STRATEGIC PLAN FOR NIKE

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Strategic Plan - Nike, Inc.

University of Phoenix

MBA 580

Strategies for Competitive Advantage

Strategic Plan - Nike, Inc.

        Former University of Oregon track coach and co-founder of Nike Bill Bowerman once said: “If you have a body, you are an athlete!” (Nike, 2009). This way of thinking is how Nike conducts every aspect of their business. Every person is a potential athlete or “consumer.” This is a common term when used in the realm of athletics, but when Bill Bowerman made this statement; it was in direct reference to the shoe industry. From their marketing strategies to their selling philosophies, Nike has developed one of the most recognizable and demanded name and logos in the world.

History

The history of Nike is a true example of an American dream that came true. A company built on the heels of a dream of two average guys. The dream was to supply the world with the best in athletic wear. Bill Bowerman, the legendary University of Oregon (U of O) track and field coach, and Phil Knight, a University of Oregon business student and middle-distance runner under Bowerman are the creators and founders of Nike, Inc. The long-lived business partnership began in 1962 as Blue Ribbon Sports (BRS). (Para 5) First year sales totaled $8,000. (Para 4) In 1972 BRS changed its name to Nike, named for the Greek winged goddess of victory. (Nike, 2009).

The U.S., namely the Pacific Northwest, is the home of Nike. The company's inception was at the U of O in Eugene, where co-founder Phil Knight went to college and co-founder Bill Bowerman coached track. The first track star to wear Nike shoes was running legend Steve Prefontaine, a native of Coos Bay, Oregon, who ran for the U of O. Now the company's World Headquarters are in Beaverton, Oregon, a suburb of Portland. The company also operates distribution centers in Wilsonville, Oregon, and Memphis, Tennessee. Nike went public in 1980 on the NYSE, with a ticker symbol of NKE. (Nike, 2009)

Nike, Inc. is an incorporated company that designs, develops and markets worldwide athletic footwear, apparel, equipment and accessories. Nike employs both traditional and non-traditional distribution channels in almost 200 countries with primary market regions in the United States, Europe, Asia Pacific, and the Americas. Nike has some 20,000 retailers worldwide including Nike factory stores, Nike stores, NikeTowns, Cole Haan stores, and websites, which sell Nike's sports and leisure products. Nike accounts for 33% of the global market share in the athletic footwear industry. (Nike, 2009).

Social and Culture

The social factors that affect Starbucks involve the beliefs, values, attitudes, opinions and lifestyles of persons in the external environment as developed from cultural, demographic, education, ethnic conditioning and customers' needs and the size of the potential market (Pearce, 2004). Nike is a well-recognized company that produces footwear, clothing, equipment and accessory products for the sports and athletic market. It also known throughout the world for the “let’s do it” commercial, as global company is also targeted by a broad range of negative publicity and issues regarding human rights. In Nike’s case, the issues are those of human rights and conditions for workers in factories in developing countries, like China, Taiwan, Korea, Mexico and as well as in the US and in Italy.

According to a report published in an internet newsletter, Mallenbaker.net, “The Global Alliance report on the factories of Indonesia gave the following workforce profile: 58% of them are young adults between 20 and 24 years old, and 83% are women. Nearly half of these workers have completed senior high school. Few have work-related skills when they arrive at the factory. 95% of the workers in the nine participating factories have received pay or wage increases in the last year, consistent with government minimum wage increases, and with small exceptions the bases wages in these factories are above the regions minimum wage – although critics would observe that doesn’t add up to a great deal.”  (Mallenbaker.net, 2009).

Nike is at the forefront of this surge in demand as people are looking for sports shoes, apparel and equipment. Nike, however, failed to foresee problems brought about by the accusations of sweatshops pertaining to labor and factory conditions at production locations throughout the world. This caused bad publicity and declining sales as society and consumers demand more socially responsible companies.

Economic

In economy, the biggest threat for Nike would be economic recession. During recession, Nike’s growth will be adversely affected. The US economy is experiencing a downturn right now. Consumer purchases are slowing down. Currently, Nike's feeling the pinch of the economic recession. The Asian economic crisis also affects Nike since its goods are manufactured in Asia. The labor costs and material prices are going up.

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Nike's growth is not just affected by the local economy but also in the international economy. A weak Euro and an Asian recession could mean weak sales for Nike. The overall results in the sales generated by Nike in athletic footwear, however, remained stable. The global market makes up for the variances in sales particularly between peak and lean seasons.

Political and Legal

The government must create economic policies that will foster the growth of businesses. Nike, fortunately, has been helped by the US policies, which enable it to advance its products. The support accorded to Nike by the US ...

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