

Region, Director of Strategic Planning for Subsidiaries, and
Director of Consumer Insights. Before join with Nike, She
worked at Pillsbury McKinsey & Company and Wilson
Sporting Goods.

Technology
• Knowledge :Operations management, supply chain,

strategic planning, forecasting, product
development, operational excellence, E-
commerce, logistics, and
• Skill :OPM consultant, business strategy, business
development, and process improvement.
• Background :
1990 – 1992 : MBA, UCLA Anderson School of
Management
1983 – 1988 : Drs. Econometrics, VU University
Amsterdam
• Style : creative, professional
1999–Present : VP operations and administrations, VP
global operations and technology, Corporate VP,
Executive, Nike, Inc.
1992 – 1998 : CPO, Shared Services, EVP Supply Chain,
Technology, COO EMEA, Consultant, McKinsey &
Company
1988 – 1990 : Business Analyst, NV Indivers

for the EMEA Region

• Knowledge :Business development, marketing, sports
goods, sales management, sales strategy, retail,
product innovation, brand leadership and sales
development.
• Skill :sales strategy, business strategic planning.
• Background :Indiana University of Pennsylvania.
• Style :competitive, perfectionist, speak to the point,
walk the talk, critical thinker.
• International experiences: 2007, Nike appointed Zeedick as
GM of Equipment for the Nike Brand. 1984-2006, GM of
Equipment and women’s for EMEA, GM of Nike Canada,
Director of Sales for America, Global Director of sales and
training development, National development sales director
for the U.S, Western Regional Apparel Sales Manager,
Territory Sales Manager in the Rocky Mountains Region,
Nike, Inc. Prior worked at Nike, Pat has joined as GM at
Joslin’s Department Store in Colorado.
Top Management’s Responsible For The Corporation’s

Performance Over The Past Few Years
She has responsible for:
- Provides strategic direction for women’s business
- Led global strategic Nike women’s fitness business for

product development, innovation, merchandising, funding,
retailing, etc.

- Organizethe entire apparel organizationincludes three
sub-brands for Nike apparel: Nike Performance Nike
Fusion, and Nike Women.
- Led the business development and growth of the global

women’s business
- Led Nike’s Global Women’s Leadership Council.
- Develop semi-virtual organization matrix for global

women’s fitness business to maximize cross-functional
business units.

- Leads the global women’s fitness team to develop new

business strategy with new products to catch new market.
- Implement integrated strategy approach in global

women’s fitness business.
- Building the global women’s footwear for approaching the

women’s market emerged.
- Led micro-segmentation approach to specified product

category based on sports activity and core products.

He has responsible for:

- Established Global HR strategy to optimize organizational
structures, positions, peoples, and key resources.
- Solves organizational matrix complexity in global

women’s fitness business
- Organizational structure assessment and resources

planning

- Led new strategic planning in ‘Change the Game’

challenge to evaluate the women’s fitness project.
- Led the research in global women’s fitness business to

redefine the business target.
- Develop overarching plan for approaching women’s

market segment.
- Drive integrated approach to support the women’s fitness

business teams

- Led creative direction for women’s fitness business
- Led creative teams to solve the problems for women’s

fitness consumers.

Fitness.
- Develop integrated business concept for women’s fitness

business through global functions and regional level.
- Build key marketing concept includes the marketing

strategies, products and seasonal marketing plan across
the world.
- Lead marketing strategy for cross-business collaboration.
- Develop and implement global marketing concepts for

primary global brand and all merchandized products. E.g.
Goddess Store/Nike Women
- Develop executions plan to actualized the marketing

strategies such as Integrated marketing campaigns in all
media (TV commercials, digital marketing, magazine,
social connections). E.g. ‘If You Let Me Play’ campaign.
- Develop Nike global women’s fitness business for long-

term strategic planning.
- Led and controls the EMEA regional marketing strategies

and periodical executions plan of Nike apparel brands and
women’s fitness campaign.

and Development

- Organize supply chain management consist of
forecastingdemand, purchasing schedule, inventory
management.
- Develop advanced system inventory management
- Led effort to integrated inventory management across the

worlds and region.
- Stimulate cross-functional metrics to optimize business

performance.
- Initiate to cross-business collaboration with

manufacturing-partners to increase productivity and
reduce risks-costs of supply chain among global and
regional level.
- Improve inventory planning system and reduce stock out.
- Develop integrated operational strategic planning

includingstrategic planning reviews, seasonal reviews,
etc.
- Lead global and regional operations strategy on adaptable

supply chain models to deliver integrated products to
market on dynamic timelines.
- Managing supply chain assessment to evaluate supply

chain performance. E.g. key metrics/ scorecards.

Women’s Fitness
- Develop the concept customer service approach of Nike

Goddess, Goddess Store or Nike Women.

- Develop and execute the new retail and merchandising
strategy
- Develop strategic planning in Nike

Technology
- Led Nike’s supply planning, sourcing, manufacturing, and

delivery mechanism across the regional business units.
- Develop advanced supply planning system to deliver the

core of integrated collections of women’s fitness footwear,
apparel and equipment products to the distribution
channels.

for the EMEA Region
Shehas responsible for:
- Develop long-term strategic planning and plot target to be

achieved in this capacity as GM.
- Assessed the integrated collection of women’s fitness

development and make sure that the plans got the key to
be success.
- Drive women’s business to deliver integrated collections

at the regional level, EMEA.

Top Management Has Established a Systematic Approach to
Strategic Management
Grossman, Winslow, and the top management team cooperate to
established global women’s fitness business to get the biggest
growth opportunities in women’s market segment. The top
management believes that the women’s fitness business will
optimize company performance in global sportswear industry. But,
Nike has very complex multidimensional business and complicated
organizational matrixed. So, when the teams develop new business
in new market segment, their led the women’s fitness teams with
systematic approach to clearly define the strategies. There are
several new strategies to drive global women’s fitness business.
1) Category-driven approach
2) Consumer-oriented approach
3) Integrated collection-based approach
4) Centralization system of product development
5) Integrated cross-business collaboration approach
6) Micro-segmentation approach
These approaches would be the strategic ways for Nike women’s

fitness team to bring new breakthrough innovation to the global
markets. Systematic approaches help the team to brief the
strategic planning into more attainable goals.
Top Management’s Level of Involvement in The Strategic

Management
The top management led the transition from strategic planning into
strategic management in which environmental scanning lead to
strategy formulation, strategy implementation, evaluation and
control. People at all level are now involved.

Trevor Edwards, currently the EVP of Brand and Category
management, will become the new Nike Brand President leading
all category and geographic business units, the Jordan Brand,
Action Sports which includes Hurley International Digital Sport
and brand management throughout the world. The team reporting
to Edwards will be organized to optimize an integrated
marketplace and will now include Nike’s wholesale, retail and e-
commerce operations.
Eric Sprunk, currently the EVP of Merchandising and Product, will

become Nike, Inc.’s Chief Operating Officer leading all
manufacturing, sourcing, IT and procurement for the company. In
this role, Sprunk will also continue to oversee the company’s
efforts to drive innovation in the supply chain. Hans van Alebeek
will remain EVP of Global Operations & Technology reporting to
Sprunk.
Jeanne Jackson, currently the President of Direct-to Consumer, will

become President of Product and Merchandising, leading Nike’s
product engines and merchandising. Jackson will be responsible
for driving the strategy for creating all footwear, apparel and
equipment for the company and leading the merchandising of
product to the global marketplace.
Dr. Thomas Clarke, currently the President of New Business

Development, will become President of Innovation. He will lead
Nike’s Advanced Product Innovation Teams and the Sustainable
Business & Innovation (SB&I) team. Hannah Jones will remain VP
of SB&I reporting to Clarke and will continue to report to Parker
on policy matters relating to sustainability and labor practices.

Edwards, Sprunk, Jackson and Clarke will report directly to Mark
Parker, Nike, Inc.’s President and CEO, along with Parker’s current
direct reports including Hilary Krane who becomes EVP, Chief
Administrative Officer and General Counsel, Don Blair, EVP and
Chief Financial Officer, David Ayre, EVP of Global Human
Resources, John Slusher, EVP of Global Sports Marketing, Jim
Calhoun, President & CEO of Converse, John Hoke, VP of Global
Design and Tinker Hatfield, VP of Creative Concepts.
The Interact between Top Management-Lower Level

Managers and Top Management-Board Of Directors
The top management are controlled by Board of Director, and top

management are monitoring lower management directly.
Employees could give the feedback for the management system.
For example, Manager is an upward feedback tool that Nike
launched in FY12 to provide managers with insights from their
employees about key strengths and opportunities to improve
according to the four core principles of our manifesto. Managers
can use the feedback they receive to create a customized plan for
their growth and development. In late FY14, Nike will begin to roll
out the tool more broadly in 14 languages. Manager Journey is an
end-to-end digital experience we plan to launch in FY15. It will
provide NIKE managers with increased visibility into best
practices, tools and resources they need to effectively manage
their teams.

Nike also make monitoring by giving relevant survey among
workers that asks 70 questions to an employee about demographic
information, employees’ perception of pay and benefits, health and
safety, management culture, hours worked, their empowerment as
employees and general job satisfaction. Until now most of them
was satisfied.
Nike believes that they can make stronger two-way communication

between upper management and lower management. Because in
manufacture business like Nike, the engagement between its
employee really important and it is also affected to the creating of
innovation inside the company.
The Board of Directors (the “Board”) of NIKE, Inc. (the

“Company”) has adopted the following Corporate Governance
Guidelines to assist the Board in the exercise of its responsibilities.
These Guidelines reflect the Board’s commitment to monitor the
effectiveness of policy and decision making both at the Board and
senior management level, with a view to enhancing long-term
shareholder value. These Guidelines will be reviewed annually by
the Nominating and Corporate Governance Committee and the
Board, and are subject to modification from time to time by the
Board. Waivers of these Guidelines may be made only by the
Nominating and Corporate Governance Committee or the Board.
Frequency of meeting- There are five regularly scheduled

meetings of the Board each year. Meetings may be held in locations
that present opportunities to expose the Board to various facets of
the Company’s business, are related to other Company business, or
connected with a shareholder meeting

Agenda for board and committee meeting- The Chairman of
the Board, and the Chairs of the Board committees, set the agenda
for Board and committee meetings, respectively. Directors are
invited to suggest inclusion of items on the agenda, and are free to
raise at any Board meeting subjects that are not specifically on the
agenda. Materials related to agenda items are provided to
directors sufficiently in advance of Board meetings, where
necessary, to permit directors to review and prepare for discussion.
Attendance of management at board meeting- At the invitation

of the Board, members of senior management recommended by the
CEO attend Board meetings or portions thereof for the purpose of
presenting information regarding a particular matter or
participating in discussions. The Board is free to excuse members
of senior management from meetings at any time.
Executive session on non-employee meeting- Executive

sessions or meetings of non-employee directors without
management present are held at least once each year. The
responsibility to preside as chair of the executive sessions or
meetings is rotated among the Chairs of the Board committees as
designated by the Nominating and Corporate Governance
Committee. This practice provides for leadership at all of the
executive sessions or meetings of non-employee directors without
the need to designate a lead director.

Nike’s Strategic Decisions are Made Ethically in A Socially
Responsible Manner
Nike has positive mindset about Corporate Social Responsiblility.
Nike believe that Corporate Social Responsibility is a good things
to do to support company’s growth and innovation. Besides that, it
becomes an integration of how brand power, Nike’s people
potential, and Nike’s business scale can be used to give a valuable
change to the environment.
Nike has CSR that related to it’s designs, sourcing, operations, and
consumer experiences function. Nike has long term goal which is
targeting to focus on three area for 2011. First is improving the
contract factories working condition by integrating business
approach in the supply chain. Second is minimizing the
environmental waste, which is caused in both Nike’s own factory or
Nike’s contract factory through sustainable in the innovation of
product and supply chain. And the last is using it’s brand power as
a media to give the importance of sport to not only youth around
the world. So, with this targets Nike will do activity such as
innovation, design and production, which is integrated with these 3
things. The purpose is for the goodness of the company and also to
create meaningful effect to the environment around the world.
Nike has made CSR committee of the board of director in 2001

which has function to review the policies and give recommendation
about labor or environment, community affairs, foundation and
charity activity, environmental and sustainability activities in the
meetings. This committee have 3 meeting each years to make
strategy in corporate social responsibility. In 2006 the member of
corporate social responsibility committee are Jill Ker Conway,

Douglas G. Houser, Jeanne P. Jackson, John R. Thompson, and
Johnathan A.Rodgers.
Nike’s Strategic Decisions are Made in An Environmentally

Sustainable Manner
In nike long term target, Nike has aim to minimizing the waste
made by it’s manufacturing process to the environment. So, in
every decision made by Nike it will be based on the environmental
effect besides on social effect. Nike focus on solving the problem
from the root rather than fixing what problem that has been
Tccurred or it’s symptom.
One of the way to eliminate waste is from it’s whole supply chain.
Nike implementing sustainability for all of it’s innovation. This
innovation will improve the quality and design of the product while
have good effect on the environment sustainability. Nike has some
target for 2011 in order to eliminate the waste there are increasing
the manufacturing above the sustainability standard index, run the
business process that produce low effect to the climate change,
decreasing 17% of it’s waste, and decreasing 30% in packaging
and purchasing waste.
By implementing this focus, From 2005 – 2006 there’s a significant

number of changes in eliminating environmental waste. Until 2006,
Nike has reach some changes in eliminating solving problem from
sustainable material, chemistry, waste, water, climate change,
business processes, and packaging. In sustainable material, nike
use rubber that more than 50% of it is environmental friendly and

also 52% of all cotton-containing garments contain minimum 5%
organic cotton. For chemistry, nike try to reduce pvc usage by
working with ink supplier and printer. In waste, nike make waste
mapping in their supply chain around the world and then they will
implement the strategy from the most prioritize part that produce
waste in this mapping. For water, nike expand the number of
suppliers to 282 in the apparel program. For climate change, nike
eliminate the production of nitrogen in all nike air product. In
business process, nike educate it’s designers to make sustainable
innovation in every product design. In this part, nike found better
solution for its product by making new technique and development
in technology. For example is when nike want to eliminate the use
of F-gas it leds to the making of Nike Air Technology which is
represented the most significant innovation in the company
product. For packaging, nike also make mapping of the packaging
footprint then implement the strategy in it.
Stock of Top Executives in The Corporation

Some of them have stock in the NikeCorporation. Mark Parker,
Trevor Edwards, Jeanne P. Jackson, and Eric Sprunk. There’s 2 kind
of stock they can get:
1. Stock Options. Mr. Parker was granted an option for 165,000

shares. Edwards, and Sprunk and Ms. Jackson each received
an option for 75,000 shares. Each award vests equally over
four years.
2. Restricted Stock. Mr. Parker received an award in the
amount of $3,500,000. Mr. Edwards received an award in the

amount of $750,000. Sprunk and Ms. Jackson each received
an award in the amount of $625,000. Each award vests
equally over three years.
Nike’s Top Management is Sufficiently Skilled to Cope with

Likely Future Challenge
The Top Management have qualified innovators, designers,
engineers, and also leaders. They’ll bring Nike Inc. into the next
level of a global company. Most of top management have broad
experience in International business both in Nike, or another
company. This makes top management know well the condition and
situation of the market, future challenges, how to manage the
corporate. Because of that, this top management experience lead
them to organize well in the strategic that must be plan and decide
by the company. For Example, Phillip Knight have been worked in
Nike since 1968. He know well the condition of Nike and it really
help him as president to decide what strategy that his company
should create.

III. External Environment: Opportunities and
Threats (SWOT)
A. Natural Physical Environment: Sustainability Issues
There are several forces that affect the corporation and the
industries in which it competes. Below is the explanation of those
several forces:
CLIMATE
Climate change is one of the natural forces that affect the

company’s overall production. It can cause the problem in water
supply due to fluctuating rainfall pattern. Water supply affects the
growing condition of cotton that is one of the main raw material in
Industry ofwomen sport apparel. If there was any problem in the
water supply, the cotton will end in bad quality. In other case, fresh
water scarcity can be a threat for industry.
In sales point of view, drastic climate change gives unexpected

shifts in customer preference that affects the company’s sales. For
example, if it became snow in one country, industry ofwomen sport
apparel sales will increase because people will do some routine
exercise to make their body warm. They will buy double products,
such as sports bra completed with sports jacket. Unfortunately,
these climate changes give the bad impact towards distribution.
The distribution will be delayed by the climate changes.

WEATHER-RELATED EVENTS
Bad weather such as heavy rain could be a disaster in cotton

growth as the main material of women apparel. Besides, floods and
extreme rainfall intensity may interrupt the supply chain,
distribution, and transportation of finished products and raw
materials.The cotton growing areas have to come up with irrigation
schemes in order to maintain the water supply level so it can
minimize the damage.
But, this force (sudden weather changes) can be used by industry

to maintain sales by having different apparel for each seasons and
weather conditions. It means that industry will always have to
provide an innovative product each seasonto maintain their selves
in the industry.
SOLAR PHENOMENA
Solar phenomenasare natural phenomena that happen caused by

the magnetically heated outer atmospheres in the sun. The
example of solar phenomena are radio wave flux, solar wind,
energy bursts such as solar flares, coronal mass ejection or solar
interruptions, coronal heating and sunspots. These phenomena
could lead to a delay production women apparel industry and it
causes a decrease in sales. However, once again, by adjusting to
sola phenomena on specific location, industry could get additional
sales.

B. Societal Environment
There are general environmental forces that currently affecting
both the corporation and the industries in which it competes.
Below is the explanation about the forces:
ECONOMIC
Women’s sportswear industry must aware of the economic decline.

The economic recession could affect overall industry growth and
development. The Economic downturn in one country could make
customer demand decreases significantly. In other cases, if there
were any changes in oil prices, global women’s sportswear
industry will also get the impact of it, as high price of oil means
that the supply chain and transportation cost increase. (Current
Threat).
TECHNOLOGY
The sports industry are growing in a fast rate especially with all of
the new technology that come into the sports equipment and
sportswear, this could be a great opportunity to be seized by
applying new breakthrough and innovation happening on new
sport science and material science for even lighter material and as
this field is start to be looked upon by many industry, the growth
and new innovation are happening quite frequently for industries
to utilize it. However, it is to be noted that the research and new
science could be seized by another company within industry.
(Current and future opportunity)

In addition to that, with the recently discovered Just in Time and
lean operation method for the supply chain and operation practice
by utilizing computer and information technology could affect the
business model of whole sports industry including Nike which
could adapt with it. (Current opportunity)
POLITICAL-LEGAL
As on this industry most of the businesses rely on outsourcing and

off-shoring for their production system, global sportswear industry
must keep them on considering the legal aspect if they outsource
the manufacturing plant. However, by doing outsourcing off-shore,
the legal aspects is more challenging and within industry more
cautious consideration should be made to prevent any sue.(Current
and future threats).
SOSIO CULTURAL
New market are started to emerge in modern era where female are
started to be considered on the equal footing. That market is
women market, with women are starting to be more active in this
decade more than they did on the last century, their market growth
is constant as a lot of women try to get their own footing and it is
so attractive for many industry with its future prospect (Current
and future opportunity)
C. Task Environment
Task environment is external environment of an organization which
affects its ability to reach business’ goals. Below the task

environment analysis based on Porter’s five forces model, a
framework for industry analysis and business strategy
development. This five forces include threat of new entrants,
bargaining power of buyers, threat of substitute products or
services, bargaining power of suppliers, and rivalry among
competing firms. The five forces included in this model help to
determine the competitive intensity and therefore the
attractiveness of a market.
1. Threat of New Entrants
New entrants are relatively hard to get into the same scale of
Nike with its global size even with the market challenger, thus a
new entry could not give a high threat towards Nike. However
as Nike is established in global market means that Nike could
have many threats from new entrants on small area (sporadic)
new entrants as the barrier from local area tend to be small or
insignificant. Distribution channel itself on the global scale need
a lot of capital and hard to be established.
Along with all Nike’s experience, it is able to cut its cost to a low
one along with the utilization on economies of scale along with
its global scale of production and a lot of supplier to let their
cost run even lower coming through their experience in the
industry. In addition to that, by experience, come more expert
and skilled people within Nike itself, leading to economies of
learning for Nike.
In conclusion threat of new entrants is more likely to be low

since Nike’s customers have had a strong brand loyalty over

time. It causes new companies are hard to get into the industry
as a significant competitor. Moreover, the experience and
history of Nike along with the market challenger that has been
large also make the others hard to gain popularity and make
sales in the industry as consumer’s value image already been
established. Nike’s top brand gives the entrants some difficulties
to access distribution opportunities from their agreements and
contracts with schools, athletes, teams, and retailers. So, there’s
just a little opportunity to compete with the large firms in the
industry such as Nike.
2. Bargaining Power of Buyers
Nike as a global brand which hope to inspire people to be

active, have a business model of business to customer selling,
thus the meaning of buyer here is their all of their global
customer and women who wear Nike as their sportswear
specifically. A B2C business model in addition does not let
customer to interfere with Nike business function.Furthermore,
with the brand as one point of differentiation of Nike, giving
customer sense uniqueness towards Nike, make the customer
quite dependent with Nike and give pressure towards buyer
bargaining power.
Bargaining power of buyers is really limited in this industry; the

customer number all over the globe is relatively big if it is
compared to the firm within industry and in addition to that,
each customer make purchase on relatively small purchase as it
is a sportswear which not need to be purchased frequently.

Thus, could be concluded that the bargaining power of buyers
toward Nike is quite low.
3. Threat of Substitutes
Threat of substitute is one of the Porter’s Five Forces that
evaluate the competition intensity in one industry that produces
the substitute product or service toward Nike women’s sport
apparel core product. The example of Nike substitute in this
case are other women’ apparel which still could be used as
active outfit such as casual clothing from Calvin Klein casual or
Burberry brand.
The threat of substitutes have moderate effect on Nike’s
apparel woman product and it can be explained as follow:
a. Nike’s substitute products such as trousers, daily
underwear, long sleeve, skirt, and heavy jacket have
performance limitation eventhough they can give better
price. The price stated doesn’t mean that those substitute
products sell comfort and design.
b. Nike’s customer are athletes and people who love sport,
thus Nike’s customer will not substitute their Nike’shigh
quality and comfort apparel with another apparel (e.g :
Women prefer to purchase Nike’s sport bra than daily bra
to support their sport activity).
c. But, it cannot be denied that Nike still have real
substitution like daily underwear (daily bra) and long
sleeve shirt for moslem customer.
d. There is also fact that the customers will be free for incur
costs in switching to another substitutes.
4. Bargaining Power of Suppliers

Bargaining power of suppliers is the existence of how powerful
the supplier are to negotiate the price of the raw material

required by industry and willingness to work on the needs of an
industry.
The bargaining power of supplier towards Nike is low and it can
be explained as follow :
a. All inputs of Nike’s women apparel are standard but it
also has been standardized for guarantee the quality.
b. Nike can switch between suppliers quickly and has no
significant impact for Nike’s capital because Nike is
strong brand and has potential suppliers all over the
world. Nike has a distribution and sub-contractors
mastery, cheap labor and raw materials, low tariffs and
duties of a country, and Nike also had 565 contract
factories in 46 countries.
c. Suppliers would find difficult enough to enter Nike
business. Although the material is standard, but Nike has
severeal criterias in selecting reliable suppliers.
d. Nike has many potential suppliers all over the world,
because Nike is a needed company for many sport shoes
supplier due to Nike’s existence.
e. Nike is important to its supplier because Nike always
order in large amoount.
f. Nike has a lot of supplier spread across the world, so Nike
can press the price of the raw material at the lowest price
from its suppliers.
g. But, Nike couldn’t substitute the input readily, because
the main material for women apparel is cotton.
5. Rivalry among Existing Competitors
Rivalry among existing competitors is the power to which firms

within an industry give a pressure on one another industry and
limit each other’s potential of profit or even steal the market
share of targeted industry. In Nike industry of women apparel,
the other potential competitors are mainly Under Armour and

Adidas which potentially start to intensify themselves on
women’s apparel and sportswear market.
Nike faces a moderate rivalry among existing competitors and it

can be explained as follow:
a. Nike believes that the woman apparel industry is growing

rapidly because women starts to aware of their health but
want to keep stylish in doing the sport.
b. Nike has big variable cost rather than fixed cost
c. The other competitors has been diversified their design
and target market, such as Under Armour and Lululemon
Athletica, which focus on niche market segments such as
performance apparel and yoga-focused apparel.
d. Nike specialized in product design and high technology to
diversified its product and also understand its customer
needs.
e. Nike is a cyclical industry and always expands its capacity.
f. Most of Nike’s competitor has been known worldwide.
g. There are large incumbent competitors who are trying to
be the favorite one and strong one.
h. Nike’s competitors give almost the same models, the differences
only on its design, color or logos.
i. It will be hard to get out of this business (sport business in
large area) due to its big capital, market share, and also
long term-contract.
j. The customer doesn’t incure cost in switching to a
competitor.
6. Relative power of unions, governments, special interest

groups, etc.
Relative power of unions and governments are high especially

because the amount of the workers being employed and the

regulation from the manufacturing-based country. Governments
in some countries have strict measures for multinational players
and in some regions. The forces itself is applied globally, but
from one country to another it is varied.
Key factors in the immediate environment are customers and

shareholders, both of them are driving Nike to grow and sustain
even more, because Nike concerned about the customers so
much and based all the products on comprehensive market
research and the shareholders drive Nike to make a profitable
and valuable strategic decision.
Here are the current or future threats:
1. Competitors are the threats as they could take the market

share as they grow, innovate, and develop new brand and
techniques. Competitors could give lower price with better
quality to beat Nike. (current and future)
2. Labor unions are the threats as they are more likely to give
additional cost and capable to sue the company. Besides,
there is a potential threat in which the increasing of
production cost especially in rising its raw material costs.
(current and future)
3. Government has the authority to close any business in the
industry in particular country if there were any sues of the
union or another party is realized (future / potential)
4. Economic could be a threat due to its recession because it
may lead to job shortages in industry and even
macroeconomics. (current and future)
5. Consumers especially women consumers tend to be savvier
and looking for discounted items.(Kartajaya, 2014)

6. Natural and Society environment could give a bad impact on
industry’s production activity.
Here are the current or future opportunities:
1. Women nowadays become more aware of doing exercise

tomake their body keep fit. Besides, they want to look stylish
and fashionable while doing exercise.(Kartajaya, 2014)
2. Scienceand research able to develop new technology and
thus giving the opportunity to industry to seize and utilize it.
(future)
3. Creditors are more likely to give credits to industry with
global market as it has high stability. (future)
4. Trade associations can give a great opportunity in
cooperation (current and future).
5. Local communities can be a great opportunity as a potential
of big market and supporter on firms at industry (current and
future).
6. Industry market tendency to stimulate one generation to
advocate their next generation, thus stimulate growth on the
long run.
7. Natural environment could be an inspiration of industry’s
design for women apparel product.
D. Summary of External Factors (EFAS)

Below is the summary of all external factors listed above, their
degree of influence towards Nike, and how good Nike could
response to it in term of rating which is scaled from 1 (poor) to 5
(outstanding) within each external factor. In addition total of the
weighted score will be used to determine how good Nike seize
opportunity from external environment or avoid any hindrance
from external threats. Any external factors considered as
insignificant or could be a Force majeure. With that being in mind,

there is additional coding (e.g. O1 which stands for Opportunity
number 1, etc.) imprinted on the right of the external factors to
help on further analysis and identification at chapter V.
Table 3.1. External Factor Analysis Summary
Weight
Weig Ratin Comment and
External Factors ed
ht g Rationale
Score
Opportunitites
The weight of 0,2 is

given towards
innovation and
technology
development because
it is one of the most
important point in
Nike history and
Innovation and strategy, it is one of
0,2 5 1
Technology (O1) the point that give
Nike their competitive
advantage, and Nike
always able to seize
any new technology
innovation, making
their performance to
be outstanding (5
rating).
Creditors Trust Towards 0,05 4 0,2 Nike with its size and
Nike (O2) capital acquired

through its profit all of
this time is not really
dependent towards
creditors (0.05
weight), nevertheless
means that Nike don’t
have enough
credibility and trust
from creditors, the
creditors would likely
to lend them fund,
with their A1 rating of
excellence on debt
(thus 4 score).
The new emerged

market of women
fitness category is
happening since the
last few years and
some company has
New emerged market of
been being in the
women fitness category 0,05 3 0,15
category on a small
(O3)
scale with thought
that it is hard to give
huge revenue increase
(weight 0,05).
However, Nike has
started to go into the
market since the first

time they realize it
and currently be the
first one to goes into
this category globally
(3 score)
Once again, local

communities are an
opportunity which give
Nike additional place
of sales and advocate,
yet it is not their main
Local Communities (O4) 0,05 3 0,15
target (0,05 weight),
even though with their
above average mouth
to mouth marketing on
local communities (3
score)
Regeneration of 0,05 3 0,15 In the industry which

Customers (O5) each generation
choice affect next
generation choices,
Nike is quite capable
on passively
encourage its
customers to advocate
Nike towards their
own kin and family (3
score). However it

never be the focus of
Nike activity as Nike
doesn’t dependent on
it, it focus on give new
innovation on every
generation by itself
(0,05 weight).
Threats
Competitors or 0,2 4 0,8 Competitors is always

substitute (T1) have been what threat
Nike the most,
especially on the
competitive global
industry, Nike need to
outperform or
differentiate from
their fellow global
firms and local firms
all over the globe in
order to keep itself as
the market leader (0,2
weight), even so, Nike
handsomely still able
to keep itself as the
market leader and
most of the time
outperform their
competitor with Nike

differentiation and
cost advantage (will
be further explained in
internal analysis)
Nike have a large

number of off-shore
factory and thus the
influence of labor
unions from different
country or even
different factory could
not influence Nike
Labor Unions (T2) 0,05 2 0,1
very much (0,05
weight). Even so, Nike
treat their employee
with minimum cost
most of the time and
often leading to labor
union reports of
protest (2 score).
Governmentand legal 0,05 3 0,15 Government and legal

aspects (T3) aspects could affect
Nike business activity
to certain degree,
however as a global
company, the
government of one
country could not give

many influence
towards Nike business
(0,05 weight), even if
they could it never
happened to the level
Nike got banned or
something similar at
certain country (3
score).
Economic condition
affects Nike quite
much as when
economics goes down,
the buying power of
customers will go
Recession Economic down too (0,1 rating).
0,1 4 0,4
Condition (T4) However, with its loyal
customer base, it can
only influence Nike to
certain degree on
recession, unless it
reach the level of
crisis (4 score)
Consumers characters 0,2 5 1 Customer is always

(T5) been the main point of
Nike consideration
and base of action (0,2
weight). However,

within the customers
of market, especially
women market, there
could be additional
threats brought from
the market itself like
customer’s
characteristics and
undetected desire
which could lead to
company downfall.
Even so, Nike has
always been able to
understand their
customer well and
adapt with it on the
best manner (5 score).
TOTAL 1 4,1
From the EFAS table above, the total point of opportunity and
threat element is 4,1. It means that Nike as an organization able to
perform on excellent manner towards opportunity-taking and
avoidance of threats which could hinder their performance. In
addition to that, with this score it can be concluded that Nike is
quite an adaptable learning organization.

IV. Internal Environment: Strengths and
Weaknesses (SWOT)
A. Corporate Structure
Nike corporate structure is using a matrixed organization
structure, along with a handful of global functions (sales, brand,
customer service, operations, logistics, etc.). The second dimension
is Nike’s four geographic area and the third dimensions are
represented by the product of sports categories.
Picture 4.1. Nike Organization Structure Example

The diagram above represent Nike’s matrixed organization
structure, but it is still lack the third dimension of the business
region.
As the structure is matrixed, the decision making and priority

setting were mainly done by each products’ category to keep the
Nike desire and mission to optimize innovation and execution
around its primary products. The collaboration of each product’s
team usually happened to some extent.
B. Corporate Culture
Nike was built with a simple main culture, hat is to do innovation.
They were able to make their culture on innovation clear since
fiscal year of 2005 and 2006, and after that Nike were able to
develop even more in the context of innovation based on what their
website stated. In addition to innovation as their culture, the CEO
also stated that every employee must be “themselves” in another
word they must say no if it is should be that way so that the idea
can be enhanced through several rejection before being accepted
and it can lead to better result of innovation.
After that there are no more clearly stated corporate culture,

however, there are some corporate culture being implied by certain
articles to said that there are several corporate culture within Nike
that was built based on the Innovation culture, that is to make
every employee feels that they are being worthy, to make Nike as
something all of employee care like family or their own tribe, and
to be like a sponge, evolve and yet simplify everything.

C. Corporate Resources
MARKETING
 MARKETING STRATEGY FORMULATION
OBJECTIVE
 Optimizing innovation and execution around its primary
products
 Bring a women’s perspective to its running category as
more and more women were becoming active in that
sport.
STRATEGIES
Endorsement strategy:Excellent marketing campaigns
featuring popular athletes.
 Present in all major world sports events
 Spend more time listening than talking strategy: Trying
to influence people to earn customer’s trust by really
listening and helping them by adding value
POLICIES
 Decentralized product development in apparel
 Policies for the women’s fitness business:
- Make believers out of these kinds of supporter and
skeptics alike.
- No longer about providing “training” products to female
consumers.

 Create at the point of the consumer touchpoint the
experience that we wanted the consumer to have was
the biggest issue
PROGRAMS
 Program for Endorsement Strategy : Endorsement
contracts with female athletes such as Sheryl Swoopes,
Lisa Lesli, Gabrielle Reece, and Mia Hamm
 Build Women-only Destination : Nike Goddess store
which offered footwear, apparel and equipment to its
customers, loosely unified via Nike’s corporate color
palette
 Make a larger assessment project called which was
called “Change the Game”
1. Knowing the five high potential opportunities from
outdoor, bags, men’s training, calve footwear, and
women had that would take to outpace growth in the
rest of business and drive the company’s next leap
forward.
2. Phase one:
2.1 Internal observation about where we had
been with the women’s business.
2.2 Analysis to get an external take on what
was going on the market.
2.3 Understanding competitive position.
3. Phase two: Developing an overarching plan for
approaching the women’s market
3.1 Seasonal Kickoff and Creative Direction

Integrated meeting to set seasonal creative
direction, confirm seasonal themes, and build key
stories.
3.2 Design Review
Integrated creative meeting to review product
design in all fitness sport, across all business
units.
3.3 Prototype Review
Planning and prioritization for the brand, retail,
sales, and regions.
3.4 Go-to –Market Strategy
Presentation of the go-to-market plan by brand,
retail, sales, and the regions.
3.5 Pralines
Product groups and brand presents an integrated
collection to key accounts in multiple regions.
3.6 Brand Execution and Post-Season Review
Brand plans presented and evaluation of seasonal
planning and booking results
4. “Road show” throughout the company, enthusiasm and
commitment remained high.
5. Developing dance as a category within global women’s
fitness and initiating the development of the first
integrated collection.
The corporation current marketing objectives, strategies,

policies, and programs are clearly stated and merely implied
through performance.
Points that are merely implied:

1. Endorsement strategy. In the case just mentioned that
the contract with female athletes in the mid-1990s to
bring the market to Nike. It means that endorsement
strategy is one of their strategy to be success.
2. The case never mentioned the marketing policy, but it
delivered the policy by the challenge that the team
faced were the policy. The challenges are given by their
leader to make everything still in the corporation role.
Beside, the two points above are clearly stated in the case,
such as present in special event. The case stated that they
created special collection for a special event because they
want to increase global function and execute through the
regions.
The corporation current marketing objectives, strategies,

policies, and programs are consistent with mission,
objectives, strategies, policies, and programs and with
internal and external environment. In line with corporate’s
mission, the current marketing also want to optimize
innovation by Global Women’s Fitness Business. The internal
and external environment in the corporation also supported
the marketing activity.
 TRENDS FACED BY NIKE
The emerging trends faced by Nike are Customization and

creating a multiple markets. In the previous productions,
Nike only plays a game in men market especially in sports

footwear, apparel, and equipment. But, in the summer of
2006, Nike announced that they will expand their market into
women’s apparel fitness. The reason of this expanding is
because Nike sees that nowadays, women want to look good
and fashionable in apparel both at the gym and after a
workout. To make clear this new target market, Nike made a
good marketing mix, so in the future, Nike could perform
well in its new target market. This new market impacts to the
increasing of Nike’s total revenue. Nike’s team apparel
estimated that the market will grow at rate of 5 to 8 percent
per year from total 70 percent current market share of
apparel because of the sales of Nike’s women apparel. After
some sales, Nike’s women apparel reaches its maturity
phases, proven by, Nike becomes a leader in women’s
running apparel. Expanding the market means that Nike has
to drive all market towards the same goal, shape the whole
market to support business strategy, stimulate cross business
collaboration, sustain innovation and avoid common pitfalls
that might hinder Nike’s progress. Nike’s marketing team
has made the strategy to boost up the Nike’s product by
Nike’s competitive advantages that are innovative and
compelling products, brands that are distinct and relevant to
their consumers.
 MARKETING PERFORMANCE COMPARED TO SIMILAR

COMPANY
Nike led in women’s running from a market share and

revenue perspective. However, in apparel women’s running
was a much more fragmented business, so the market share

was much lower. But, after that they changed to women’s
fitness market. The primary takes away for the team was that
no single company, Nike included, had a dominant mindshare
in the women’s fitness market when these conditions came;
 Reebok dominated the market in women’s aerobic.
 Adidas brought celebrity designer to create fashionable
athletic wear.
 Puma introduced its Olive brand to try to break into the yoga
market.
 New Balance launched cause-related marketing to attract
women via connections to Race for the Cure.
 Lulu Lemon, Under Armour, and Danskin took a singularly
focused.
All of these facts show that Nike still lead the market.
 MARKETING APPROPRIATENESS TO IMPROVE

CORPORATE PERFORMANCE
The marketing managers used market research to evaluate

and improve product performance as mentioned in the
second program when they made women’s fitness business.
The case doesn’t explain about product lifecycle, market
segmentation, and product portfolios for improvement
innovation)
 MARKETING ADJUSTMENTS TO CONDITIONS IN

EACH COUNTRY

The marketing adjusted to the condition in each country in
which it operates. As mentioned above, the product
development is decentralized. The marketing have four
different product-creation engines because it has four
geographic region, they are United States, Europe, Middle
East, and Africa, Asia Pacific and America. The marketing
appropriate with the region, so the marketing developed
products for four seasons a year, however as to maintain the
sales value, the price adjustment is not quite significant
between each country, lead to higher percepted price on
several country, especially developed country (for example,
$60 for woven women sport shirt is affordable, however in
Indonesia it is quite expensive).
 MARKETING CONSIDERATION TOWARDS

ENVIRONMENTAL SUSTAINABILITY
The marketing didn’t consider environmental sustainability

when making decision. They just thought to continue to grow
the business, and the challenges are market wants and needs
and competitor.
 MARKETING MANAGER’S ROLE IN STRATEGIC

MANAGEMENT PROCESS
The role of senior management is finding the new potential

for company growth from researching. But actually there are
no global marketing manager, so there are no specificrole for
marketing manager. The global marketing manager is
replaced with Global Director for Marketplace Development.

The rolesof Global Director for Marketplace Development are
develop and drive vision for retail presentation in market,
create and manage global showrooms, identify and helpto
develop priority markets for Women’s Fitness, lead efforts
globally to identify and drive new distribution channels for
Women’s fitness, and leade integration of sales into Global
Women’s Fitness.

FINANCE
 FINANCIAL STRATEGY FORMULATION
Nike’s current financial objectives, strategies, policies, and

program are all cleary stated during its investor meeting in
New York. NIKE, Inc. Officially announced 2015 GLOBAL
GROWTH STRATEGY as its strategy to achieve sustainable
and long-term growth of brands and businesses.
The Company declared a revenue target of $27 billion by

the end of 2015 based on expansionprospectsover NIKE
Brand, Cole Haan, Converse, Hurley, Jordan Brand, NIKE
Golf and Umbro. Moreover, the Company is being confident
it will generate the cumulative free cash flow over $12
billions from operation activitiesby 2015. Those
objectiveswill lengthen NIKE’s long-term financial
conditions on its revenue growth, earnings per share
growth, and increasing returns on capital.
NIKE Brand is the most potential asset in NIKE, Inc.

Portfolio, since it is controlling ±85 percents of total
revenues. The other brands have a role of
increasingcontributions to the Company’s growth on the
whole. For example, by doing acquisition to Umbro, NIKE
has been increasing its position as the largest football
company in the world; Hurley keeps on performing better
than the others in its market; and Converse has expanded
its strategy to double revenuesthrough 2015.

Geographic Opportunities – Nike has target and
projection can produce additional revenue in the end of
December 2015 as much as $ 3 – $ 3.5 billion per year. This
additional revenue can be earned by increasing the growth
of nike’s brand in 6 of its geographic both with mid growth
in north America, japan, and western Europe and also with
aggressively growth in geographic market like greater
china, emerging market, central europe and eastern
Europe.
Direct to consumer – In this 5 years, Nike has target by

opening more than 250 new stores around the world for
direct selling consumer. By opening new stores, Nikeexpects
the increasing of its growth and can earned $ 2.2 - $ 2.6
billion in 2015. This growth gives impact to the increasing
of consumer experience, digital commerce, positioning of
brand in shopping location, and the growth in NIKE ID.
Retail Partners- NIKE, Inc.focuses on increasing working

with retail partners to produce more advanced and
differentiated consumer experiences based on their
segmented concepts within key markets. NIKE’s businessis
expected to consistently survive as the key driver of long-
term growth, with retail partners still expected to
contribute for more than 80 percent of the Company’s
business as a whole through 2015. To develop and build up
its global retail existence, NIKE, Inc. Is planning to invest
$500-600 million in capital over the next five years to
expand the Direct to Consumer business and build

competences to support wholesale retail productivity and
company’sperformance.
Other Businesses- Other Businesseswhich include Cole

Haan, Converse Inc., Hurley International LLC, NIKE Golf,
and Umbro Ltd., the Company declared a low double-digit
growth expectation which contribute an additional $1.5-2.0
billion of revenue by the end of 2015.
Long-Term Financial Objectives – Nike has long term

financial model which can build strong performances in
market environment fluctuation. This model make more
sustainability in the company, generate more revenue,
strong balance sheet, and also profitable growth which
gives impact to the business investment flexibility and also
can increase the value of shareholder. Nike has some
financial objective until 2015, they are high revenue growth,
growth in earning per share and also 25% of return on
invested capital.
Picture 4.2. Nike’s Income Statement
 COMPANY FINANCIAL ANALYSIS
 VERTICAL COMMON-SIZE STATEMENT OF INCOME

Gross margin was decrease a little from 2005 to 2007. This
badness balanced by a grow in interest (income) expense, net
and a down in income taxes. The finish result increase
slightly in net income.
 HORIZONTAL COMMON-SIZE STATEMENT OF INCOME
 Material goes up in revenues
 Gross margin increased in a great amount less than

revenues.
 Net income goes up slightly, and it’s more profitable than

revenues increase.
 Increasing in net income was the result of the income tax

decrease.

 THREE-YEAR RATIO COMPARISON
Picture 4.3. Nike’s third year ratio comparison
Some of the liquidity ratios increased and some decreased.

Receivables increasedsignificantly, which would be a good
sign. This resulted on operating cycle increase. Working
capital also increased materially. The current ratio decreased
a little, whereas the cash ratio increasedsignificantly.
Operating cash flow/current maturities of long-term debt,
current notes payable, and sales to working capital
decreasedsignificantly. But overall liquidity ratiosis
performingvery well.

Some of the long-term debt paying ratios increased and some
decreased. Times interest earned and the fixed charge
coverage decreased a little, but still in a good performance.
The debt ratio and the debt/equity increased a little, and they
both are performing very well.
Some of the profitability ratios increased and some decreased.

Net profit margin until gross profit margindecreased a little.
But overall, profitability ratio is performing well.
Some of the investor analysis ratios incerased and some

decreased. Diluted earnings per share increased, which would
be a good sign. The important one, which is Price/earnings
ratio increasedmaterially in 2007. It makes overall investor
analysis are performing well.
 RATIO COMPARISON WITH INDUSTRY

Picture 4.4. Nike’s ratio comparison with industry
 LIQUIDITY
Nike has significantly different policies in the receivables and

inventory areas than the industry.

 LONG-TERM DEBT-PAYING ABILITY
Nike’s long-term debt-paying capabilitylooks to be

significantlypreferable than the industry.
 PROFITABILITY
All profitability ratios were significantlypreferable for Nike

than the industry, except for operating asset turnover.
Operating aseet turnover was preferable for the industry. But
overall, Nike had a better profit on that year.
 INVESTOR ANALYSIS
Only some ratios were possible in the investor area. The ratios
are profitablefor Nike.
 ROLE OF FINANCE MANAGER IN STRATEGIC

MANAGEMENT PROCESS
“Financial managers ensure the financial health of an
organization through investment activities and long-
term financing strategies.”
Company activities can be divided into many different

sector, one of the sector which is important for the company
is financial sector. So financial manager needs to take action
regarding the financial activities of the company.
A financial manager job is to take care of the financial

sector of an organization or institution. The person in
charge for the job need to maintain the company fund in

order to ensure the funds are used in the most efficient way.
The actions taken by the person in charge significantly
affect the profit, growth, and goodwill of the firm itself.
RESEARCH AND DEVELOPMENT (R&D)
 R&D STRATEGY FORMULATION
Objectives
Nike’s R&D team is focus to develop sustainability innovation
products for global women’s fitness. The R&D creates
integrated collection of women’s sportswear products,
services and values specifically in apparel, footwear, and
equipment business.
Strategies
1) Category-driven approach are chosen to be new
corporate’s major to increase the eminence of global
women’s business which has potentially profitable market
segment.
2) Consumer-oriented approach will optimize the
company’s innovation and product development to give
customers an integrated products collection met with they
want and need in doing a specific sports category.
3) Integrated collection-based approach to organize all
their collections from footwear, apparel and equipment
products. The customers would be easier to get any
products with different types from all sports category in
the same area. For example, The Goddess Store (Nike
Women). It shows their objectives to deliver an integrated

collection of products to female customers in the same
place at the same time.
4) Centralization system of product development. Nike has
four product-creation engines which are distribute in
United State, Europe, Middle East, and Asia-Pacific which
is have different product creation cycle, calendar/timelines
and priorities. Regional levels mostly adapt the plans
based on local prospect, potentiality and domestic
demands. These product-creation engines are
decentralized because they have so many different product
types, it causes the cross-business collaboration was
harder to work together. This centralized system is
implemented to unified global level and regional business
units’ strategy. It is also making the business units can
optimize innovation sustainability and excite cross-
business collaboration strategy in the same vision, the
same priorities, in the same calendars and process.
5) Integrated cross-business collaboration approach to
synergize women’s innovative products collection and
hasten integration planning and execution. It makes the
strategic ways are potentially offer bigger opportunities
and better performance.
6) Micro-segmentation approach. Nike creates more
specific products for a particular sport activity regarding
the differences about.
7) Technological leader. Nike well-known as a pioneer an
innovation and athletic shoes products. Nike spends more
R&D’s budgets than the competitors in the industry, e.g.
Adidas/Reebok, etc. Innovation is the core of the
company’s values, and an innovative product is the
company’s primary competitive advantage.

8) Open innovation, Nike’s also collaborates with scientist,
orthopedist, stylist, artist, athletes, academics lab and
consumers to develop new breakthrough innovation.
Policies
1) Collaboration. Product groups from global and regional

level would collaborate to work together to create products
collection for the special event or some extent. E.g.
Olympic, World Cup, etc.
2) Men is men, Women is women. Over the past years,
there’s no faction separation between men’s and women’s
product development, product design, or innovation in the
organizational matrix. But, after doing some experiments
within the company, clearly after cross-business work
during Change the Game, it shows that there are differences
between men’s and women’s teams from innovation,
product development, and design by interpreted the women
feminine style, women perspective and women’s products.
3) Perspective. Everybody in the same perspective. The team
creates the product innovation by defining what women’s
consumers really want to wear when they were doing
particular sport activity.
4) Translated technology into fantastic products.
Footwear products are made by women’s biomechanics
engineers. Actually, there was a distinct between men’s foot
and women’s foot size. It would require different shoe
designs and dynamics mold. So, The R&D’s teams develop
accurate technology to make sure that the product exactly
fit with the women’s feet.

Programs
Changing the Game-The program is developed by Nike’s

senior management team to determine profitable potential
growth for the company business sustainability. The teams that
combined of five or six men and women from different business
part are worked for the women’s business task force. Emma
Minto will join in this game as an external consultant of the
strategic lead. This program consist of three phase.
Phase 1, the teams were focused to determine the:
- Internal analysis :key success factor, key challenge, and
market definition.
- External analysis :market analysis; define market, size
market, and competitive position.
- Consumer analysis: women’s market (internally & externally
research).
Phase 2, the teams were focused to develop planning for
approaching potential women’s segment which delivering
integrated collection from head-to-toe of footwear, apparel and
equipment to the global market. The team approach cross-
business collaboration to ensure that every functional element
such as marketing, operation, HR, and others, would be
synergized before plans are executed.
Phase 3, the teams were preparing the final presentation to
senior executives. The teams focused on designing
organizational structure and financing the business. It was so
challenging because the teams should understand “the

strategy” to get the power in the global women’s fitness
market.
Nike has clearly stated performance of the research and

development teams reflect on company performance in return
on investment. But the company doesn’t show the R&D’s
budgets in the case. The company only attached the financial
report (FY 2006, exhibit 1) based on quarter ending and year
ending growth.
Nike’s R&D team is still consistent with company’s mission,

objectives, strategies and policies and with internal and
external environments. They‘re bring the inspiration and
innovation through women’s products with huge impact toward
women’s sport perspective. They build a new brand, new
products for new market segment. After survive in Change the
Game challenges, women’s fitness business became Nike’s
leader board. They’ve got the key for their competitive
advantage is to bring integrated women’s fitness collection in
‘Goddess Store’ as well as strong brands. Change the game
completely leads the team’s strategies to sustainable
innovation, profitable opportunities, potential market, and
integrated business that would makes Nike as the prior brand
of women’s choices. Nike had grown into the one of the world’s
strongest brands and largest competitor in the top global
athletic footwear, apparel and equipment market.
Research and development is one of the key success factors for

company performance. Technology is the fundamental

stimulation to bring new breakthrough innovation and product
development. Technical research innovation in the product design and
manufacturing process of all merchandized are supported by high technological
engines. Technologies also help the company to reduce inefficient process or
activities to maximize production capability.
Nike input mixed method of basic-applied research in day-to-day engineering

activities to support innovation and product development process using
scientific studies includes biomechanics, physiology,
engineering, science, arts, etc. For example, Change the Game
challenge.
Nike’s R&D gained competitive advantage from technology

innovation products and integration strategic decision to build
strong barrier in global market as the top global brands.
Innovation is the core of the corporate values, and technical
innovation is the key success factor of company’s performance.
 CORPORATION’S RETURN FROM INVESTMENT IN R&D

Indirectly, the return of investments in R&D captured from
high technology & breakthrough innovation that affected to
increase company growth in the future. As the result, based
on FY 2006, Nike sales achieved $15 billion or grew up 9%
than the last year. At the same time, net income of Nike
attained $1.2 billion compare to the previous year. Nike’s
market shares within the company are contained 66% footwear,
28% apparel, 6% equipment. Approximately, huge opportunities of global
women’s business expected to $13 billion market. It shows that new market in

women’s products is positively correlated to the company growth in FY 2005
to FY 2006.
 COMPETENCY IN TECHNOLOGY TRANSFER

Nike transferred their high-technology to outsource alliance
in developing countries to increase manufacturing
productivity. Nike also uses subcontracting (outsourcing)
manufacturing with low-cost production and low-labor
wages. E.g. Product creation-engine U.S, product-creation
engine EMEA, product-creation engine Asia, and product-
creation engine The America.
 ROLE OF TECHNOLOGICAL DISCONTINUITY PLAY IN

THE COMPANY’S PRODUCTS
Technological discontinuities could deliver better product
performance, it might be attract many new competitors, and
also require new technology to increase company’s growth.
Nike has strengthens in high technological development that
creates positive impacts for environmental sustainability.
 R&D PERFORMANCE COMPARED TO SIMILAR COMPANY

Nike’s core competitive advantage is products innovation.
Nike is the global leader in sportswear innovation. Nike’s
R&D activities focus on new technology development with
breakthrough innovation as key investment. Their
investments directly affect increasing company’s growth
which attracts investor to join with Nike’s business.
Furthermore, Nike on 2006 have registered almost 300
patents to show their differentiation on Innovation, along

with around 14% growth on number of patents granted to
Nike every year.(Macquarie Capital, 2006)
 R&D ADJUSTMENTS TO CONDITIONS IN EACH COUNTRY

Nike has difficulties to integrated global and regional
business level because both of them day-to-day operate in
different timelines/calendar, priorities, plans and execution.
Their decentralized systems and processes are unable to
deliver an integrated collection of products to the same place
at the same time. Regional levels usually adjust the plans
based on local issues, opportunities and needs. So, Nike
created a sub-team to work & trying to align the calendars
and the process that could be leveraged across all regions,
which they called Integrated Calendar Alignment Process.
 R&D CONSIDERATION TOWARDS ENVIRONMENTAL

SUSTAINABILITY
Nike global women’s fitness leads the company to develop
innovations that are reducing environmental impact. Nike
has a commitment to optimizeenvironmentalsustainability
toward integrated business strategy. Nike creates premium
design to reduce the waste and eliminate
inefficient/ineffective activities in the product life cycle.
 ROLE OF R&D MANAGER IN STRATEGIC

MANAGEMENT PROCESS

Refers to the Nike’s R&D objectives, R&D manager are
responsible for the global women’s fitness as a key part of
Nike’s breakthrough products. The manager leads the team
to develop sustainability innovation, integrated strategic
planning, encourage the teams to be creative thinker while
solves women’s consumer needs & wants problems, and
monitoring products development for women’s sportswear,
cooperate with key partner in integrated business process
from all element in internal or external environment.

OPERATIONS AND LOGISTICS
 OPERATIONS AND LOGISTICS STRATEGY FORMULATION

Based on Nike’s Global Women’s Fitness Business case, the
objective and policies are not clearly stated. But implicitly,
Nike wants to optimize company activities to give the
customer a holistic collection of everything they need and
want in particular sports. Because in approximately thirty
years Nike run the business it was dominated and focusing
on male product, while women’s market have great potential,
Nike planned to give more effort to the women’s market.
Then, Nike wants to deliver a cohesive collection of footwear,
apparel, and equipment to the women market by creating the
strategy in how to selling, designing a product and
communicating its product to the women’s market. That’s the
challenge for Nike team at that time. Nike want to increase
the return of shareholder through effectively managing
operating cost related to the company’s growth rates. Deliver
good quality of product, create significant growth in their
geographic regions and elevate retail experiences were the
way to reach target revenue of Nike’s long term goal (2011)
at amount $23 billion.
The strategies and program are also not clearly stated, but
we can see it through the Changing the game assessment
project that is consist of 4 phase. In this 4 phase, Nike
women’s teams analyze the strategy from its internal and
external condition of the company and also see the behavior

of the customer target market and competitive perspective.
By finding positioning through Nike’s dance collection
product from 3 Nike’s product focused (footwear, apparel,
and equipment), finally Nike find the right strategies that can
delivered integrated way to the customer. And with the new
organization structure on its team and also budgeting and
revenue projection on this women’s focused product, this
small Nike team has successfully implemented women’s
product to the market.
 TYPE AND EXTENT OF OPERATIONS CAPABILITIES OF

THE CORPORATION
Nike is an iconic footwear and apparel manufacturer that
operates in over 180 countries. Nike contract outsource
manufacturers to produce and deliver their product to the
retailers in the world. Most of them are independent contract
manufacture, operate multiple factories, and are outside
United States. Nike currently has 719 factories, employing
990,325 workers in 44 countries around the world. The
company was supplied by 150 footwear factories in 14
countries. Contractedfactories are mostly located in Vietnam,
China, and Indonesia.
With this capacity of plant facilities, Nike can fulfill its

demand over the world. Nike chooses some country around
the world with low labor cost for manufacturing while the
place is near to the place of the supplier of raw material.

Because of that the production cost of Nike is very low. But
Nike has a high cost in distributes the product to the
customer. Because the place of its customer is further from
where it was manufactured. For distribution in South
America, which is the largest Nike customer, Nike has a
contract with HDL to help in distribution of products.
 MANUFACTURING OR SERVICE FACILITIES

Most of Nike’s manufacturing product is outsourcing. The
purpose is to minimize cost of production. After being
manufactured, it will deliver to the US, where Nike come
from then delivered to customer around the world. So most
of Nike production is depends on an international 3 rd party of
Nike. If there’s something happen to this 3rd party, it will
affect Nike operation.
In 2006, contract footwear supplier manufactured 35% in

China, 29% in Vietnam, 21% in Indonesia and 13% in
Thailand of Nike footwear product. Besides that, Nike also
made manufacturing agreement with some independent
factories like Argentina, India, Brazil, South Africa, Italy, and
South Africa. For apparel, it produce outside united states by
40 independent manufacture like Bangladesh, china,
Honduras, India, Indonesia, Malaysia, Mexico, Pakistan, Sri
Lanka, Taiwan, Thailand, Turkey and Vietnam.
Nike trying to reduce the number of contract factories in

order to minimize the risk ofnaturaldisaster like labor
performance and product quality by make long-term

relationships with few numbers of factories as trusted
partners. So, Nike can create more integration of
sustainability in its manufacturing, premium product, good
quality and innovation on product, deep understanding and
relationship with contractor, labor, and factories.
Nike buy raw material in bulk. Most of them are available in

contract manufacturing countries and it makes the difficulty
in checking the material requirement. Materials used by Nike
in footwear product are natural and synthetic rubber, nylon,
leather, polyurethane films, plastic compounds and foam
cushioning materials. The largest Nike’ssupplier are NIKE
IHM and NIKE (Suzhou) sports company. The most important
part of the material in apparel product is natural and
synthetic fabric and threads, specialized performance fabric,
and metal hardware.
International operation give some risk to Nike business

process such as revaluation of currencies, change in the
export duties, instability in politics, terrorism. This risk
happened unpredictable. If something happened to the
manufacturer process, it will give financial impact to Nike.
The Material used was increased by time to time, because of

that Nike make the reduction of material used in the
manufacturing factories and also try to reduce the number of
vendors Nike have.
 APPROPRIATE MIX IN MANUFACTURING OR SERVICE

FIRMS

In operation part, Nike use some mix between human and
machine Like using of i2 and NSC system. This system have
purposes on controlling supply chain more accurately in the
operation system in Nike. To maximize its production, Nike
should match its supply and demand. So this system help
Nike match between supply and demand and also in purpose
on reducing the exceed raw material. At once, Nike failure in
implementing i2 system in the 2000. It is because some
factor like the inexperience of i2 and also the forecasting
which forecast too far out ahead. Because of that Nike stop
using i2 in 2003 and then Nike change to another system
named NSC and succesfully implement NSC or Nike Supply
Chain after 2004. This NSC planning the projection of
moving and manufacturing the product. It’s become
important for Nike to have sytem like this tohelp Nike doing
well organized in manufacturing globally, because it’s
operation made in some country in the world and the product
which will be distribut to customer in different country in the
world.
 CORPORATION PERFORMANCE RELATIVE TO THE

COMPETITION
Sports footwear, apparel, and equipment are very
competitive industry in worldwide. Nike should compete with
this industries competitor that ishaving increasing number
over the time and also have rapid changes in innovation and
technology. Because of that, it is important for Nike to always
adapt to the changes of trends. In operation segment,
Nikeimplements the revolution of its manufacturing. It is

including the improvement in technology and decreasing the
volatile labor and material price.
Operation gives great impact to the company. Because of this

production, Nike can get high price on the product but low in
the production cost. So it creates large product margin in
each unit.
 OPERATIONS AND LOGISTICS APPROPRIATENESS TO

IMPROVE CORPORATE PERFORMANCE
Nike uses appropriate concept and technique in evaluating
and improving its current performance. To make effective
forecasting, in 2000 Nike launch NSC Project or Nike Supply
Chain Project which have goals to make integrated platform
from ERP (Enterprises Resources Planning) and CRM
(Customer Relationship Management) software.
Besides that, in order to make efficient inventory

management, Nike develops more accurate demand forecast.
Then, Nike implement recent ERP software and coordinate it
with Nike’s supplier through vendor managed Inventory and
continuous replenishment program. This combination will
give a great impact to the company and also supplier. Besides
that, it also improves all part in supply chain.
 OPERATIONS AND LOGISTICS ADJUSTMENTS TO

CONDITIONS IN EACH COUNTRY
Nike has calculates and think about where facilities placed in
every country. Nike finds country where facilities placed near
to the suppliers of raw material. Besides of that, Nike also
considering the cost of labor in the country where its product

being manufactured like Because of that, Nike can reduce its
operational cost.
 OPERATIONS AND LOGISTICS CONSIDERATION

TOWARDS ENVIRONMENTAL SUSTAINABILITY
Operation of Nike is based on environmental sustainability
when making a decision. Because the objective of Nike that
want to create sustainability both in the company, customer,
and an environment. Nike always makes products that have
high waste management that does create a low waste level in
manufacturing.
From 1996, Nike has started to concerned on reducing waste

caused by manufacturing in contracted footwear factory.
Then to make an improvement in environment Nike make
Environmental Engineering (E2) organization that make
some program to reduce waste in each factory. One of this
organization work result is make foot bed from the waste of
producing the cushioning foam. In 2000, Nikemakes waste
management system near the factories.
To make environment sustainability from operation, Nike

have some goals like make minimum target of organic cotton
in its material, increasing the used of environmentally rubber
material, minimizing the used of PVC, continuing to eliminate
the waste in its supply chain, make strategy on
environmental footprint to the water, eliminate nitrogen in
the manufacturing process to create climate change-neutral,
make a sustainable innovation for product design, and create
efficient and less waste packaging.

 ROLE OF OPERATIONS MANAGER IN STRATEGIC
MANAGEMENT PROCESS
Nike’s Operation manager have responsibility in designing
and creating Nike’s long-term operating strategy and driving
innovation through the global supply chain. Operation
manager make the management of growth in its supply chain
and also the growth in its innovation and design for the
purpose of designing the operation strategies of Nike’s
manufacturing and production globally.

HUMAN RESOURCES MANAGEMENT (HRM)
 HRM STRATEGY FORMULATION
Nike’s current HRM objectives, strategies, policies, and

program are not all clearly stated from within the company
itself. However, Nike implied their objectives, policies and
program on HRM from several sources and state that as Nike
is having more than fifty thousand of employee, Nike’s
growth can be unlimited, and thus developing everyone
within the organization is a must and has been done through
intense leadership specialize in developing everyone within
the company. (Nike Corporation, 2007).
In addition, even though the HRM policies of Nike are not

stated, it is implied on the proxy annual report of Nike that
HRM policies especially on compensation encourage that all
the directors, executives, and even employee to have stock
ownership on Nike either by giving an option to buy stock
with discount or getting a huge amount of stock as
compensation. Those are implying that Nike hope every
single human resource will do their best to increase Nike’s
value through high performance, resulting on personal
wealth increase too. Another fact, is that compared to other
corporation, Nike give more long term and performance
based incentive instead of a fixed bonus based on position.
(Nike Inc., 2007)
 IMPROVEMENT IN FITTING BETWEEN INDIVIDUAL

EMPLOYEE AND JOB

It is said that the fitting between individual employee and job
at Nike is excellent and are being improved through the
previous mentioned programs and policies. None of the
employees are represented by the union, except for certain
employee in the Emerging Market. However, the effect of the
union in Emerging Market could possibly hindrance Nike
performance for the future even though on small value, but it
is predicted that as it can lead to legal issue, if it is being let
for a long time it could lead to a bigger hindrance.
 HRM PERFORMANCE COMPARED TO SIMILAR

COMPANY
The HRM performance compared to similar company can’t be

compared head to head as each company has their own
unique human resource management strategy and form. One
of the indicators to show it is the end result of the human
resource management itself, which are employee turnover
and well-being of the workers. As the data are not shown by
Nike, the next or derivative indicators are the stock value of
Nike and the loyalty of the directors and executives.
As for the stock value of Nike, it’s been said on Wall Street
that Nike performances is outstandingly great and make both
their profit and stock value growth consistently, or in another
words, HRM as one of the function to keep Nike running,
support it greatly. In addition, most of the directors and
executives on Nike are loyal as some could stay as the
directors from 1990s and the executives who get to his/her

position from the lower level of employment in Nike,
ensuring a loyalty.
 HRM APPROPRIATENESS TO IMPROVE CORPORATE

PERFORMANCE
In the case, it is stated that the team developing the Nike’s

Global Women’s Fitness are started as a virtual team, where
everyone is becoming the part of the team without significant
additional compensation and it’s only as far as an additional
burden for each of the member in the team (everyone has
already their own responsibilities and position). However,
after showing a high performance and chance to show
themselves, the team is given a chance to be a semi-virtual
team with a supported funding to create the team and give
more compensation and off-load each team member each’s
responsibilities a little. This shows that even though without
being compensated, the company’s employee are trying their
best to improve the company performance, meaning that the
loyalty and motivation of the employee are excellent.
However, it can’t be debated that the triple layer matrix of
Nike make the change on the organization is really hard
because each position can affect many others position.
 WORKFORCE DIVERSITY AND HUMAN RIGHT
As stated, Nike’s management is thinking that the

relationship with all of the diverse employee, start from the
part-time employee until top management are excellent.
However, there are some noted issue on human right,

especially on the labors at factories which has been said to
be given a low salary and bad working condition for the
labors, making the living condition worse and their works to
be harder than it is supposed to be.
 HRM ADJUSTMENTS TO CONDITIONS IN EACH

COUNTRY
There are three matrix dimensions on Nike’s organization;

the first one is the functional business matrix such as sales,
brand, operations, human resources, etc. The next one is
their geographic regions as the second dimension and the
last one are Nike’s nine sports categories which included
running, basketball, tennis, soccer, and golf. The matrix of
Nike already shown that their function, including Human
Resource, has their own adjustments towards the area of
business.
 OUTSOURCING IN HRM PLANNING
Nike’s main strategy is 100% subcontracting / outsourcing

manufacturing, meaning that each factory’s being used for
manufacturing their products are owned by subcontractors
throughout the globe with the majority of the output only
consisting of Nike’s products. However, the HRM take role on
employing one team consisting four expatriates per each of
the big three countries of the manufacturer (China, Vietnam,
and Indonesia), that focus both on quality of products and
working conditions that could be done by visiting the
factories regularly every week. Also the HRM planning

created a code of conduct back on 1992, even though the
implementation is still controversial until now especially on
the human issue right and misconduct of the code.
(University of North Carolina, 1997).
 ROLE OF HRM MANAGER IN STRATEGIC

MANAGEMENT PROCESS
It is implied that the there are two roles of HRM Manager in

Strategic Management Process, the first one is as shown in
the annual report and proxy report of Nike, that is designing
an appropriate compensation system to encourage everyone
in the company work more than merely their job description
as they are part of the company and they also own the
company, also led to a better performances. Secondly, the
HRM Manager role is to develop all human resources on the
company through extensive development and leadership
within the company, this to ensure the utilization of the
company’s potential kept on each and all individuals who are
the human resources of Nike.

INFORMATION TECHNOLOGY (IT)
 IT STRATEGY FORMULATION
Nike’s current IT strategy is very important to the company as

the company rely significantly on technology in their supply
chain, and any failure, inadequacy, interruption or security
failure of that technology could harm their ability to effectively
operate their business.
 IT PERFORMANCE COMPARED TO SIMILAR COMPANY
Paanakker, Nike’s chief information officer and the vice

president of Nike Technology says that IT is the one area of
business left on the outside looking in when it comes to strategy
innovation development. The statistic says that Depending on
the industry, companies will spend between 3 percent and 8
percent of revenues on IT. For Nike that number is
approximately 2.7 percent. This condition shows that Nike
company doesn’t really rely on the IT department of their
company because they rely mainly on the technology of its
product which is done by Research and Development
department
 IT APPROPRIATENESS TO IMPROVE CORPORATE

PERFORMANCE
In the case, Nike is trying to compete in women fitness market

and they try their best to lead the market share in the world. IT
department doesn’t directly involved in the development as IT
department works behind the scene as the developer of the

computer system and software Nike use for their manufacturing
everyday
 IT ADJUSTMENT TO CONDITION ON DIFFERENT

COUNTRY
IT department have to adjust each time Nike emerge in new

country. The adjustment is mainly concerned in manufacturing
world in some country as the technology and the human
resources available in each country is not always support the
former technology. The adjustment also concerned when new
store are open in new country as the store system each country
differs from the other
 ROLE OF IT MANAGER IN STRATEGIC MANAGEMENT

PROCESS
The Role of IT department in strategic management process is

mainly occurred in raising the company competitive advantage
in the market as the IT department is responsible to make the
system and management system move as fast and as real-time
as possible. The company can also achieve sustainable
competitive advantage in the market by using the appropriate
ways to use the technology available.
D.Resources as Nike Strength and Weakness

(IFAS)
Based on all of the resource possessed by Nike and mentioned
above, there are things that could be classified as strong point
of Nike as Strengths and point in which Nike is lacking as Nike
Weaknesses as below.
Here are Nike’s Strengths:

1. Strong innovation and technology development within Nike
itself rather than being too dependent with the new
breaktrough happening outside Nike.
2. Their brand is already deep rooted in many country and all
over the globe as a sportwear and equipment related
company along with their customer focused approach.
3. Along with all of Nike experience, large number of
distributed manufacturer in low minimum wage level, and
economies of scale and scope coming with it, Nike
manufacturing cost considerably very low
4. Nike financial performance is good compared to industry
along with internal growth of the company itself.
5. Human resource within company are extremely understand
the DNA of Nike on innovation and always actively perform
initiative in order to improve Nike.
Here are Nike’s Weaknessess:
1. Complicated matrixed corporate structure that leads to long

decision making and needs extraordinary effort to perform
collaboration.
2. Nike as a global brand charge an above average price to
maintain their image and quality, however on developed
country it is often viewed as a premium/expensive price.
3. Overseas manufacturer lead to Nike depedencies on them, as
Nike doesn’t have any own factory, they are really dependent
towards the overseas manufacturer.
4. Nike often too focused on lowering their cost and one of their
way in order to perform that is by paying minimum wage
towards overseas labor cause criticism towards them.

Below is the internal factor analysis summary table which
summarized the internal factors which affect Nike performance,
its importance towards Nike growth and sustainability, and
current performance of Nike related to the factor. The factor are
having a coding on the right of the sentence to make it easier on
understanding the SWOT table later on (e.g. S1 to be coding of
Strength number 1). In addition to that, the current
performance of Nike is assessed at Rating from 1 (poor) to 5
(outstanding).
Table 4.1. Internal Factor Analysis Summary (IFAS)
Weight
Weig Ratin Comment and
Internal Factors ed
ht g Rationale
Score
Strength
Nike Innovation and 0,2 5 1 Innovation and

TechnologyDevelopment technology
(S1) development is
insribed within Nike’s
culture and vision,
thus it is a very
important thing for
Nike identity (0,2
weight). Nike has
many innovation on
sportwear and sport
equipment, also their
capital allocation for
Research and

Development is one of
the biggest within
industry (5 scoring).
Nike as a global brand

and a company with
customer as main
consideration on
taking their action or
decision really need
their brand image to
be established and
improved from time to
time along with the
Global Brand Equity (S2) 0,2 4 0,8 trust which already
been put into Nike
brand (0,2 weight).
They have done
marketing effort
continously and
actively, along with its
positive outcome
shown by sales
increase steadily. (4
scoring)
Low-cost 0,1 4 0,4 With Nike global size,

Manufacturing(S3) a small cost
efficiencies could
mean a huge profit

increase, thus low –
cost manufacturing is
constantly pursued by
Nike even though it is
not affecting Nike
existence too much
(0,1 weight).
Nevertheless of it,
Nike able to maintain
their low-cost
manufacturing (4
Score).
Financial Performance 0,05 4 0,2 Financial performance

(S4) is the indicator to
show how good Nike is
running and quite
important for
investors, however it
is not really significant
towards Nike
operational
performance except
for its evaluation
standards (0,05
weight). Along with
that, the financial
performance of Nike is
relatively good
compared to industry

average and yearly
growth(Thus, 4 score).
Employee and
personnel with
leadership at Nike is
one of the important
point to ensure
competitive advantage
and sustainability (0,1
weight) and this is
Employee and Human
0,1 4 0,4 always maintained by
Resource Quality (S5)
Nike by giving enough
compensation on well-
performed personal
along with its HR
program to encourage
their employee fulfill
company objective (4
score).
Weakness
Complexed Corporate 0,1 2 0,2 Corporate structure

Structure (W1) ensure the business
process activity being
fulfilled by a certain
person at certain
position accordingly
and efficiently (0,1
weight), but by having

a complex structure,
the decision making at
Nike and collaboration
between division
needs initiative by the
employee within
division itself (2
score).
Price is one of the

marketing mix and
main component on
getting revenue (0,1
weight). Nike are
having a global price
with little adjustment
Expensive Price (W2) 0,1 3 0,3
and it could mean
overpriced at
developed country, but
it could also means
just the right price at
another country (3
score).
Overseas Manufacturing 0,05 2 0,1 Manufacturing

Dependencies (W3) dependencies towards
oversea manufacturer
could lead to hard
process control yet it
could be overcome

through enough
quality control (0,05
weight). Nike itself
has a weekly
delegation to do
quality control at each
factory even though
they are recruited
from oversea too (2
score)
Treatment Towards 0,1 1 0,1 Treatment towards

Labor(W4) labor in the short run
could not affect Nike
quite much unless for
the additional profit
obtained through low
wage cost. However,
with future and ethical
consideration in the
long run, treatment
towards labor could
cause criticism and
brand trust decrease
or pessimism (0,1
weight). This far, Nike
is reportedly pay its
labor on minimum
wage and often make
them overwork (1

score).
TOTAL 1 3,5
From the IFAS table above, the total point of strength and
weakness factors is 3,5. It means that Nike as an organization
able to perform well by being able to utilize their strength and
cover their weakness. In addition to that, with this score it can
be concluded that Nike is an organization with a good internal
condition.

V. Analysis of Strategic Factors
A. SWOT MATRIX
In order to analyze the strategic factor of Nike, all of Nike
strength, weakness, opportunity and threat are being listed on a
SWOT matrix as below:
Table 5.1. Nike’s SWOT

STRENGTH WEAKNESS
Nike Innovation and Technology Development (S1)
Complexed Corporate Structure (W1)
Global Brand Equity (S2) Expensive Price (W2)
Low-cost Manufacturing (S3) Overseas Manufacturer Dependencies (W3)
Financial Performance (S4) Treatment Towards Labor (W4)
Employee and Human Resource Quality (S5)
OPPORTUNITIES THREATS
Innovation and Technology on industry (O1) Competitors or substitute (T1)
Creditors Trust Towards Nike (O2) Labor Unions (T2)
New emerged market of women fitness category (O3) Governmentand legal aspect (T3)
Local Communities (O4) Recession Economic Condition (T4)
Regeneration of Customers (O5) Consumers characters (T5)

B. STRATEGIC FACTOR ANALYSIS SUMMARY
In order to develop a strategy which will have a significant result,
strategic factor identified based on most weighted, aligned with
chosen issue, and more easily to be changed or adapted factor at
Strength, Weakness, Threat and Opportunity factors. In addition to
that, all of the listed factors will be assessed to know their level of
importance as shown on Weight, how good it is performed by Nike
on terms of Rating from 1 (poor) until 5 (outstanding), and in
additional, duration of the strategic factor influence toward Nike
are also being noted to know the level of urgency or time-based
decision (e.g. long run decision).
The importance being represented on weight are calculated

previously based on weight from EFAS table (chapter III) and IFAS
table (chapter IV) with ratio between external and internal factors
is 1:1. This ratio is taken with consideration that external and
internal factors both are equally important for strategic decision
within Nike. Performance rating is being taken and adapted from
both of EFAS and IFAS tables.
Table 5.2. Strategic Factor Analysis Summary Table
Factors Weight Rating Weighted Duration Comments

Score
Short Inter- Long
mediate
Nike 0,15 5 0,75 X The weight of 0,15 is
Innovation given towards
and innovation and
Technology technology
Developme development

because it is one of
the most important
point in Nike history
and strategy, it is
one of the point that
give Nike their
competitive
advantage, and Nike
always able to
develop any new
technology
nt (S1) innovation, making
their performance to
be outstanding (5
rating). Intermediate
duration is taken
because now, on
2006, technology
development needs
quite a time to be
developed while the
technology can’t last
more than several
years.
Global 0,14 4 0,56 X X Nike as a global
Brand brand and a
Equity (S2) company with
customer as main
consideration on
taking their action

or decision really
need their brand
image to be
established and
improved from time
to time along with
the trust which
already been put
into Nike brand
(0,14 weight). They
have done marketing
effort continously
and actively, along
with its positive
outcome shown by
sales increase
steadily. (4 scoring).
Short duration on
brand equity focus
on acquiring new
customer to show
immediate result
while in the long
run, Nike needs to
sustain the
customers’ loyalty.
Low-cost 0,07 4 0,28 X X X With Nike global
Manufactur size, a small cost
ing (S3) efficiencies could
mean a huge profit

increase, thus low –
cost manufacturing
is constantly
pursued by Nike
even though it is not
affecting Nike
existence too much
(0,07 weight).
Nevertheless of it,
Nike able to
maintain their low-
cost manufacturing
(4 Score). Low cost
manufacturing
needs to be run at
all the time to
maintain the low-
cost whole
production
activities.
Complexed
Corporate
Structure 0,07 2 0,14 X X X
(W1)
Expensive
0,07 3 0,21 X
Price (W2)
Innovation 0,15 5 0,75 X
and
Technology
on Industry

(O1)
New
emerged
market of
women 0,05 3 0,15 X X
fitness
category
(O3)
Competitor
s or
0,15 4 0,6 X X
substitute
(T1)
Consumers
characters 0,15 5 0,75 X X
(T5)
1,00 3,65

VI. Strategic Alternatives and Recommended
Strategy
A. Strategic Alternatives
Based on all of the strategic factors on previous chapter, TOWS
matrix are made to enable strategy alternative creation through
combination of Strength, Weakness, Opportunities, and Threats.
TOWS matrix are having four parts of content with each parts are a
combination and match-up from: Strength and Opportunity which
signifies what is being the positive side of Nike and what
Opportunities are available to be seized by Nike through their
strengths, Weakness and Opportunities which indicates what
opportunity which could be seized to overcome the weakness of
Nike, Strength and Threats which signifies through what method
could Nike avoid or overcome the external threat through their
strength, Weakness and Threats which shows through what way
could Nike minimize their weakness and avoid the external threat.
TOWS Matrix below explain and show what alternatives are

available based on the previous’ chapter strategic factor.

Table 6.1. Nike’s TOWS
Strength Weakness
1. Nike Innovation  Complexed
and Technology Corporate
Development (S1) Structure (W1)
2. Global Brand
 Expensive Price
Equity (S2)
(W2)
3. Low-cost
Manufacturing
(S3)
Opportunities SO WO
 Innovation and  S3O1 : Good  W1O1: To solve

Technology on technology with complex
industry (O1) low cost by doing structures,
 New emerged
joint-cost within Management
market of women outsourcing center builds own
fitness category manufactures and priority innovation
(O3) partnership base while let each
research in regional
technology structured adapt
development regional
 S1O1 : With characteristics
strong RnD in (Asians, American,
manufacturing European, and
technology African) to creates
supports the uniqueness
product innovation based
development on local issues,

creates cultures, and
breakthrough trends. Then,
innovation develop integrated
 S2O3: Integrated business region by
collection for joint cross-cultures
global women strategy.
sportswear by  W1O3 :
creating trend There is an
based on women’s opportunity for
fitness needs. each region to
expand the
women’s market
by joining cross-
cultures strategy
as the products
value.
Threats ST WT
 Competitors or  S1T1: Nike’s RnD  W1T1: Nike has

substitute (T1) develop the core- expand the
 Consumers
identity & business across
characters (T5)
uniqueness the countries
innovation (American,
continuously, so African, Asian,
Nike could European). Each
compete with the region has own-
competitor as identity. Nike
innovation leader creates
with strong breakthrough
identity. product &

 S2T1: Utilize innovation by
brand equity by adapted local
improve firm’s issues, cultures
value, increasing and trends as
brand awareness core-products
as well-known value.
brand and  W2T5: Quality
engaging over quantity.
customers loyalty Builds image as
to generates elegant and classy
profits while products with high
winning the value. Offer the
competition. cross cultures
 S3T1: Keep the value makes the
cost product more
manufacturing low worth than the
by joint-cost or price nominal. Sell
economic of scale, the products
economic of scope experiences and
strategy to value to attract the
compete as cost- customer’s
leader and also interest.
innovation leaders
in global women’s
fitness business.

B. Recommended Strategy Based on TOWS
Matrix
By knowing Porter’s generic strategies, and knowing of lower cost
and differentiation at a broad target as being signified by Nike, all
of the strategy alternatives generated through TOWS Matrix are
being assessed and chosen based on their compatibility, efforts
needed and impact expected as being show on the table below.
Table 6.2. Nike’s Porter generic strategies
Lower Cost Differentiation

Broad Target Cost Leadership Differentiation
S3O1, S3T1 S1O1, W1O1, W1O3,
Nike keeps W1T1,W2T5, S1T1
manufacturing at Builds strong RnD in
lower cost by joint- manufacturing
cost or economic of technology and
scale within business
outsourcing development to
manufactures. Then, supports
cooperates to breakthrough
collaborate with products. To solve
research center at the complexity
university or within the
institutional organization central-
partnership. regional, Nike has an
Furthermore, women opportunity to
products with the expand the business
same basic material with cross-cultures
could promote strategy because

economies of scope integrated region
in production by (American, Asian,
sharing mutual African, European)
resource such as can serve women’s
machine with man need with unique
products. values and
experiences cultures
across the countries.
Through combining, choosing, and eliminating the strategy

alternatives, integrative manufacturing between women
sportswear and existing men sportswear also to create a
breakthrough products on women market to be the leader in the
market through differentiation are two recommended strategies
which could Nike to show their Strength, overcome their
Weakness, seize the Opportunity, and avoid the risk coming from
Threats.

VII. Implementation
A. Program
Based on the recommended strategy, the program below will show

on what manner will it be implemented and who will be responsible
for the strategy to ensure its success.
1) Nike women integrated business
This program is aiming to solve regionals organization

complexity (America, Asia, Africa and Europe Business
Units), strengthening operation strategy in its production
costs by joint cost or economic of scale and economics of
scope strategy, besides that it can improving its R&D by
differentiation strategy. They could decline costs by joining
the cost from each region about the materials and
manufacturing technology. We recommend cross-cultures
value of the products to connecting women’s needs across
the region (American, Asian, African, and European) by
product design sharing and exchange. Product design
sharing provides products variety with country uniqueness
value. For example, with the same raw materials, production
process, technology and production machine Nike can
produce different type of women’s sportswear depend on its
country by adding its country’s value (e.g. motives from
another country) and produced also sold accordingly to the
trend happening in one country or region (e.g. Batik has
been used as motives in Indonesia’s Nike last year, but on the
next year it will be a trend on Europe to wear Batik, so the
design through the same manufacturing process could

reduce the cost through time saving for design and
economies of scale by having the products from Indonesia).
So, it can decrease manufacturing costs for any additional
design.
Nike also can take an opportunity to create differentiation by

producing women’s sportswear with country’s value. Darcy
Winslow, Global General Manager for Women’s Footwear,
Apparel and Equipment will lead and oversees the team to
develop integrated business program (Africa, Asia, America,
Europe) for every 18 months and direct the strategic
planning into feasible action. Nike provides the same
material and resources for all region and then allowing the
regional business unit to explore their potential. Moreover,
Barbara Sumner, Creative Director for Integrated Footwear,
Apparel and Equipment creative direction for women’s
fitness business led the team during the process of executes
this program for 4 month or every season.
2) Research Partnership
Research partnership will help Nike to create breakthrough
innovation and product development with the experts
especially to give more innovation which is appropriate for
women market. Combined internal ideas and external ideas
will bring unlimited out-of-the-box ideas. There are some
recommended institutions such as sports science laboratory,
sports engineer, sports medicine research laboratory,and
fashion engineer. To achieve synergy by applying sharing
common resource methodsof R&D laboratory through
making contract with sports laboratory center. This contract
will be valid for 10 years with option to add the duration for

the contract for preserving the cooperation if it goes
well.This synergy purposes is to maintain the sustainability of
innovation in the long-term growth.
Hans Van Alebeek as the Vice President on Global Operation
and Technology could assign his division to take care of the
strategic synergy with the laboratory. Through his experience
and knowledge on the operation and technology, he could
assess the ability and performance of a lab to contribute
towards Nike. This program expectedly could run through
the sparring of Nike budget on internal R&D to the
laboratory R&D. With the facility of the lab and Nike
investment, it could quicken the progress of innovation. In
addition to that, the main policies that should be noted are to
make the innovation patent to be registered under Nike
name along with rewards to the appropriate researcher.

VIII. Evaluation and Control
In order to ensure that the performance and the strategy being

implemented is perform well and align with the Nike target,
evaluation and control need to be done with appropriate standard
and measurement tools. Evaluation and control which can be done
to assess the performance for each of the program are as specified
below:
1) Nike women integrated business

Regional business decentralization giving huge opportunities
for Nike business in order to dominated global women
sportswear market. The evaluation and control of women
integrated business strategy is concerning to the business
expansion. It could be expressed on the additional sales
volume; manufacturing cost reduction or cost saving, and
visible profitability increase.
The standards of those measurements expectedly increase
the sales volume more than 10% (as Nike average sales
growth from 2004-2006 is approximately 10%) with this
additional strategy or else the strategy don’t give any impact.
Manufacturing cost reduction or cost saving and profitability
increase are could be expressed through the same proxy, that
is net profit margin, which if the strategy going well, then the
operational expense percentage should remain the same or
even lower than 2006 cost of 56,1% of sales and the net
profit margin should increase more than 0,16% (average net
profit margin growth from 2005-2007) to show this strategy
effectiveness.
2) Research Partnership

The evaluation and control in regards of research
partnership worth (success) could be represented by the
number of patent growth. This far, the average patent
granted growth to Nike every year is almost reach 300 and
14% increase from to year. Thus, with the research
partnership with external laboratory, it is expected that Nike
growth in patent granted starting from 2007 and beyond
could reach more than 14% to show this strategy
effectiveness.
References
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Available at:
http://investors.nikeinc.com/files/doc_financials/AnnualReports/2014/docs/nike-
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[Accessed 13 09 2015].
Nike Inc., n.d. Investors: Nike Inc.. [Online]

Available at: http://investors.nike.com/investors/corporate-governance/?
toggle=directors
[Accessed 13 09 2015].
http://strategicmanagementofnike.blogspot.co.id/2013/02/general-environment-
factors-of-nike.html
http://www.trefis.com/stock/nke/articles/217421/marynike-through-the-lens-of-
porters-five-forces/2013-12-02
http://123writing.com/sample_description.php?sample_id=1
http://www.mba-tutorials.com/strategy/1677-porters-five-forces-model-of-nike.html

www.investors.nike.com
www.bloomberg.com
www.seacrh.proquest.com
www..nikebiz.com
www.nikeresponsibility.com
https://books.google.co.id/books?
id=EMGjIz5QMfAC&pg=PA413&lpg=PA413&dq=nike's+2006+financial+o
bjectives&source=bl&ots=OTe_sbXDYl&sig=zEKVT7N68QgqdgsMV-
llESNIVW8&hl=en&sa=X&ved=0CDAQ6AEwBGoVChMIj6XziZKjyAIVyhWUC
h0ffwMp#v=onepage&q&f=false
http://www.managementstudyguide.com/role-of-financial-manager.htm
http://news.nike.com/news/nike-inc-introduces-2015-global-growth-
strategy
canadean
Denand, Lyn. 2007. Case 22 Nike’s Global Women’s Fitness. Business: Driving
Strategic Integration.Standford Graduate School of Business.
Nike, Inc. FY12/13 Sustainable Business Performance Summary.
http://nikeinc.com/, Nike official website.
http://www.nikeresponsibility.com/report/content/chapter/targets-and
performance#sthash.pIPsX0QT.dpuf
http://blogs.marketwatch.com/behindthestorefront/2014/04/17/nike-was-awarded-
540-patents-in-2013-heres-what-that-means-for-investors/
https://www.coursehero.com/file/p3bukr2/MARKET-SHARE-NIKE-Nike-currently-
enjoys-a-47-market-share-of-the-domestic/

https://books.google.co.id/books?
id=zQs0OS7Bj4QC&pg=PA37&lpg=PA37&dq=nike+technology+transfer&source=
bl&ots=FcB-tUw61J&sig=_tkvvj-
WQXVBP84zdtILGkOyTDU&hl=en&sa=X&ved=0CC8Q6AEwBGoVChMIhNDYo
4ijyAIVQmGmCh28GAxQ#v=onepage&q=nike%20technology%20transfer&f=false
http://marketrealist.com/2014/12/an-overview-of-nikes-brand-
stable/
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management-problems-at-nike.html
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sustainability-strategy#topic-materials-matter
International Business Times, 2015. Chinese Labor Strike: International Business

Times. [Online]
Available at: http://www.ibtimes.com/chinese-labor-strike-5000-workers-strike-
factory-making-shoes-nike-timberland-kenneth-1842606
[Accessed 27 September 2015].
Marketrealist.com, 2015. Market Realist. [Online]

Available at: http://marketrealist.com/2015/03/nikes-earnings-preview-can-
outperformance-streak-continue/
Nike Corporation, 2009. Corporate Social Responsibility: Nike Inc.. [Online]

Available at: http://www.nikebiz.com/crreport/content/people-and-culture/6-2-0-
human-resources.php?cat=human-resources
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Available at:

http://investors.nikeinc.com/files/doc_financials/AnnualReports/2014/docs/nike-
2014-proxy.pdf
Nike's Global Women's Fitness Business: Driving Strategic Integration (2007) Lyn
Demend.
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STRATEGIC

Picture 4.1. Nike Organization Structure Example

STRATEGIC AUDIT OF NIKE, INC. - OCTOBER 2015

This case focus on giving a strategic management auditing on Nike

CASE ISSUE AND SUBJECT

STRATEGIC AUDIT OF NIKE, INC. - OCTOBER 2015

In summer 2006, Nike conducted a considerable corporate change

Nike businesses are mostly concentrated in footwear, apparel, and

Darcy Winslow asgeneral manager of Nike’s global women’s fitness

STRATEGIC AUDIT OF NIKE, INC. - OCTOBER 2015

By 2006, Nike adapted from Greek goddess of victory had grown to

STRATEGIC AUDIT OF NIKE, INC. - OCTOBER 2015

Nike considered to add gender on its organizational structure as a

As the project and business on women’s market grow, another idea

Changing the Game

STRATEGIC AUDIT OF NIKE, INC. - OCTOBER 2015

 What had been our successes?

Internally, the team confirmed that there was a great initiative to

Apparel data was particularly challenging due to the blurry

They are some competitors entered the women:

 Reebok (dominating the market in women’s aerobic)

STRATEGIC AUDIT OF NIKE, INC. - OCTOBER 2015

Nike had to figure out a new way to talk to female consumers by

STRATEGIC AUDIT OF NIKE, INC. - OCTOBER 2015

1. Seasonal Kickoff and Creative Direction

STRATEGIC AUDIT OF NIKE, INC. - OCTOBER 2015

 How we would organize, and

Jim Sutton, global HR director for apparel, designed the

Minto spent estimated the amount of additional revenue the

STRATEGIC AUDIT OF NIKE, INC. - OCTOBER 2015

1. People who like her

The team used a strategy of spending more time listening than

The challenge to the women’s fitness team was to make believers

STRATEGIC AUDIT OF NIKE, INC. - OCTOBER 2015

Integrated Spring Dance Collection

The global women’s fitness team started to design its first

Grossman said that being able to create at the point of the

STRATEGIC AUDIT OF NIKE, INC. - OCTOBER 2015

Biographies of Nike Employee

STRATEGIC AUDIT OF NIKE, INC. - OCTOBER 2015

STRATEGIC AUDIT OF NIKE, INC. - OCTOBER 2015

STRATEGIC AUDIT OF NIKE, INC. - OCTOBER 2015

STRATEGIC AUDIT OF NIKE, INC. - OCTOBER 2015

STRATEGIC AUDIT OF NIKE, INC. - OCTOBER 2015

NIKE’s ROI over the Quarter Ending May 31, 2006

Cost of investment = $2,252.2

Retur n on Investment =77.84

STRATEGIC AUDIT OF NIKE, INC. - OCTOBER 2015

NIKE’s ROI over the Year Ending May 31, 2006

Cost of investment = $8,367.9

Retur n on Investment =78.72

It means that the company has the ability by 78.72% of the

STRATEGIC AUDIT OF NIKE, INC. - OCTOBER 2015

2. Net Profit Margin

Net Profit Margin Quarter Ending

Net Income= $332.8

Net Profit Margin=0.1478

Net Profit Margin=14.78

NIKE’s ROI over the Year Ending May 31, 2006

STRATEGIC AUDIT OF NIKE, INC. - OCTOBER 2015

Net Profit Margin=16.63

STRATEGIC AUDIT OF NIKE, INC. - OCTOBER 2015

STRATEGIC AUDIT OF NIKE, INC. - OCTOBER 2015