IBUS3310 - Nike: A Comprehensive Report on Foreign Operations

This report provides a comprehensive analysis of Nike's foreign operations, focusing on franchising and licensing strategies in Australia and India. It begins with an executive summary and introduction, outlining Nike's global presence and the report's scope. The main body delves into two foreign operation methods: franchising in Australia and licensing in India, explaining their implementation and impact. A critical analysis of the development and performance of these operations is presented, evaluating their effectiveness and contribution to Nike's international success. The report concludes with recommendations for further development and improvement of Nike's foreign operations, providing actionable insights for future growth. The analysis incorporates relevant concepts and theories to support its findings, drawing on extensive secondary research to offer a holistic understanding of Nike's strategic approach to foreign markets.

Internal Business
Operations

Table of Contents
Executive Summary.........................................................................................................................1
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................2
TASK 1............................................................................................................................................2
Discuss two foreign operation methods used by Nike in two different countries it is operating
................................................................................................................................................2
Critically analyse the development and performance of these foreign operations.................3
CONCLUSION and RECOMMENDATION..................................................................................5
References:.......................................................................................................................................6
Books and Journals.................................................................................................................6

Executive Summary
International business operations are the opportunity to enter the new foreign market. There are
the many different ways of the international business operations such as import and export trade
of movements of goods and services from one country to another a contractual agreement
between the two nations in the form of licensing or franchising, joint ventures and much more
(Cherunilam, 2020). Among the various foreign operations methods franchising and licensing
are considered as the most common and widely used methods by the top business organisation to
expand their business in the foreign markets of the different countries. International franchising
the method of expanding in new establishment franchise in the new foreign geographical area
and market apart from the franchisor's home country where as International Licensing is a way
by which a firm in one country permits perform in another country to use its intellectual
property, patents and trademarks. Both International franchising and licensing are efficient and
profitable methods for a business to expand business overseas. The aim of the report is to
demonstrate a holistic understanding of how a business can expand its business in the foreign
country with the help of corporate foreign operation method as well as to demonstrate the skills
in strategic analysis and planning of foreign operations based on the institutional and external
situations of the market (Cavusgil and et. al., 2020).
INTRODUCTION
Foreign operations is a basically a term that is used to define the business activities that are
operated at the international level in which company usually indulge themselves in expanding
their business across their home country (Păunescu and Argatu, 2020). The report the report will
outline before an operation report for the Nike- footwear and the sports brand. Nike Inc. is a
multinational American corporation that is headquartered in Oregon, U.S.A. The company was
founded by 57 years ago by Bill Bowerman and Phil Knight in name of "Blue Ribbon Sports".
Nike is popular for designing, developing, manufacturing and worldwide marketing and selling
the footwear apparel equipments and sportswear. The company is world's largest supplier of the
athlete shoes and apparels and also manufactures the top most brand sports equipment. The
company operates in more than 20 countries all around the globe among which United States is
the largest place for the total revenue. The purpose of report is to explain the two foreign
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operation methods that night is currently using in two different countries along with the
development and the performance of the company in these two foreign operations.
MAIN BODY
TASK 1
Discuss two foreign operation methods used by Nike in two different countries it is operating
Nike the world's top most American multinational company that supplies largest amount of
sports shoes and apparels in the brand name of Nike which has a slogan just do it with tick logo.
The brand is recognised all over the world in has a brand value of approx dollar 32 billion in a
year. The company is one of the most prestigious brands and sell its products over 130 countries
all over the globe. In order to expand its business internationally the company has adopted two
well known foreign operation methods in the two countries India and US. The two foreign
operation methods adopted by Nike are franchising and licensing.
Franchising in Australia
International franchising is a method by which organisation enters the new foreign market which
is extremely efficient and profitable for the big organisation like Nike to expand the business
overseas (Onyusheva, 2020). Nike has franchising in the Australia. Buds company e give the
right to the Australia to open the companies owned or out let's answer franchise in the Australian
countries thereby granting the franchising licence to the Australia to use the marketing, branding
and operations of the Nike. This International franchising of a Nike in Australia was a amazing
opportunity for the company to expand their operations in the developing country like Australia.
In Australia Company employs approximately 480 employees. In Australia Nike ID product
branch office the customers with the option to customise their sporting footwear online. Nike
Australia consumer product director and retail director showcase the very unique and diversify
and it range and a marketing tool to drive the demand for the brand. The franchise of Nike in
Australia has bring Nike by you customisation service in the Australia. The service the customer
one allowed to purse personalize their Nike sneakers and apparels by printing and engraving they
choose an initial or phrases on items and choosing the coloured laces for the sneakers.
Licensing in India
International licensing is a business agreement that involves the two companies of different
countries in which one company allow another company to use its patents, copyrights and
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trademarks on its products (Bretas, 2020). The international business licensing agreement
involves two main forms of the different countries that receive the licence regarding right of
using the resources to manufacture in the foreign country and also includes the patents
technology managerial skills and the other necessary requirement to manufacture the good in the
foreign country. Nike has a licensing in India along with that it also has a franchise outlet in
India. Nike has a licensing agreement in India with BCCI Indian Cricket Corporation. The Nike
in India Launch Nike in India as a subsidiary by customising the first cricket shoes, the Air
Zoom Yorker for the Indian athletes with logo of Nike. This expansion of Nike with such a
marketing strategy to promote the brand of Nike on the pitch of cricket was tremendous foreign
operation method by which Nike beat the competitive companies like Reebok and Adidas. The
licensing with the BCCI Nike also got the right to make become the official cricket kit sponsor
for the Indian cricket team by making every essential sport apparels and items in the brand name
of Nike along with the logo and slogan on it. Licensing with BCCI was a new contract of Nike
with the Indian cricket team that show the fans loyalty of Nike towards team India and its
commitment to the market as well. This foreign operation method was a wonderful deal for Nike
to bring a new fresh momentum to India. Decide this BCCI was also allowed to launch official
merchandise compromising of replicas team jerseys kit bags and backpacks in the name of Nike.
This deal was a huge opportunity for Nike and made Nike on total of $20 million for the sales of
licensed merchandise.
Critically analyse the development and performance of these foreign operations
It is critically evaluated that International franchising allows the organisation to develop and
expand the business and their products by entering in the foreign markets also helps in reaching
the new customers with low risk model (Lemos, 2020). This foreign exchange method of
franchising is a great opportunities for the big brands like Nike to expand their operations in the
model that possess significantly less risk and offers high rate of revenue and exchange. Countries
like India with the growing economy is a significantly an opportunity for the company like Nike
to enter into the franchising model. Franchising is a best suitable method of foreign operations as
organisation is doesn't required to spend much time in money over recruiting the full
complement of staff in that area there are only required to relocate the offices or stores to the
new area (Mohapatra and Mishra, 2020). Basically it is analysed that franchising is a strategic
way by which Nike can reduce the dependence on the domestic demand and grow new future for
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the company to attend the revenue and profit from all around the globe. Basically franchising in
considered as a cooling of resources and capabilities to enter into the new foreign market in order
to accomplish strategic marketing distribution and the sales to achieve the higher revenue and
goals for the company. Franchising is a method that help the organisation like Nike to develop
and produce new customer visible products for the company there by fostering the innovation in
an organisation and also helps to increase the performance of the organisation to meet the
demand of particular segment of audience of a particular country. It is analysed that Nike
operates in a franchise model for the entrepreneurs and has a profitable and provide minimum
guarantee on return on investment (Guercini, Milanesi and Runfola, 2020).
It is critically evaluated that licensing agreement between the two companies of the different
countries provide the main advantage of using the trademark, patent or branding of the other
organisation which helps them in earning the profits and expanding in developing their business
organisation in terms of branding as well as in the form of financial support (Dratler, 2021).
Licence requires less money and the better opportunity to start a business with a good brand
name with the benefit of reputation and customer awareness about the existing product. It is
analysed that with the help of licensing Nike can easily expand its business in the India as there
will be less requirement of the product development, market testing, with the help of licensing
license given to the person knows they market better than the average licensor in this manner
Nike gains the advantage in the countries like India where there are different rules and
regulations regarding the intellectual property and entering into the licensing helps the
organisation to develop their performance in the India with the help of the licensee and actually
gained the investment. International licensing to enter the foreign market include the licensor and
the licensee where both the parties come together in the licensing agreement where the licensee
will have a right to use the licences intellectual property such as patent trademark copyrights
designs which gives the advantage to the licensee to develop the market with existing knowledge
and brand equity. With the help of licensing agreement both the companies can protect from
tariff or the cultural barriers in order to enter the foreign market. It is analysed that licensing is
considered as the most suitable method to develop and perform in the foreign market without any
barriers regarding any tariff or other legal rules and regulations as it provides the company with
all the intellectual property rights and the brand image of the other company to successfully
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operate in the foreign market and gain high rate of return and profits in exchange (Ferrucci and
et. al., 2020).
CONCLUSION and RECOMMENDATION
It is concluded from the above report that there are the significant mode of methods to enter into
the foreign market such as franchising, licensing, joint venture and other several ways that helps
the big organisations to enter and expand globally into the multiple countries in order to expand
their business and gained large amount of profit as well as brand equity. It is also concluded from
the above report that franchising and licensing are the best methods to expand the business
globally in the foreign market with less risk and less investment in exchange of higher profits
and revenue. It is also analysed from the above report among the above two discussed foreign
operation methods franchising is the most popular and well known method of entering into the
foreign Market by many big organisations like Nike, Adidas, McDonalds etc. It is recommended
to the Nike to enter the new market of Canada as there is full opportunity for the company to
grow the market of shoes and sportswear. Canada is the most suitable country for Nike to expand
globally into the new foreign market as the country is full of resources and has a growing
economy that will gain the larger customer base for the organisation and also provide the
significant resources for the manufacturing at the cheap rate which will help the organisation in
increasing their revenue as well as successful expanding their business in the Canada. Hence in
the current competitive business environment expanding the business internationally is the best
strategy to gain more customers, brand image, productivity and profitability.
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References:
Books and Journals
Bretas, V.P.G., 2020. International franchising governance modes: an emerging market
perspective.
Cavusgil, S.T and et. al., 2020. Risk in international business and its mitigation. Journal of
World Business. 55(2). p.101078.
Cherunilam, F., 2020. International business. PHI Learning Pvt. Ltd..
Dratler Jr, J., 2021. Licensing of intellectual property. Law Journal Press.
Ferrucci, E and et. al., 2020. From a distinctive sign to an exchangeable asset: exploring the US
market for trademark licensing. Industry and Innovation. 27(1-2). pp.25-51.
Guercini, S., Milanesi, M. and Runfola, A., 2020. Foreign market entry decision-making: what
do we know so far?. International Journal of Economic Behavior. 10(1). pp.133-147.
Lemos, D.M.A.A.D.S., 2020. International franchising models and the impact on businesses
success: Keller Williams case (Doctoral dissertation).
Mohapatra, C.K. and Mishra, A., 2020. Franchising of Intellectual Property in India. Psychology
and Education Journal. 57(9). pp.902-904.
Onyusheva, I.V., 2020. Exploring Foreign Market Entry Strategies as a Way of International
Business Expansion. Вестник университета «Туран». (1). pp.9-14.
Păunescu, C. and Argatu, R., 2020. Critical functions in ensuring effective business continuity
management. Evidence from Romanian companies. Journal of Business Economics and
Management. 21(2). pp.497-520.
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