REACTION PAPER ON NIKE INC.

– STRATEGIC PLAN ANALYSIS

Part 1 : SUMMARY

Nike is the leading corporation in the world, which deals in equipment supply & sportswear.
Established in 1962 by Bill Boverman & Philip Knight in the name Blue Ribbon Sports. Later it was
changed to Nike Inc. in 1978. Nike’s business practices and manufacturing methods are based on
innovation. Its mission is to become the best shoe provider. While its vision is to assist every athlete in
developing motivation and creativity throughout the world. Their goal and objective are to become the
leader through the different activities, which exhibit concern for those who are associated with Nike,
such as customers, employees and suppliers throughout the world. Former CEO, Philip Knight played a
vital role in the establishment of strategic management where in his style of management is
“idiosyncratic”. He reflects broad mindedness based on different aspects, such as the conservative
decisions and planned risks. The Management Style of Nike differs greatly with the management style
of Toyota, as it employs the concept of quality across all the levels of management. Nike is indirectly
accountable for the working conditions of employees and gives immense focus on the sales. On the
other hand, Toyota focuses on cutting down the number of human labor by adopting the system of Just
in Time. Similarities lies in their focus of developing the global brand terms of the quality and style.

Toyota successfully adopted the system of Total Quality Management. Toyota adopted a
learning attitude and as a result, it underwent transformation. Assigning with the responsibilities of
handling individual machines, documentation, cleaning of dirt and practices of systematic maintenance
are the procedures that helped Toyota in redesigning and making modifications in the parts and above
all, these processes led to the building of highest quality cars as a result, it became the most profitable
car manufacturer. Considering, Nike its strategy always focused on encouraging customers to buy the
products and the investors to purchase the stock. TQM practices of Toyota can be incorporated into
Nike by shifting its focus on quality measures. In order to implement TQM system, there is a
requirement of increasing the level of accountability among the employees, which in turn can assist
them to achieve the goals successfully, so Nike should also consider this aspect in the implementation of
TQM practices.

Part 2: REACTION

My reaction on Philip Knight, the CEO who independently make his decisions. He was really a leader, I
like how he manages his team and relationships with his employees. He gathers all his team and
organize a meeting and asked first for their views, opinions, and suggestion before coming up for a final
decision. It is good to know that it keeps their bond strong and connected especially when involving his
team in decision making. I have encounter in my recent work before and some offices where by, My
boss asked the views or suggestion of us her employees yet what prevails most was her decision even
we think our suggestion is for the better, where in fact it creates conflict of interest and
mismanagement. That is why there is a need to change this practice, for the opinion of others be heard
as well. And importantly for the growth and development of the company.

Nike has been able to differentiate itself, compared to competitors, and has become the global leader in
the athletic footwear/apparel industry. The absolute key to Nike’s success has been its excellent
marketing strategies that allow the company to sell a massive quantity of its highly innovative products.
Nike has become a transcendent super-brand, because it understands that products are made in
factories, but brands are built “in the mind and bought by the consumer”. The Nike swoosh is widely
considered the most iconic logo in the business world and revolutionized the way that the corporation
has been able to market its products. The first aspect of Nike’s strategy is to find its target market for a
particular product. For example, for most of its products it tries to cater towards all types of athletes or
sport enthusiasts. These targeting techniques include product sponsorship by many different types of
professional athletic teams, college sports teams, as well as celebrity athletes. This is where Nike has
really gained a major competitive advantage over other companies in its industry. The portfolio of teams
and athletes that endorse Nike is extremely long and all are considered to be at the top of their
respective sports. The company made it famous and has shown it be extremely successful. This
particular strategy does an excellent job of increasing the brand awareness and popularity of Nike,
because people see their favorite players, celebrities, and teams wearing Nike products. This makes
them significantly more inclined to purchase those items, because they want to support and be like their
favorite player/team. Nike has accumulated sponsorships from, arguably, the three best basketball
players of the last 10 years. The “Just Do It” campaign is arguably the industry’s greatest advertising
slogan of all time and has continued to fuel sales even today.

Both Nike and Toyota have a different management style that makes each of them unique in terms of
strategies in marketing their products. Similarly, they both focuses in developing global brand in terms
of quality and style. Just like other businesses like Bags Industry having a branded name (Louis Viton,
Dior, Coach and others) who also provides the best quality and style of bag products. They do have high
prices yet, it’s worth the price since it last long and satisfy customer.

Finally, Total quality management is a management system that is an integral part of an organization’s
strategy and is aimed at continually improving products and service quality so as to achieve customer
satisfaction and build strong customer loyalty. In other words, the true Total Quality organization will
eliminate all competition. Nike achieves TQM by integrating principles of sustainability into all major
business decisions. Overlooking their environment in the day-to-day operations and throughout every
stage of the product life cycle is very important. I agree with this that all business must monitor the
everyday operation if the business is having a progress or dwindling. So that you can forecast what to do
next. Management Team developed Management planning. Projected benefits can also include reduced
time to market and improved profitability. For Toyota, TQM is based on the concept of “customer
first”, kaizen meaning continuous improvement and “total participation” which means the involvement
and input of all employees.   TQM implementation is dependability. This means timely working to ensure
that customers get their products within the promised time. Toyota has included just-in-time production
system comprised of multi-skilled employees who work as teams. One reason is to lessen or minimize
their inventory. Hence, they do things fast in order to reduce the time spent between ordering and
availing the product to the customer. I also tried ordering a product who used JIT in Shopee, whereas I
ordered one dozen of sandal which I thought would arrive a couple of days but I was wrong. It was
delivered after ten days since they just manufactured their product if someone’s ordered. Customer
focus is one of the major success factors in TQM implementation of Toyota. For every business to grow,
it should have understanding, reliable, and trustworthy customers. So, the key challenge to a
competitive organization, is to raise the expectations of the market place by providing goods and
services at quality levels higher than those offered by the competition.

Part 3: CONCLUSION

I therefore conclude that to retain the growth rate, the brand must retain focused on product
innovation and marketing. Nike understood that the key to increasing its profitability is to offer the most
advanced products on the market and by building a strong and immensely popular brand reputation.
Incorporating innovation into its mission and vision statements was a great move by Nike, because it
stressed to the public and its employees just how important it was for it to be the most innovative
company in its industry. This led to major breakthroughs in the company and has prepared it for future
growth.

Nike must focus also on the customer experience in its store and on its websites to improve it using
modern technologies. In order to implement TQM, eight important aspects must be considered:
Principles, Integrity, Trust, Training, Recognition, Teamwork, Leadership and Communication. Must have
proper management in controlling the labor issues since it is indirectly accountable for the working
condition of its employees. They must keep also
their strong competitive edge in order to prevent any potential threatening entrants.

Lastly, there should be clarity in the goals and objectives that can help in making employee satisfied to
do their job well, customer satisfaction that would assist for the continuous successful in the industry.