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Being able to recognize the importance of reaching and establishing global market, different companies are able to expand their business to the global market through the use of different marketing entry strategies. The globalization of different companies have pave the way for having diverse cultures which post some challenges to the human resource management of the company . One of the companies known in the global market is Nike. Primarily, the main goal of this paper is to analyses the globalization strategy of Nike.
Overview of the Company
Nike’s foundation was on 1964 as managed Phil Knight and Bill Bowermann who are both the former track coach in the University of Oregon. Nike are more commonly known as Nike is a globally recognized manufacturer , designer , distributor and marketer of athletic apparel which include footwear , clothing , sports accessories and sports equipment for different sports and health endeavor . It can be said that most of the Nike’s products are usually produced outside the US and are manufactured by independent contract industries which normally design and product for other internationally and globally recognized brands. The host country such in China, India, Malaysia and other are also attributes the Nike brand. The company also made to have further diversification and marketing oriented with emphasis on its tagline “Just Do It”. In addition, Nike also owns different subsidiaries in which all are based in the US such as the Bauer Nike Hockey, Cole Haan Holdings, and others. Currently, Nike has been recognized all over the world to be one of the largest sports apparel industries competing along with Adidas, Reeboks and other…
Nike’s mission statement is what they, as a company, would like to achieve. Nike’s vision is how Nike wishes to achieve their mission. Nike’s mission statement is “to bring inspiration and innovation to every athlete in the world”. It recognized in the way products are marketed, and in the social responsibility feels to the world. With their mission statement, Nike prepared the individuals of the world with regards to sports. In addition to the development of this shoe, Nike is reinvesting the proceeds into healthcare programs geared towards Native Americans.
Founded as an importer of Japanese shoes, NIKE, Inc. (Nike) share the common goal that is has grown to be the world’s largest marketer of athletic footwear and apparel. In the United States, Nike products are sold through about 20,000 retail in worldwide; the company’s products are sold in about 110 countries. With among others, have led Nike to a profit of $15 billion, became the largest private employer worldwide. Both domestically and overseas Nike operates retail stores, including Nike Towns and factory outlets. Nearly all of the items are manufactured by independent contractors, primarily located overseas, with Nike involved in the design, development, and marketing. “The company focuses its efforts on core impact areas tied to its long-term growth and innovative strategies”.
Nike has established a high-level and comparatively extensive corporate responsibility management structure. A corporate responsibility committee, established in 2001, is among six board level committees and includes four non-executive directors. In 2004, a Business Leadership Team was formed to oversee the work of the team and departments. A useful organize programmer of Nike’s management. For more refer to appendix 1 â€¦.
The company has relied on consistent innovation in the design of its products and heavy promotion to fuel its growth in both U.S. and foreign markets. Nike brand are often to trademark led to a backlash against the company by 20th century, particularly in relation to allegations of low wages and poor working conditions at the company’s Asian contract manufacturers. It is obvious that Nike focuses on cost-leadership management where they provide the lowest price to their customers compare to their competitors such as Reebok.
The Nike logo is a classic case of a company that to corporate identity as its frame increases. The motif on that brand to checkmark is recognizable that the company name itself has become inessential. The Nike logo design is an abstract wing, was an appropriate and meaningful symbol for a company that marketed running shoes. The “Just Do It” slogan and logo design campaign communicated such a strong point of view to their target market that the meaning for the logo design symbol evolved into a battle cry and the way of life for an entire generation. It was amazing how a small symbol we call a logo design can make a company into a huge success. Nike is one of the few corporate brands that claim superior design performance as a core value.
Cultures of organizations can be positive or negative. An organization’s culture is positive if it helps to improve productivity. A negative culture can hinder behavior, disrupt group effectiveness, and hamper the impact of a well-designed organization. Nike culture is considered to be somewhat insular and protective. The leader of the company is a powerful leader whose style has a major effect on the company culture. Nike culture seems to be controlled and modified by how Knight behaves and makes decisions. As the opening vignette illustrates, a culture such Nike’s can grow by carries a lot of influence in the entire cultural mix. Nike culture is considered to market culture which an emphasis on sales growth, increased market share, financial stability, and profitability are attributes of a market. Nike has a little feeling of teamwork and leadership. Employees have a contractual relationship with the firm. For example, Nike employees cooperate and work together in order to achieve market share and financial performance goals. It show the cooperation when necessary, but not deeply anchored relationships. Its culture has a very strong sense of quality and quality improvement and has an entrepreneur style of management. Nike also sends off a powerful cultural message.
As result Nike became a very large company due to its success of Nike brand name and changes in the external environment. Its internal organizational structure is informal and based on teamwork and is a more flat organization functional and flexible. Informal control systems within the organization. More than in the external environment the athletes wanted more comfortable shoes and due to major life style changes in health and fitness. The Nike’s internal and external environment needs a good leadership style that encourages innovation and flexible in its work processes and decision-making to improve quality on a continuous basis and to have a strong direction for the organization as whole.
Nike leadership is make a good strategic management that give where the organization to be in the future and how to get there the leaders will provide the staff a clear direction to meet the organizational goals by identifying the processes and products which will maximize the value of the company on a consistent basis therefore be competitive in a dynamic and changing market in international business. Moreover, a strategy manager has many different leadership role to play such as coaching others to do them are difficult tasks, as being a ‘spark plug’.
Like most companies, Nike has corporate strengths and weaknesses. It has weathered most challenges. Strength of Nike’s such as competitive brand, not tying up to the factories making it a lean organization, global brand and also manufacture products at lowest possible price. Following that Nike weakness is lack of diversification in products and also in retail stores.
Overall the Nike an industry main opportunity is to apparel industries benefit from the currently strong economic backdrop in the United States. Spending is high and is expected to result in sales growth industry-wide. This is due to increasing numbers of people exercising and the trend towards casual apparel. The strong departments as Nike will surely capitalize on the trends of their efforts are successful. While style and technology in athletic apparel and footwear has reached a leveling-off point, the important aspect now is for companies to differentiate their lines.
Additionally, the company has gone out of its way to market itself, this is because it has such a huge production potential and needs to back this up with a wide client base. Nike’s marketing mix serves as an example to other dealers in the sports wear industry.
These are all ways in which the company is trying to meet consumer needs. It realizes that there clients could be participating in more than one sporting event. The Company has also gone out of its way to add some value to its products. The company also takes time to create quality goods. This is especially in relation to its shoes. The Company has established a reputation of quality in their industry.
The Nike Company has applied a number of pricing strategies. First of all, it used introductory strategies when entering the market. However, after establishing itself in the industry, the company has adopted a premium pricing strategy. The premium strategy is application of a fixed price based on the quality of the product. Some critics have claimed that Nike prices are rather high. However, experts claim that prices should reflect quality of the product.
The Nike Company has tried to maximize distribution channels in order to increase sales. The company sometimes sells its products directly or it also uses subsidiaries and distributors. When selling its products directly; the company has created the idea of Nike towns in different parts of the US in order to bring something unique to the market. Additionally, the company has also utilized the internet to distribute some of its products. This can be deemed as a virtual store. Such a strategy was quite feasible in the current age of technology. Because the company is located all over the world, it also had to use licensed distributors because it is rather difficult to reach all those parts of the global.
Nike encourages their staff members to participate in community activities. The main advantage of promotion method is the fact that third parties get to talk about a given company. When a newspaper or magazine writes a good review about a certain company, clients are more likely to believe it than if they just saw a huge poster created by the company. Nike has tried to maximize this aspect of its marketing mix. First of all, the company normally sponsors numerous sporting personalities in a wide range of sporting activities. Examples of such people include Kobe Bryant in basketball, Ronaldinho, Wayne Rooney and Christiana Ronaldo in football, Tiger Woods in Golf and Roger Federer in tennis. The purpose of doing this is to establish a strong brand in those sporting activities. There are thousands of Nike advertisements that can be found on televisions, the internet and posters.
Nike’s marketing strategy is to continuously improve its products and services. It does this through measures of product movements, assessments of their competitor’s products and innovation. They have achieved competitive by the employment of sound marketing techniques in the four aspects hence their performance.
The business is focus of the decrease of the transport cost because Nike believes that it can also gain higher margins with low labor cost. The primary reason of the declination of the company is the fact it is doing many limited editions and special runs so that they can maintain its image to be. These only show that they have brilliant marketing brand but their strategy remain to be unproven. It has also been added on implementing child labor with minimum pay wage and lack of compensation and sick pay.
The basic success of the company of Nike is through its marketing strategy. Nike also sets the trends and it had been targeted for the biggest. The company also goes out its way in creating for its image which resulted to be the loudest. The company also made to have further diversification and marketing oriented with emphasis on its tagline “Just Do It”. However, behind the successful strategic management and behind the achievements of the company, there are employees and workers who are being exploited. This only shows that the success of the company are just the front liner but behind these are the ignorant mind who are looking for the proper place exact compensation, but cannot be given by the company. It is ridiculous that the company supported child labor.
On the social side, attitudes and the tastes of the consumers were change towards the image of the product due to the issues which came out. On the technological side, the company’s image had dropped down due to the sites which generate allegations. Ecologically, the failure of the company made was also through producing of the poor quality of the air caused by the solvents which are primarily petroleum-based and lead to breathing problems.
In the political issues includes on the news on paying for the trip of the US Ambassador and the magazines as The Big Issue of Britain encouraged the consumer to boycott Nike. On the legal aspect, the low compensation package to its employees as not giving sick compensation while continuing to have poor factory facilities operations. And, ethical manner, is the child labor to its employees was implemented by the company without giving them proper workplace and exact compensation.
Nevertheless, the company is still optimistic that they can fix the mess in their company and they will settle everything so that they start all over again and I agree with them because further strategies can help them to stand up again as holistic reorganization as applying the past yet ethical strategies in the new organization. The intensity of the competitive can overcome by the company through the further diversification and having the high level of advertising and the bargaining of power of customers to which the product are environment friendly has the cost which suits the budget of the consumers.
Nike Inc. can utilize the complete structured approach to select a grand strategy in carrying out the above corporate objectives. The table below concludes that focusing on product development will allow Nike to continue to build upon our founding tenant that has secured us a position that borders on leverage and maintenance within the athletic footwear, apparel, and accessories markets. Because Nike has such a strong history of effective marketing in key global regions, concentration is an alternate strategy. Market development is a third strategy for consideration due to Nike’s ability to geographically expand our product offerings. The three strategies are very closely linked. To determine which would prevail as our overriding strategic position, four evaluation criteria were weighted according to each strategy: distinctive competency, culture, timing, and demographics.
In the past the competitive, the company has utilized product differentiation as a competitive strategy. Reebok’s shortcoming in the area of marketing is their key weakness. While Reebok’s competitors are known by familiar slogans like Nike’s “Just Do It,” Reebok’s, “Are You Feeling It,” does not related to their brand name in the eyes of most consumers.
Nike has built its business on providing products that raise above all others and it made the company success by today.
Nike is known for its technologically advanced products. Nike is leader in the host n home country, which allows their products to stand out from the rest. They always focus on maintain a consumer needs and wants. Nike will also focus on making a strong effort in price leadership. Their products in the past have been concentrated in the higher end of the pricing category. They now make a decision into lower price categories with good quality products.
Firstly, the major problem is finance. It is symptom of declining stock market price. This because of declines in net income and sales revenue from year 1997 to 1999. It can be solved by operating in a mature market with maximal opportunity growth. To continuing success for Nike is based on their ability to generate future cash flows by producing higher revenues and net income. Future positive cash flows are required to invest in research & development, marketing campaigns, and capital improvements required by their production activities.
Secondly, the marketing problem that decline in sales at India. It is cause of recent marketing campaigns is vague, focusing on relating Nike to a non-related item. Poor reception of these ads by consumers. The Nike’s product offerings are limited to athletic footwear and apparel in that country. To consult that Nike must increase in market share for shoes and apparel to non-traditional athletic companies in that country.
As the result, company will be specifically the booming market of Japan, India and Malaysia to study the buying habits of consumer. And also determine what factors motivate their athletic footwear and apparel purchases. Conduct focus groups in Asia to get feedback on their existing products, as well as good quality.
According the pricing, for Asian product offerings that are properly adjusted for regional buying power, competition, and currency valuation.
In conclusion, global market becomes more liberalization and the technological has developed rapidly. It brought the increase of the worldwide competition. Nike is a company rooted in competition. From equipping consumer with the finest sports equipment in the world to continuously improving their own financial performance, Nike dominates its competitors. They did know that product quality and innovation would help customer to achieve greater goals by worldwide. Nike still operates on this philosophy today. It is one that has helped consumer and stakeholders alike to realize consumer and financial greatness. Nike should have a total reorganization on the company as its primary marketing strategy and must have solutions on the obstacles that it had faced. Despite a changing marketplace for customer. For satisfy the consumer’s wants; Nike should continue to expand their product lines and marketing reach to become a more powerful global brand.
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