nike leadership strategy

Merchant, H. (2014). A. Mark Parker (AP/Rick Bowmer) Mark Parker. Thus, this intensive strategy supports Nike’s differentiation generic competitive strategy via product innovation. New technologies enhance the products and set them apart from the competition. Founded in 1964, Nike Inc. has grown to become one of the biggest players in the global athletic shoes, apparel and equipment market. NIKE’s clear strategy moving forward, its leadership’s high confidence in the brand and deep customer loyalty put it on solid footing to prosper as it emerges from the pandemic. Product Development. Overall, NIKE emphasizes the key differentiation strategy on its branding, customer services, product quality and innovations. Cost leadership strategy used by Nike also supports this intensive growth strategy as it allows the organization to minimize the costs and use existing infrastructure to launch new products. Thus, Nike’s strategy is an integrated cost leadership and differentiation. Organizational Structure Characteristics (Analysis), Nike Inc. Five Forces Analysis (Porter’s Model), Nike Inc. Configurations of governance structure, generic strategy, and firm size. A strategic objective linked to market penetration is to increase Nike’s market presence by increasing the number of authorized retailers. They believe each employee holds great potential. Nike’s secondary intensive growth strategy is market penetration. These leaders will report to Michael Spillane, who becomes President, Consumer Creation.*. This has greatly helped the managers to lay a plan for the organization and take it where they want it to be. Prior to his tenure at Coca-Cola, Williams spent three years in the eye care industry with CIBA Vision Corp. in global marketing. In product development, these products remain attractive despite changing consumer preferences. Carl Grebert, VP/GM, EMEA, is a 23-year NIKE veteran most recently serving as VP/GM, APLA. Parnell, J. Nike Inc.’s generic strategy for competitive advantage emphasizes product mix diversity. Dess, G. G., & Davis, P. S. (1984). Executive Summary: Constant innovation has been the byword for Nike's success.This case study analyses the ever-evolving marketing strategies adopted by Nike to become a … How a Strategy Change Led to Nike’s Formation 1) Both the manager and employees play a key role in formulating a firm’s strategy. Nike Inc.’s Mission Statement & Vision Statement (An Analysis), Nike Inc. However, market penetration is just a secondary intensive growth strategy because the company already has significant presence in the global market. Shana Lebowitz. 31% of the global athletic footwear market. The mid1980s Nike had fallen off the pole position of being the industry leader. This generic competitive strategy helped the company regain its competitiveness, especially against Adidas. 2. Prior to NIKE, Mensah worked for 19 years for the NBA’s Portland Trail Blazers where she served as SVP and Chief Operating Officer. Considering Nike, its strategy always focused on encouraging customers to buy the products and the investors to purchase the stock. Leadership Defined — NIKE, Inc.’s leadership framework — gives us a common set of behaviors to achieve this, together. An intensive strategy shows how a company grows. This type of strategy includes two or more of the generic strategies from Porter's model. Cost Leadership Strategy. Nike has captured approx. The combined cost leadership and differentiation generic strategies boost Nike’s performance in the global industry. Here's the leadership strategy Nike's CEO uses to make employees smarter. Whitney Malkiel, VP/GM, Women’s, is a 17-year NIKE veteran. Business Level Strategy: Nike's Generic Strategy (Porter's Model)Nike Inc. uses a combination strategy for its competitive advantage. Diversification can support Nike’s generic competitive strategy of differentiation through new businesses that supply materials for product innovation in the athletic shoes, apparel and equipment business. Meanwhile, Nike outsources its manufacturers in the low cost countries to keep a low cost leadership advantage. Nike has set business plans through strate… Compete with yourself not your colleagues.” Nike’s leadership and top management style can be characterized by the team management approach. The following are the generic competitive strategies implemented in Nike’s combination strategy: Nike’s cost leadership generic strategy sustains competitive advantage based on costs. G. Scott Uzzell, President & CEO, Converse, Inc., joined NIKE, Inc. in January 2019 from The Coca-Cola Co. where he most recently served as President, Venturing & Emerging Brands Group (VEB), leading the identification and development of a portfolio of high-growth brands for The Coca-Cola Co. Uzzell began his career within sales and marketing for companies such as Procter & Gamble, Coca-Cola and Nabisco, before returning to Coca-Cola in 2000 in the Strategy & Planning division. Differentiation StrategyNike incorporates a business level strategy that most resembles a differentiation strategy. Strategic leadership of Nike is based on the principles of heterogeneous top management team and evenly distributed powers among top management. Alongside product development, the company applies the market development intensive growth strategy by investing in new technologies to penetrate new market segments, such as segments composed of bodybuilders. The generic competitive strategy of differentiation helps the company enter new markets, based on product attractiveness. A suitable strategic financial objective based on this intensive growth strategy is to increase Nike’s market share through cutting-edge technologies integrated in the design of sports shoes, apparel and equipment. Nike is famous for taking a leadership position on the field and in the marketplace. In conjunction with Denson's decision to retire, the Company also announced strategic changes in its executive management team as part of the Company's long-term organizational strategy to align the business to continue to drive growth. In this strategy, the company grows by increasing sales revenues in existing markets. McCallester Dowers becomes VP/GM, Kids. In the NIKE Brand’s geographic operating segments, NIKE announced new leaders in Europe, Middle East and Africa (EMEA) and in Asia Pacific and Latin America (APLA). Nike implemented this intensive strategy in its early years, such as when it introduced apparel and sports equipment to its product mix. Uzzell is also a member of the Executive Leadership Council and the Florida A&M University Foundation Board. A financial objective based on the differentiation generic strategy is to maximize Nike’s profit margins, such as on new sports shoes. Description of marketing strategies applied by Nike Air Force 4.1 Challenges Forcing Nike to Focus More on Marketing Sportswear is defined primarily as apparel and footwear made for sports participation, though is now also includes casual clothes worn by people for daily activities (E. Ko, C. R. Taylor, et al., 2012). A generic strategy, according to Michael Porter, defines how a business achieves and maintains its competitiveness. For example, Nike enters new markets in Africa and the Middle East to increase its shoe sales revenues. Phil Knight even decided to take a break in the 83-84 year, although he was still chairman and CEO. Mensah joined NIKE in 2013. Market Penetration. Nike Air technology incorporated in the running shoe and with the completion of the IPO some of Nike’s major businessmen had decided to step away from the company. Read full article. * Disadvantage of the cost leadership strategy is lower customer loyality, the reputation of the company may also result in the producing low quality of the product and rebrand itself with a good reputation with leadership. “Heidi and Andy’s leadership has been instrumental in both evolving and driving Nike’s strategy … Nike Marketing Strategy 7428 Words | 30 Pages. Driving continued growth across the NIKE, Inc. brand portfolio, Craig A. Williams, President, Jordan Brand, and G. Scott Uzzell, President & CEO, Converse Inc., join NIKE’s Executive Leadership Team reporting to John Donahoe. Nike, Inc. Dowers is a 24-year NIKE veteran, serving in various North America leadership roles, including VP/GM, Sportswear and VP, Retail Brand, North America. New evidence in the generic strategy and business performance debate: A research note. Diversification. Copyright by Panmore Institute - All rights reserved. All Geography leaders report to Heidi O’Neill, President, Consumer and Marketplace. Nike has an organizational culture that encourages human resources to behave in ways that address business objectives. * The marked paragraph contains forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially. Initially, the Nike brand was on athletic shoes only. Intensive growth strategies: A closer examination. In spite of this, the production of Nike suffered because of its poor labor law and less focus on the workers conditions (Nike Dispute, 2008). The cost leadership generic competitive strategy empowers Nike to penetrate markets based on product affordability. A strategic financial objective based on this intensive growth strategy is to improve Nike’s financial risk by entering other industries. With its strong marketing strategy, Nike Inc. has been successful in stretching its reach globally. This type of strategy includes two or more of the generic strategies from Porter's model. NIKE, Inc. announced a series of senior leadership changes today supporting the company’s Consumer Direct Acceleration (CDA). Nike is one company that revolves around motivation. Nike is successful because it has some of the best, if not the best, marketing in the world. panmore.com/nike-inc-generic-strategy-intensive-growth-strategies In addition, a financial objective related to this intensive growth strategy is to increase Nike’s sales revenues through more sales to sports enthusiasts in current markets. This strategy facilitates the company’s growth by targeting new markets or market segments. This team is responsible for directing NIKE, Inc.'s mid- and long-term strategy. For example, Nike’s mission statement highlights innovation applied through new designs for shoes and related products. This article may not be reproduced, distributed, or mirrored without written permission from Panmore Institute and its author/s. Manufacturing: As I've covered in previous posts, Nike puts a huge emphasis on low costs and high reliability… He also led the Global Kids category, and then had a leadership role in Jordan Brand, before moving into his role with APLA. Although the brand is big on positivity, Nike motivates employees as well. Organizational Culture Characteristics: An Analysis, Nike Inc. SWOT Analysis & Recommendations, Nike Inc. Operations Management: 10 Decisions, Productivity, Nike Inc.’s Marketing Mix (4Ps/Product, Place, Promotion, Price) - An Analysis, Nike Inc. PESTEL/PESTLE Analysis & Recommendations, Nike’s Promotional Mix (Marketing Communications Mix), Puma’s Generic Strategy, Intensive Growth Strategies & Competitive Advantage, Puma’s Organizational Culture & Its Characteristics (An Analysis), Puma’s Mission Statement and Vision Statement (An Analysis), Burger King’s Generic & Intensive Growth Strategies, PepsiCo’s Generic and Intensive Growth Strategies, Toyota’s Generic Strategy & Intensive Growth Strategies, Puma’s Organizational Structure & Its Characteristics (An Analysis), Ford Motor Company: Generic & Intensive Growth Strategies, Harley-Davidson’s Generic & Intensive Growth Strategies, About Nike – The official corporate website for Nike, Inc. and its affiliate brands, Generic Strategy (Porter's Model) & Intensive Growth Strategies. *, The leadership changes, combined with a strategic alignment of NIKE’s operating model against the CDA, will create even greater focus and agility that will be enabled by a nimbler, flatter organization in service of consumers. This style of leadership leads to relationships of trust and respect. He also served as NIKE’s VP, Global Retail Brand and held roles in global retail marketing for both Sportswear and Basketball. Nike did not say when Hill and Sprunk will depart the company. Operational model changes to fully align against the CDA are expected to lead to a net loss of jobs across the company, resulting in pre-tax one-time employee termination costs of approximately $200 million to $250 million.*. Results of Nike's new Customer Experience distribution strategy in place for over a year in a study by Euromonitor. In this generic strategy, the company minimizes production costs to maximize profitability or reduce selling prices. Nike is making changes to its senior leadership team and expects employee layoffs as part of its new digital-focused business strategy. Competitive Advantage Through Information-Intensive Strategies. Nike Inc.’s generic strategy (based on Michael Porter’s model) is appropriate for its diverse product lines, ensuring competitive advantage. Nike Inc. uses a combination strategy for its competitive advantage. Craig A. Williams, President, Jordan Brand, joined NIKE, Inc. in January 2019 from The Coca-Cola Co., where he most recently served as SVP, The Coca-Cola Co., and President of The McDonald’s Division (TMD) Worldwide and was responsible for growing brands and beverages categories. Shana Lebowitz. The following are the generic competitive strategies implemented in Nike's combination strategy: Cost Leadership Strategy 2. Prior to joining NIKE, Montagne held roles in allocation, planning and merchandising at Gap Inc., Mervyn’s and Walmart. Leadership Defined provides all of us — across geographies, business units, functions, roles and levels — a clear, consistent understanding of how to lead at NIKE. A strategic financial objective under this intensive growth strategy is to increase Nike’s profitability by entering new markets in Africa and the Middle East. Strategic leadership of Nike is based on the principles of heterogeneous top management team and evenly distributed powers among top management. From 2015 through 2020, Andy served as Nike’s EVP and Chief Financial Officer, a role that also included leading the company’s strategy function. Carl Grebert becomes VP/GM, EMEA, succeeding Bert Hoyt, who will retire from NIKE later in 2020 after 22 years with the company. The generic strategy trap. Ann Hebert and Angela Dong will remain the VP/GMs, North America and Greater China geographies, respectively. The corresponding intensive strategies grow Nike’s global sports shoes, apparel and equipment business. Table 6.9 from the text covers when Function is Aligned/Misaligned with Cost Leadership Strategies. Prior to joining NIKE, Dowers had over a decade of experience in the North America retail industry. To drive this focus, NIKE will streamline its organization, including its Corporate Leadership Team (CLT). The CDA, announced in June 2020, is a new digitally empowered phase of NIKE’s strategy to unlock long-term growth and profitability. But what it’s just done for the entire apparel industry is both surprising and enlightening. To keep its position and competitive advantage, Nike must ensure that its generic strategy and intensive growth strategies are always suited to current business conditions. He also spent seven years with Kraft Foods Inc., working in brand management and new product development, and five years in the U.S. Navy as a Naval Nuclear Power Officer. The CDA will create a more premium, consistent and seamless consumer experience across NIKE’s owned and strategic partner ecosystem, align around a new simpler consumer construct and also unify investments in an end-to-end technology foundation to accelerate our digital transformation. In the late 1990s, Nike reduced costs and the selling prices of its athletic shoes and other products. The main of the Nike Company is to produce lowest cost and distributes to suppliers in the industry. Its swoosh symbol is easily recognized by everyone. He then served in General Management roles of increasing responsibility in Northern Europe, Germany and Japan. Diversification is the least significant in Nike’s intensive strategies for growth. The company has a compilation of motivational slogans to get people going. Amy Montagne, VP/GM, Men’s, is a 15-year NIKE veteran, most recently leading the entire global category portfolio as VP/GM, Global Categories. Porter’s (1980) generic strategies as determinants of strategic group membership and organizational performance. Pricing strategy: Nike has value based/price leadership strategy that offers the customer with the price that customer value so it has high prices for its products as it has niche market to serve with Whitney Malkiel becomes VP/GM, Women’s. November 14, 2015, 7:30 AM. She has also served in various GM roles in NIKE’s EMEA operations, including GM, Kids and Strategic Planning Director for Western Europe. The sportswear giant announced today that, aligning with its … Announces Jim Scholefield As Chief Information Officer June 04, 2015 – In this role, Jim will be responsible for leading NIKE, Inc.’s technology strategy to support the company’s future growth. NIKE, Inc. (NYSE: NKE) announced today that Charlie Denson, NIKE Brand President since 2006 and a 34-year veteran of the brand, will retire in January 2014. For GDPR compliance, we do not use personally identifiable information to serve ads in the EU and the EEA. We regularly review supplier factories to assess their ability to meet our high standards. (1997). 2015-11-14T15:30:00Z The letter F. An envelope. On the other hand, Nike’s intensive growth strategy reflects the company’s focus on innovation to develop the business. This intensive strategy involves the introduction of new products to grow sales revenues. Nike Success. Malkiel previously served in various senior management roles across the company, including VP, Global Product and Merchandising Operations Analytics and VP, Product Strategy. Prior to joining Nike in 2007, Andy held leadership roles in strategic planning, mergers and acquisitions, financial planning and analysis, operations planning, investor relations, and tax at The Walt Disney Company. See our Privacy Policy page to find out more about cookies or to switch them off. Malkiel most recently served as VP/GM, Specialty Categories (Golf, Tennis, NIKE SB). There are a few different choices in the marketplace for buyers to obtain athletic shoes, apparel and the like, however Nike's products are distinct for a variety of reasons that enable them to derive economic profit from other means than simply controlling costs. For example, Nike increases its stores and retailers in the United States to sell more athletic shoes to American consumers. Nike Reshuffles Marketing Leadership Amid Reports of ‘Behavior That Is Inconsistent With Our Values ... Not a Problem When You Put a Contextual Marketing Strategy in Place . Nike has a moderate cost leadership strategy within its industry. This strategy involves developing new businesses to achieve growth. We use cookies for website functionality and to combat advertising fraud. Nike's Strategy to Become the Leader in their Market. Training programs are designed to uphold such corporate culture that aligns with the Nike brand image for sports footwear, apparel and equipment. The cornerstone of the Triple Double Strategy is the Nike Consumer Experience (NCX), which includes Nike’s own direct-to-consumer network, as … Nike’s Code of Conduct is an integral component to our sourcing strategy and how we determine the suppliers Nike will continue to engage and grow our business to create a lean, green and equitable supply chain. These risks and uncertainties are detailed from time to time in reports filed by NIKE with the Securities and Exchange Commission (SEC), including Forms 8-K, 10-Q and 10-K. Nike works to keep their supply chain and production costs as low as possible; however, that is the extent of their cost consciousness. It is noted that Nike owns 48% of the athletic footwear market in the United States. As it forges ahead with its new digital-focused business strategy, Nike Inc. is making a series of leadership changes. It reflects employee voices, is One of Nike’s supporting intensive growth strategies is market development. 5. The strategy of Nike is to controlling the marginal customer accounts, reduction of input costs and tight control of labour costs, lower distribution costs. Dowers has played a key role in elevating and evolving many strategic wholesale partnerships in the U.S. and globally. A strategic objective based on the cost leadership generic strategy is to grow the company’s competitive advantage through new technologies to reduce production costs. Like most companies, Nike inspires and influences employees to take challenges. Previously she has held the roles of VP/GM, Global Women’s, VP/GM, Global Merchandising and also held positions of increasing responsibility in North America, Running, Women’s Training and Sportswear. Currently, Uzzell serves on several boards, including the SC Johnson Company and the Greater Boston Chamber of Commerce. Employees are the biggest asset of a firm; without its employees, a firm can never prosper and without skillful employees, the firm will go bankrupt within years. Disclosure: I own shares of NKE For years, US sports gear maker Nike, Inc. (NYSE:NKE) has delivered superior sales and earnings performance, handsomely … For example, the company integrates cutting-edge designs for its shoes. *, “We are announcing changes today to transform NIKE faster, accelerate against our biggest growth opportunities and extend our leadership position,” said John Donahoe, President & CEO, NIKE, Inc. “Now is the right time to build on NIKE’s strengths and elevate a group of experienced, talented leaders who can help drive the next phase of our growth.”, A shift to a new, simpler consumer construct of Men’s, Women’s and Kids will allow NIKE to create product with deeper insights and drive even greater specialization through performance sport and sport lifestyle. The management employs strategic management components such as vision, environmental analysis, strategy creation, strategy implementation, and strategy assessment (Nike, Inc., 2009). Varadarajan, P., & Dillon, W. R. (1982). Sarah Mensah succeeds Grebert becoming VP/GM, APLA. Miller, D. (1992). Nike’s primary intensive growth strategy is product development. The following are the generic competitive strategies implemented in Nike's combination strategy: Cost Leadership Strategy 2. Glazer, R. (1999). Grebert joined NIKE in 1997 in Melbourne, Australia, and served in marketing leadership roles in Australia, Asia Pacific, and EMEA. This type of strategy includes two or more of the generic strategies from Porter’s model. Strategic management is a technique that Nike, Inc. has been able to apply to determine how it is performing in its current position and how its future should be. With the strategy, Nike intends to ramp up investments in e-commerce and technology, as well as simplify its “consumer construct” of men’s, women’s and kids’ businesses. The leadership changes, combined with a strategic alignment of NIKE’s operating model against the CDA, will create even greater focus and agility that will be enabled by a nimbler, flatter organization in service of consumers. Nike has followed the innovative strategy and has captured the market by introducing different athletic brands such as Nike Air, Max Air, Zoom Air, Nike Golf, Nike Pro, Nike +, Air Jordan, Nike Skateboarding and Nike … Nike is the number one footwear brand works with different top suppliers. Prior to NIKE, Grebert worked in marketing and finance roles for Unilever and The Coca-Cola Co. Sarah Mensah, VP/GM APLA, most recently served as VP/GM, Sportswear in APLA. Here's the leadership strategy Nike's CEO uses to make employees smarter. As it forges ahead with its new digital-focused business strategy, Nike Inc. is making a series of leadership changes. Aligning against the new consumer construct, Amy Montagne becomes VP/GM, Men’s. Click here to read the full article. Also, Nike’s differentiation generic strategy provides unique products. Market Development. To enhance corporate leadership, Nike has established Strategic Leadership Team, chaired by CEO Mark Parker. Nike assumes the moral high ground by arguably foregoing its leadership position for the sake of the greater good. This team is responsible for directing NIKE, Inc.'s mid- and long-term strategy. ... Statistics on Nike's Leadership. However, the saturation of Nike stores and retailers around the world means that this intensive strategy has only a supporting role in the company’s growth. Strong Brand Awareness – Nike is one of the most recognizable brands in the world as its name alone is memorable, easy to pronounce, and very unique. Nike, Inc. uses Michael Porters strategies for competitive advantage such as cost leadership, focus, and differentiation (Johnson & Scholes, 2008). Nike’s Strengths – Internal Strategic Factors. To enhance corporate leadership, Nike has established Strategic Leadership Team, chaired by CEO Mark Parker. Prior to the APLA role she served as the North America VP/GM, Jordan Brand. McCallester Dowers, VP/GM, Kids, most recently served as VP/GM, Kids, North America. To drive this focus, NIKE will streamline its organization, including its Corporate Leadership Team (CLT). Nike asks it players (employees) to work by two principals above all others, “Honesty first, and competition second. Kids, most recently served as Nike ’ s intensive strategies for growth remain attractive despite changing Consumer.! Northern Europe, Germany and Japan asks it players ( employees ) work. Athletic footwear market in the EU and the investors to purchase the stock develop... Long-Term strategy strategy in place for over a decade of experience in the marketplace “ Honesty first, and second. 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