Case Analysis.doc for CS2
Compiled by Dr SIU Brian KT, February 2010
CS1:Pages 38-53
CS2:pages:61-71 (7 topics documented)
(10 topics
fit into Tutorial 1_3 student summary (length of Case Study):
documented)
11
-Company Background
12
-Sales and Markets
13
-Logistics
14
-Location of NIKE facilities (UK, France, Germany==>3 wh,mixture in-house & contracted, 25,000m2)
15
-CUSTOMER SERVICE
16
ISSUES 5
17
-Analysis of the options (footwear,apparel,#distribution centres)
CS2: Case Analysis
Note: CS1 and CS2 can be found in***
11
-Company Background
Started in 1963, NIKE stands for the GREEK goddess of victory.
It is a US company which started importing sports shoes from Japan to the US
Mr Knight Head of business looked for better footwear in late 1950s when he ran for the University
of Oregon track team
1980s and 1990s global dominance second to Microsoft
1992 4.5billion turnover corporation, important keyword is “global dominance”
-management strategy: called “buttface” meetings with plenty of shouting at each other in pursuit of
athletic performance.
- the Internationalization follows from the growth, the company grew to size of 10,000
-NILE entered the Europe market in 1992
Case Analysis for CS2, NIKE, Taylor, D***, 1997.
1
12
-Sales and Markets
-the 1992 forecast for 1997 expected sales reflected a bullish vision for Europe (What is bullish?
Answer: hopeful of rising prices (as in a stock market) <a bullish market>
-the forecast amounted to sales to around $2 billion per annum
From the graph analysis, 3 countries were leading can you find it out on page 62.
this has implications for further analysis in later topics
Some problems encountered: (1) business was seasonal, with spring and autumn which was
driven (a) by weather, (b) by sporting calendar, (2) A second problem might be the “future
programme” where retailer were expected to place bulk order 6 months in advance
-good news were (1) NILE supports Olympus in UK with expanding sales
-For large retailers, they bought centrally where the top 20 delivery addresses accounted for > 50%
of NILE sales
-different figures were quoted for UK, France and Germany; what findings can we conclude? (for
class discussion), with reference to page 62 of Case Study.
13
-Logistics
Stockholding points seemed to be a problem in Europe, according to the Consultants;
-there were 20 main warehouse in 11 countries visited by the Consultants, it seems to be a problem
with sufficient warehouse space.
-Next issue it eh problem of the supply chain
Hong Kong buying office coordinated the sourcing: (1) footwear sourced from the Far East using
containers, (2) Hong Kong office also coordinated purchasing and manufacture
-but for apparel, almost 30% were source in or near Europe (can we answered the question “why?”)
from the low-cost coutries Portugal, Italy (can we name one more near UK?)
- so what is the relationship of warehousing location in relation to the 3 countries in Section 12
above?
-Stock Keeping Units (SKU) was also discussed for footwear and apparel based on Style, Color,
Size (for different combinations)
-some problems: (1) although order placed months in advance, goods not available by the agreed
shipment date (problem with transportation cost!), (2) for new products combinations of different
sizes also presented a problem.
(Do we have an idea to solve this problem?)
14
The logistics problems in 13 above resulted in the followings:
Case Analysis for CS2, NIKE, Taylor, D***, 1997.
2
-Location of NIKE facilities (UK, France, Germany==>3 wh,mixture in-house & contracted,
25,000m2)
15
-CUSTOMER SERVICE
After meeting with the logistics partners, the consultants found the following problems: (1) customer
delivery service not matching the fast growth of business:
16
ISSUES 5
The customer delivery service issues are:
(i) problems to the retailers
(ii) information availability to local management about shipment date…
what else, can we join the discussion?
and what could be done to solve these problems?
17
-Analysis of the options (footwear,apparel,#distribution centres)
Some problems were discussed around the theme of centralization benefits:
(1) how does it relate to operating costs?
(2) How does centralization affect the (a) inbound transport (b) warehousing (c) transportation
How does it affect the product characteristic, relative to footwear and apparel
***see web site http://personal.cityu.edu.hk/~dcbksiu/207kmav/
1b lecture program Lecture_Program_v3.pdf,
It is Extracted below:
TUTORIAL Week 4
From Week 4-Week 12, Selected Case Studies workout from one or more of the followings (for practice in theory, and
practice). The purpose is to give students more practice in more detailed or complex case studies where they should be
able to tackle based on experience in the first 3 tutorials.
List of case studies:
CS1. CISCO’s Single Enterprise Strategy. Bowersox et al., 2007. Supply Chain Logistics Management, pp.39-43
(ILO2)
CS2. NIKE Europe. Taylor, D, 1997, Global Cases in Logistics
and Supply Chain Management pp61,64-65,68-69 (ILO4)
Case Analysis for CS2, NIKE, Taylor, D***, 1997.
3
Case Study Class tutorial work
Are we ready to answer the questions below
(extracted from t4 in web site)
Appendix 4a. Case Study Questions for Presenter’s work
Question 1: In your own words (15-25) give an idea of the value chain concept. Your definition would be best if it is
thought out by you after reading a number of articles or books. You may also compare their definition and give your own.
Question 2: How can you apply the value chain concept to enhance the competitive advantage of the company (recall your
learning in Tutorial 2 and 3-the solution); in particular which part of the value chain activity would you focus on so that
the company is more competitive in global supply chain management? Choose one or two activities in the Figure below
(not more than three) which you believe would give the company more competitive advantage over their competitors in
the global market.
-to be discussed in the class as a training exercise (non-credit bearing exercise)
DISCUSSION (TOWARDS THE FINDINGS: WRITTEN
ASSIGNMENT WORK)
What lessons do we learnt?
Basis of analysis:
(1) Year of case study 1997, how about 2010?
(2) Further analysis from Internet resources to give further findings
(3) What are the problems, for example competitive force (5 forces model such as Written Assignment work)?
(4) How do we measure the case study performance and/or current performance (can we apply the SCOR model
such as Written Assignment work)?
to be discussed in Week 7 Tutorial
The CS1 and CS2 together: CS1 739 words, CS2 1018 words
1857 words – is this good support for your further work in the
Written Assignment? The Written Assignment is a very good
training for us! Work hard!
Case Analysis for CS2, NIKE, Taylor, D***, 1997.
4