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.