Human Resource and Financial Strategies of Nike

This project discusses the effective human resource and financial strategies of Nike. It explains the recruitment, training and development, and rewards and appreciation strategies of Nike's HR strategy. It also analyzes Nike's profit and loss statement and balance sheet to understand its financial management strategies. Additionally, it provides a SWOT analysis of Nike, highlighting its strengths, weaknesses, opportunities, and threats.

FY021 Introduction to
Business Studies

TABLE OF CONTENTS
TASK 3............................................................................................................................................3
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Human Resource Strategies.........................................................................................................3
Financial Management Strategies................................................................................................4
SWOT analysis............................................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

TASK 3
INTRODUCTION
Business studies is the demonstration of the areas of study which are the combination of
the activity that provides increase in the understanding of the mutual dependencies through the
business systems. In this project the chosen organization is Nike which is a American
multinational corporation which is engaged in the designing, developing and manufacturing of
worldwide sales of footwear mostly related to sports. In this project the human resources
strategies and financial management strategies will be explained. This project will explain the
Swot analysis on Nike for finding the key strengths, weaknesses, opportunities and threats.
MAIN BODY
Human Resource Strategies
Human resource strategies are the plan of a company for the management of all its human
capital and also ensuring that it aligns with the business activities (Muškardin, 2021). This
strategy is considered to be set as the direction of the all the major key areas which include the
process of hiring and performing, appraisal. Following are the different strategies that are part of
Nike's HR strategy,
RECRUITMENT STRATEGY
In this strategy the company highlights all the essential parts of its company culture,
innovation and way of doing things. This is the reason the organization wants to empower the
people which might hire to make it happen. This acts like a motivation for employees which it
wants to hire. A part of this strategy from this company is to be more transparent about their
actions. It has helped the company to improve diversity in its hiring. Certainly with the help of
surveys the company is able to hire the best and most talented. The purpose of the recruitment
strategy is to fill all the open position at the organization.
TRAINING AND DEVELOPMENT STRATEGY
For Nike whose business model is so much based on the innovation of product it requires
its employees to give their optimum. This is the reason there are training and development in the
organization. This strategy is the outline which develops an organization's workforce
capabilities, skills and competencies and also be able to make it successful. Nike trains its

different departments according to their practices. For lean manufacturing department the focus
is to build their employees skills through empowering them with voice which would be helpful
for the creation of innovative solutions such that they can improve the productivity of the
organization. The Human Resource Department which are the in-charge of the training and
development are also trained by this organization explaining them about the values and culture of
the organization, so they can implement that in their hiring. Employees in this organization were
also trained about their health and safety along with their compliance to the environmental risks
which can hurt them. It can be said that the application of this can be considered to be the key
element of the compliance of the environmental strategies which helps the business to dispose
the hazardous materials out of their operations.
REWARDS AND APPRECIATION STRATEGY
This is also a part of human resource strategies which include the appreciation and
rewards which are provided by the company to their employees to motivate their for their
performance. It can be said that this is a very effective way in which the employees are able to be
more productive towards the organization (NGUYEN and NGUYEN, 2021). It is the
management of the organizational values which help the Nike to grow.
Financial Management Strategies
The financial management of an organization is about the planning, organizing and
controlling the financial activities which are considered to be the procedure and utilization of the
funds of the enterprise which helps on the application of the management principles (Polderman,
2020). The financial management strategy and its effective can be understood with the help of
referring to its financial statements.

Profit and Loss Statement :
Source : Nike, Inc. Reports Fiscal 2021 Fourth Quarter And Full Year Results, 2021
This income statement of Nike is for the 2021 the year in which the business was
recovering from the impacts of Covid-19. As a result of this the Revenues in this income
statement has increased for the company by 96%. However, the business increased its selling and
administrative expenses by 17% which was the reason to influence the demand creation through
the expenses of $997 million that included the return on sport policy and also its investments in
the digital marketing. The operating expenses of this organization also increased by 16% which
was due to increased in the hiring made by this company for better results in this organization.
The full year report of revenues was to show an overall increase in 19% of the revenue which

was due to the increase in sales by 73%. Thus, the financial strategy according to this profit and
loss statement for this organization has been to increases its operating expenses to increase the
business production to eventually increase the revenue of Nike.
Balance Sheet :
Source : Nike, Inc. Reports Fiscal 2021 Fourth Quarter And Full Year Results, 2021
This is the consolidated balance sheet of Nike for the year 2020 and 2021. This shows the
comparison and the changes which has happened in financial strategies of the company during
these two years. It shows that the inventories for Nike which were $6.9 have decreased by 7% in
comparison to the previous year. This was the result of the recovering business of Nike in
comparison to the last year. The cash equivalents and the short term investments of this business
were $13.5 billion that now has increased by $4.7 billion (Zhang, 2018). The balance sheet also
shows that the dilute earnings per share for this organization has been $3.56. This shows the

financial viability of the organization showing the effectiveness of its performance in the
financial strategies.
The financial strategy of this company has been expecting the revenue to reach more than
$50 billion. This has been due to its increase operations in the digital and DTC operations. Nike
has opted to reach DTC of 50% by 2025 which is 35%. This will increase the profit margin of
the organization and also allow it to decrease its costs.
SWOT analysis
The breakdown of Nike's Swot analysis is as follows,
Strengths :
This organization has been very effective in its hiring and experiences which has helped
the business to improve the talent in its operations. The team of professionals at this organization
which design the shoes and sports accessories are very talented and are one of key reasons for
the success of the organization (Abad-Santos, 2018). The financial strategies have been very
effective in developing of sustainability in the operations which is due to the low cost of
manufacturing which provides the business of the company more and more profit which
reinvests for growth. Customer base of this organization is very high which is the reason why it
gains the financial performance that it is getting.
Weaknesses :
The aim of this organization has always been to increase its revenue and for that the
company utilizes developing countries for establishing their manufacturing unit. It has been
found that the organization does not care about the issues of these poor labour in the developing
countries and the environment in which they work has been deemed to as unsafe. According to
the incomes statements of Nike the balance sheet of this organization shows that this
organization is still facing financial threats due to high total of long term debts.
Opportunities :
This being an multinational organization it has opportunities of new emerging markets in
which the country can expand like India, China and Brazil (Courey, 2019). The Human
Resource Strategies are also very efficient towards making it possible. The talented employees of
this organization are known for their innovation which is one of the key to the success of this
company. Development of partnership with some big retailers can help this company to grow
even further and improve the customers experiences.

Threats :
The total number of counterfeit products there are of this company is ruining the image of
the brand due to the customers are thing that Nike has started to produce low quality of products
(Tang, 2021). Hence, this is the reason the focus of this organization is directly sell their
products to the customer also known as the DTC. It has already reached 35% of DTC and is
trying to reach 50% by the end of 2025. The competitive pressure this organization gets from
company like Adidas is huge concern and is the reason why it spends so heavily on the
marketing.
CONCLUSION
With the help of this project it can be concluded that Nike has been able to improve its
business with the effective Human Resource and Financial strategies. This project shows how the
Human resource of this organization hires talented employees for maintaining the quality and the
level of innovation which it needs for its operations. In this project the financial operations of
this organization has also been discussed which has helped the business to improve its financial
effectiveness and introduce the DTC method for more profit and reducing the threats from
counterfeit products.

REFERENCES
Books and journals
Abad-Santos, A., 2018. Nike’s Colin Kaepernick ad sparked a boycott—and earned $6 billion
for Nike. Vox, September. 24. p.218.
Courey, A.K., 2019. The Effects of Social Activism on Business Strategy and Revenue as
Observed in the NFL and Nike Consumer Trends (Doctoral dissertation, University of
Oregon).
Muškardin, R., 2021.Brand image transfer from an athlete to a sponsoring brand resulting from
athlete transgression (Doctoral dissertation, University of Rijeka. Faculty of Economics
and Business).
NGUYEN, C. and NGUYEN, L., 2021. The relationship between corporate social responsibility
and financial performance: empirical evidence from Vietnam. The Journal of Asian
Finance, Economics and Business. 8(8). pp.75-83.
Polderman, M., 2020. Responsiveness, Cost-Efficiency and Sustainability in The Global Apparel
Supply Chain: Towards an Integral Approach on Manufacturing Location Decisions A
Nike Inc. Case study (Doctoral dissertation, University of Groningen. Faculty of
Economics and Business).
Tang, R., 2021, December. Study on the Strategic Development of Foreign Manufacturing
Industry Under the Chinese Fad. In 2021 3rd International Conference on Economic
Management and Cultural Industry (ICEMCI 2021) (pp. 1880-1886). Atlantis Press.
Zhang, J., 2018, August. Strategy of Sports Brand Network Marketing on the Basis of Brand
Image Promotion. In International Conference on Management, Economics, Education
and Social Sciences (MEESS 2018). Atlantis Press: Advances in Social Science,
Education and Humanities Research (Vol. 236, p. 39).
Online references
Nike, Inc. Reports Fiscal 2021 Fourth Quarter And Full Year Results, 2021. [Online]. Available
through <https://investors.nike.com/investors/news-events-and-reports/investor-news/
investor-news-details/2021/NIKE-Inc.-Reports-Fiscal-2021-Fourth-Quarter-and-Full-
Year-Results/default.aspx>