Group 4:

STRATEGY IMPLEMENTATION Rohit Parab

Sampurna Kar

PROJECT ON NIKE Ashwin Mathew

Deepak B
Ayush Agarwal
 Company Background

Split with Head quarter Worth 130

Japanese Started first shifter to billion and
from tiger basketball Brewerton, 1000+ stores.
shoes and go shoes call Air Oregon Market leader
solo Force 1

1964 1971 1980 1982 1988 1990 2003 2018

Bill Bowerman Went Public Released first International

(track and field and overtook “just do it” sales overtook
coach ) & Phil Adidas in terms campaign US sales
knight start Blue of market share
ribbon sports

Nike Acquisitions

COLE HAAN Hurley Converse ZODIAC Invertex

1998 2002 2003 2018 2018


Controversial Marketing
• 1993 -> Charles Barkley -> “I’m
not a role model”
• 1995, Nike featured HIV positive
runner Ric Moniz
• Tiger Woods case, maintaining
polarized endorsements
• Kaepernick case gave Nike 43
million dollars worth of free press
Important Milestones
Air Jordan's Exclusive contacts with sports leagues
• Signed Michael Jorden as young • MLB signed a 10 year shoe deal
rookie in1985 with Nike
• Protest against NBA got them • Now Supplies top 3 leagues in
100 millions in sales in just 3 US
months • NBA
• In 2018, Jordan’s contribute to • MLB
9.5% of total Nikes Sales • NFL
• Jordan's to be targeted to • Also trying to get MLS by 2024
women and children

Creating long term value
• Increase customer life time value
• Increase earnings per share
New Customer
• Geographic expansion
• Sub-branding(Skateboarding
by Nike)
• High spend on endorsement
by best in the world athletes
Reduce Cost
• 3D printing adoption
• Innovations in product
materials
• Outsourcing production
Leadership Excellence through
innovation
• Leaders interact with athletes
to see what is working on
ground
Organizational Strategy Map
Sustainable Company
• Focus on unit cost
• Invest in R&D to manage costs
Customer Retention
• Best in class after sales service
• Create brand resonance
through different touch points
in consumer life such as Run
Club & Training club
Reduce Lead Time
• Production units across the
globe
• Lesser variety in size per
shoes than New Balance &
other rivals
Supporting the achievement of targets
Reward Performance driven
remuneration
• Long term incentive program
• Early recognition of
commendable performance
Revenue Growth
•
Improve Revenue through new products
and geography expansion
Financial
• Maintain Gross margins unmatched in Perspective
industry
Customer Satisfaction Increase demand
• Personalizing the experience • Enter new categories in sports Customer
• High quality products • Enter new geographies
developed from high R&D Perspective
spends
Increase Creativity and innovation
Product Development
• Nike Innovation Lab in • High percentage of R&D Internal process
spend(687 patents in 2016)
Chicago, NYC Shangai to get
customer feedback on new • Innovative marketing
Perspective
campaigns like ‘Dream Crazy’
innovations under trial
Learning &
Development of technology
Provide training & development opp. growing
• Diversity initiatives and sensitivity
•
Designers encouraged to
individually work on product
workshops Perspective
• Leadership training programme
ideas and pitch
allowing employees to enrol in
business school for free
 Functional Area Assessment: Nike’s Distribution Strategy
In June 2017, Nike announced a re-organisation called the Consumer Direct Offense. This re-organisation aims to improve innovation,
speed and distribution. Some salient features of this strategy: 66% of wholesale revenue

Consumer This is Nike’s new strategy to serve customers with greater speed and personalisation
Direct Offense at scale. It is driven by its Triple Double Strategy where the company will double the
Digital
cadence and impact of innovation, double its speed to market and double its direct
connections with customers.
Nike.com Differentiated.com Undifferentiated.com

Multi Brand Retail

Nike Brand Retail
Nike Consumer This is the term that Nike uses to describe the experience it’s creating in its direct sales
Experience channels to consumers (both online and offline) and 40 strategic partners (both online
(NCX) and offline—retailers and non-retailers).

Nike Stores Differentiated Stores Undifferentiated

Nike Direct This refers to Nike’s own channels, both online and offline, where consumers buy Nike Stores
products directly from the brand.
Physical

Nike Network This is the 40 retailers that Nike has chosen to focus its relationships on out of the
current 30,000. These retailers meet the brand’s demands for differentiation in the
retail landscape. Nike is investing in its direct channels to make them more
robust experiences for shoppers. Nike will give differentiated
Differentiated Differentiated retailers offer the best in assortment, exclusive services and unique retailers popular products, and likely exclusives, and more
Retail shopping experiences (either online or in store). These retailers offer superior customer
marketing dollars, diverting people and resources away from
experiences, quality service or powerful storytelling.
undifferentiated retailers in the process. The goal is that
differentiated retailers will account for two thirds of its
Undifferentiate The retailers do not offer compelling differentiation in the minds of consumers and wholesale business, with one third coming from
d Retail compete only on broad product access. undifferentiated.

NikePlus Nike’s free loyalty programme. Data gathered from the programme will impact many
aspects of the business from assortment to new product development.
 Nike Distribution Strategy Map

Revenue Growth Strategy Productivity Strategy

Financial
Add new Increase channel Retain old Acquire new Reduce Cost per Perspective
product lines presence customers customers customer

Exclusive Personalized experience Access to Nike experts Access to free services Priority Access to Customer
Products -Discounts and Offers from partners events and stores Perspective
- Workouts

Nike Run Club Nike Live & Nike Digital Partnerships Nike Brick n Mortar Go Direct-
and Nike House of with Amazon, Tmall and Partnerships Better control Internal Process
Training Club Innovation Zalando With Nordstrom and over supply. Perspective
Footlocker

Organizational Charactersistics Information Systems- Focus on Data

Bootcamp for top managers: The program includes live and Nike is focusing more on data both through its NikePlus
online training, simulations, workshops and ample time to Learning and
membership programme and from its digital assets.
practice in small groups These data are used in a range of purposes from
Growth
Upward feedback tool: It’s not so much a measure of product design, inventory management, and Perspective
performance, but an opportunity to develop and grow,” personalised shopping. These data are also shared with
Andre Martin, ex Chief Learning Officer, Nike
retail partners.
 Organizational Balance Score Card
Strategy Map Balanced scorecard
Turnaround
Objectives Measurement Target Action Plan
Management

• Create long term value • Customer LTV • $2000 • Stretch existing product lines
Financial • Sustainable company • Revenue Growth • >8% CAGR • Enter new categories and
Perspective • Revenue growth • Gross Margins • Maintain current geographies
margins • Invest in R&D to reduce costs

• 20% revenue through new • Increase popularity by

• New customer • New customer customers endorsing world class athletes
Customer • Customer retention • Customer retention • Reduce customer churn to • Increase customer life touch
Perspective • Customer satisfaction • Customer satisfaction rivals points & personalize experience
• Increase demand • Increase demand • Increase repeat sales by
10%

• Reduce cost • Maintain same gross margins • Invest in scaling 3D printers

• Reduce lead time
Internal process
• Product development
Perspective • Increase innovation &
creativity
• Profitable unit
on every new product line • Productions hubs across the
economics
• Reduce lead time on Air globe
• Lead time to meet
demand
Jordans and other limited • Create demand through
edition products to 1 week innovative marketing campaigns

• Performance based • Reduce employee churn by • Diversity initiatives and sensitivity

Learning & •
remuneration
Leadership excellence
• Employee retention rate 5%
•
workshops
Leadership training programme allowing
• Diversity in top management • Increase diversity in top
growing through innovation • Rankings in ‘Best place to management by 20% over 5 employees to enrol in business school for
• Technology Development free
Perspective • Training & development
work’ survey
•
years
Be the employer of choice • Designers encouraged to individually
opportunity work on product ideas
 Nike Distribution Balance Score Card
Strategy Map Balanced scorecard
Turnaround
Objectives Measurement Target Action Plan
Management
• Streamline the distribution
• Revenue Growth • Channel Sales • 66% of total sales channel
Financial • Productivity • Trade Spends on • 15% of MRP • Focus on differentiated
Perspective Enhancement Channels • >15% channels over multibrand
• ROA
outlets

• Service Escalation Rate • Service escalation • Allow select customers to try

• Superior customer • Backlogs rate<10% products under development
Customer experience • First Response Time • Backlogs <5% • Enhance customer experience
Perspective • Customer acquisition • Average Resolution • First response time<12 hrs through interaction at multiple
• Customer retention Time touchpoints

• D2C Strategy • Daily Active Users • Create demand through

• Inventory Turnover Ratio- innovative marketing campaigns
Internal process • Nike Training and • Inventory Turnover Between 4 to 6
Running Club Ratio • Leverage data for inventory
Perspective • Stickiness- 80% management and demand
• Nike Live and House • Stickiness-DAU/MAU
of Innovation forecasting

• Information Systems- • • Diversity initiatives and sensitivity

• Employee retention rate Reduce employee churn by
Learning & Nike Plus Membership • Diversity in top 5%
•
workshops
Leadership training programme allowing
program • Increase diversity in top
growing • Bootcamps for managers
management
management by 20% over 5 employees to enrol in business school for
• Rankings in ‘Best place to free
Perspective work’ survey •
years
Be the employer of choice • Designers encouraged to individually
work on product ideas
THANK YOU!