Comprehensive Strategic Management Report for Nike Inc. Analysis

This strategic management report analyzes Nike Inc.'s current business operations and proposes a future strategic plan. It includes an examination of Nike's mission, vision, and objectives, followed by external (PESTLE analysis, industry scenario) and internal (SWOT analysis, strategic capabilities, business canvas model) analyses. The report then explores strategic choices using the Ansoff Matrix, Porter’s generic strategies, and functional strategic analysis. Finally, it discusses the implementation of the chosen strategies to help Nike maintain its competitive advantage and defend its core business. The analysis covers competitive advantages, industry scenarios, and internal capabilities using VRIO analysis to provide a comprehensive strategic overview.

RUNNING HEAD: STRATEGIC MANAGEMENT
STRATEGIC MANAGEMENT
Name of the Student:
Name of the University:
Author’s Note:

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Executive Summary:
To develop a future strategic plan for Nike, the Board of Directors of Nike has approached a
strategic consultant. The strategic consultant has the responsibility to develop a strategic plan
for this sports accessories business organisation by analysing the business operation of Nike.
To do that the strategic consultant has to analyse the mission and objectives of the company,
external and internal analysis of the company, strategic choice and implementation of the
strategy. For the external analysis part, PESTLE analysis and industry scenario will be
discussed. For the internal analysis part, SWOT analysis, strategic capabilities, and business
canvas model will be discussed. For the strategic choice part, Ansoff model, Porter’s generic
model, and functional strategic analysis will be done. In the end, the implementation of the
strategic choice will be discussed. This strategic change will help the company to defend its
core business in future. To accomplish a competitive advantage, these modifications are
needed.

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Table of Contents
Task 1: Vision, mission and objectives:.....................................................................................3
Vision:....................................................................................................................................3
Mission:..................................................................................................................................3
Objectives:..............................................................................................................................4
Task 2: External analysis:..........................................................................................................4
PESTLE analysis:...................................................................................................................4
Competitive advantage among its direct competitor:.............................................................7
Industry scenario:...................................................................................................................8
Task 3: Internal analysis:...........................................................................................................9
SWOT analysis:.....................................................................................................................9
Analysis of mission statement and vision statement:...........................................................11
Strategic capabilities:...........................................................................................................11
Business canvass model:......................................................................................................13
Task 4: Strategic choice:..........................................................................................................14
Ansoff Matrix:......................................................................................................................14
Porter’s generic strategy:......................................................................................................16
Functional strategy analysis:................................................................................................18
Task 5: Implementation:..........................................................................................................20
References:...............................................................................................................................22

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Task 1: Vision, mission and objectives:
Nike. Inc, the American international corporation headquartered near Beaverton,
Oregon, in the Portland metropolitan area, is the manufacturer of footwear, sports
accessories. In 1964, this business organisation was established by Phil Knight and Bill
Bowerman. Board of Directors of Nike Inc has requested a strategy consultant for the future
strategic direction of this business organisation. The strategic consultant has the responsibility
to analyse the business operation, the business strategy of this organisation to set an effective
strategic plan for Nike Inc.
Vision:
The vision of this business organisation is “To bring inspiration and innovation to
every athlete in the world”. There are the key elements of this vision statement of this
company which are ‘Inspiration’, ‘Innovation’, and ‘to every athlete’. The management team
of this organisation uses its marketing to create and encourage demand. To increase the
demand for Nike’s product, this organisation spend billions of dollars. As an innovative
business organisation, Nike Inc prioritises the innovation procedure. Through innovation, this
company increase its sale. The third key element of the vision statement is the athlete.
According to this organisation if a person has a body then that person is an athlete. The
demand generation strategy of this company follows the vision of Nike Inc.
Mission:
The mission statement of this organisation is to “do everything possible to expand
human potential” (Nike News 2019). By analysing the mission statement of this organisation
it can be said that there are certain key elements of this mission statement, which will be
discussed here. The aim of this company is to influence the customer’s psychology. The
customer should have a feeling that wearing products of Nike can be ideal for them. To

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generate demand this organisation has to innovate new products for the customers.
Sustainability is a crucial part of the mission statement of Nike Inc.
Objectives:
The objective of this organisation is to make a profit for its shareholders. To achieve
the objective, the management team of this organisation has taken several small aims and
steps. The goal of this organisation is to enhance partnerships. The opportunity to work with
its stakeholder in the apparel industry must be prioritised. To accomplish its goal and
objectives, this organisation produce superior products, maintain the integrity of the
international brand and empower the innovation procedure for nee design. These profit-
oriented goals of this company will be balanced by its social and sustainable responsibilities.
Task 2: External analysis:
PESTLE analysis:
PESTLE analysis, which a framework used by the management team of a business
organisation, examine the macro-environmental factors of a business organisation. These
factors can create an impact on the business organisation. In this part, a PESTLE analysis will
be done to evaluate the macro-environmental factors of Nike. This analysis will identify the
political factors, economic factors, social factors, technical factors, legal factors and
environmental factors of this organisation.
Political factors  The stable political scenario is
beneficial for a global business
organisation like Nike.
 Expansion of free trade policy can be
an opportunity for this company.

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 As a leading global business
organisation, Nike is successful to get
support from the government of the
host country.
Economic factors  The economic stability of developed
market like the USA can be beneficial
for this organisation.
 Developing markets are growing
rapidly.
 An economic slowdown can create an
adverse impact on this organisation.
Social factors  The positive attitude of the customers
towards leisure.
 The concept of product safety is
prioritised by the customer.
 The concept of health consciousness
is rapidly growing in the customer. So
it can be said that this psychological
change is an opportunity for Nike.
Technical factors  The management team of this
organisation is interested to increase
R&D investment.
 The management team of this
organisation has successful to use
social media for its marketing.

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 With the help of technologies, this
organisation is successful to increase
its targeting, production and revenue
(Angeles 2014).
Legal factors  This organisation is improving the
employment law in the developing
counties.
 For doing business internationally,
this organisation has been following
regional consumer law, health and
safety regulation.
Environmental factors Mass production factories of this
company are creating a negative
impact on the environment. That is the
reason this organisation is interested
to follow environmental law.
 To enhance its brand reputation, this
organisation is interested to make a
sustainable business operation.
Competitive advantage among its direct competitor:
Nike is a leading business organisation in footwear and sportswear brand in this
world. Competitor of this business organisation is Adidas, Puma, and Asics. In this part, the
competitive analysis of Nike will be done through which the position of Nike will be

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analysed with its competitors. Global revenue, pricing policy and key success factors of Nike
and its competitors will be discussed here.
Nike Adidas Puma Asics
Global
revenue
31.35 billion
Euros (Statista
2019).
21.92 billion Euros
(Statista 2019).
4.65 billion Euros
(Statista 2019).
3.O7 billion Euros
(Statista 2019).
Pricing
policy
Value-based
pricing.
Competitive
pricing.
Premium pricing
strategy.
Product mix pricing
strategy.
Key
success
factors
 Unique
design.
 Product
quality.
 Innovative
marketing.
 The
innovation
of product
and
procedure.
 International
presence.
 Product
quality.
 Exclusive
product
range.
 Brand
equity.
 Customer
base.
 Global
distribution.
 Brand
reputation.
 High
product
innovation
(Childs and
Jin 2018).
 International
supply
chain.
 Brand
reputation.
 Quality of
the product.
 Products of
this company
are
manufactured
to sustain a
high level of
training.
Industry scenario:
Industry scenarios of Nike will be analysed in this part. The scenario faced by this
business organisation within its exist6ing market domain will be analysed through Michael
Porter’s five forces model. To analyse the competition intensity, attractiveness and

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profitability of the sportswear industry or market can be analysed through Porter’s five forces
model. By applying this model, the strategy consultant can analyse the market scenario. It
will help this organisation to take precaution for the negative factors.
Competitive rivalry This organisation has to manage intense competition
from several business organisations like Adidas, Puma,
and Asics. Competitors of this organisation are
investing heavily to enhance the brand reputation, and
market share (Fritscher and Pigneur 2009).
Bargaining power of suppliers As a global business organisation, the bargaining power
of supplier for Nike is low. The management team of
this company plays a dominant role to manage its
suppliers (Angeles 2014). The suppliers of this
organisation must have a high level of bargaining
power.
Bargaining power of buyers The bargaining power of the buyer of Nike is high
because of its low-product switching cost. Customers
can buy low-priced products from their competitors.
The profitability of Nike can be affected by this
situation.
The threat of new entrants Threats of new entrants are high for Nike. Though it is
difficult for the local and small business organisation to
compete with Nike yet the profitability of Nike can be
affected by this situation.
Threat of substitutes The threat of substitutes for Nike is low. Sports shoes,

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accessories, and apparel do not have a substitute.
Substitute product of Nike cannot serve the purpose
appropriately. So it can be said that threat of substitutes
for Nike is low.
So after analysing the external environment of Nike, the competitive advantage of this
organisation and industry scenario of this company is can be said that the management team
of this organisation is successful to implement its strategic plan (SHTAL et al. 2018). In
comparison with its competitors, this organisation holds the leading position in this industry.
Task 3: Internal analysis:
SWOT analysis:
The extent to which the company s facing strategic drift will be discussed through the
SWOT analysis. This analysis will identify the strengths, weaknesses, opportunities, and
threats of Nike (PANDEY 2017). It will help the strategy consultant to recognize new
opportunities be analysing the business environment of Nike.
Strengths  Strong brand awareness
 Large customer base.
 The goal of sustainable business
operation.
 Iconic relationship
 Low manufacturing cost.
 In-house professionals.
 Superior marketing capabilities.
Weaknesses  Poor labour situations in foreign

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countries.
 Pending debt.
 Dependency on the US market.
 Sexual harassment issue.
 Lawsuits.
Opportunities  Increasing the emerging market.
 Innovation and variation in
products.
 Efficient integration system (Gürel
and Tat 2017).
Threats  Intense competition.
 The pressure of the marketing
budget.
 Risk due to the economic recession.
 Risks due to unstable foreign
exchange.
Analysis of mission statement and vision statement:
In this part, the mission statement and vision statement of Nike will be analysed.
Whether the mission statement and vision statement of this organisation are aligned to the
demand of market place or not will be discussed. The mission statement of this organisation
is to “do everything possible to expand human potential”. The vision statement of this
company is “To bring inspiration and innovation to every athlete in the world”. Nike is the
manufacturer of sports shoe, sportswear, and sports accessories. As a leading business
organisation, Nike has the responsibility to fulfil the demand of the market. Customer of