Strategic Management Analysis
- Every athlete in the world
- Sustainable Economy
- Planet, people, and profit are in balance
- Help Nike Inc. and its customers
However, it can be said that both mission and vision statement of the Nike Inc. support the development of sustainable competitive advantage in a significant manner. The mission statement of the organization mainly highlights the general strategic directions of the business which enforces it to fulfill all its objectives on a timely basis. Due to its high focus on the mission statement, the organization can easily face the current situations which make it capable of gaining competitive advantage over its potential competitors. Inspiration and innovation concept of its mission statement helps the organization in maintaining competitiveness and create tough competition among market competitors.
On the other hand, it can be said that the organization does not have a suitable corporate vision statement. In such situation, CSR vision statement of the organization becomes a good start for it (https://www.mindcoral.com/questionlibrary/view/1526). The CSR vision statement of the organization guides it at every step of its working. This will bring improvement in firm operations, and the organization can significantly create competitive advantage in its potential market. With the vision and mission statement, the organization can keep its operations in the right direction which helpful in avoiding mistakes and possible risks. Thus, it can be said that mission and vision statement of the organization has potential to create a sustainable competitive advantage over its competitors.
Scenarios and Industry Analysis
Competitive Rivalry or completion:
This element of the five forces model represents the level of competition affecting the industry environment and performance of the organization (https://www.ukessays.com/essays/marketing/company-overview-and-mission-statement-of-nike-marketing-essay.php). The following external factors develop the strong force of competitive rivalry in the case of Nike organization:
- Moderate number of firms
- Low market Growth
- High aggressiveness of firms
Bargaining Power of Buyers:
Customers of the sportswear industry directly influence the organization's performance. This element of the porter five forces model represents how customers determine industry environment and competitiveness of business. The below mentioned are some external factors that contribute to the bargaining power of buyers:
- Small size of individual buyers
- Low switching cost
- Moderate substitute availability
Bargaining Power of Suppliers:
Suppliers influence the sportswear industry through the availability of raw materials. It includes following external forces:
- Moderate size of Individual suppliers
- High overall supply
- Large Population of suppliers
The threat of Substitute: Availability of substitute influences the organization performance in global athlete shoe market in a greater manner. It includes following forces:
- Low switching cost
- Moderate availability of substitutes
- Moderate performance per price of substitutes
The threat of New Entrants: New organizations and new entrants can work as a barrier in sportswear industry environment. It includes following external forces:
- Moderate cost of doing business
- High scale of economy
- High-cost involvement in brand development
After conducting the porter five forces analysis, it can be said that sportswear industry is less attractive than the other industries. It is because the industry has intense competition, price-conscious consumers, fashion trends, and competition that slowed growth in the sportswear industry. Slow growth of industry makes it difficult for the business organizations to create their brand image that appeals to the consumer in a significant manner. Competitive rivalry or competition force of porter five forces model is liable for bringing change in the next 24 months. It is because technology is changing continuously. Due to change in technology demand and preferences of consumers also changed. Due to it, high completion is growing in the sportswear industry which influences the organization performance and sale in a greater manner. In this situation, the organization needs to manufacture such products which differ from its competitors. By doing this, the organization can significantly create and maintain its edge in its potential market.
- Industry Attractiveness
- Bargaining power of suppliers
- Bargaining power of customers
- Threat of substitutes
- Threat from new market entrants
- Competitive Rivalry
- Weak Force
- Moderate Force
- Moderate Force
- Weak Force
- Strong Force
Evaluation of Nike’s resources and capabilities by utilizing the value chain framework
Resource and values of Value Chain Analysis
There are two main broad categories of activities in value chain analysis framework- Primary Activities (outbound and inbound logistics, production and marketing) and Supporting Activities (technological development, HRM, Firm infrastructure) (Gereffi, et al., 2003).
Nike Inc. delivers its products to approx. 143 global destinations. Their delivery originates from factory to the docks which receive the products of Nike. Nike's operations of logistics consist of three lines of products: equipment, apparel, and footwear. There are four different regions who manage the orders through the logistics of company's service provider. There is a well-managed co-corporation in the company's supply chain hence there is no need to involve any middle man. Because of the facility of online system of ordering, many shipments are directly supplied to their customers instead of involving retailers.
Marketing- All the endorsing and branding activities can impact the reputation of a brand as doing the market research beforehand can help to enhance the brand image and make the footwear and apparel selling the company as a leader.
Production- Nike's mission can help to create cost effective, innovative manufacturing processes and proprietary materials with high-quality components and materials.
Technological Development- Nike has established itself as leaders and innovators in the shoe industry by differentiating their offerings accessing the use of technologies that are patented.
Human Resources management- Human Resources include skills, accumulated wisdom, judgment, competencies, and experiences of Nike Inc. Regarding the Human Assets, Nike has declared that it has various opportunities to gear up the growth in terms of profits and competitive advantage and our leaders are working on a daily basis to ensure that the brand is inspiring many of the employees to work even harder (Walters, et al., 2000).
Firm Infrastructure-Nike is developing the logistics, information systems and management of supply chain and marketing the company’s product in new innovative ways. Moreover, Nike is finding new ways to operate on the system that creates an effective balance between financial and managerial disciplines which can drive growth effectively. With The increasing awareness of corporate social responsibility, Nike is helping to keep the environment safe and produce maximum quality products with the efficient use of resources and keeping the environment safe.
Intangible Resources- Nike wants to establish itself as leaders and innovators in the shoe industry by differentiating their offerings accessing the use of technologies that are patented.
Human Resources- Human Resources include skills, accumulated wisdom, judgment, competencies, and experiences of Nike Inc. Regarding the Human Assets, Nike has declared that it has various opportunities to gear up the growth in terms of profits and competitive advantage and our leaders are working on a daily basis to ensure that the brand is inspiring many of the employees to work even harder.
Financial Resources- These monetary resources include credit lines, debt capacity, cash reserves, available equity, and other equitable financial holdings. Nike’s largest category of product is Footwear which is representing approx. 53.7% of the revenue of the company. These resources of finance are used to buy the large space for advertising be it billboards, TVs or any stadium for athletics.
Physical Resources- Resources which are in physical forms like retail stores, office supplies, inventory, machines, plants, buildings are called as Physical resources. Shoe line is considered to be the most important line amongst all other.
The Market-Based View: According to this model, Nike Inc. needs to focus not only on industry factors but also the external market orientation. It is because these are considered the primary determinants of organization performance (Bharadwaj, 2015). Furthermore, it also suggests that the strategic position of Nike Inc. largely depend on its activities. It is necessary for the organization to differentiate its activities from its competitors. It is because performance and profitability of organization largely depend on its competitive dynamics and structure within which it operates. On the other hand, the organization should consider Industrial Organization paradigm. It is because with the help of this paradigm the organization can gain significant knowledge about how the structure of the industry influences its behavior and performance. With the help of such knowledge, the organization can develop an effective strategy to gain competitive advantage.
The Resource-Based View: According to this model, the organization needs to focus more on its internal environment because it is a significant factor which helps the organization in determining an effective strategy for competing in existing market. The internal environment is considered the driven factor of competitive advantage. So, the most of the focus of organization should towards on building its internal environment. Generally, it is concluded that the resources of an organization are primary sources of gaining competitive advantage. So, Nike Inc. should focus more on its resources with which it can produce high-quality products. On the basis of its product quality, it can achieve competitive advantage in a significant manner.
The Knowledge-Based View: According to this model, knowledge is an important force which enables an organization to gain a competitive advantage over its competitors. It is because knowledge has such potential that makes it most valuable and important resource for the organization. So, it is the responsibility of the organization to focus more on getting enough knowledge, competencies, and intellectual assets (Li, 2014). It is because these are the main forces that bring improvement in performance of the organization in the digital information age environment. Generally, it can be said that material resource of the organization can decrease after use but knowledge resource never decrease and copied by others. So, Nike Inc. should focus more on developing its knowledge to compete in the international and regional market.
The Capability-Based View: As per this model, capabilities are considered as the source of competitive advantage and resources are considered as the source of capabilities. Capabilities have such potential with which it can significantly help the organization in gaining competitive advantage. Nike Inc. has many capabilities to face a large number of competitors in a single time. So, it can be said that the organization should focus more on developing its capability with which it can perform a critical task in a significant manner.
If the organization considers all the given suggestions, it can significantly gain a significant position in its existing market as well as eyes of customers. Furthermore, the organization can also improve its product quality which enables it to provide large satisfaction to its target customers.
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