Introduction

Since 1980s, the word “globalization” has become a popular term among economists. It leads to the combination of local culture and phenomenon’s including technological, economics, political and sociocultural force. (Sheila, 2004) During the last two decades, rapid development in information technology has accelerated the globalization process of the world economy, and created lots of opportunities and new challenges for the organizations which have capable resource to globalize. Many of such companies took the chance and expanded their business across borders. However, operating in countries which has different culture and political background is extremely risky, therefore, organizations need to apply effective strategies to help them reduce minimize the risk, and take good advantage of globalization. Strategy is both planned deliberate actions and unplanned emergent activities; on a business point of view, it is defined by Mike & Peng as a firm’s theory about how to compete successfully. (Mike & Peng, 2006) At the global level, a well designed strategic management enables multinational companies to survive in extensive competitions and overcome risks involved in cross-border operations. This report will take Nike as an example of successful multinational organization, its general business environment including demographic, Economic, Political/legal, Sociocultural, Technological and Global will be analyzed, also a 5 force analysis will be done to evaluate Nike’s industrial environment.

General background of Nike and its current operating strategies

Nike was found by Phil knight and Bill Bowerman in 1964, originally it was know as Blue Ribbon Sports, which was a distributor of Japanese shoes. In 1972, the Phill and Bill introduced their first product line and named it as the Greek goddess of victory, which is known as Nike. Later in 1978, Blue Ribbon Sports is officially renamed to Nike, INC. (Hincker, 2008) Now, Nike has already become the world’s No.1athletic shoes and sports wear equipments supplier. In the year 2007, Nike has achieved total revenue of $16 billion USD, a $1.3 billion increase from 2006. In 2008, Nike hired 30000 employees worldwide, and its rank in Fortune global 2008 has reached No. 153. (Nike, 2008)

In the late 1980s, Nike decided to switch its operating system from manufacture oriented into market oriented, which has now became its core operating strategy. This system efficiently applies all the resource that is related to the company to the most suitable places. For instance, dropping the manufacturing process and pass it to manufactures based in Far East greatly reduce the manufacturing cost for NIKE products, so that Nike can provide customers with cheaper products. All Nike needs to do, is train these manufactures to become capable of producing Nike products, and inspect carefully on the quality of the products. In addition, apart from cost saving, outsourcing manufacture also saves Nike heaps of time and resource on plant, management resource and equipments. Therefore, Nike is able to apply most its resource on marketing and research & development, now those two aspects has become Nike’s best competitive edge. Nike is positioned at a premium sport and foot ware brand, its marketing strategy is based on the Nike logo and a slogan called “just do it”. Basically Nike’s marketing strategy is carried out through sponsorship agreements with the famous athletes, and then uses these celebrity images to enrich its advertising appeal. Famous athletes such as Michael Jordan, Roger federer and Renaldo have participated in these marketing campaigns. (Nike 2008)

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General Environment

Demographic of Nike Customers

Basically Nike is targeted at youth who are aged in the range of 13 to 24, both male and female. This group of population is mainly consists of high school, college students and people who started working but still participate in sport activities. Basically, Nike’s athlete’s foot ware appeals to most popular sport activities including basketball, soccer, tennis and running. This helps Nike to make all its targeted population to become potential buyers. Idol effect is extremely useful on marketing this population group. For example, most young basketball players see Jordan as their ...

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