Analysis of Nike

Nike, Inc

Nike, Inc was founded in 1964 as Blue Ribbon Sports by Bill Bowerman and Philip Knight. It officially became Nike, Inc in 1978. The company took its name from Nike, the Greek goddess of victory. Nike, Inc is one of the best recognizable brands in the world. It is known for the logo Swoosh which was created before the company became Nike, also known for the trademark of “Just do it”. (Wikipedia.com) Nike has a lot of product lines designed to accommodate different consumer needs. Nike has Air Jordan which designed for basketball lovers; Apple iPod-linked Nike plus for people love to run and also music, etc. Throughout the years, Nike has never stopped innovating its products to respond to consumer need at different times. Nowadays Nike is focusing on environmentally sustainable designs which is definitely a future trend.

Nike, Inc has a matrix structure. One the top of the structure, there’s the Board of Directors, the CEO, then there’re five major departments in the organization. They are Human Resources, Marketing and Sales, Accounting, Production, Design and Development. Each employee would report to the product manager as well as to the department manager. Each product team and the product managers make decisions regarding product specifications and production independently. Department managers focus primarily on policy-related issues. (ehow.com) Nike, Inc has a recent change on the structure of the organization. They will cut off up to 5% of the workforce in order to make fewer management layers. After this change, the organization would become flatter and more decentralized. Some people doubted that will Nike spread out too thin that they’ll lose the competition gradually. However, managers in Nike are pretty confident about this new design. They say it will sharpen consumer focus which would allow them to respond to customers’ needs more quickly. Also since powers and duties are designated from top to each level, lower level managers have more decision making power. This would result a faster reaction to marketplace dynamics and a faster decision making. This style would fit Nike’s global strategy well since the world is now changing rapidly, everything needs to be done efficiently and effectively.

Nike, Inc is very famous for its outsourcing strategy. They actually don’t produce anything. As they claimed “Focusing on its core competency, outsourcing the others”. (Schermerhorn, 435) Nike’s core competency they’re focusing on is their unique design and advertisement. Actually they spend about $2.3 billion annually on all kinds of advertisements. Besides those, they’re outsourcing their nonexecutive responsibilities over to the other countries especially for their production subsystem. They’re doing this to reduce the overhead cost to enhance profit.

However, Nike has been criticized for contracting with factories in countries such as China,