Ch 12

Nike has been expending their product lines. Nike is not only a sport product company, now they do sell casual and fashion products.NIKE, Inc. announces the 10 companies that are participating in its Nike+ Accelerator program powered by TechStars. The program leverages the success of the Nike+ platform by connecting with viable companies that share a commitment to helping people lead more active lives.I also mentioned that NIKE is doing business with Apple, they put technology together to output new earphone, watch, scale, etc.

CH 6 Crafting Business strategy for Dynamic Contexts

Nike has built a success story as good as it comes with new products. Nike took a relatively unlikely bid in

giving a young NBA player named Michael Jordan a signature brand which resulted in pure genius, well at least back in the 90's it was considered risky as in now many NBA players have sponsor contracts but still until this day not many NBA players have signature lines under iconic brands such as Adidas, Reebok, and Nike let alone any basketball player even comparing to what Michael Jordan has built under Nike. Michael Jordan has been well recognized as the basketball player ever to play the game. Only person who is even compared to him are Kobe Bryant and Lebron James who Nike has managed to snag up also. Of course back to the significance of Michael Jordan he has built a legendary legacy in the sports world and a man with such success it would only be fate for him to have build a legendary sneaker brand under Nike. Jordan has been retired for the last nine years yet he manages to sell more sneakers now under his name than before, not saying that he didn't sell many while in his playing days which he did but one would ask what a wonderful job Nike has done in keeping the Jordan brand afloat. Well this brakes down in to two primary components during Michael Jordan's career Nike managed to release a new shoe under the Jordan brand yearly even during the year he retired and then came back to the sport. Now Nike has a tremendous amount of sneakers under the Jordan line but the Jordan brand's success comes from the Jordan's retro line which consist of "twenty-three" (Michael wore number "23") sneakers which carry a nostalgic significance to Michael Jordan's career which fans of today still collect and buy due to its luxurious presence Nike has managed to tag along to the best basketball player ever. Nike introduced a new shoe which Jordan wore during the season yearly no breaks.

Ch 11

Strategy Implementation

In 1985, thirteen years after the company was founded, Nike was blindsided when Reebok developed its multicolored aerobic shoes. It was then that we decided to reinvent our business and culture, becoming highly motivated about selling sports and a "Nike way-of-life." With this decision the company also restructured its marketing campaign, focusing more on an image rather than just product advertising, a strategy which led to the "Just Do It" mantra.

Communication - Strength

In late spring of 1999, Nike Retail, Nike's subsidiary consisting of the Nike Town shops and employee stores around the world, upgraded their hardware and software. Our former technology offerings consisted of IBM 4690-series point-of-sale cash registers running on the OS/2 operating system. We have upgraded to PC-based systems running the more sophisticated Windows NT operating system. The software we have been using for the past few years called, Connect: Remote, made by Sterling Commerce Inc., is also being upgraded to the new operating platform. Corporate office communications capabilities with these branch locations will be improved dramatically. Sales and inventory data can be monitored in real-time. Electronic journaling, credit authorization, and sales reconciliation processing-efficiency will increase due to the addition of in-store databases. Modems transmitting data at 56K BPS, or even with digital technology, will replace the 9600 BPS modems and provide for quicker processing times. All of these innovations will allow executives at the corporate office and in other branches to better manage operations.

Leadership - Strength

Nike’s top management’s leadership style can be characterized by the team management approach. Top management consists of a committed group of executives all bringing together vast experience and knowledge. The group is team oriented, but is capable and does work independently recognizing the common stake that each places in Nike. This style of leadership leads to relationships of trust and respect. The company culture lends a hand to the fact that top management’s teamwork style has spread throughout the organization.

Motivation - Weakness

While Nike employees have been loyal and committed workers, after the cost-reductions that took place in the fourth quarter of 1998 resulting in a reduction of the number of employees, we have had to place greater emphasis on motivation among the retained employees. Morale also fell as a result of bad media coverage over reports of substandard working conditions for our Asian factory workers. While initiatives have been set to increase overall employee morale, this area remains a challenge to the company.

Ch 10

Being a company that is continually seeking out sources of competitive advantages, Nike has historically implored merger and acquisition strategies when the proper alliances present themselves.  The main reason Nike implements these plans is to ultimately create economic value in its exploitation of the competitive opportunities that a target firm creates for the company, which in turn increase the economic profits for its shareholders.  Nike also implements this strategy to gain market power in product markets and to take advantage of the potential above-normal profits a merger and acquisition can create.

Currently, Nike owns four key subsidiaries (Cole Haan, Hurley, Converse, and Umbro) but I would not be surprised if Nike continues expanding on their merger and acquisition/diversification strategy.  With reported free cash flows increasing substantially over the past decade (from $575.5 million in 2001 to $4.5 billion in 2011: an appreciation of about 680%), Nike has an awful lot of reserves at its disposal for future merger and acquisition plans.

Ch 9

A big part of Nike's corporate strategy is their alignment with outside agencies in cooperating to develop, manufacture, and sale their products.  This practice is known as strategic alliances.  There are three categories of strategic alliances - nonequity alliances, equity alliances, and joint ventures - and Nike implements them all.


Most notably, Nike has entered into a nonequity alliance with Apple to meld sports with music and thus created the "Nike+ iPod" line of products.  Both companies utilize their areas of expertise and popularity to capture new markets and industries.  They share their unique resources and capabilities to create a cooperative competitive advantage that capitalizes on their differences in an innovative and profitable way.  Examples of this partnership can be seen with the Nike+iPod Sport Kit that wirelessly connects a removable "chip" in a person's Nike shoes with their iPod to allow a them to track their pace and workout audibly through the music player while working out.  Another example of Nike reaching into the technological realm is their partnership with Dutch-satellite navigation company TomTom and their creation of a line of GPS-enabled sports watches, Nike+ SportWatch GPS.

Ch 8 Looking at International Strategy

NIKE, Inc.  unveiled its strategy and key initiatives to achieve sustainable, long-term growth across its global portfolio of brands and businesses. The Company announced a revenue target of $27 billion by the end of fiscal 2015 based on growth expectations across its portfolio, which includes the NIKE Brand, Cole Haan, Converse, Hurley, Jordan Brand, NIKE Golf and Umbro. Additionally, the Company believes it can generate over $12 billion of cumulative free cash flow from operations through 2015. Both goals extend NIKE, Inc.’s long-term financial model of high single-digit revenue growth, mid-teens earnings per share growth, and expanding returns on capital.

NIKE Brand – Geographic Opportunities
The Company announced plans to grow the NIKE Brand in all six of its geographies including driving mid single-digit growth through broader expansion in its developed geographies (North America, Western Europe, and Japan), targeting an additional $3.0-3.5 billion of annual revenue by the end of fiscal 2015. Additionally, NIKE plans to invest aggressively in its developing market geographies (Greater China, Central & Eastern Europe, and Emerging Markets) targeting low double-digit growth and an additional $3.0-3.5 billion of annual revenue by the end of fiscal 2015.

CH 7 Developing Corporate Strategy

This chapter talks about how to develop the corporate strategy to expand the business.

• Make Today Better, which covers our progress in six key impact areas and shows how we are redefining the business to improve our performance. 
• Design the Future, which illustrates how we are unleashing innovation to drive our business forward and embedding sustainability into our approaches to product and manufacturing. 

Nike already has strategy to improve their performance today and in the future. Nike believes that they are leading in the sport world, they have to prepare well for anything. I think that is the key that Nike can be successful.

CH 5 Creating Business Strategies

In this chapter, the book teaches about how to create strategies for a business in the competitive  business world. The book talks about two different type of strategies cost or differentiation. Nike locates the industries in China which can lower the production cost. However, innovation is at the heart of NIKE, Inc.'s business growth strategy. Our relentless focus to be better helps us create the world's most innovative products for consumers across the globe. This same philosophy and determination is driving change in how we approach corporate responsibility in today's marketplace. In recent years, Nike share 50% of U.S athlete shoes market; therefore, I think Nike is on the right track with the right strategies.

Chapter 3&4 :Examining the Internal Environment and External Environment

Profile of Factories

At the end of 2009, Nike contracted with approximately 600 factories in 46 countries to manufacture Nike products.

Nike is executing a long-term sourcing consolidation strategy and streamlining its supply chain operations, which has, thus far, resulted in a 10-percent decrease in suppliers from 2006 to 2009. In 2007 Nike began assessing the contract manufacturing base and undertaking a multi-year strategy to:

1. Streamline our supply chain to do business with a focused number of contract manufacturing groups
2. Build a strong and sustainable sourcing base for greater operational efficiencies and future growth
3. Align with contract manufacturing groups best positioned to deliver performance product and innovation that Nike consumers have come to expect
4. Continue to partner with contract manufacturers committed to Nike's corporate responsibility principles

Nike Brand Factories by Region and Product (at FY close, May 31 each year)

Nike contracted with 618 factories to manufacture product in FY09, down from previous years and reflective of our consolidation strategy that focuses on contract manufacturing group optimization to build a long-term sustainable sourcing base capable of delivering product, innovation and reinforcing relationships with factories committed to our corporate responsibility principles.

When you look at the reach of Nike's contracted manufacturing base and the potential risk, it becomes clear why global supply chains face such serious issues around working conditions. Working in different countries, each with different regulations and operating environments means there is no one-size-fits-all approach.

Contract Manufacturing Base

Nike overall manufacturing base is generally comprised of long-term partnerships, with some fluctuation based on product sourcing requirements, changing business and fashion trends or general factory performance.

Contract Factory Disclosure

In 2005, Nike was the first company in the industry to disclose its factory list. Nike is committed to supply chain transparency by updating public disclosure of the contract factories worldwide that are producing Nike-branded product. It also discloses those factories that make licensed collegiate apparel. Nike's goal in disclosing the factory base is to encourage transparency and collaboration with other companies to improve conditions across the industry.

All NIKE, Inc. affiliates are also working to increase transparency around their supply chains. This work will continue as we anticipate future reporting on all contracted factories serving NIKE, Inc. affiliates.

Focus Factories

In 07-09, Nike prioritized monitoring by focusing on the 20 percent of key contracted factories that account for approximately 80 percent of Nike's production by volume.

To identify focus factories, we rate high-volume factories using a risk index that assesses five primary factors designed to focus on the most vulnerable workers:

• Country in which the factory is located
• Factory worker population
• Type of factory operation
• Manufacturing process
• Management and environmental, safety and health (ESH) compliance performance

This index has evolved from 05/06, as we continue to refine our approach to assessing risk. To further understand the full range and nature of risks across the NIKE, Inc., supply chain, in 2009 we partnered with Maplecroft, a firm specializing in global risk assessment around areas such as climate change, pandemics, resource security, terrorism and human rights. The Maplecroft work will supplement Nike's current risk criteria around focus factories by providing an additional geographic and specialized issue lens to our current analysis. Nike expect their relationship with Maplecroft will deepen our understanding of existing and emerging challenges in work force and environmental, health and safety management.

In 09, approximately 180 factories met the criteria of focus factories. For many of our assessments and business targets, we report on efforts with these focus factories.

Nike continue to evaluate our risk-based monitoring approach. It anticipate revising their risk index to cover additional areas, including new source approval, new country approval and other factors.

New Sources

For new factories to enter Nike's supply chain, they must go through our new source approval process. Factories that have not actively produced with Nike in the past 18 months also must go through this process. In 07, we added 67 new factories to our contract manufacturing base through this process. In 08, we added 57 new factories and in 09 we added 42.

The majority of new factories were in apparel, due mostly to additions by licensed and agent business and sources needed for the local market.

Ch.2 Leading Strategically Through Effective Vision and Mission

Nike, Inc.

Mission Statement:

“To bring inspiration and innovation to every athlete in the world.”

The legendary University of Oregon track and field coach, and Nike co-founder, Bill Bowerman said, “If you have a body, you are an athlete.”

Nike sponsors many high-profile athletes and sports teams around the world, with the highly recognized trademarks of "Just Do It" and the Swoosh logo.

The company is headquartered near Beaverton, Oregon, in the Portland metropolitan area. It is one of the world's largest suppliers of athletic shoes and apparel and a major manufacturer of sports equipment, with revenue in excess of US$24.1 billion in its fiscal year 2012. As of 2012, it employed more than 44,000 people worldwide. The brand alone is valued at $10.7 billion, making it the most valuable brand among sports businesses.

Strike in China factory

In April 2014, one of the biggest strikes in mainland China took place at the Yue Yuen Industrial Holdings Dongguan shoe factory, producing amongst others for Nike. Yue Yuen did underpay an employee by 250 yuan per month. The average salary at Yue Yuen is 3000 yuan per month. The factory employs 70,000 people. This practice was in place for nearly 20 years

Ch. 1 Introducing Strategic Management

What is strategic management?

Strategic management is the process by which a firm manages the formulation and implementation of its strategy.

Why study strategy?

Employers expect you to be functionally fluent in accounting, marketing, or some other specialization. The also expect that you will understand the " big picture"-strategic management gives you the tools to understand and describe the big picture. This course will help you in several areas critical to your career. With a good strategy, a organization would be easier to achieve the goal. A bad strategy will make millions lose.

NIKE, Inc.

Nike, Inc. is an American multinational corporation that is engaged in the design, development, manufacturing and worldwide marketing and selling of footwear, apparel, equipment, accessories and services.The company was founded on January 25, 1964, as Blue Ribbon Sports, by Bill Bowerman and Phil Knight and officially became Nike, Inc. on May 30, 1971. The company takes its name from Nike, the Greek goddess of victory. Nike's logo, tick mark, is a very successful design. It is easy to understand but with a lot of meanings. It is also a great example of strategy.