The Nike Company Essay
Abstract This writing analyzes the footwear leading company, Nike. It will look at the best ways of marketing which have been used to make the company a success through out, but at the same time the weaknesses of the the polices in the labor department on the Nike company will not be ignored in any way.
Michael (2000) posited that, by doing a thorough research, the plan has been looked into by considering how it has affected the growth of the company and also how the present or future plan can help deal with the challenges which may face the company. Nike company still faces issues which call for urgent and strong policies to address. It is also important to note that, not all the corners of the company have been explored but much effort still need to be put in place to get the best results for the company. Lynn (2004) explained that there is need to fight with the company’s competitors by use of very creative and high technology skills in business area and also to employ strategic skills, and all this could be achieved if complete exploitation of the companies resources is done. Introduction The name of the company Nike is very famous in the world of those who love sports. The name has been used over and over again in arenas, courts, stadiums, and in any other athletic grounds. According to (Marrios, 2007) Nike has really improved and made changes in all areas of athletics.
Though Nike company has really gained a lot of fame the world over, it is the active people who are players and and vigorous sports promoters who have helped the company to achieve the glory it has. Bowerman bill together with Phil Knight were the two pioneers of the Nike company. According to William (2003), Bowerman who held the post of a trainer and also acted as a star in the field was in need of shoes for the the Oregon University runners which would be used by the players for the activities they undertook he also needed shoes which were stylish. Knight and Bowerman came to know each other well in the year 1964.
As a learner at the University of Standford the student Knight was given the task of carrying out project which involved a business plan creation and a product foundation which would aggressively get into the market for sale. Knight planned to make high quality goods and at the same time he considered ways of reducing costs in the process of production. Lynn (2004) explained that when Knight was through with college, he undertook to visit Japan where he came to know about Japan’s way of manufacturing which had low expenses in production and yet producing high quality goods.
Upon this he went ahead and began his own company where he intended to produce very classic shoes for sports use at very reasonable production costs. In his aggressive marketing skills, Knight approached Japan and asked the shoe company called Tiger to assist his own company by the name Blue Ribbon to expand the markets for the company oversea, in the process Knight established a big company company where he later became partners with the former trainer Bowermann. William (2003) posited that a salesman by the name Johnson later joined the two businessmen where they distributed their Adidas Knock-offs which were famously referred to by the name Tiger shoes, the business rose from a humble one and ended in a very big company. Today the company appears as the largest company in the world over leading in footwear production. The company is widely involved with the improvement and development, designing and selling of sportswear, footwear, accessories and equipments. Letcher (2004) stated that Nike carries out its operations in various countries like Africa, Europe, USA, Asia Pacific and the Middle East. The headquarter of the company is located in Oregon which is in Beaverton.
The companies effort to establish itself in the developing and upcoming countries has enabled it to achieve low manufacturing prices in the developing companies due to the structures that allow low in cost in the process of production. At the same time the company has been able to achieve very good and classic products. The motto which the trainer Bowermann used as posited by Lynn (2004) is that anyone who has a complete body has the ability to be an athlete and they apply the same term to the consumers stating that everybody can be their potential consumer as well as an athlete in the industry. By Nike following their set rules and strategies, it has become the prominent company in the athletic corners of the world. As of the year 2008, the company was recorded as leading in the world in the supply and production of athletic products and its income had been stated to be in excess of 16.7 billion US dollars in the year 2007. The company is said to have employed a number not less than 35,000 employees in the world.
Despite all the acknowledgment that has been given to the company, it has also been criticized by scholars such as (Irvin, 1998) for its weaknesses with regard to its policies especially in the area of labor which polices are enacted in the locations which are overseas. Due to the weaknesses noticed, the company has gone down on the sale as well as creating a poor public image because of the bad policies of labor and by the fact that it lacks any good policies of labor which should be established abroad.The Trends in Income and Sales There was a a negative of income in the year which closed up in 1999 the 31st of May. Michael (2000) stated that since the year 1993, there had never been any negative graph in the revenue history of the company. The graph for the first time went down to the amount of 8.77 US billion dollars to 8.
6%. Despite the going down in the company revenue income, it was still able to attain r achieve an increase over a period of 10 years which amounted to 300%. This great improvement was boosted by the large amount of sales in the US dollars 2.435% billion in the year 1991. The income counted as net in the year 1999, rose up by 14% despite the going down in revenue in the same year.
According to Prakash (2003) the late years of the 1990’s had very negative net income for the company and this was a great challenge to the company. There were restructured changes in 1999 and in the period of 1997 which contributed to a negative impact in the net income. The recent going up in the income on the net has largely been boosted by effective management of the inventory records, and good cost maintainance. The year 1998 can be termed as the booming year as the company was able to achieve 42% growth, and US dollars 785.
5 million income on the net.Marketing Strategies Applied By Nike According to letcher (2004) Nike has got very good marketing strategies which have seen the company grow to the level where it is today. One of its strategy is in the use of a very unique and and great image which has been known the world over, leading to the company becoming an enterprise which is multinational. The association with the company in the whole world has maintained the image brand such that it has become very famous, at the same pace, the company has a strong slogan and a distinctive and high class logo. The words that you can manage to do it are used by the company as its slogan in the field of advertisement and it is also important to acknowledge that the company uses millions of money invested in advertising to maintain its image.
The company also conducts various activities which are promotional in nature. According to (George, 2002) the promotional methods which they apply include forming arrangements with athletics who are professional to to boost the items produced by the company, they also use celebrity who take part in athletics, and various teams in schools and colleges. The company is very aggressive in the production of various goods which are used in sports. It makes sure that it outsmarts all the other small companies in the market. Nike always makes sure that it matches the needs of sports in the market and competes with any new brands which come into the market. William (2003) explained that due to the aggressive nature of Nike the it is left without any other brand which can threaten its own in a direct manner.
The German company which produces Adidas is the only direct competitor of company Nike. This greatly boosts the popularity of the Nike company the world over. In the Fiscal year which ended in May 2005, the company had a capital investment return of 16%. The company Nike is very aggressive in the business field and they believe that no competitor can outdo them. Marrios (2007) posited that the company the fights its competitors in a healthy way. A good example is in Olympics held in Atlanta, where the company Rebook advertised its items while the Nike did not. When the winner was announced however, Nike took to sponsor him and ended up being the getting a great fame. This was a show of how Nike has been swift in their marketing which make them appear as the world champions.
Due to the fact that the company Nike does not have manufacturers spread the world over, it reduces the loss of holding its cash in workers as well as having the expenses of paying for factory up keeps. There has been very skillful and innovative personnel who are employed in the company to ensure that their output is super, effective and likable by all the potential consumers. The other strategy which the company believes in is in the minimization of cost of production as well as production of high quality and effective outputs. Lynn (2004) stated that this puts the company in a safe position in cases where competitors improve prices for their products due to high production prices, Nike is able to retain low sale prices and at the same time still makes good profits. The combination of the Directors in the company as independent as well as in the management level is of great benefit to the company. The directors who are not directly involved in the company oftenly bring new experiences which are used for the growth of the industry. This board helps in having to think outside the box and thus they come up with very mature decisions in the management of the company.
According to Prakash (2003) the fact that the one at the top management in the company is still the founder with all the required skills, and experience about the in coming companies and the company itself is an additional point to the success of the company. The top manager does keen calculations in the making of decisions in the company to ensure that all occurrences such as risks are taken care of. Knight is also open minded and a good participant who by the idea of other board members when it comes to making decisions. The internal environment created in the company allows for room to do research into the current market and makes analysis is done carefully. This has enabled the company to even make decisions that favor the the world of fashion which most consumers concentrate on. The company has had a very strong corporate structure which has worn the goodwill of the worker and also very well established team work.
Letcher (2004) expressed that the label of the company is used everywhere in the on coffee cups and even on their screen savers in the companies headquarters. The company instead of being referred its name they call it in an interesting way a campus, players is the name given to the workers and coaches to the supervisors, this creates a very good working environment under which if any company is exposed would excel. The company has greatly improved its hardware in the office as well as the software to enable easy communication which is now a system PC-based running very effective windows. According to Irving (1998) this has enabled effective communication within the company from its headquarters to the many branches the world over. Inventory are closely looked into at the right time, authorization of credit can be done well, and this does boost the management of the company in the overall.
The company has standards for its profit margins which helps the company on its follow up of the individual performers and this also assists in the management to be able to check itself with the other competitors in the market. The standards that are set are clearly utilized by the company and they include every share that the company get on earnings, any returns got from investments, asset growth and sales part of growth and equity returns. As Lynn (2004) posited the standards of performance are checked and established every now and then. The performance standards have been set up in areas like United states area and the perception of the public. Proper strategies are also put in place in Nike to ensure that that very high performances standards are achieved. The aim measuring the effect of strategies on performance is for purposes of comparing performances in the past, the performers in the present and the intended future performance. After looking into all this, it would be able to determine which strategies work best for the company.
Weaknesses of the Company Another of Nike competitors in the market is Reebok and the LA Gear, with the inclusion of the Adidas which had been mentioned in the easy earlier on. According to George (2002) there also other manufactures of casual footwear who have come into the market. Although the Nike company has gone through ups and downs and conquered it all, like the way it survived in the 1990s difficulties in its business, it still has to do much exploitation in various markets if it is going to retain as the company the world over.
Nike should look at the possibility of getting into other markets rather than only retaining as a footwear specialist. This is because we have small companies coming up at a very high rate who are likely to do a lot of exploration in the industry besides what their businesses specialize in wanting to achieve the business advantage in the areas of manufactures, promotion and the distribution of products. According to Michael (2000) the analysis done on the footwear in this industry is that the industry is used by the non athletes wearing the shoes casualy, but the existence of other wear shoes which are casual also pose a great threat to the industry, an example of the casual threatening footwear companies is the Timberland which produces and sells very appealing footwear designs which shoes are used on outdoor activities by consumers who do not necessary participate in sports but use the shoes for outdoor purposes.
All the same the consumers do not necessarily use the shoes for its purpose but also for other purposes. This explains that there is a lot of substitution in this industry. On analyzing the competitors in the footwear industry, it is true that Nike appears as the leading competitor in the market though it has another strong competitors who can outsmart the company if it relaxes,one of the great competitor is the Reebok participant. The other weakness of the Nike company is on the way its sector in the retail section is very much sensitive on the prices. This means that, most of the incomes of the Nike company are from the sales made at the retail, most of the dealers at the retail give to consumers same and monotonous services. Michael explained that, due to the fact that all retailers tend to boost sales by selling the products at the lowest prices available, the profits of the company are affected and become very low because the same retailers put pressure into the company to offer them the products at low prices. Lynn (2004) observed that the board at the Nike company mostly comprises of aged people who may not be fashion sensitive. The youngest of the board members is 48 years old while the oldest is 72, most of the board members are in the range of 62years.
There is therefore need to have a young person to represent the ideas of the youth in the industry. The mission of the the company is the same as its vision and this has by and large created a weakness overall. The reason behind a mission should always be to make a good description of a business and what it is involved in doing. The mission here has failed in specifying the kind of services and products which the company provides. The mission has also left out the customers involved in the distribution channels. The company lacks proper established objectives which the stakeholders must and should always be informed about in order to always understand which direction the company is heading to and also get to understand the affairs taking place in the company. The objectives which the company has come up with lack the two important elements of time and they cannot be measurable for the company to know the period in which they can accomplish the set objectives. The 1998 the method of cutting down costs in the factory lead to most of the Nike company loyal workers being thrown out of office and the remaining workers are still not very well paid.
There are always complains about poor working conditions which the employees in the company are oftenly exposed to especially in countries such as Asia. The various outlets of the company have been reported getting involved in employment of minors who are oftenly misused and underpaid, this does affect the company also because the expected returns from such a practice is not effective. Michael (2000) stated that failed in its obligation of observing of the human rights in the countries overseas like Pakistan, Thailand, Indonesia and China. Sweatshops are used by the company in the overseas companies. The working conditions in the factories are very poor and lead to the denial and failure in the observation of human rights and the suffering of workers in the company.
The sweatshops installed by Nike in various countries overseas are immoral, unethical and shows a clear picture that the company has failed in its responsibility to observe the societies rights. Workers go through stressful days in the company, with sometimes no break at all or very short breaks and the returns from all that work is very little pay. Despite all the suffering of the workers in the overseas countries, million dollars is still being paid to the athletes in the parts of North America.Challenges that the company may face in future Letcher (2004) stated that due to the international nature of trade that Nike is involved in, it has the challenges involved in the international trade where the currencies used are different and most of the time the rates are very unstable. This in return means that depending on the currency changes the company could be selling or manufacturing at great loses due to the effects of currency changes. Global brands are always faced with this kind of problems. The business field where Nike plays in the market for markets and sport shoes is very competitive one as we have other companies which have come up with substitute products.
When Knight first came up with the principle of producing high quality products at low prices, the aspect was then new in the market but this is no longer a new aspect and is used by most of the competitors of Nike in the same industry. These competitors have come up with brands which can easily interfere with the market share for Nike. Competition in the price of goods is also another of the challenge facing Nike. Marrios (2007) explained that this was due to the varieties available in the market, a consumer can before buying a product may decide to go for widow shopping and after getting various prices for the same type of shoes they may end up buying the cheapest which would serve as a sports wear but may not belong to the company Nike.
This becomes a big threat to the company future success. The board in the company admitted that thy had a great challenge of maintaining the company to its former financial position which had been realized through working very hard in the past financial period the years specified to have been very successful were in 1998 and also the following year which was 1999. According to George (2002) the company had to come up with very good and clear strategies on the way forward.
One of the directors at the company recommended that the open opportunities in the Asian Pacific should be exploited as they had potential customers who would boost the sales of the company. A recommendation was also given by Irving (1998) who stated that a complete exposure of the company to events that would greatly help in boosting the sales of the Nike products would be very effective. Events such as the Games held in Sydney in the year 2000 would really popularize the company.Opportunities which can still be exploited in the company Michael (2000) stated that the fact that the company can improve its product leaves it with a very great room to be exploited. Though the company has over and over tried to defend its product arguing the it is not in a form of fashion or any style which can easily get out of market, the truth is that in practical life, this is not the position. Most young people have bought the product as a fashionable wear which means that as the rest of the fashion gets out of the market as it always happens, the Nike shoe is also likely to get out of fashion. This therefore calls for the Nike to put a lot of effort in improving their product. The company is also in a position to improve other its sportswear beside shoes, improvement can also be done on jewelery, and sunglasses which are looked as classic items in the west.
This valuable products if well improved would attract a lot of profit margins in the company. There is a great opening for the company to expand its boundaries to the international markets, by exploiting the potential of its famous brand which is recognized the world over. George (2002) stated that there are still very potential markets that can boost Nike by buying their products out there, as long as the products are of high quality, markets can be good in countries like India and China who have very potential consumers that are rich. Occasions like World cup are also very good for promoting a companies product in the international field and Nike can such a chance. By and large, the Nike has achieved a lot in the past years in this industry. It has had very good management from the top to the bottom which has ensured that there is a good flow of all the activities involved in the ares of production, distribution as well as in the sale of the product. The strategies applied in the marketing of the company also marks one of the strong points that has assisted in the success of this company. If Nike can put much more effort in improving the above noted weaknesses and ensure that all its competitors are taken care of, it would for sure remain the most productive company in the world of athletics.
ReferencesGeorge, A. (2002). Government, Society and Business: How to Manage the Business World. New York : McGraw publishers.Irving, J. (1998). Marketing Career and Sales Resume: How to Become a Winner.
New York. McGraw publishers.Lechter, F.
and Boli, J. (2004). The Reader in the Global World. Toronto: Queens University publishers.Lynn, B.
(2004). Brand Identity Building: How to plan and Conquer in a Hostile Market Place. Oxford: Oxford University PressPrakash, S. (2003).
Global Standards Setting: Codes of Conduct and how to Effect them. Chicago: Chicago University PublishersMichael, E. (2000). The Aspect of Marketing. New York: McGraw-Hill publishers.Marrios, P. (2007). Business in the International Arena: A Perspective that is Global.
Chicago: Chicago University publishers.William, S. (2003).
The Marketing Strategy: The Core Aspect. New York: McGraw publishers;