CUEGIS ON NIKE
C- Change
U- Culture
E- Ethics
G- Globalization
I- Innovation
S- Strategy
Overview of Nike
1. Change
2. Culture
• Nike employs more than 1 million people around the world
• Maintains its reputation through extremely committed workforce.
• The company is aware of its own history and story, and works to keep
employees conscious of it (shared basic assumptions; deepest level of
corporate culture said by theorist Charles Handy)
• The company keeps a Winnebago to use as a conference room in the middle
of its innovation kitchen because cofounder Phil Knight, first sold shoes out of
a similar vehicle.
• The waffle iron that Bill Bowman destroyed while attempting to make rubber
shoes is kept on campus like a museum piece. This helps set a sense of
value, history and shared culture in what employees are doing.
• “Figure out where you want your career to go, and when you see something
that we would help you get there, ask us for it” by Nelson Farris. This attitude
helps create loyal and ambitious employees.
• Some employees even tattoo a swoosh on their legs!
• With people choosing a better and healthier life-style in MEDCs (joining gyms
and sport clubs), Nike products have a higher demand by customers.
• Democratic, decentralized and emphasizes trust, respect and loyalty in a
business.
• Nike also makes sure that their franchise managers across the globe have a
democratic leadership style like the laissez-faire style, thus creating
motivation and encouragement within the workplace (in stores).
• Gives benefits to employees such as:
- gym memberships
- cars for transportation fees covered when employees live far from stores or
factories
- free footwear and apparel
- discounts on some products that employees might like to purchase.
- They encourage gender equality at Nike, for example setting women
marathons where a rase for Leukemia and Lymphoma.
3. Ethics
• Nike was being shamed in public for its labor practices to the point where it
badly tarnished the company’s image and hurt its sales.
• Even though Nike managed to turn around its image, large parts of the
industry still have not changed much at all.
• Outsourced manufacturing, using money Nike saves on aggressive marketing
campaigns.
• Child labor!
• 1991 - activity Mr. Ballinger published a report documenting low wages and
poor working conditions in Indonesia. It highlighted the workers who worked for
a Nike subcontractor for 15 cents per hour, which is less than Indonesia’s
minimum wage and documented their abuse.
• Protests were set in the early 90’s in Barcelona Olympics and NGO’s started
getting involved.
• Nike established a department tasked with working to improve the lives of
factory laborers.
• However, in 2005 Nike published a list of factories that they are in contract
with, and revealed working conditions and pay and stuck to its commitment
standards as a part of its Social Corporate Responsibility.
• Donated 37,000 to orphanages.
• Encourages ethical behavior through “8 recycled bottles for 1 football shirt”.
4. Globalization
• The growth to global or worldwide scale, the interdependence and
interrelations of the world’s regions through business activity.
• Started in 1964 in the United States by Philip Knight and Bill Bower-man.
• Headquartered in Oregon, but spread around 147,000 stores in 140 countries
around the world including the UK, Russia, Pakistan, Turkey and United Arab
Emirates.
• 648 factories mostly in Asian countries like Indonesia, Vietnam, China,
Taiwan and Korea.
• Wide and global workforce from different nationalities.
• Millions of nike products get sold in Europe alone annually.
• Largest sportswear supplier in the world.
• Uses subcontractors to run their activities in factories (not owned by Nike).
• Nike contributes to 1.36 tonnes of Carbon added to emissions per year
• Aim for 17% growth rate by 2017.
• Contracts with various athletes from around the world such as Michael
Jordan, Cristiano Ronaldo, Raphael Nadal, Karim Benzema, Samir Nasri.
5. Innovation
• #1 innovative company in 2013.
• Revealed new products to be launched onto the markets involving running,
basketball, soccer and training.
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Kits with AeroSwift technology (tops and shorts with small yellow fins used to
reduce drag for sprinters and middle distance runners)
Nike’s association with Apple to produce the Nike app for athletes.
Nike HyperAdapt 1.0 is a new product (when you step into these shoes, it has
electro reactive lacing, a sensor in the heel triggers the shows to tighten
automatically to an ideal extent.
Aim to make all their bags out of recycled material.
Raised wages and ensured clean air standards
Donating more and more to orphanages.
6. Strategy
• Trying to reduce environmental impacts like ecological waste or exploitation of
resources like the eco-friendly kits for 2010 world-cop made from recycled
polyester.
• Sells through retail accounts, its owned retail stored, and through internet
official website nike.com
• A subsidiary for many other companies like Converse.
• Technology in products - had most cutting-edge product on the market e.g.
Nike + iPod
• Use of outsourced manufacturing based outside the U.S. to lower costs of
production in China or Vietnam
• Research and development to find out what people are in need of or have
desire for.
• Aims to deal with competition through increased marketing and promotion
(signing with a sports figure) and encouragement to purchase products with
new technology and new features like their new set of patterns on women’s
shoes.
• Branding such as “Just do it.” or “You don’t win silver, you lose gold”
• Organization strategy: functional departments based on geographic divisions
and product categories (apparel, footwear, accessories & equipment)
• Responses to slack: Performance-related-pay
• Responses to holdup: contracts, building relationships with other businesses,
increasing bargaining.
• Responses to competition or substitution: online customization of footwear,
aggressive advertising, mergers and acquisitions (Converse, Umbro).