nike internal external assessment 1218783971527971 8
TRANSCRIPT
strategic management
NIKE just do it!
andi erdika
maydita diah s.
m. setiawan kusmulyono
rieni widyastuti
yusuf firdaus
Internal and External Assessment
S1 Business Prasetiya Mulya Business School
Undergraduate Degree
Indonesia
Company Profile
Visi …
To bring inspiration and innovation to every athlete
… MisiNike is the “largest seller of athletic footwear and athletic apparel
in the world. Performance and reliability of shoes, apparel, and
equipment, new product development, price, product identity
through marketing and promotion, and customer support and service
are important aspects of competition in the athletic footwear,
apparel, and equipment industry… We believe we are competitive in
all these areas.” The company aims to “lead in corporate
citizenship through proactive programs that reflect caring for
the world family of Nike, our teammates, our consumers, and
those who provide services to Nike.
The Internal Assessment
Marketing
Target Market Male and Female; 18 – 34 y.o.
Positioning High performance shoes designed with hi-tech features
Have many brands and products model for each type of
consumers.
Have high allocation of advertising budget for endorser contract,
TVC, print ads, and sponsorship activities.
Have top endorsers that are the champion in their sports areas.
Distribution
Nike has worldwide distribution line
Nike has good distribution line to retailer
Nike has new ordering system, named Futures Ordering
Program
Research & Development
Nike has NSRL (Nike Sport Research Laboratory) and APE
(Advanced Product Engineering) which cooperated in
developing and executing idea
Nike did direct research to the athlete by accompanying their
daily activities to find the best suitable product
Nike always developing superior technology to compete with
others
Management Style / Culture
Knight as CEO Nike, is an former athlete of long distance run
Nike working culture is established as camaraderie and
cooperative culture.
Factory design in Oregon is especially designed to create
natural circumstances and equipped with complete sport
facilities.
Social Responsibility
Nike placed VP for social responsibility in 1998
Nike joined Fair Labour Association (FLA) and Global Alliance
for Workforce and Communities (GAWC)
Nike funded many NGO such as WWF, etc.
Nike do public relation activities to keep the company’s image
Finance / Accounting
• Nike has healthy financial situation
Sumber: Nike 2003 Form 10-K, p.37 (data diolah)
• But, Profit margin is lower than
Gross Profit margin
The External Assessment
Economic forces
EU is changing into one currency.
USA economic growth is in slow growth because of WTC.
Contract manufacturing is chosen by many athletic shoes
company.
Social forces
Since 70-s, customer is more brand-minded.
Sport Consumer preferences is changing into more fashion-
oriented.
Young consumer is believed much in advertising promotion and use
internet as the primary sources of information.
Buying motives of young consumer is dominated for leisure activity
Since 90-s, woman’s consumer dominated the athletic shoe market
because of the changing lifestyle.
Political forces
World is entering global trade climate with NAFTA and GATT
There is anti-dumping regulation existed in EU
Technology forces
Nike has integrated technology system to develop their product
Nike always adopted latest technology for their product and
matched with their vision
Competitive forces
Competition is more tight with the coming of Reebok and
Adidas
Competition is happened around the world, globally, not locally
Athletic shoe trend is going to be fashion-oriented
Five forces (Porter)
Bargaining to :
– Supplier High
– Buyer High
– New Entrant Low
– Substitution Low
Conclusion:
– Internal Rivalry High (Oligopoly)
Conclusion
SWOT analysis
Strength(s) High brand awareness
Highest market share
Worldwide distribution line
Integrated and future R&D
Better working culture
Healthiness of financial condition
Weakness(es)• Bad social issues, such as children
labor, sexual harassment, etc
SWOT analysis (lanjutan)
Opportunity(ies) Total of athletic shoe sales in US is
increasing in 2002
Fashion trend
Domination of womans consumer
Global and Free Market
Threat(s)• US economic growth is decreasing
• More newcomers
• Close competitor, such as Rbk And
Adidas are more aggresive
• Anti-dumping regulation in EU
Generic Strategies Nike uses network structure
Nike implemented Differentiation Strategies
Detail Strategies• Finance Keep the financial ratio in standard
• Marketing use endorser in every sport
Higher allocation of marketing budget
• Operation Centralization of R&D in Oregon
application of NSRL
• HR Network Structure
Athlete management
Problem(s) :
1. Manufacturing ethics Social issues about labor exploitation
2. Law suits
3. High endorsement fees paid to athletes High SA Expenses (selling and administrative)
Based on the analysis of Nike I/S, the growth of SA expense in 2002 -2003 is
not comparable (11.2%) with the growth of the sales (8.1%).
Measure Performance
Nike has good position in market
Financial liquidity is good
Primary threats is coming from:
– Contracted manufacturing(labor)
– Long-term endorser usage
Conclusion
There is a changing behaviour of the consumer in athletic shoe.
They are moving from sportswear to fashion-sportswear.
Unfortunately, Nike is still using the endorser that is not
fashionable, even though they are the champion in their area. It
was proven by the highest growth of SA expense in 2002-2003.
Recommendation
Try to generate sales from SA expense, by:
– Flexible endorser contract (not in long term)
– Lifestyle consideration in choosing the endorser
