Washburn & Hunksaker (2011) dicuss new ideas in global business where companies innovate and devise strategies for success in the market. Multinational organizations have a complex system with multiple operational issues. Critical factors in operation management include efficiency in the supply chain management. Reliable decision making factors include the management of operations, processes and functions. This report presents primary data from Nike’s case study on cost effectiveness and efficiency in the supply chain management. This method is effective because it targets issues of concern for better data interpretation on specific issues. Nike faces challenges of managing supplier expectations. This is due to changes in the system, pricing plans, divergent customer trends and managing multiple segments.
Nike is a retail seller of designer products from the US. The company’s business model comprises of products and services. It has a manufacturing unit, design, distribution, sales and marketing. Its processes have a consistent theme that revolves around a niche strategy. Operation management of the store influences customer behavior (Hill & Hill, 2012, p. 203). Nike is a global brand specialized in footwear, apparel and accessories. Recognized as the leading global supplier of apparel and athletic footwear, the company employs more than 44000. It also manufacturer of sports equipment such as balls, and rackets. The company has a progressive growth in brand value with an equity value of more than $29 billion (Forbes, 2017). The figure below shows a BCG matrix with footwear as the leading revenue earner for the company (Shabotisky, 2017). Nike’s business strategy features a business model for Nike Inc. and its subsidiaries, and product segments. Its target market include men, women and sports persons.
Nike achieves value proposition through its cost effectiveness, monetization and reduced costs. This are important because poor management strategies bring out the negatives of a business strategy (Simons, 2010).
The Company has a remarkable global marketing strategy that includes taglines like Nike Air, Air Max and Nike Golf. Known for numerous products its product segmentation includes trademarks with a ‘Just Do it’ Logo. The company’s growth and development has been through acquisitions sales and marketing strategies. The company has a brand mission to blend inspiration and innovation in meeting the athletic customer needs. Its values feature inspiration, innovation, focus, care, and connection. Its brand agenda is to develop an authentic performance. Nike also invests in CSR practices and it has partnerships with leading institutions for various causes. The global supply chain today faces challenges in maintaining a balance between the cost factor, profitability and service personalization (Swartz, 2014). Its strategic decisions include product development, talent, efficiency and quality management. Below is the company’s famous company logo, which has global recognition. Operation management includes branding strategies that enhance customer loyalty for stronger brands (Hill & Hill, 2012, p. 117).
Internal strategies place the customer needs ahead of the profitability. An open strategy includes crowd sourcing principles that emphasise on IT systems and e-commerce (Newstead & Lanzerotti, 2010). This becomes a challenge because of the internet and information sharing factors. Improvements in the Nike market share depends on operational efficiency within its business categories. The brand has an edge in the market size depicted by different consumers segments. These include the fashion and consumer goods. The figure below shows Nike’s performance with a higher market capitalization as compared to its enterprise value and market value (Shoertmnb, 2018).
The figure below shows Nike’s performance in the market against its competition Zacks. From the graph, Nike faced a dwindling market performance in 2016 and it attributes the drop to operation management issues (Ferguson, 2017). In order to succeed, the company needs to make continuous improvements in strategic decisions. Customer experience, supply chain efficiency and e-commerce enhance Nike sales for a competitive edge against competitors such as Adidas, which capitalizes on casual and athletic footwear.
Nike stock perfomance in the market (Zacks, 2016). A critical analysis of the OM identifies gaps in the Nike strategic planning. the figure below shows Nike’s performance against its leading competitor Addidas. From the chart, it is evident that the company’s price strategies keep changing showing a continous struggle (Tonner, 2016). This report is about these operational issues in Nikes case. It gives recommendations for the present and future management.
Nike is a reputable global organization with a high brand equity. However, its performance against industry leaders shows drops. Insights into these shows that the brand has challenges in maintaining its market position. Managing unprofitability is one way to deal with brand issues. Research reveals that there are common issues affecting businesses in the manufacturing industry (Mittal, et al., 2008). Operation strategy issues include an analysis of the competition and service delivery. It considers the business health, market objectives, and maintenance. A research on the internal and external operations looks for its level of efficiency, cost effectiveness differentiation and focus.
Terry Hill (1998) notes that a company has to face stiff market competition in order to thrive. In order to ascertain this, Nike needs to check the market response for its products because creating a competitive edge happens when the brand responds to the market trends. The adoption of strategy by a brand is in response to the changing market. Research by Gino & Pisano ( 2011) describes the strategic decision making process involved in after action review of factors leading to a win. The discussion points out the need to test the theories for effectiveness. Nike UK needs an analysis of competitive market features products from different brands. The order winners involves standards set by a firm such as different products and services, quality and affordability. Nike has set standards in the sports arena as the largest manufacturer of sports shoes. In logistics management, the company needs to analyze order qualifiers present entry strategies required by the product in order to perform in a market as shown in the figure below. Order winners feature factors that enhance product performance or why consumers prefer it.
Decisions made by the management in the manufacturing sector supports its success. These strategies have lessons for both the products and service sectors. This calls for data on attributes defined by the customer’s perception of goods and services. The table below shows Michael Porter’s competitive strategies with the firm’s profitability at the center of the industry needs (Porter, 1985). From the table, Nike’s internal strategies endears it towards consumers giving it an edge against the competitors. Therefore, the operational management needs order winning strategies or the corporate strategy that gives it a win in the retail or fashion industry. Sustainability in competitive edge leads to market performance. Nike has unique product designs with a quality management process and capacity design. The brand data analysis of its process and capacity design focused on efficient production and improved strategies (Hill & Hill, 2012, p. 25).
Table 2 below shows an approach that Nike’s uses for internal and external management. Its policies revolve around the quality response to the product and service levels. Nike invests in cost effectiveness and lean management strategies for cost reduction, quality enhancement and lean strategies (Gouillart & Sturdivant, 1994).
Order qualifiers represent the competitive standards that describe a product as quality based on specific tactics of management. The table below shows data for Nike to collect information on price, reliability, design, leadership and brand name as some of the qualifiers (Tsai, et al., 2008). Competitive strategies approaches cover themes in cost leadership, differentiation factor and the brand focus. The table below shows corporate guides to developing objectives through a questionnaire process. Nike’s plans to develop a marketing mix strategy will design interviews based on the function support. The questionnaires in this case contains data on the brand’s manufacturing planning, systems controls, quality assurance, brand capacity and size of work structuring (Hill & Hill, 2012, p. 312).
Market dominance gives Nike an edge in market share and for athletic shoes but it needs improvements in organizational structures for efficient management. The shifting global supply chain reveals the emergence of differentiation as the management of supply chain and product innovation (Hill & Hill, 2012). The company’s value creation supports improvements in market share, cost reduction and improved market support. With a global brand presence in more than 180 countries, the business needs a closer monitoring process for its supply chain, production units, brand image development and revenue capabilities. In order to understand the market trends, the research set out to carry out a survey on efficiency in the brand’s efficiency. Using questionnaires as formal and informative techniques for this discovery, the research opted for a sample analysis of the entire population (Rowley, 2014). My preferred choice was an online survey featuring 50 participants. These are men and women in Nike working as employees at different branches. Using cloud sharing, the research sought information about the company including its strengths and weaknesses. In order to understand the target population, the study used a sampling unit from one Nike’s distribution and manufacturing centers. This was a good decision because it reduced bias. The market opportunities while overcoming threats to business growth (Khanna, et al., 2011). From the figure below, Nike, which has a wide variety of products, enjoys a large market share with Adidas as the main competitor.
The table below shows these research questions identifying financial, social and environmental goals of the Nike UK brand. when designing the questions on how to influence sales, market share, and the customer service. The data collected from the Nike UK headquarters. Unique strategies include ideas for tackling price the supply chain issues (Yan, et al., 2013)
|
Themes |
Positive response |
Negative response |
|
Does Nike have supply chain management strategies that works with its employees or teams |
10 |
40 |
|
Does the team have a strategic plan with effective leadership? |
12 |
38 |
|
Is there a team charged with the oversight of OM functions? |
38 |
12 |
|
Does the Nike team enjoy interaction while at work? |
45 |
5 |
Research into Nike’s customer focus combines cost leadership and its differentiation in order to come up with a competitive advantage in its production costs. Its marketing mix strategy covers the pricing strategy in which Nike comes out as a success based on value and quality. Product image is critical in the Nike case study because it explains why a brand gains a positive reputation due to its target on a variety of consumers and productivity issues. Hill & Hill (2012, p. 52) discusses operation management with a focus on selling services, design, deliver and account transactions. Driving business management in the manufacturing sector calls for effective business processes. In order to do this, a survey on the distinct customer perception gives the brand its distinct attributes. For the observation, it was necessary to test the findings from Nike’s enterprise (ERP) forecasting plan that reveals a competent, continuous interaction and analysis approach. The figure below shows its collaboration in the supply chain for improved customer satisfaction, production planning and reduced inventory. This reinforces the planning and objectives for its footwear segments. (Kosasih, 2010)
Although the brand has products for sports and casual customer needs, the survey identifies Nike’s main target consumer as the sports person. This case study’s analysis reveals that the company’s investment in advertising techniques has a focus on its segments (Gino & Pisano, 2011). Customers get motivation in associated thinking processes. Unfortunately, interviews on the customer perception failed to match the customer demand. It was difficult to find information on improved reliability and efficiency plans. Nike has a complex system with a wide range of designer footwear, accessories and apparel. The figure below shows its highest revenue earner as the sports equipment followed by the parallel and footwear (Alpha, 2017). This research covers the North American market.
The research notes that Nike’s corporate objectives include a return on shareholder investments. Customer satisfaction attracts and retains customers hence calculated efforts directed at higher revenue projections, reduced debt and personal trainers. Distribution strategies also support cost reduction for a higher yield. Communication and promotional strategies create a structure for a competitive edge. Through observation, the research took few days trying to understand the customer through observation (Gouillart & Sturdivant, 1994). The customer gives insights into the market trends and distribution chain for end user product designs. The appendix 3 shows some of the ideas obtained from the consumer with a highlight of sales projections.
From the analysis of the brands technology department indicates an implementation structure focused on the internal and external factors such as process re-engineering, project management and consultant competence (Harindranath, 2018). The figure below shows how to develop an ERP for the Nike team under its supply chain management.
Green supply chain approaches to business influence the internal and external systems (Sonia & Power, 2010). Nike needs a clear plan on reduced energy usage, reduced wastage of natural resources like water and minimized production of surplus order. Sustainability is critical for a business because it leads to competitive position through value addition and situational analysis. The emerging markets present a good opportunity for Nike’s sale. However, this should have a focus on research and development guides. Nike UK risk management plan is also a strategy concerned with the business environment (Business side of sports, 2015).
Customer participation in the global footwear designer wear is appropriate for the optimization of sales in the international market targets through different buyers. Nike needs leadership objectives for its segmentation. Customer satisfaction in the supply chain supports efficiency, waste management and customer satisfaction. An analysis of the case example reveals progressive revenue increases and turnover. The figure below identifies areas in which Nike may capitalize on for the ultimate goal, which is customer satisfaction. Nike needs to gain more customer insight for its multichannel operations. New strategies focusing on supply chain management, pricing, IT, and people leadership enhance the brands ability (Harindranath, 2018).
Educating staff and customers on the brand reputation and new product is crucial. This is because the customer has the power to inspire and affect the brand and product development (Grant, 2011). Effective leadership motivates a positive outcome such as energy efficient products and processess across different points. The cost verses benefits analysis reveals the importance of value addition using non tangible elements.
Alternative approaches to improvements include incremental improvements in the level of investment. This captures the procedues and technology additions within the longterm and short term (Hill & Hill, 2012, p. 222). Customer response on a business provides data for strategic processess. The cost and benefit analysis is important because it identifies the resource availability for the next move in business (Godin, 2003). Operational realities reflect on the delivery process for costs, demands and delivery processes. Creating a competitive advantage calls for marketplace analysis with a focus on order qualifiers and winners. Using quality in the criteria analysis brings out the customer perception and Nikes brand performance. Operation management in the manufacturing sector changes the cycle time makes use of the time resources.
Nike has a good reputation because of its quality mark. The company has high quality products sold globally under favorable pricing strategies. Its management practices reveals a strategic process that captures the target market and capitalizes on the brands strengths. Training staff is one way of supporting the supply chain for customer satisfaction. These factors support its development into the largest sports manufacturer. However, an analysis of the business shows the need for constant monitoring systems in is internal and external factors (Fleschmann, et al., 2014). Below is integration of the supply chain and value chain with critical areas of focus.
An ideal OM plan is sensitive to price mechanisms and value factors. The perceived value in Nike shows the need to emphasis on cost factors, differentiation and IT benefits. This effect is evident in the critical variables within the operations management. This is about enterprise resource planning and its optimization of the company name and visions (Ram, et al., 2013). The figure below shows critical aspects of for the brand’s focus with the incorporation of technology in the supply chain. In this case, Nike needs IT solutions for an integrated business plan, optimization tools and supplier and risk analytics. Therefore, operations management is the implementation of improved measures for a better output and increased productivity. Using a product related demand is ideal for Nike, which needs an effective management of both tangible and intangible.
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