Internal Environment: Strength and Weaknesses (IFAS)
Corporate Structure
Nikehas a geographicaldivisionalorganisationalstructure, which is guided by boththe organization’svision and mission statements (Thompson). However, the decision making is centralised, with directions emanating from the top management.The employees are conversant with the mission and visionstatement of the organisation as it providesguidelines to their culture. Further, the structureofNikerelates to that of other companies since the mission and vision statement impactsignificantly in guiding the employees in theiroperation to meet the needs and demands of their target consumers.
Corporates Culture
It is worth noting that the company’s success is linked to the corporateculture, which embraces the strength, dedication, and creativity of the employees (Amah and Daminabo-Weje 42).Nike’s corporate culture revolves around creativityand innovativeness to meet the needsof the consumers (Young).Therefore, the organisationpolicies, objectives, and strategies aimed at supporting the organisationalculture. Further, diversity has been developed in the company’sculture leading to a dynamic workforce that focuses impacts on the creativity, innovativeness, and brand image to have implications on the firm’s competitive advantage. Also, the companyoperates in variousnations; thus, it takes into consideration these nations’ values of a healthful country by providing high-quality products.
Corporate Resources
Marketing
The marketing element of Nikeincludes sportswear’sapparel and accessories.Nikepromotes its products in various ways, which include direct sales, sales promotions, personal selling, and adverts (Gregory).Therefore, the companiesutilise their marketing mixes toimpacts the sale of their products. Following the ideology, the company can determine the customer behaviour and trends.Nike has built an excellent reputation amongst the customers, who moistly are athletes and sportsmen in bringing high-quality products in the market.Nike uses different forms of communication to markets its products across the countries it operates. However, the marketingstrategies used by Nike are dependent on the culture of the countries that it operates.These marketing strategies have foreseen the company generates revenue of $10.2 billion in the fourth quarter in 2019 (Yuonis). The marketing manager of Nikeplays an integrals role in the strategic management process by ensuring that the firmstays ahead of its competitors through promotions, customerloyalty, and distribution of its high-quality products. However, with the company operating in various countries across the globe, the marketingstrategies vary from one state to another.
Finance
Nike Company has recorded a high stable financialpositioning over the years. For instance, in 2017, the assets of NikeCompanywere $23.53 billion, with the revenues amounting to $34.34 billion (Macrotrends). In 2018, NikeCompany indicated a 5.96 percent increase to $36.40 billion, and in 2019, the company’s revenue increased by 7.47 percent to $39.11 billion (Macrotrends). From the analysis, there has been an increase in revenues, which shows that sales of Nike products have increased over the years. Also, the company may be utilised the concept of capital budgeting to ensure that the resources are allocated effectively in relation to the spending of the organization. Following the ideology, the financial managers played an integral role instrategicmanagement by ensuring that the resources were utilised effectively to minimise in the cost and maximise on the output.
Research and development
Over the years, Nike company research and development team have been conducting research on the latest technologies to ensure that they implement improved products in the footwear and apparel line (Buderi). This aligns with the company’s mission and vision of ensuring that they are creative and innovativein the athlete world by improving their products to meet the need so the sportsmen across the globe.Therefore, technology has played a significant role in theinnovativenessso the company. For instance, Nike has utilised the Lunarlike technology in the creation of the lightest cushioning materials for footwear (Buderi). It shows thatthecompany is competent in technology transfer sinceit embraces the Lunarlike technology concerning the Phylon.Nikehas invested heavilyin the research and development more than any other company in the industry since their products are based on technological advancements to meet the needs of the growingdemand for footwear. There research and development of Nikecentralised to ensure taste there is the consistency of the products delivered to the customers in all countries across the globe.However, firms createenvironmentallysustainable products. The research and developmentmanagerplays an integrals role in ensuring the utilisation of technology in the productionof improvedproducts that can competeeffectively in the business environment.
Operation and logistics
From the inception of Nike as Blue Ribbon Sports, the company has brought an excellent reputation, which has branded the image of the company.Nikedoes not own any manufacturing factory to make its own footwear and apparel but outsources the manufacturing form third parties(Singh). The company has been one of the pioneer’s companies in outsourcing, with its footwear manufacturedoutside the United States by organisationsthat operate multiple factories (Singh). Further, Nikehas licenses that allow these unaffiliated parties to manufacture and sell their products, which is done in an environmentallysustainable manner.Nike has used the consumer director offense strategy to impact the growth of the digital business (Singh). It has enabled the company to survive in the face of threats in the countries that it operates and provide high-quality products to the consumerson a global scale. However, with the company supplying its products in variousparts of the world, it faces challengesemanating from the disasterstart occur in this country, which often leads to the fluctuation of prices and competition, bringing about market saturation. Nevertheless, the company has overcome these challenges by utilising the direct-to-consumer and concentrate its manufacturing operation in low-cost countries such as China, Indonesia, and Vietnam (Singh).Nikehasdiversified its sources of supply, which has impactedsignificantlyin lowering the impact of tariffs.From the analysis, Nike has a trend of ensuring that its operations are cost-effectiveto impact on its profitability. With the continuityofthese trends, thecompany is likely to maintain its competitiveadvantage in the global market.Therefore, since the companydoes not have its manufacturing factory, whichcan be risky, leading to alienation in supplies.Thus, the operations manager has to utilize the concepts of total quality management to ensure that both products delivered to the consumer are of high quality to maintain the consumers’ loyalty.
Human resources management
Notably, for the smooth running of the company, it is necessaryto have a reliable and efficient human resource so that the employees become associates of the company and impact on the utilisation of both total quality managementapproach (Adam 3). With globalisation, the business activities of the company have been affected, which has changed the role do the HRM. The organization has a workforce of over 30,000 in more than 160 countries that it operates (Shetty). The company uses appropriatetechniques in determining corporate performanceby analyzing the labor policies to ensure that all the employees’company with the guidelines(Shetty). Also, Nike has employed a lean manufacturing approach to ensure that they eliminate waste and reducing cost. This policyimpacts in the elimination of waste and impacting on the productivity of the workforce. The HRM ensures that the employees’ have competent skills to impacts the productivity and profitability of the organisation.
Information technology.
Information technology
Nike Company has been reliant on the information technology to ensurethat they produce high-qualityfootwear and apparel based on technology, in line with the mission, vision, and values of the organization.Following the ideology, the informationtechnology managers have inflicted the research and development programs to ensure that the firm keeps abreast of technology.NikeCompany have a website where consumers can place their orders. Thereof, the information technology team monitors the site to eliminate any hitches that may prevent the customers from f placing their orders successfully. Also, the team tracks the customers purchasing behavior to determine the trends of the customers to have an understanding of the tastes and preferences of the customers.
Summary of the Internal Environment
Strengths
• International brand name
• Effective market leaderships
• The information system is adequate
• Reliable humanresourcemanagement
• Stable financialposition Weaknesses
• Market saturation
• Diversification of suppliers which can be risky
• Lack of its manufacturing factories
Analysis of the Strategic Factors (SFAS)
Situational Analysis
Various factors affect the company, which can lead to problems in the future.First, Nike experiences competitionfrom other companies such as Adidas, which reduces its market share and brings about market saturation. Also, the company does not have its manufacturing factories and is over-reliant on the unaffiliated party to produce and sell its brands with the Nike trademark. This is likely to affect the profitability of the organisation in the future in case such companies collapse.
Review of mission and objectives
Nike’s mission influences the strategic factors since the firm is innovative and customer-oriented.Therefore, the purpose and objective should not be changed as the firm is innovative in producing high-quality products that impact the firm’s productivity and profitability.
Strategic Alternative and Recommended Strategy
Strategic Alternative
The implementation of the current strategies can achieve the objectives of the company. For instance, the company utilizes its online channels such as the website to market its new products, which attract new customers. Further, the organisation can track the buying behavior of the customers through the information systems which determine their tastes and preferences. However, the organisation can utilise alternative measures such as leveraging on governmentagreements and the international brand, which is advantageous in enabling the firm venture in the emerging markets. Nevertheless, it can be beneficial since the firm has to comply with various regulations of the countries that it runs its operations. The functionalstrategies that the company can embark on leveraging the economies of scale, which will impactssignificantly in lowering both production costs. As a result, this will make the productsavailable to the customersatanaffordable price.
Recommended Strategy
There are various strategies that Nike can implement to impact onitsweaknesses. First, the company should develop individual policiesthat are strict so that they canattracta competentworkforcethat will impact the production of high-quality products.Secondly, the company can venture into new emerging markets to offset the costof market saturationin the emergingmarkets in the long term.Additionally, the company can investheavily in technology to ensure that they produce a high-quality product in the long run and avoid the case of potential lawsuits. Lastly, the organisation can utilise their online channels to impact their delivery services and reduce the instance of supply-employee violations.These recommended strategies will influence the company to maintain its competitiveadvantageand becomeprofitable in the long run.
Implementation
In the implementation of the above strategies, various programs should be applied or reconsidered. First, the CEO, in collaboration with the human resource, should review the compensationpackages for the workers to avoid underpaying them, which will motivate them towards the production of high-quality products that can enable the firm to maintain its competitiveadvantage.Secondly, human resource has torevisit the employment policies to ensure that the firm hires a competent workforce. Also, the companyCEOcan restructure its corporate culture to modify the cultural difference, which will attractconsumers from different regions across the globe to gain trust in the company and shop online.
Evaluation and Control
The information systems of NikeCompanyis capable of providing sufficient feedback based on the implementationactivities. The firm utilises this information to understand the buying behavior of the customers and determine their needs, which impacts their competitive edge over its rival companies. The information is timely as the IT managersregulate monitor the website and other socialplatforms. Nike utilises the benchmarking, where the managers examine the strategies that they implement and evaluate the performance to determinehoweffectively they aid in achieving the organisation goals and objectives (Ferguson). The controlmeasures are out in place by the managers where they collect the data and identify the problems in the current procedures and operations. Therefore, the organisation should work on their compensation systems to ensure that competent employees are rewarded for their excellent performance.
