Managing Innovation in Business: A Nike Case Study

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MANAGING INNOVATION IN
BSUINESS

TABLE OF CONTENTS
Assessment......................................................................................................................................1
Executive Summary.....................................................................................................................1
Introduction..................................................................................................................................3
Future of Industry in 2020 and Beyond.......................................................................................4
Organisational Innovation Requirements 2020 and Beyond.......................................................6
Developing Future Innovation Capabilities for Organisation.....................................................8
Conclusion.................................................................................................................................13
References......................................................................................................................................14

LIST OF FIGURES
Figure 1: Mock picture of innovation centre...................................................................................5
Figure 2: Model of path goal theory................................................................................................7

Assessment
Executive Summary
The businesses across the world face stiff competition that requires various plans and strategies
to be change from time to time by applying new techniques and creativity in product or service
that enhances global results and outcomes. The business requires various changes according to
trends and preferences of customers that might come due to technology, fashion, ideas etc. Thus,
it is significant to initiate improvements to business for obtaining desired objectives and aims.
The current study has discussed about Nike that deals in sport wear with quality and quantity. It
is based on innovation audit that is done for identifying various areas of innovation and issues
that can be done and resolved in Nike. The firm is indulged in manufacturing accessories, shoes
and clothes that target its products to sports athletes as well as industries. The study has aimed on
Nike Air Max that is known as shoe which was launched in 1987 (Biemans, 2018).
In addition, it has evaluated the need of innovation in product line for making firm on top ranks
and for achieving this it is essential to be creative and innovative for business. It has discussed
various factors that make innovation important for business such as boosting sales, growing
emerging markets and segmenting products. The firm has various strengths and weaknesses that
have been identified using swot that rectified innovation importance in business. Moreover, the
current report will provide how leaders promote innovation and creative ideas within firm to
acquire higher productivity as well as sales increase. The term innovation states that a product or
good that is changed due to various factors for obtaining better results in business. In the era of
competition, innovation is term or activity that keeps business alive and famous for which it is
important to have adaptability skills within workforce in an organisation (Archibald and
Archibald, 2016).
Nike has been initiating various strategies for maintaining its market positioning for which it has
targeted sportsperson and athletes that has huge requirement of quality products in which most
important are shoes that must be light weighted and proper that it helps to play according to the
flow of game. In such things also, it is essential to initiate changes like the Nike Air Max is now
need to change various things for attracting more and more customers as brand is paying quality
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to customers that makes feel comfortable. Hence, the innovation audit will help in determining
ways from which innovation will be managed effectively in business era of Nike for sustained
practise (Nohria, 2017).
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Introduction
Innovation management in business is determined as techniques from which innovation; ideas,
creativity and features are added to business process from which change management takes place
that must be adopted by employees. The current report will aim on discussing innovation drivers
in reference to Nike that has aim to innovate product of Nike Air Max for attracting customers
and boosting its sales and profits. It will analyse methods by which leaders will prepare and plan
for presenting innovation idea. It will further discuss significance of organisational knowledge,
cross functional cooperation and knowledge transfer that aids in assessing innovation blockage
and capability. The study will identify new service that will be planned by Nike for making the
innovation successful using various activities and approaches. At last, the report will focus on
conducting audit for developing organisation or innovation that helps in determining the market
competition, problems and customers while introducing fresh service or product.
Thus, report will target Nike products for achieving global development in product and services.
It will surely highlight method of conducting innovation in business by using successful methods
and approach. Therefore, it will discuss importance of innovation and creativity in firm to gain
competitive edge and profitability.
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Future of Industry in 2020 and Beyond
Nike Inc is known as American Multinational Corporation which deals in development, design,
marketing, sales and manufacturing of apparel, services, footwear, equipments and accessories. It
supplies sports equipment and athlete apparels and shoes that has made it largest and popular
firm. The organisation was founded in 1964 that serves its products across the world with the
revenues of US$36.39 billion. It has employed 73100 employees that manage all its operations
and activities. It has various ranges of products that are created by staff of firm in which Nike
Air Max is famous series. The product is classy and has quality features that are specially created
for people that have sports or athletic field. This is the product which was launched in 1987 after
which various series of products have been introduced including Nike SB shoes, Nike NYX and
Nike 6.0 (Antikainen and Valkokari, 2016).
The organisation is constantly updating and changing its services for gaining competitiveness by
being on top position in market. Even it develops and creates plan by keeping future needs in
mind so that products availability with high tech innovation satisfies customers. The members of
firm are aiming on initiating creative ideas either in manufacturing process or product designing
that helps in meeting market segments by fulfilling consumer requirements. The air cushioning
in Nike Air Max shoes has attracted cricketers and athletes that has made comforting in games
that requires running and jumping. The organisation has created several plans and strategies for
upcoming future in which the major one is to start innovation centre in its headquarters. This is
the best idea by firm that will contain area of 125000 square foot with the advanced designing
technologies and manufacturing. The advanced technology equipment will include 3-D printing,
automation and knitting machines. The final product will be accessed through Flyknit that will
help in increasing communication and speed in completing tasks (Winterhalter, et.al, 2016).
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Figure 1: Mock picture of innovation centre
(Source: Brendan Dunne, 2015)
Another plan by Nike consists of igniting idea of female sneaker culture. Today’s time people
including man and women both wear shoes for which necessity of shoe development for men or
women has equally increased. From the survey, 5.7 billion women were found to be working and
upcoming year will record it as 11 billion. In reference to this, various plans have been created
by Nike to capture areas in which it can gain huge revenues and popularity. Till 2020, the China
has been targeted by Nike to increase its market share and growth as high population helps in
boosting sales of organisation. The innovative shoes and apparel will provide huge success and
growth of organisation. Thus, product innovation play important role in gaining competitive edge
as it provides variety of choices in products and services (Prange and Schlegelmilch, 2018).
Therefore, till 2020 the organisation will focus on various new and effective plans that will boost
its growth and success. It is essential for firms to innovate things by applying ideas, technologies
and methods so that better opportunities can be obtained by business thus providing chances to
grow at immense level.
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Organisational Innovation Requirements 2020 and Beyond
Innovation in Nike is essential in today’s time as various upcoming year plans have been created
by firm. The current plan according to market situation and consumer trends targeted Nike Air
Max shoes that have been selected for initiating innovation for increasing consumer base as well
as sales of the organisation. The creativity might be done in colours, structure, materials or way
of creating products. This innovation is likely to be helpful for firm as it will focus on targeting
athlete as well as sportsperson so that satisfaction level can be boosted. The creative and ideas
can be developed within firm through motivational and directional leader that guides the people
in firm according to situation. The leaders play important role in developing employee’s minds
that drives positive motivation in employees to achieve desired skill of creative and developing
ideas (Al-Hakim and Hassan, 2016). The Nike requires to have competent leader so that
innovation can be completed based on consumer and market demands. Following are examples
of leader’s work in Nike innovation plan that includes the following:
 The employees are motivated for completing innovative plans.
 It provides guidelines to select innovation strategies and organisational objectives.
 Develops cooperation and mutual trust.
 Dispensing resource allocation for fulfilling innovation plans.
 Sharing value and beliefs.
Therefore, innovation in business is effectively handled by Nike’s leaders by using various styles
and concepts in which Air Max product innovation can be effectively fulfilled. The best concept
of leadership consists of Contingency Leadership theory that will give huge satisfaction to the
employees as well as customers (Hislop, et.al, 2018). This theory states that single style cannot
be adapted to issues and problems that are coming in path for innovation. The conditions and
factors that are present in innovation plan decide which leadership style will be best suitable. The
leader uses the theory as capability and motivation of employees are its followers, it requires to
have personal traits, experience and behaviour of leaders and at last, situation decides method of
completing task, environment and structure. For initiating innovation in product line of Nike Air
Max shoes it is important that leader in firm initiates best theories that includes path goal theory.
Path Goal Theory
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Figure 2: Model of path goal theory
(Source: Higher Employee Performance, 2013)
The theory guides employees and staff members about methods and criteria to minimise issues
and obstacles that should be eliminated for completing firm’s goals. It says that organisational
leaders has duties and responsibilities to avail required information, resources and support while
planning an innovation that plays key role in grabbing. Thus, the leaders in Nike must have the
active approach to acquire desired results and outcomes in terms of consumer attraction, profits
and revenues. The theory will be beneficial for Nike as shoes will be innovated based on need of
people which will make liberal to take decisions related to purchasing (Famakin and Abisuga,
2016). Hence, innovation plays key role in applying new techniques, methods, ideas and features
to specific product so that it remains in market for long time and capture attention of customers
within various parts of world to gain successful results.
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Developing Future Innovation Capabilities for Organisation
Knowledge Management
The organisation while planning an innovation require to rectified innovation capabilities using
effective source of gaining knowledge that will be managed by analysing resource present with a
firm. In reference to Nike, Air Max product line has been targeted to innovate so that generation
of young people desires to choose range of Nike series. Thus, the innovation plan must have full
knowledge of sources and information so that effective results according to desires. Thus, Nike
also requires having full knowledge of market and competitors while changing any plan or idea
initiated in organisation. The firm regularly requires knowledge management so that teams and
people are guided with all resources and information to fulfil innovation plans and structures
(Webb, 2017). It is important to manage knowledge in Nike due to various reasons that consist
of:
 Regular pressure on innovation and creative techniques.
 Strong and competitive marketplace.
 The complex services and products with better solutions by getting significant element
of knowledge.
 Idea of intellectual capital.
 Provides digitalisation in IT revolution and business environments.
 Low knowledge in team members due to various reasons such as retirements, staff
mobility, redundancies and staff attrition.
Thus, employees of Nike should be provided with necessary knowledge so that they become best
people and workforce in serving customers from various parts of world. The knowledge within
firm can be enhanced using two methods such as sharing and capturing. The sharing refers to
give whatever the person knows about specific thing or topic. On other side capturing knowledge
requires to go through specific process (Donate and de Pablo, 2015). The Nike requires
managing knowledge using various techniques that must be regularly practised for avoiding
challenges and issues of KM. The main challenges consist of collecting employees for giving
information, not having single aim, giving permission to technical equipments for giving
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information through dictation, barriers related to politics, commitment and structures and
knowledge has been found un-static that creates direct pressure on ideas and information.
Thus, Nike should have ability to handle problems effectively by eliminating unnecessary reason
by focusing on learning techniques. The regular learning in firm will provide various benefits as
it will make innovation plans successful and meaningful. This will benefit plans of Nike as all
information related to shoe market and trends will analyse areas in which innovation can be done
effectively. The learning will dispense certain advantages that include hikes in competition, the
increase in staff capability, boost skill and knowledge of team members, huge staff commitment,
enhances searching on innovative ideas and job satisfaction (Nonaka and Toyama, 2015). Thus,
the firm will receive success and growth if it will regular disseminate new knowledge for
completing creative tasks of goods and services in specific timeframe.
Activities required for Product’s Successful Development
The marketplace in current time requires constant innovation and creative plans to be initiated to
the product for obtaining strong market positioning and brand recognition with high revenues. It
is important for business to practise new idea and plan with motive of creating successful good
or service that has meaning to customers for which specific amount will be paid by them. A shoe
of Nike contains best quality and features that makes person comfortable after wearing it as soul
and material that is used in production has researched huge requirement of customers based on
which success has been gained. The innovation is promoted through stars and a player that draws
huge attention of customers towards the Air Max series as it also contain customization option
for which services are rendered for fulfilling consumer satisfaction (Vanbésien, et.al, 2016). The
innovation in business can be managed by focusing on various factors that plays essential role of
attracting buyers from various parts of world.
Therefore, various techniques or activities must be planned and prepared by leaders and workers
for developing Nike’s product in successful manner. Following are activities that must be used
by firm for obtaining expected results which are as follows:
Constant Improvement – It is crucial for Nike to initiate necessary improvements and changes
for personal growth of employees as well as developing firm for being in international market. In
reference to regular improvement in business process, working styles and methods it is important
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