Nike Case Study

1. A decision to retain an in-house arm of agency Weiden & Kennedy by Nike exemplify the concept of organizational design by allowing Nike use the agency’s creative designers to focus solely on Nike work, giving them un-parallel access to executives, researchers and anyone else who might provide Nike advertisers with their next inspiration for marketing greatness before listening to any other organization.Having the agency in the building is having them at their disposal at anytime they need them and also the agency will have to consider them first incase of any new ad or good idea discovered by the agency or when Nike needs to salvage a problem with the help of the agency. Thus, the agency at their finger-tips serves great advantages for not only trouble shooting. 2. I believe the organic design of Nike helped in posing the sweatshop labor problem Nike faced. Using a flat structure helps get a lot of work in a short time but none-the-less can cause a lot of trouble as seen in Nike.With a more highly bureaucratic structure, also known as Mechanistic design, practices will be closely monitored to prevent such problems from arising. In a centralized design with many rules and procedures which have to be followed, a clear-cut division of labor and narrow spans of control and formal coordination, the higher management/ board of directors will be very well informed on what is happening in the organization at each and every level. Though organic design has more personal coordination a more strict coordination will help in preventing such issues.For example, if Nike had a tight structure, they would have a predictable goal, centralized authority on whom to report directly to, many rules and procedures they must abide by, a narrow span of control so as to control their workers/management’s practices, everyone has his/her specialized task, and formal and impersonal coordinator. Having this sort of clear division of labor and coordination helps keep the man agement well informed and they would have known and remedied the sweatshop labor before the allegations surfaced.Nike would have known the right factories to outsource to instead of using factories that fail to meet their standards. 3. Fig. 1 shows what Nike network structure looks like, Mark Parker (CEO) reports to the Board of Directors and in return almost every manager/worker reports directly to him when the need arises. Nike is a divisional company but retains some functional departments as well. The brands Nike sells comprise many of the divisions of the company.Apparel for Nike brand, Converse, and Jordan brands are examples of some divisions created around specific products. Functional departments such as Nike design and investor relations are also part of Nike’s organizational structure. Nike‘s vertical structure includes CEO Mark Parker and a board of directors chaired by co-founder Phil Knight. Although Nike has functional divisions and divisions based on spe cific products it is not a matrix organization. In a matrix organization, employees report to a functional and divisional manage.At Nike, employees report to the divisional manager and the president of each division reports directly to the CEO. Nike’s continued product innovation and successful marketing are due to the combination of functional and divisional organization using an operations department to insure communication between divisions. There is division of labor but it is not clearly identified. With a more pronounced division of labor and levels of direct supervision Nike can improve its business thereby staying ahead of competition like Adidas.The bulk of divisions reporting to Mark Parker can be cut down introducing more managers to report to in other to lessen the workload on him. Having more layers can help ease the workload and also the more levels reported to will enable more ideas to be shared. A lower manager can have important ideas that will be welcomed by Mark Parker and Board of Directors but cutting such a manager from the line of report will render him unaware of the situation and not able to share his ideas, which may potentially be just the perfect solution to the situation.No doubt he flat structure makes work faster and workers feel more involved in a project, but it’s not always the best because once a project goes wrong, salvaging it is not impossible but it is hard and more time consuming to investigate than in a mechanistic bureaucratic structure. REFERENCE Schermerhorn, John R.. Management. 11th ed. Hoboken, N. J. :Wiley; 2010 Nike Case Study Profile: Nike is a cooperation which sells clothing, footwear, sportswear, and sport equipment. Through many retail stores and various distributors, the company sells products to more than 170 countries including the USA, Europe, Middle East, Africa and Asia Pacific (Datamonitor, 2012). Nike is headquartered in Beaverton, Oregon, USA; it is the top supplier of athletic shoes and apparel and is one of the top manufacturers of sports equipment, with revenue in excess of $20. 862 million in FY ended May, 2011 (Datamonitor, 2012).Based on geography regions, revenues are generated by Nike through six main regions: North America accounted for 42. 1% of sales, followed by Western Europe (21. 1%), Emerging Markets (15. 2%), Greater China (11. 5%), Central and East Europe (5. 7%); and Japan (4. 3%) (Datamonitor, 2012). Also, Nike is facing with strong competition from Adidas at present. According to James (2012), Nike has 18% market share of the United Kingdom’s markets while Adidas ha s only 15%. Origins and Key Developments According to Datamonitor (2012), Nike was established in 1964 by Phil Knight and Bill Bowerman.At the beginning, Nike was known as Blue Ribbon Sports which sold Tiger shoes. At that time, Knight shook hand with the Onitsuka Co in Japan in order to mass-produce products. In 1971, Knight and Bowerman planned to change their company from a footwear distributor to a company designs and manufactures athletic shoes. The name â€Å"Nike† was created in 1972 and the brand mark was designed by a student at Portland State University. The mid-1980s was a period of transition when Nike had made a wrong aerobics boom calculation which gave chances for other competitors to develop their businesses.Fortunately, in 1985, new ideas in a signature shoe for National Basketball Association from Michael Jordan helped Nike improve their performance. By the end of the 1980s, Nike has finished their IPO and became a publicly traded company. At this time, Nike focused on advertising to attract more customers and differentiate themselves from competitors. The 1990s saw the rapid expansion of Nike since there are many Nike’s stores around the US and internationally. By the middle of the 1990s, Nike concentrated on sponsorship to make the company become well-known.In 2000, Nike created a new innovation called â€Å"Nike Shox† and focused on the â€Å"Secret Tournament† marketing campaign in 2002. They are continuing to focus on innovative and marketing to differentiate themselves from competitors (Nike, 2012). SWOT Analysis According to Datamonitor (2012), the first of three Nike’s strengths is the market position with strong brand equity. The company became the leader in most of sport’s product segmentation. As a result, their global footwear market share increases from 14% in 2006 to 16% in 2009 (Datamonitor, 2012). In 2011, Nike’s brand value achieved $14. 28 million (Forbes, 2011). Secondly, Dat amonitor (2012) pointed out that Nike concentrates on technical innovation and cooperates with other famous companies to create a new range of products. The company is carrying out research to give advisories to athletic, coaches and trainers on effective designs, light materials and develops functions of products. Furthermore, Nike has built the relationship with Apple and has created a product for Apple’s users called Nike+ GPS. Nike+ GPS lets users track their pace, distance, time and calories-burned through their Iphone or Ipod (Nike, 2012).Consequently, many Apple’s users buy Nike footwear to discover this function on their devices. Finally, Nike has a world-wide distribution channel. They sell their products by means of Nike-owned stores and a mix of independent distributors and licenses around the world. In term of weaknesses, Nike depends too much on third party manufacturers in Asia, such as: vietnam, China, Malaysia, Sri Lanka, Turkey and Indonesia to decreas e the costs of production (Datamonitor, 2012). As a result, Nike has not much control of the product quality.For example, Renonvpilaw (2005) reports that Nike took back about 9,000 units of Nike Get-Go and Little Get-Go children’s athletic shoes which were produced in Indonesia in 2005. Thus, this event makes some impacts on Nike’s image. Nike also has some opportunities to develop the business. First of all, the development of India’s economics within the remove restriction on foreign investment from government make India becomes an attractive market for foreign companies. Datamonitor (2012) shows that the footwear market in India increased 9. 2% and achieved at $4,104. million in 2009. Another opportunity is the rapid development of the global footwear market. According to Datamonitor (2012), the global footwear market rose by 2. 6% and reached $196. 3 billion in 2009 and will achieve $230. 8 billion in 2014. The main threats that Nike is dealing with are the intense competition from Adidas in the international market. Moreover, in the US market, the company has to face cheaper imported footwear from Asia; especially China. It will have some effect on the price of Nike’s products and influence revenues of the company.In addition, according to BBC News (2009), there are about 8,000 pairs of counterfeit sports shoes from China imported to UK per month. It affects not only Nike’s revenues but also the image of company. Evaluation In spite of depending too much on third parties, there is evidence that Nike will try to tighten management in third party factories. Nike will reinforce inspectors and send them to different factories on the world (BBC News, 2008). These staff will ensure the product is produced following the right standards. Beside that, there are signs which show that Nike will develop well in India.According to Nike (2012), Nike wrested the rights to become the official kit sponsor for the India cricket team from 2010 to 2015. By this way, they will become famous in India since Indian is a crazy cricket fan. For another, in order to maintain the market leader position, it depends on Nike’s ability to increase innovation and sponsorship to compete with Adidas. Lee and Aiken (2010:250) report that Nike will investigate into High School League in Taiwan to develop a long term relationship between a company and young customer public events.Thus, Nike will continue to get feedback as well as works on research projects directly with customers, to get experiences in order to innovate their products (Ramaswamy, 2008:11). Finally, Nike will establish the relationship with the police in some countries to avoid counterfeit goods. In Croatia, Nike and Police cooperate together to find out counterfeit goods (Williamette Week, 2011). To summarize, Nike will has chances to develop the company if they continue to maintain the market leader position in term of innovation, taking advantage of sponsorsh ip and having solutions to prevent the development of counterfeit goods.Bibliography BBC News (2009), Fake shoes valued at ? 1m seized, [Online], Available from: http://news. bbc. co. uk/1/hi/england/suffolk/7976876. stm [assessed 7 May 2012]. BBC News (2008), Gap and Nike: No Sweat? , [Online], Available from: http://news. bbc. co. uk/1/hi/programmes/panorama/970385. stm [assessed 7 May 2012]. Datamonitor (2012), Nike Inc: Company Profile, [Online], Available from: www. datamonitor. com [assessed 2 May 2012]. Forbes (2011), The World's Top Sports Brands, [Online], Available from: http://www. forbes. om/2010/02/03/most-powerful-sports-names-tiger-woods-nike-cmo-network-sports-brands. html [assessed 6 May 2012]. James, H. (2011), London 2012 Olympics: Adidas aims to beat Nike into second place at Games, [Online], Available from: http://www. telegraph. co. uk/finance/london-olympics-business/8545104/London-2012-Olympics-Adidas-aims-to-beat-Nike-into-second-place-at-Games. html [assess ed 6 May 2012]. Lee, C. and Aiken, K. (2010), Changing brand associations in Taiwan: Nike's sponsorship of high-school basketball, Journal of Sponsorship, Vol. 3, May, pp. 50. Nike (2011), Annual Report, [Online], Available from: http://investors. nikeinc. com/Investors/Financial-Reports-and-Filings/Annual-Reports/default. aspx [assessed 4 May 2012]. Nike (2011), History & Heritage, [Online], Available from: http://nikeinc. com/pages/history-heritage#tab6-tab [assessed 3 May 2012]. Nike (2012), Nike celebrates India’s cricket team with elite holiday collection, [Online], Available from: http://nikeinc. com/news/nike-celebrates-indias-cricket-team-with-elite-holiday-collection [accessed 4 May 2012]. Ramaswamy, V. 2008), Co-creating value through customers' experiences: the Nike case, Strategy ; Leadership Journal, Vol. 36, pp. 11. Renonvpilaw (2005), NIKE Recall of Children's Athletic Shoes, [Online], Available from: http://renonvpilaw. com/picontent/products/recalls/product. php? id=76 [assessed 3 May 2012]. Williamette Week (2011), NIKE REPRESENTATIVE DESCRIBES COUNTERFEIT GOODS SMUGGLING IN CROATIA, [Online], Available from: http://wweek. com/portland/article-18471-nike-representative-describes-counterfeit-goods-smuggling-in-croatia. html [assessed 7 May 2012]. Nike Case Study 1. A decision to retain an in-house arm of agency Weiden & Kennedy by Nike exemplify the concept of organizational design by allowing Nike use the agency’s creative designers to focus solely on Nike work, giving them un-parallel access to executives, researchers and anyone else who might provide Nike advertisers with their next inspiration for marketing greatness before listening to any other organization.Having the agency in the building is having them at their disposal at anytime they need them and also the agency will have to consider them first incase of any new ad or good idea discovered by the agency or when Nike needs to salvage a problem with the help of the agency. Thus, the agency at their finger-tips serves great advantages for not only trouble shooting. 2. I believe the organic design of Nike helped in posing the sweatshop labor problem Nike faced. Using a flat structure helps get a lot of work in a short time but none-the-less can cause a lot of trouble as seen in Nike.With a more highly bureaucratic structure, also known as Mechanistic design, practices will be closely monitored to prevent such problems from arising. In a centralized design with many rules and procedures which have to be followed, a clear-cut division of labor and narrow spans of control and formal coordination, the higher management/ board of directors will be very well informed on what is happening in the organization at each and every level. Though organic design has more personal coordination a more strict coordination will help in preventing such issues.For example, if Nike had a tight structure, they would have a predictable goal, centralized authority on whom to report directly to, many rules and procedures they must abide by, a narrow span of control so as to control their workers/management’s practices, everyone has his/her specialized task, and formal and impersonal coordinator. Having this sort of clear division of labor and coordination helps keep the man agement well informed and they would have known and remedied the sweatshop labor before the allegations surfaced.Nike would have known the right factories to outsource to instead of using factories that fail to meet their standards. 3. Fig. 1 shows what Nike network structure looks like, Mark Parker (CEO) reports to the Board of Directors and in return almost every manager/worker reports directly to him when the need arises. Nike is a divisional company but retains some functional departments as well. The brands Nike sells comprise many of the divisions of the company.Apparel for Nike brand, Converse, and Jordan brands are examples of some divisions created around specific products. Functional departments such as Nike design and investor relations are also part of Nike’s organizational structure. Nike‘s vertical structure includes CEO Mark Parker and a board of directors chaired by co-founder Phil Knight. Although Nike has functional divisions and divisions based on spe cific products it is not a matrix organization. In a matrix organization, employees report to a functional and divisional manage.At Nike, employees report to the divisional manager and the president of each division reports directly to the CEO. Nike’s continued product innovation and successful marketing are due to the combination of functional and divisional organization using an operations department to insure communication between divisions. There is division of labor but it is not clearly identified. With a more pronounced division of labor and levels of direct supervision Nike can improve its business thereby staying ahead of competition like Adidas.The bulk of divisions reporting to Mark Parker can be cut down introducing more managers to report to in other to lessen the workload on him. Having more layers can help ease the workload and also the more levels reported to will enable more ideas to be shared. A lower manager can have important ideas that will be welcomed by Mark Parker and Board of Directors but cutting such a manager from the line of report will render him unaware of the situation and not able to share his ideas, which may potentially be just the perfect solution to the situation.No doubt he flat structure makes work faster and workers feel more involved in a project, but it’s not always the best because once a project goes wrong, salvaging it is not impossible but it is hard and more time consuming to investigate than in a mechanistic bureaucratic structure. REFERENCE Schermerhorn, John R.. Management. 11th ed. Hoboken, N. J. :Wiley; 2010 Nike Case Study 1. A decision to retain an in-house arm of agency Weiden & Kennedy by Nike exemplify the concept of organizational design by allowing Nike use the agency’s creative designers to focus solely on Nike work, giving them un-parallel access to executives, researchers and anyone else who might provide Nike advertisers with their next inspiration for marketing greatness before listening to any other organization.Having the agency in the building is having them at their disposal at anytime they need them and also the agency will have to consider them first incase of any new ad or good idea discovered by the agency or when Nike needs to salvage a problem with the help of the agency. Thus, the agency at their finger-tips serves great advantages for not only trouble shooting. 2. I believe the organic design of Nike helped in posing the sweatshop labor problem Nike faced. Using a flat structure helps get a lot of work in a short time but none-the-less can cause a lot of trouble as seen in Nike.With a more highly bureaucratic structure, also known as Mechanistic design, practices will be closely monitored to prevent such problems from arising. In a centralized design with many rules and procedures which have to be followed, a clear-cut division of labor and narrow spans of control and formal coordination, the higher management/ board of directors will be very well informed on what is happening in the organization at each and every level. Though organic design has more personal coordination a more strict coordination will help in preventing such issues.For example, if Nike had a tight structure, they would have a predictable goal, centralized authority on whom to report directly to, many rules and procedures they must abide by, a narrow span of control so as to control their workers/management’s practices, everyone has his/her specialized task, and formal and impersonal coordinator. Having this sort of clear division of labor and coordination helps keep the man agement well informed and they would have known and remedied the sweatshop labor before the allegations surfaced.Nike would have known the right factories to outsource to instead of using factories that fail to meet their standards. 3. Fig. 1 shows what Nike network structure looks like, Mark Parker (CEO) reports to the Board of Directors and in return almost every manager/worker reports directly to him when the need arises. Nike is a divisional company but retains some functional departments as well. The brands Nike sells comprise many of the divisions of the company.Apparel for Nike brand, Converse, and Jordan brands are examples of some divisions created around specific products. Functional departments such as Nike design and investor relations are also part of Nike’s organizational structure. Nike‘s vertical structure includes CEO Mark Parker and a board of directors chaired by co-founder Phil Knight. Although Nike has functional divisions and divisions based on spe cific products it is not a matrix organization. In a matrix organization, employees report to a functional and divisional manage.At Nike, employees report to the divisional manager and the president of each division reports directly to the CEO. Nike’s continued product innovation and successful marketing are due to the combination of functional and divisional organization using an operations department to insure communication between divisions. There is division of labor but it is not clearly identified. With a more pronounced division of labor and levels of direct supervision Nike can improve its business thereby staying ahead of competition like Adidas.The bulk of divisions reporting to Mark Parker can be cut down introducing more managers to report to in other to lessen the workload on him. Having more layers can help ease the workload and also the more levels reported to will enable more ideas to be shared. A lower manager can have important ideas that will be welcomed by Mark Parker and Board of Directors but cutting such a manager from the line of report will render him unaware of the situation and not able to share his ideas, which may potentially be just the perfect solution to the situation.No doubt he flat structure makes work faster and workers feel more involved in a project, but it’s not always the best because once a project goes wrong, salvaging it is not impossible but it is hard and more time consuming to investigate than in a mechanistic bureaucratic structure. REFERENCE Schermerhorn, John R.. Management. 11th ed. Hoboken, N. J. :Wiley; 2010