TABLE OF CONTENT

INTRODUCTION

HISTORY AND ORIGIN

MISSION STATEMENT

VISION STATEMENT

OPERATIONS AND PRODUCTIVITY

DECISION OF OPERATIONS MANAGEMENT

PRODUCTIVITY
I
NIKE INTRODUCTION

This Nike, Inc. is an American multinational corporation that is engaged in the design,

development, manufacturing, and worldwide marketing and sales of footwear, apparel,

equipment, accessories, and services. The company is headquartered near Beaverton, Oregon, in

the Portland metropolitan area. It is the world's largest supplier of athletic shoes and apparel and

a major manufacturer of sports equipment, with revenue in excess of US$24.1 billion,it

employed more than 44,000 people worldwide. In 2014 the brand alone was valued at $19

billion, making it the most valuable brand among sports businesses. As of 2017, the Nike brand

is valued at $29.6 billion Nike ranked No. 89 in the 2018 Fortune 500 list of the largest United

States corporations by total revenue.

The company was founded on January 25, 1964, as Blue Ribbon Sports, by Bill

Bowerman and Phil Knight, and officially became Nike, Inc. on May 30, 1971. The company

takes its name from Nike, the Greek goddess of victory. Nike markets its products under its own

brand, as well as Nike Golf, Nike Pro, Nike+, Air Jordan, Nike Blazers, Air Force 1, Nike

Dunk, Air Max, Nike Skateboarding, Nike CR7, and subsidiaries including Brand Jordan, Hurley

International and Converse. Nike also owned Bauer Hockey (later renamed Nike Bauer) from

1995 to 2008. In addition to manufacturing sportswear and equipment, the company operates

retail stores under the Nike town name. Nike sponsors many high-profile athletes and sports

teams around the world, with the highly recognized trademarks of "Just Do It" and

the Swoosh logo.

HISTORY AND ORIGIN

Nike, originally known as Blue Ribbon Sports was founded by University of Oregon track

athlete Phil Knight and his coach, Bill Bowerman, on January 25, 1964. The company initially

operated in Eugene as a distributor for Japanese shoe maker Onitsuka Tiger, making most sales

at track meets out of Knight's automobile.

According to Otis Davis, a student athlete whom Bowerman coached at the University of

Oregon, who later went on to win two gold medals at the 1960 Summer Olympics, Bowerman

made the first pair of Nike shoes for him, contradicting a claim that they were made for Phil

Knight. Says Davis, "I told Tom Brokaw that I was the first. I don't care what all the billionaires

say. Bill Bowerman made the first pair of shoes for me. People don't believe me. In fact, I didn't

like the way they felt on my feet. There was no support and they were too tight. But I saw

Bowerman made them from the waffle iron, and they were mine".

In 1964, in its first year in business, Blue Ribbon Sports sold 1,300 pairs of Japanese running

shoes grossing $8,000. By 1965 the company had acquired a full-time employee, and sales had

reached $20,000. In 1966, Blue Ribbon Sports opened its first retail store, located in Santa

Monica, California next to a beauty salon, so its employees no longer needed to sell inventory

from the back of their cars. In 1967, due to rapidly increasing sales, Blue Ribbon Sports

expanded retail and distribution operations on the East Coast, in Wellesley, Massachusetts.

By 1971, the relationship between Blue Ribbon Sports and Onitsuka Tiger was nearing an end.

Blue Ribbon Sports prepared to launch its own line of footwear, which would bear

the Swoosh newly designed by Carolyn Davidson. The Swoosh was first used by Nike on June

1971, and was registered with the U.S. Patent and Trademark Office on January 22, 1974.

In 1976, the company hired John Brown and Partners, based in Seattle, as its first advertising

agency. The following year, the agency created the first "brand ad" for Nike, called "There is no
finish line", in which no Nike product was shown. By 1980, Nike had attained a 50% market

share in the U.S. athletic shoe market, and the company went public in December of that year.

Together, Nike and Widen Kennedy have created many print and television advertisements, and

Widen Kennedy remains Nike's primary ad agency. It was agency co-founder Dan Widen who

coined the now-famous slogan "Just Do It" for a 1988 Nike ad campaign, which was chosen

by Advertising Age as one of the top five ad slogans of the 20th century and enshrined in

the Smithsonian Institution. Walt Stack was featured in Nike's first "Just Do It" advertisement,

which debuted on July 1, 1988. Widen credits the inspiration for the slogan to "Let's do it", the

last words spoken by Gary Gilmore before he was executed.

Throughout the 1980s, Nike expanded its product line to encompass many sports and regions

throughout the world. In 1990, Nike moved into its eight-building World Headquarters campus

in Beaverton, Oregon. The first Nike retail store, dubbed Nike town, opened in downtown

Portland in November of that year.

Phil Knight announced in mid-2015 that he would step down as chairman of Nike in 2016. He

officially stepped down from all duties with the company on June 30, 2016.

In a company public announcement on March 15, 2018, Parker said Trevor Edwards, a top Nike

executive who was seen as a potential successor to the chief executive, was relinquishing his

position as Nike's brand president and would retire in August.

In October 2019, John Donahue was announced as the next CEO, and will succeed Parker on

January 13, 2020. In November 2019, the company stopped selling directly through Amazon,

focusing more on direct relationships with costumers.

NIKE MISSION STATEMENT

Nike’s mission statement is “do everything possible to expand human potential.” Although

precisely crafted, this statement shows that the company does not limit itself to certain strategies

in ensuring it gives its customers the best there is in the world of sports. The picture portrayed by

this mission statement is that Nike does not settle for normal, instead, the company goes for the

most dynamic, simple, yet incredibly efficient designs with worthwhile impacts on the users. In

accordance with this observation, the following characteristics relate to this mission statement:

1. Improvement of lives. Nike Corporation is a people-oriented company whose operations

targets leaving a positive impact on the people it comes in contact with. The company

does this by incorporating objectives that improve societies to run parallel to its primary

goals – and these form its corporate social responsibility. For instance, Nike is accredited

for leading environmental conservation strategies across the globe, and this is not all. The

company is vocal in other social targets as part of its overall mission of bringing the best

out of the people it serves.

2. Exceeding expectations. If there are companies that have gone out of their way in what

they do, Nike would definitely top the list. In all its operations, Nike has proven beyond

doubt that it does not simply give what the customer expects. The ever-growing

reputation of this company is directly linked to the incredible efforts it puts in

manufacturing products whose quality goes over and above the market expectations. For

years, there has been no comparison to what Nike does, their products are simply

extraordinary.

3. Expanding human potential. The desire to give its primary customers, the athletes the

best footwear, apparel, and other equipment remains the major priority of Nike. It is

something that the company has stayed true to for years ever since it was founded. In
 fact, the company understands the diverse needs of different sportspersons, and in this

way, stimulates creativity to produce products tailored to the needs of each category.

NIKE VISION STATEMENT

Nike’s vision statement is “to bring inspiration and innovation to every athlete in the

world.” This statement focusses on the influence that Nike has in the sports sector. It

specially resounds the ability of this company to stimulate and turn athletes into their best

versions. In fact, it also hints that this is what athletes who want to be clutch should look

out for. Some of the components related to this vision statement include:

1. Bring inspiration. To satisfy this component, Nike has been on the front row when it

comes to motivating its customers how it knows best – providing them with comfortable

footwear and apparel. Additionally, the company understands the importance of looking

the part, and this motivates their desire to excel. For instance, its wide range

of sportswear gives an impression of what this is exactly all about.

2. Innovation. The reason Nike has remained at the top in this game narrows down to its

unrelenting clamor for coming up with the most versatile, aesthetically appealing and

most of all dependable products. It does this by engaging the most creative minds in its

team of experts to advance its innovative agenda when launching any products in the

market. In fact, the house of innovations showcases lots of artifacts and facts that prove

the commitment of the company to innovations in the sports sector.

3. Global presence. In this element, Nike shows that it is a company that wants its presence
felt everywhere. The desire to meet this component explains the diversification tactics of

the company to include different products targeting athletes across the globe. For
 instance, Nike has initiated signature initiatives that look to grow sports talents across the

globe.

Nike operation management concerned:

 Forecasting .

 Controlling .

 Designing .

 Operating .

 Scheduling Business operations .

OPERATIONS AND PRODUCTIVITY

DECISIONS OF OPERATIONS MANAGEMENT

The 10 strategic decisions of operations management (OM) at Nike Inc. cover a wide variety of

issues, considering the company’s global market for sports shoes, apparel and equipment. Nike

effectively addresses these decision areas through standards consistently applied in operations

management throughout the global organization.

Nike’s Operations Management, 10 Decision Areas

1. Design of Goods and Services. This strategic decision area deals with the design of Nike’s

athletic footwear and other products. The operations management objective is to ensure that

product design aligns with organizational capabilities and business goals. In this case, Nike Inc.

focuses on designs based on advanced technology and current market preferences.

2. Quality Management. Nike emphasizes quality in its processes and products. The objective

in this strategic decision area is to satisfy consumers’ expectations about product quality. The

company’s operations management addresses this concern through high quality standards and the

application of total quality management (TQM) in the production of sports shoes, equipment and

apparel.

3. Process and Capacity Design. This strategic decision area requires that Nike’s operations

management must prioritize streamlining and efficiency of production. The objective is to ensure

adequate, effective, and efficient production. At Nike, operations managers apply continuous

improvement strategies to support the company’s production goals and needs based on market

dynamics.

4. Location Strategy. Physical location is the typical concern in this strategic decision area of

operations management. The objective is to optimize costs and efficiency through proximity to

employees, suppliers and the target market. In the case of Nike Inc., the operations managers

apply a corporate strategy that chooses production facility locations based on costs and nearness

to the most significant markets. For example, Nike Inc. has sports shoe suppliers in Southeast

Asia because of the cost advantage based on cheaper labor in the region.

5. Layout Design and Strategy. Nike’s operations management deals with the layout design of

its facilities. The objective in this strategic decision area is to optimize workflow based on

human resources, capacity requirements, technology, and inventory requirements. Nike’s

operations managers apply corporate layout design and strategy to company-owned facilities

only. For example, the firm uses office layouts where employees can move easily. The factories
that produce the athletic shoes, apparel and equipment are not under Nike’s control in terms of

layout design and strategy.

6. Job Design and Human Resources. Human resource adequacy and maintenance are the

objective in this strategic decision area of operations management. Nike Inc. satisfies this

concern through internal leadership development, along with coaching and mentoring. The

company also has regular evaluations of job assignments to ensure person-job fit.

7. Supply Chain Management. Nike has excellent supply chain management, which facilitates

efficient production to support the global sports shoes, apparel and equipment business. The

objective in this strategic decision area of operations management is to align the supply chain

with the company’s overall strategic aims. Nike Inc. satisfies this objective through supply chain

automation and optimization of transport distances among suppliers, production facilities,

distributors and retailers.

Vertical Supply Chain: For automation and reshoring to succeed, Nike also needs to consider

and innovate on other parts of its supply chain. Today, China’s competitive advantage owes in

part to its vertical supply chain, and specifically its extensive material base. For Nike’s onshore

strategy to be competitive, R&D in materials manufacturing should also be a priority.

8. Inventory Management. The objective in this strategic decision area is to maintain

operations management that minimizes inventory costs while maximizing its effectiveness and

efficiency. Nike’s operations managers apply the perpetual method of inventory management,

which involves continuous monitoring and movement of inventory from the supply chain to the

distributors and retailers.

 9. Scheduling. Nike’s scheduling approach is primarily concerned with corporate operations and

the coordination of the supply chain with distribution and retail operations. In this strategic

decision area of operations management, the aim is to maximize resource utilization. Nike Inc.

managers satisfy this aim through automation. Corporate office schedules are standardized, while

supply chain schedules are adjusted according to the conditions of the market. Nike applies

changes to the supply chain based on market demand for its athletic footwear, equipment and

apparel.

10. Maintenance. Nike’s maintenance strategy considers adequacy of all resources. Adequacy of

human resources, facilities and capacity is the objective in this strategic decision area. Nike’s

operations management implements continuous recruitment programs to support HR needs, as

well as reward programs and career development strategies for maximum retention of

employees. For facilities, the company has dedicated teams to regularly evaluate facility and

equipment integrity and requirements. The companies that manufacture Nike shoes, apparel and

equipment are responsible for their own maintenance.

Productivity at Nike Inc.

Nike Inc. operations management supports maximum productivity of corporate offices, the

supply chain, distribution network, and company-owned retail facilities. There are a variety of

measures applied to determine actual productivity levels. In this case, Nike uses the following

criteria to measure productivity in some business areas:

1. Revenue per square foot (Productivity of Nike’s retail stores)

2. Pair of shoes per hour (Productivity of Nike suppliers)

3. Items per day (Productivity of inventory personnel)

4. Documents per day (Productivity of Nike’s corporate offices)

OPERATIONS STRATEGY IN A GLOBAL ENVIRONMENT

COMPETITIVE ADVANTAGE:

Competitive advantages implies the creation of a unique advantage over competitors.The idea is

to create customer value in an efficient and sustainable way. NIKE resources and competences

are because of their strategic capabilities, and because of their strategic capabilities they have

following Competitive advantages like rareness , Value and limitability.

CULTURAL AND ETHICAL ISSUES .

Despite the organisations growing success, Nike face criticism since the 1990s regarding the

unethical treatment of employees overseas and its impact on the environment .As well as this,

there is evidence to suggest that Nike has failed to meet consumer or stakeholder needs in

relation to corporate social responsibility; therefore, reducing customer-brand loyalty and

consumer trust. Regardless of the effort put in place to overcome these issues, Nike still faces

ethical problems on a daily basis, primarily relating to child labour, social injustice, uneducated

workers, workplace abuse and poor employment pay levels .Thus, we are going to focus on three

ethical issues faced by Nike Inc., its stakeholders, and society in general.

 The first ethical issue involves the use of sweatshops – a factory whereby manual

workers are employed at very low wages for long working hours and under very poor

conditions .Since 1996, Nike has been critiqued for manufacturing its products

Indonesian, Mexican, Chinese, Vietnamese-based sweatshops. Many workers were found

 to have been subdued to minimum wage and long overtime hours; issues which violated

laws put in place to protect workers.

Nike critically assessed its factories in order to detect the horrific conditions in place, and found

that all factories had no drinkable water and had high toxic chemical concentrations – above the

permitted levels deemed as ethical. By 2001, Nike had been exposed for its poor treatment of

employees who faced poverty, harassment and in some cases, violent intimidation .Further

strategic changes to improve these conditions failed.

 The second ethical issue, similar to the use of sweatshops, involves child labour. In

business, the minimum working age is 18 within the footwear industry. With more than

600,000 employees worldwide, there is evidence to suggest that Nike has broken several

laws in relation to working .Away from the footwear industry, Nike produces sporting

goods and manufactures sporting accessories worldwide for famous teams. In particular,

Nike is known for their production of soccer balls in Pakistan, which are then distributed

overseas .

Following issues with sweatshops, the organisation was furtherly criticised for using employees

lower than the ethical legal age. In some cases, children as young as 4 or 5 years old were found

working in poor conditions for long periods of time. Interestingly, Pakistan has laws in place to

prevent child labour and slavery – all of which are against this unethical act from taking place –

however, the government has done little to overcome this issue nationally .As child labour is

considered as inhumane and illegal, Nike was negatively impacted in terms of its brand loyalty

and consumer trust.

  The final ethical issue, enforced by Nike Inc., is the organization’s effect on the

environment. As part of corporate social responsibility and meeting the ethical needs of

stakeholders. However, Nike was unable to do so in 2015 when the company received a

poor rating in the Ethical Consumer’s Environmental Report (Nike, 2017). The report

identified that its manufacturing factories were responsible for increases in climate, toxic

pollution, and water use and waste. However, as no mention was given to agriculture,

Nike was unable to provide reasoning behind why the effects had occurred. Moreover,

additional reports also identified issues in terms of carbon emissions, renewable energy

use and the sourcing of certain materials. While Nike did establish strategies to overcome

these issues, little was done to combat the high toxic levels occurring within the

workplace and in the environment.

Given the above, it is clear to see that Nike has been faced with several ethical issues over the

last two decades – all of which have negatively impacted on the organization and its ability to

meet consumer needs. However, Nike has put in place several policies/strategies to address these

challenges .

STRATEGY: Nike has a very clear cut business strategy and specific goals it wants to

accomplish. Innovation is at the heart of Nike’s business growth strategy. Nike uses this

innovation in order to become a more sustainable company, which is the second key aspect of its

business strategy. We live in a world where natural and human resources are constrained and

Nike realizes that this could greatly affect its business. The cost of competition for resources will

increase as these resources become increasingly scarce. Coupled with emerging trends, such as
customization, a push to be closer to multiple markets, and shifting labor markets, Nike sees a

new opportunity to create business growth for the future.

Operations Management Problems at Nike

Operations management is a vital business function that remains a very important field of study

in both academia and the corporate world. Operations is concerned with the transformation of

inputs into outputs, and how this transformational process is managed determines the efficiency

and profitability of a company.

TYPES OF GLOBAL OPERATIONS STRATEGY USED BY NIKE :

INTERNATIONAL STRATEGY: Nike’s current international strategy and help to identify

Nike’s current strengths, weaknesses, opportunity and threats. This essay will also consider the

political, legal and cultural issues which Nike can face while implementing any strategies in

international markets. This strategy will also consider the threats of entering into a new market

and supply of sufficient funds and labour in terms of applying the strategy. Taking any strategy

into consideration will also involve an impact analysis and risk, therefore, any potential

consequences and levels of risk involved and how to overcome those risks will be covered in the

next section.

Another section will talk about the never ending controversies which Nike has been facing due to

its manufacturing factories in low labour countries. What strategies Nike is applying to overcome

this situation and some recommendation for Nike. Finally, the essay will analyse the competition

in the selected market, strategy adapted by the competitors and how Nike uses its brand power

strategies to anticipate such threats.

GLOBAL STRATEGY:

Global marketing strategy, is 'marketing on a worldwide scale' taking note of differences,

similarities, and opportunities in order to meet global objectives. Or, simply put, it's creating a

strategy that fits the market you're trying to reach. What works for one market may not work for

another. Global marketing helps create a strategy for a similar product in a different market.

Nike's business and marketing strategy, both at home and abroad, help keep them at the forefront

of their industry of footwear and athletic apparel. Nike succeeds in global marketing because

they understand world markets and how to reach each audience in a personalized approach that

works for different languages, cultures, customs, needs, and differences.

Nike is one of the most successful companies on the globe, both from a sales standpoint and in

their marketing initiatives. Here are a few of the ways Nike achieves success in reaching varied

audiences with the right message.

PROJECT MANAGEMENT
Project management is the practice of initiating, planning, executing, controlling, and closing
the work of a team to achieve specific goals and meet specific success criteria at the specified
time.

The primary challenge of project management is to achieve all of the project goals within the
given constraints. This information is usually described in project documentation, created at the
beginning of the development process. The primary constraints are scope,
time, quality and budget. The secondary—and more ambitious—challenge is
to optimize the allocation of necessary inputs and apply them to meet pre-defined objectives.