Nike: Global Business Environment, Strategies and Challenges Report

This report delves into the global business environment of Nike, examining key factors driving global commerce and trade, such as cost, market dynamics, and the external environment. It then assesses the strategic challenges Nike faces in the global market, including international business structures, legal and regulatory complexities, currency rate fluctuations, communication and cultural differences, and political risks. The report further evaluates the influence of globalization on the organization, focusing on leadership, market expansion, and operational changes. Finally, it explores various routes to internationalization and effective decision-making in a global context, providing a comprehensive analysis of Nike's global strategies and challenges. The report highlights the importance of adapting to diverse cultural and economic landscapes to ensure successful international operations.

GLOBAL BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Key factors which drive global commerce and trade.............................................................1
TASK 2............................................................................................................................................3
P2 Complexity of strategic challenges faced by company in global market..............................3
TASK 3...........................................................................................................................................4
P3 Evaluate the influence of globalisation on organisation........................................................4
P4 Influences of ethical and sustainable globalisation on organisational functions..................5
TASK 4............................................................................................................................................7
P5 Evaluate ways, decision making can work effectively in global manner..............................7
P6 Determine the various routes to internationalisation.............................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Many big companies are established in different country of world and also look further to
expand their business in other remaining country and cities too. Firms do make research and
strategies before going out in several places as because of various cultures and norms various
people and places have (Trompenaars and Hampden-Turner, 2011). Bringing enterprise in global
part make organisation to become aware of environment as because government of different
country has their own protocols of running a business. Report is based on NIKE and it was
founded by Phil Knight and Bill Bowerman although it was founded in year 1964. Organisation
is being considered as top firm in manufacturing athletic Footwear and mainly NIKE has
invested their amount in design, quality and marketing as well. Assignment will include factors
like cost, market and environment although company has to also face complexity in strategy
challenges with global environment, influence of globalisation on organisation and making
decision in various ways and determining the various routes for making business
internationalisation. All such will company to bring effective working in different market
environment.
TASK 1
P1. Key factors which drive global commerce and trade
Global business environment has to be kept in mind while making strategy and decision
so that effectively work can be done in better manner too. There are various key factors which
drives the global trade and commerce in various ways and thus they also affect efficiency of
company in better working too (De Jonge, 2011). Some of key factors are as follows:
COST
It is such which is being occurred in production, research and marketing etc. although it
can be said as cost is somewhere the value of money which is used in creating or producing
something with quality or to provide any service and although not being available for further use.
The forces of globalization have continued to evolve, as manufacturing continuously shifts to
lowest-cost labour markets, fostering significant change in the modern era of business and one of
the biggest effects is pricing pressure. Globalisation also reduces trade rates and taxes by which
business associations, i.e. Nike can easily expand their business over the world and sell their
products at lower prices.

Key factors are as:
Direct cost: This is that which is being identified with the some particular or specific
cost centre or having cost end too like department, process and product as well. This is that
which consider all those thing as (Labour, material and power etc.), although they are such which
are taken under the control and also the responsibility of various department manager. Normally,
some costs are considered as fixed in short period and variable for long run too.
Indirect cost: An expense which occur anytime like (Advertising, maintenance and
supervision, etc.) and somewhere it also incur with the joint usage too and it is being identified
like having a specific cost with the cost centre as well. Indirect cost is that which are constant
and stable in market for the wide range of different output too and it has also seen that as it is
being considered as fixed cost as well (Ferraro and Briody, 2017).
MARKET
Market is being called as place where the different people come and exchange product
with money and although market does also change with time and bring various criteria in
working of organisation too. Globalisation of markets put a huge impact on economic
transactions, processes, institutions, and players is dramatic and wide ranging. It creates
opportunities for multinational associations who are proactive and visionary. Many companies
have become disillusioned with sales in the international marketplace as old markets become
saturated and new ones must be found. Key factors of marketing are as follows:
Labour market: This is that which consider the people who can work and looking
forward for the jobs in country and although this is related with number of jobs available in
country of market too. They are included in driving the commerce and trade of country and
considered as key factor in better working as well.
Market for Raw materials: Raw materials are substance and having production of
various goods as well. Some of raw materials are being referred to commodities and which is
being bought and also sold in worldwide criteria (Colfax, Rivera and Perez, 2010). They are
being determined as factor market as because this is such and also being raw material for factors
of production, although this also consider the labour and capital too.
ENVIRONMENT

It is such in which different business operate their function in better manner and thus
environment also changes with time and affect the organisation in great manner, therefore
company also look forward to have a right contrast of working so that they can cope up with
changes too. Global business environment has a vast role in growth and success of companies as
in international market there are so many factors which may affect decision making process and
working activities of firms. There can be seen decline in barriers of selling in various countries,
this change aid companies to begin selling products internationally, since lower tariffs keep
consumer prices lower and fewer restrictions when crossing borders makes it easier for a
company to enter a foreign market
The key factors of environment are as follows:
Internal environment: This is that which affect the working of organisation from the
internal part and thus it is affected by various things like (Customers, suppliers and shareholders,
etc.), it is required by firms to undertake such condition and also make a proper and effective
decision with strategy so that efficient in working can be seen as well.
External environment: Mostly large organisation like NIKE is affected from the outside
company and generally it is being done by (Political, technological, economic and social etc.),
although this criteria needs attention to make a better working so that company can also attain
their business goals too.
These factors market, environment and cost is that which drive commerce and trade in
various ways and also being considered to be taken under care while going with any working in
organisation in better manner too.
Competition -
Due to globalisation, companies are allowed to expand their business areas in other
countries and gain high market growth & share. Globalization leads to increased competition.
The competition can be related to product and service cost and price, target market, technological
adaptation, quick response, quick production by companies etc. When a company produces with
less cost and sells cheaper, it is able to increase its market share. Through which small firms
cannot survive for long run; this affect their sales revenues & profitability.

TASK 2
P2. Complexity of strategic challenges faced by company in global market
When a company already established in different countries and looking forward to
expand their business in various organisation too and thus firm also face various challenges when
they are operating in global market and some of those are as follows:
International Structure of business: Moreover, every company like NIKE is having a
base aim is of earning profit by fighting in competitive world and thus it is being considered as
challenge as because making team in place is biggest challenge. Generally, they also consider
structure of big organisation too (Wild, Wild and Han, 2014).
Example: ROLEX is serving millions of people with their watches in different country and have
a president to oversee them, it also has central president which also has responsibility of
managing all the work of president with segmented market.
Laws and regulations: Apart from the structure of company in various country, it is
required by business to keep in mind the laws and regulation posted by government of UK and
such protocols has to be taken under while establishing in various country. Following these help
firm to have smooth functioning of their work and also look forward to attain their goals and
objective in better manner too. Moreover, tax implications are there with trading laws and also
look for navigating the legal requirement and it is considered as middle function of international
business. Although labour requirement and employment is also different in another country.
Currency rates: Payment and the currency prices are somewhere a major consideration
as because rates of currency fluctuates in great manner and thus is like challenging international
problem of company to have navigation. Therefore it is required to monitor the exchange rate
and it must be a central part of strategy too with international business too (Louhiala-Salminen
and Kankaanranta, 2011). Moreover any fluctuation in money and price can has a great impact
on profit and business expense as well. Although, organisation also has to protect themselves
from the currency fluctuation in great way by having pay suppliers and cost of production in
same manner even though in way of selling in.
Communication and cultural difference: Having a great communication can be
considered as base and blood of having an effective international strategy in business. Moreover,
interacting with the several culture can be a great challenge. Efficient communication style with
the colleague, client and customers having abroad can bring a success in business too. Hence, all

work would be done after having a research of market and their culture too which somewhere
help company to attain their expansion of business as well (Werther Jr, and Chandler, 2010).
Example: Although shaking hands with other person is a professional criteria but in another
country this is not a good sign and such thing has to be considered while going with business in
their country too.
Having political risk: The word political is being considered as biggest risk for
international business as because it is uncertain and not stable in market as well. Moreover,
various countries and markets are also being considered as biggest opportunity as well for
somewhere global business which looks forward to have a pose with challenges and when a
company enter into new market and country a risk assessment is very much required related to
economic and political landscape which is critical in nature too.
TASK 3
P3. Evaluate the influence of globalisation on organisation
When a business move more further to establish their business in many other countries
too it does also affect the working of organisation and thus it is required by company to consider
all such in great way. Influence of globalisation can be in positive and negative ways both and
can be considered in many ways too. But it is required to bring strategy and decision in best way
for right working as well (Cantwell, Dunning and Lundan, 2010). Some of the thing on which
globalisation is having their influence in great manner and thus they are as follows:
Leadership: Every company is looking forward to expand their business in another
countries as well whether they are established in various part of country too. Globalisation is that
which always impact on the working condition of company in various ways as this make firm to
does get affected and wind up their business. Moreover, research does help firm to make a better
strategy and decision by using a collected information and data related to expansion of entity.
Leadership style of organisation make them to perform in right context and also make them to
deal with different situation too. Leadership make firm to bring effective work and also motivate
their employees in great manner so that they can also increase their working, although can accept
the changes in environment too as this help in competing in market too.
Culture and functions: NIKE is that company which is already working in global area
and always looks forward to expand their business in other country as well so that they can earn
higher amount of profit and company does produce a quality athletic sports shoes and this make

people to buy their product in great manner. When an organisation move further to go in another
country then they need to motivate their employees to go there and work and also hire new
employees and worker as well. When a firm open a business in new country then culture and
function of entity also get influenced in great way (Gecevska and et. al., 2010). Organisation also
look to maintain culture with different functions of firm in right direction so that nothing can
bring any work downwards.
Structure: Different country has their various business structure which has to be
followed by the NIKE so that they can bring a effective functioning of their working too.
Structure is that which make firm to perform in better manner and to have a best work as well.
NIKE has to follow the structure system of business in various country so that organisation can
run their business in ethical manner and nothing can in between their working as well. This is a
biggest challenge for industry as because they have to bring their team in line for better working
and allow them to increase their working too.
Governance: From last so many years it has been seen that the standard of living of
people has raised in great manner and such thing has governed the organisation in great way.
Although companies are governing their activities in better manner too which make them to
perform even in right context and globalisation is that which has a great impact on working of
organisation which bring changes in them and leads to reduce their productivity as well (Laudon
and Laudon, 2015).
P4. Influences of ethical and sustainable globalisation on organisational functions.
Effective ethical culture and sustainable globalisation will help the organisation to adopt
a positive culture in corporate, financial strength and consumer confidence. The fact of adopting
ethical approach and sustainable marketing practices often turns out to be controversial issues.
Nike is a global country and having a vest empire of business activities hence it has become very
difficult for them to capitalize on both ethical factors and sustaining in business market. Ethical
influence on the corporative culture have different effect which area as follows:
Positive corporate culture- Nike must ensure that they develop certain policies and
values in the organisation so that they can build a positive organisational culture. This will give
values to the employees so that they can feel protected and believe in organisational structure
(Cavusgil and et. al., 2014). These policies dreck on anti-discriminatory rules, equal
opportunities and open door policy (policy to welcome views and ideas of their employees). This

will ultimately make the employee feel good and they can perform to their potential and
contribute to the growth of organisation.
Consumer confidence – It is a large organisation who have made their mark in all over
the world due to adoption of ethical culture in their workplace as well as their product. So it has
become more important for them to maintain that value and service in their product otherwise the
whole market will be affected. For example Nike have many competitor in business market like
Reebok hence any wrong doing like negative marketing will be noticed very quickly which may
deteriorate their brand value in market. So for maintaining the confidence among the customer
they must ensure that they maintain their values in product and services in the market.
Reduction of financial liabilities – For a global organisation like Nike they must ensure
that they reduce the liabilities in business organisation. Increase of liabilities for any organisation
lead to unethical practices which will affect the systematic approach in doing business in
workplace.
Effect on recruitment and selection process- The organisation has adopted several
legal practices while recruiting candidates for their business activities. Company have strictly
followed the guidance, policies and laws which have been pinned down by UK government for
example labour practice (1996), Labour law. Apart from that they have developed a team called
as Nike Environment Action Team (NEAT) in June 2000 under their Compliance Department
and Corporate Responsibility who have defined job to look after legal aspect of the recruitment
and selection process and training and development department (Hamilton and Webster, 2015).
In current scenario they have planned to implement this different outlets in different countries
e.g. The team has taken strict action against the illegal activities going on in Sialkot, many small
scale organisation who are working in collaboration with Nike are using child labour to stitch
football, the team has taken strict decision on them
Health and care – This is also included in ethical issues. Nike must make proper
measure to provide healthy and positive environment for their employees so that they thee can
work effectively in workplaces. For example in a factory in Vietnam Toluene (a chemical
substance) level increases drastically which may invite several health issues so Nike action team
has taken strict action against it.
These are some of the major ethical approaches which have been adopted seriously in
business practices of Nike to sustain in global market.

TASK 4
P5. Evaluate ways, decision making can work effectively in global manner
When the organisation NIKE looks forward to enhance their business in global context
they always go with a better research of market so that firm can collect a important information
and data which can help entity to produce a better strategy and decision which can make
organisation to perform even in various situation in right context too and thus it make industry to
earn higher amount of profit as well (Tarique and Schuler, 2010). Decision making and strategy
both help company to choose the best working and plan from the available to them according
tom market requirement.
There are various ways for decision making can work in more effective manner with
global context and some of those are as follows:
Pinpoint the issues: The organisation before going with anything they always identify
and look into business to know what kind of problems and issues firm is facing while going
global in another country too and bringing a better solution to that only and even in better way
too. Pinpointing the issues in right context make company to have a better working as well.
Market environment is that which changes with time and thus through research organisation do
come to know the factors which affect their working in great manner too.
Determine solution: Moreover, the company work hard to know the solution for the
problem occurred in working of organisation and thus also make them to have a better resolution
to them as well (Simic and Dimitrijevic, 2012). The decision which has to choose as a solution to
for the problem should not affect working of company and also look for advantage and
disadvantage of such thing as well because sales and revenue does also get affected with all the
working in organisation. Determining the solution in better manner help those to have a great
working in company and right solution also make firm to attain their goals and objectives too.
Implement solution: When the company and firm looks forward to determine the better
solution then they move forward to choose the better solution and they does implement such
which make them to know that solution is quite satisfied or not and may be it will be helpful to
firm in their working or not. Implementing solution in right context make NIKE to perform in
better manner and use solution to fight with competition in market as well.
Evaluate the effectiveness: In last the company also look forward to evaluate the
effectiveness of working in correct format so that they can work in better manner too. Evaluating

effectiveness of solution for problem make them to identify in right way that problem and issues
can be solved by that or not or need to choose the other solution available with them too (Peng,
2016).
Below is defined two main learning styles acquired by Nike, such as -
Behaviourism – The learning style is focused on recognising new behaviour or changes
in attitude or behaviour of people through associations between response and stimuli.
Behaviourism learning style refers that behaviour of individuals get changed as per the time and
market scenario.
 Advantages – It helps to observe and manipulated behaviour of people as render strong
arguments for the nurture side of the nature/nurture debate Disadvantages – This theory is too much deterministic as behaviouristic believe that
behaviour of people can be identified through environmental aspects.
Cognitivism – It is based upon the thought process behind the behaviour. Cognitivism
theory is a idea that human process the information they receive instead of merely responding to
stimuli. The approach of learning pays attention to determine what is in learner's mind rather
than observing their behaviour.
 Advantages – By recognising mind set of individuals', managers will enable to recognise
what are the needs and wants of people and then provide them training accordingly.
 Disadvantages – Its concept are too abstract and there is no single model to organise and
guide the theory of research.
P6. Determine the various routes to internationalisation
Company like NIKE has various routes for coming into internationalisation and thus
there are various problems and issues like increased cost in their country just because of change
in environment in great manner and thus it becomes the problem for entity to operate their
business in such situation as well.
Moreover the companies are also having many barriers while they enter into business
market of different country and also make firm to produce a plan and strategy in great way so
that they can make themselves stable in market too. Some of the biggest problem and issues face
by company are like as follows:
Monopoly: This is such situation which restrict the other company to enter into market
and service millions of people with their product and services in better manner too. Different

country has various monopoly situation and it is required by firms to fight such situation to make
their entity stable in market too (Kasemsap, 2014). Although, monopolies are such which create
a problem for entry of competitors and it makes them to use patent and licenses as well which
make them to prevent various development of different possible substitutes and this also control
different thing like distribution routes and the resources as well with suppliers and also make
pricing strategies we well.
Example: There is one example of such thing like internet service provider in North America.
Although this is because internet signals are also carried out with the two choices and how they
also obtain their services as well.
Legal protection: Moreover the foreign company is having various barriers in legal
protection which make them and thus company also cannot make assume in better protection of
its intellectual property too with the fair and effective dispute as well which help in settling the
mechanisms. Moreover, in few country having a legal action over some commercial dispute can
be ineffectual just because neither the law nor various court does not favour to them (exporter).
Bribery and Corruption: Although in many countries the business of various company
move further just because of payment of bribes in great way as well. Moreover, corrupt is that
thing like which can make them to induce the government to have adoption of different thing
which measure the favourable to industry and thus it make them to influence government
purchasing the decision and this help them to have a great working although too. In this, cases
officials and decision making will have a great demand which have a form of payment and thus
also make them to proceed with the transaction as well.
Following is given with different routes of internationalisation such as: Franchising – It is one of the best ways of expanding a business over the world without
putting extra efforts and finance. Franchising consists with a pool of capabilities or
resources in order to attain strategic marketing, distribution and sales goal of a firm.
Under this, two persons i.e. franchisee and franchisor are involved in which franchisor
refers with the one who grants to an individual i.e. franchisee to right to run business and
selling products by using name of franchisor's brand name and business model. For this,
franchisor charges some sort of money from franchisee. Joint venture – It is a kind of business two or parties get engaged to combine their
resources in order to do specific business activities or projects. Most of companies also

acquire the concept of joint venture to expand themselves over the world, for example – a
company joint hand with another foreign company with an aim to starts their function at
there for obtaining high profits.
 Strategic alliances – It is an arrangement among two companies which are decided to
share their resources for undertaking a mutually beneficial project. Strategic alliances
allow companies to work on common goals and objectives but at this time they need to
maintain their autonomy while gaining a new opportunity. In context of
internationalisation of a business, the main objective of strategic alliance is to explore
several synergies that can be achieved by working together, specifically in an industry.
CONCLUSION
From the above report, it has been concluded that global business environment is that
which affect the business in various ways and thus it makes them to have better strategy and
decision so that they can work in right context and can earn higher profit as well. Different
barriers are there which affect enter of business in new market which make them to bring
something new to enter into market and make themselves stable too. Report has also discussed
about the decision making and the ways which help in choosing the effective solution and
working too. Moreover various key factors are also discussed which help in driving the
commerce and trade of company in various ways. Therefore the organisation has also faced a
complexity in strategy making and having or choosing better solution to overcome such help
company to bring their firm globally and thus in right context too.

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