KST6103- STRATEGIC THINKING AND PLANNING TRIMESTER 2 – 2023/2024 (2410) ASSIGNMENT 1 (20%) COMPANY: NIKE NAME STUDENT ID KHAIRYNA SUFIA BINTI KHAMIDON 241UK24174 MIKAIL MUQRY BIN MOHD MUSYIRI 241UK2416V DAMIA SARI BINTI ESMA DAINAL 241UK2416Z AKID BIN ABDUL RAHMAN 241UK241C6 ARARYA NADZIHA BINTI TAURAN NADZMI 241UK2412D HANINAH BINTI KHAIRIL AMIR 1211101387 NURDANIA AFFIERA BINTI YASIN 1221102956 AKOCHI PRAISE TOCHUKWU 241UK240GW IMRAN ILMAM BIN BADRULHISHAM 241UK240FS LECTURER’S NAME: DR NURAFIQ INANI MAN SUBMISSION: WEEK 5
1.0 Company logo, Vision, Mission, and Values, Product Services, Target Market ● VISION Nike, Inc. is an American athletic footwear cooperation. They are the largest distributor of athletic shoes in the world as well as being a major company responsible for the manufacture of sports equipment globally. Nike aims to create a world where every athlete regardless of their physical appearance can strive to achieve incredible feats. Their vision statement, to “do everything possible to expand human potential” serves as a constant and bitter reminder of the company’s mission ● MISSION Nike’s mission is “to bring inspiration and innovation to every athlete in the world”, a powerful statement that summarises the company’s main goal. The goal of providing the best possible sports equipment as well as services that inspires athletes around the
world to reach their full potential and to push beyond their limits through hard work and dedication ● VALUES Nike has many values that mirror the company’s overall vision statement. For instance, Nike values innovation as well as sustainability, working to seek new ways to improve their products and services as well as reducing their environmental footprints to make their products environmentally friendly. Nike also values inclusion and empowerment believing that sports brings people together and that athletes must unleash their full potential whether it’s on or off the field ● PRODUCT SERVICES Being an athletic footwear cooperation, most if not all of Nike’s products are linked with sports, their most popular as well as their most recognizable being their shoes with Nike offering many kinds of shoes fitted for any type of sports. In addition to shoes, Nike also offers bags, socks, eyewear and many more equipment that can help athletes with their goals. In contrast, Nike offers services digitally including the Nike Training Club App as well as the Nike Run Club App, both of which provides athletes with their own personal training programs that fits with their own unique style of fitness ● TARGET MARKET Nike’s target market consists of athletes of all abilities worldwide. Their demographics and age range includes a wide range of users, aged from 15 to 45 years ensuring further growth by targeting middle aged customers who have disposable
income. Regarding geographic segmentation, Nike’s stores are located mostly in urban centres commonly found within malls in major cities as well as standalone stores consistently generating revenue
2.0 Strategic Directions For The Year 2024 - 2026 i. Market Expansions Nike understands the significance of entering new markets in order to maintain its upward growth path. This could mean focusing on developing countries with a growing middle class that has more money to spend. Furthermore, Nike has the option to increase its presence in current markets by launching more stores, growing its online footprint, or collaborating with nearby retailers. By broadening its geographical presence, Nike can vary its sources of income and lessen reliance on any one market. ii. Increase Product Selection Nike are trying to expand their product range which include more clothing, accessories, and footwear in order to attract a more diverse customer base. This may involve creating new apparel, accessories, or outdoor gear designs specifically for particular markets or uses. Moreover, Nike may also consider partnering with well-known designers, artists, or athletes to launch exclusive products targeted towards specific consumer groups and generate buzz in the market. iii. Customer Centric Approach Nike recognizes the importance of providing outstanding experiences to its customers in order to cultivate brand loyalty and to encourage more frequent buying. In order to accomplish this goal, Nike will focus on grasping customer preferences through data analytics, market research, and direct feedback channels. By using information obtained from these sources, Nike can customise its marketing plans, products, and customer service efforts to better connect with its desired audience, ultimately creating stronger relationships and increasing brand support.
iv. Sustainability And Environmental Responsibility Nike is a globally dedicated company in the diligence of enhancing and improving the environmental impact of their products and hence providing and promoting a much greater outcome for the consumers and environmentalist idealism worldwide. The tango of countering this is not only involved on the end supply product chains alone, but rather is being implemented in a much bigger scale which include the supply of the material, the outsource impact of the contingent user, manufacturing chain lines, quality or (QC Control) and etc. In the advancement of this far right idea in their business model, it enables them in opening new doors in managing environmental risk and boost their brand reputation, and as well appear much more eco-friendly for consumer and investors alike. v. Innovation And Product Development All of Nike's success is due to its own dedication to creativity, always pushing limits in the design, technology, and also performance of its own products. This requires a continuous financial backing for research and development to discover much more fresh advancements such as in materials, manufacturing methods and the product characteristics. Furthermore, Nike fosters innovation and collaboration by partnering with athletes, designers, and technologists to develop cutting-edge solutions for changing consumer demands. Nike stays ahead in innovation to stay competitive in the ever-changing sportswear market and still engages and enthrals customers.
3.0 SWOT Analysis i. Strength The first core strength Nike has going for is its Brand recognition. According to an article by Lin (n.d.), Nike is the biggest shoe company in the world if we look at market share of shoes, with a value of $153.14 billion, completely trumping it’s competitor in second place, with over $100 billion separation. They have reached this position due to the way they creatively combine elements of inspiring, unique marketing campaigns and the outreach they are able to achieve. Most individuals in the world know what Nike is, and most individuals likely have owned at least 1 Nike product in their lifetime, which means that they have a massive customer and following base. They aren’t just in the lead in the market share of the footwear industry, but they are also one of the most recognised brands in general. The second core strength of Nike is the quality they maintain in the manufacturing of their products, and the quality of marketing campaigns and ads. A book published by Jin and Cedrola (2018) identified that Nike capitalises on using quality as a selling point to professional athletes, and it was the usage of Nike shoes by athletes alongside marketing campaigns communicating simple messages such as “Just Do It” that resulted in Nike being associated as a trusted brand of quality. On the marketing end, They employ strategies such as influencer marketing, capitalising on activist campaigns like black lives matter, collaborating with superstar basketball player Micheal Jordan and capitalising on limited edition sales to create demand means that everywhere you go, you are always bound to see a creative Nike ad on billboards, video advertisements or when you go to the mall. On product quality, Nike invests millions of dollars in constantly innovating their shoes, and this has been the biggest strategic goal of the brand as a whole, where premier researchers find new ways to improve their product and communicate to stakeholders their strategic objectives for every new venture Nike goes ahead with (This strength implies that stakeholders will always associate Nike with quality, and it has built a standard of prestige whenever they associate and purchase products from Nike. Nike capitalises on this narrative of quality, and has successfully promoted a brand image that constructs continuous demand for stakeholders of all demographics to keep hooked in. Finally, Nike maintains very clear strategic philosophies of how they seek to communicate to their stakeholders, which has led it to strive in innovative ways to display the purpose of
every footwear they manufacture they release. The design of each footwear is focused and has an intentional design, which makes it easier to communicate with stakeholders the varying diversity of their products, and stakeholders are able to assess how their preferences match with the clear cut designs of each shoe and build a connection. Nike is also the master of simplicity and storytelling through their marketing and ad campaigns, and as they already have massive reach through their brand recognition, It is very easy for stakeholders to connect to the company and understand their goals. ii. Weakness The biggest weakness that Nike has is in regards to the various controversies surrounding labour and company culture. Nike has been accused of terrible working conditions in regards to its manufacturers in the developing countries, to a point where their brand was synonymous with slave wages, forced overtime and arbitrary abuse” (Dionne, 1998, p. A7). This perception has put them at the forefront of political consumerism needing to pressure companies to be more ethical with manufacturing and has affected their brand image. They have also fallen under fire with lawsuits in regards to toxic work culture, many of which have gotten publicised by the media. Nike is also known to not be fully compliant with ESG standards and the manufacturing of their shoes combined with the large scale of products they create means that the company contributes a significant amount of pollution in developing countries. The implication of this weakness means that in an age of increasing expectations of CSR and competitors capitalising, Nike risks losing a good chunk of their customer base. Nike is also Secondly, Nike has historically focused on a selling strategy of third party retailers and wholesalers, which means that Nike has a lack of control over the pricing structures of how their products are sold. This means that Nike is very much at risk of losing profits if anything bad happens to their retailers, evident in the massive loss of revenue during the COVID-19 pandemic as most retailers and wholesalers were forced to close down, and there was not enough online stores nor demand for footwear. Nike also has an issue with a lack of diversity in the products they sell, which makes them much more vulnerable to shocks or shifts in demand in the market and they are under increasing pressure to diversify.
iii. Opportunity Opportunity in SWOT refers to external factors or trends that businesses can take advantage of. As for Nike, a potential opportunity is the growing athleisure market. Since younger consumers prefer versatile, comfortable, and trendy clothes that can be worn for both daily wear and sports, Nike has a lot of potential in the athleisure industry. The market is anticipated to increase from $411 billion in 2021 to $793 billion by 2028, according to a Strategic Management Insights article (Jurevicius, 2023). Nike can benefit from this trend by offering a wide selection of products that blend style and functionality. Other than that, Nike also has a substantial opportunity to cater to consumer demand for sustainably made products and ethical operations by investing in sustainability. Considering consumers are seeking constantly for brands who advocate sustainability as global problems grow traction, Nike has an opportunity to establish itself apart through new approaches to resources, production, and longevity of product cycles. Nike's dedication to sustainability not only improves the company's reputation but also fosters customer loyalty and trust. Nike could boost its earnings by adopting sustainability-focused programs that reduce waste and use less energy, thus saving money. Nike sets the bar for other sportswear companies by applying these sustainable practices, which draws in new business, improves their image, and builds a strong business model. Last but not least, Nike has the opportunity to develop technological advancement into their products to appear more innovative to the market. Nike can tailor products and services that appeal to customers by utilising modern technology like artificial intelligence (AI), virtual reality (VR), augmented reality (AR), and elaborate data analysis. As an example, AR can enable virtual try-ons, developing the experience of shopping on the internet. Additionally, technology helps manufacturing processes smoother, which lowers waste and increases sustainability. If they were to pursue these technological advancements, Nike would improve its operations, promote loyalty to the brand whilst creating unique experiences for consumers. iv. Threat One of the aspects that poses a threat to Nike is indefinitely its intense competition with other sportswear brands such as Adidas, Puma, New Balance and Under Armour.
These companies are stepping up their marketing efforts by collaborating with celebrities, as well as other well-known brands and using sponsorships with sports teams. In addition to standard athletic companies, Nike is under pressure from designer brands and newcomers who have entered the streetwear and athleisure marketplaces to provide customers more options. Nike has to keep coming up with fresh concepts, to ensure their products are far better than their competition in order to maintain its lead in an intense and ever-changing marketplace. Moreover, the ever rising market for counterfeit goods also poses a threat to Nike as it encourages consumers to purchase for quantity instead of quality. These counterfeit products are infamous for being low quality and much cheaper than the real product itself. Plus, buyers may mistakenly associate fake products to poor craftsmanship and a lack of safety regulations, thereby damaging Nike's credibility if they believe these defects are inherent to the real deal. It takes a lot of funding to address this problem, including tools to verify products, advertising to increase awareness of the dangers of purchasing counterfeit goods, and regulation. Last but not least, recessions pose a risk to Nike as well as they reduce customer purchasing power for more expensive goods. Customers often give basic necessities a higher priority than luxuries during unpredictable economic times. The demand for Nike's products, which are often considered as non-essential, could decrease as an outcome of the change in buying habits. As a result, Nike may encounter a drop in revenue therefore, they need to frequently run discounts or promotions in order to hold onto its market share. Nike needs an adaptable business approach allowing it to quickly adapt to changes in the marketplace.
4.0 Strategic Goals i. Mission The effectiveness of Nike’s strategic planning is based upon its main mission which is towards innovation, sustainability and empowerment of the athletes. The corporation intends to amend its mission statement in order to achieve these key beliefs, thereby making transparent its intent to always go further in wardrobe components, footwear and hi-tech while also promoting the welfare of communities everywhere. Nike’s mission which firmly governs the organisation’s strategic decisions serves as their main mission. ii. Vision Nike is determined to stay ahead as the top international brand in the sporting industry. The company plans on improving product innovation and market presence and at the same time lead the way for environmental sustainability and social responsibility. This long-term vision which is holistic (meaning, refers to the entirety of the company) integrates between overall objectives and purpose based businesses which make consumers and stakeholders satisfied. iii. Objectives SMART goals are essential for Nike to accomplish its general goals. These goals are specified, measurable, realistic and time-bound. This involves such measures as capturing a definite percentage of targeted markets by using focused marketing strategies, distinguishing products from competitors while also looking into emerging markets. The company also intends to lower its carbon footprint by using responsible sourcing practices which includes employing renewable energy as a key within environmental protection. iv. Innovation Nike aims to lead the market through continuous innovation in product design, materials, and technology. This involves investing in research and development to create advanced products that meet the needs and preferences of the consumers.
v. Expansion Nike seeks to expand its presence globally by entering new geographical locations and reaching new customers. This could involve opening new retail stores, partnering with local distributors, or launching targeted marketing campaigns to connect with specific demographics. These goals align with Nike's overarching mission to maintain its position as a global leader in the athletic footwear and apparel industry while driving sustainable growth and making a positive impact on society.
5.0 Progress Indicators i. Organisation Objectives ● Nike’s ultimate goal is to deliver innovative products to everyone through enhancing performance, reducing injury, strengthening perception and feel. However, the business is far more than just an apparel manufacturer. They are the ultimate lifestyle brand that embodies the idea of living an active lifestyle and constantly pushing the boundaries. ● Nike's business aims and objectives are “To do everything possible to expand human potential. We do that by creating groundbreaking sports innovations, by making our products more sustainable, by building a creative and diverse global team, and by making a positive impact in communities where we live and work.” and "To bring inspiration and innovation to every athlete in every world." ii. Annual Initiatives ● The Nike team believes in the power of community. It’s through community that the company pursues its vision of creating a better world for all athletes* — one that’s inclusive, equitable, diverse and sustainable. Their 2025 targets help hold them accountable to making a real difference, and the FY23 NIKE, Inc. Impact Report highlights the progress that they're making. ● The FY23 Nike, Inc. Impact Report is a comprehensive document that outlines Nike's efforts and progress in various areas such as sustainability, social responsibility, diversity and inclusion, and community engagement for the fiscal year 2023. It provides detailed information on the company's initiatives, achievements, and goals related to making a positive impact on the environment, society, and its stakeholders. The report may include data, case studies, and stories that highlight Nike's commitment to driving positive change and creating a more sustainable and inclusive future.
iii. Quarterly action ● Athlete Endorsement and Collaboration: Collaborate with renowned individuals, prominent athletes, or other influential people to develop co-branded goods or advertising campaigns. This can increase the visibility of the brand and appeal to various market segments. This strategy can be used to assess current alliances, look into fresh talent, or update endorsement plans in response to market changes or athlete performance. ● Marketing Campaigns: Create and carry out focused marketing strategies to advertise products by Nike across a variety of media, including digital, print, television, and social media. These advertisements may highlight particular product categories, joint ventures, or brand projects; and may include influencer partnerships and cause marketing. ● Digital Transformation: Invest in digital platforms and technologies to boost engagement with customers, optimise online shopping, and collect data for targeted marketing. This could consist of using augmented reality (AR) and virtual reality (VR) technologies such as developing virtual showrooms, investing in mobile apps which can offer exclusive deals and loyalty rewards, or increasing e-commerce capabilities such as implementing elements like interactive product displays and personalised recommendations. iv. Key Performance Indicators (KPI) ● Market Share: By comparing its sales revenue or unit sales to the whole market sales or sales of its rivals, Nike can determine its market share. It represents the company's standing and level of competition in the athletic clothing and footwear industry. This will offer information about Nike's capacity to draw in new clients, grow their customer base, and outperform competitors. ● Employee Engagement: Employee engagement is for determining how driven, dedicated, and content Nike employees are. Engaged workers encourage teamwork, contribute to a positive work environment, and are the company's major source of success. They are also more likely to be innovative, productive, and provide excellent customer service. ● New Product Success Rate: Evaluate the success and market acceptability of new products from Nike by measuring metrics like profitability, market demand, customer
satisfaction, and sales volume. This will help assess Nike's potential for development, innovation, and customer satisfaction.
6.0 Conclusion In conclusion, Nike, Inc. positions itself at the cutting edge of the sportswear and footwear industry, guided by a well-defined vision, a resolute mission, and rock-steady beliefs. It has adopted an innovation-based, sustainable approach, as well as giving athletes all around the world a gateway to attain their fitness goals, which has been the secret factor that has spearheaded its growth and made it among the top brands. Accordingly, the mission for 2024-2026 consists of technology horizon, growth in the market, increased product selection, putting the customer first, sustainable living, and ongoing innovation. On the positive side, the company enjoys strong recognition for its brand, quality products, and the effectiveness of its marketing; however, labour problems and extreme rivalry are significant hurdles. Nevertheless, prospects are rich in adapting to distinctive emerging athleisure stores, sustainability efforts, and technology advancements. The strategic objectives of Nike's action plan, which are organised around mission alignment, innovation, expansion, and sustainability, are achieved through a host of actions like the company's organisational objectives, annual initiatives, regular actions for the quarter, and crucial performance indicators. Nike's mission statement, with its roadmap and commitment to superiority, Nike is determined for their story to be told globally, contributing to shaping the future of sportswear.
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