Nike Product Launch, Essay Example
Nike’s objective is ‘to bring motivation and advancement to each player around the globe’. Hence, has consistently been putting our endeavors to the global markets in order to rouse individuals to get fit and turn into the best player they can be. This Report will speak to various certainties and insights with respect to Nike and the games business. As the interest for innovation and new developments of items builds, it is Nikes obligation to address the issues and needs of their clients. Nike’s situation with their new product launch is spelled out within this report is to distinguish what their client’s needs. What is absent in the business and how Nike can propel and urge everybody to turn into ‘the best competitor they can be.
This project for the new product development will be done over the term of one year prior Nike discharges another item into the business. Nike’s objective is ‘to bring motivation and advancement to each player around the globe’. Hence, has consistently been putting our endeavors to the global markets in order to rouse individuals to get fit and turn into the best player they can be. This Report will speak to various certainties and insights with respect to Nike and the games business. As the interest for innovation and new developments of items builds, it is Nikes obligation to address the issues and needs of their clients. Nike’s situation with their new product launch is spelled out within this report is to distinguish what their clients’ needs. What is absent in the business and how Nike can propel and urge everybody to turn into ‘the best competitor they can be. This examination will be done over the term of one year prior Nike discharges another item into the business.
One of the leading sneaker companies in the world, Nike began in Beaverton, Oregon. It has an extraordinary fitness to influence clients with its form patterns and to incredibly expand its benefits. In only a matter of years, the organization opened up to the world what represented a relentless development. Knight’s principle system for separating themselves over their rivals was in light of a fundamental equation: to outsource its generation over fewer expensive builders and the capital spared is put once again into the business for promoting purposes. Knight likewise accepts that the firm ought to put resources into endorsements from celebrities in order to align the company with powerful sports figures, as well as contribute to the overall brand notoriety and loyal customer base. To tail its methodology of outsourcing for shoddy delivering, Nike moved its assembling to firms in South Korea and Taiwan. Nevertheless, as these two nations created it has to be in these locations to high of costs in operations to leave. Quickly producers moved their office to fewer expensive countries, for example, Indonesia and China. Despite the fact that Nike was encountering the fervor snippet of its presence with overwhelming development and brand picture. Nike has steadily increased their product lines, by getting famous sports figures in different sports arenas such as NFL, NHL, Track and Field, Football, Basketball, and other fields in order to capture their versatility, as well as their fans. With the growth of their Jordan line, it has netted Nike billions in revenue, and have helped to popularize the growing corporation. With the addition of new products to their shoe lines, they are sure to maintain their leadership position in the shoe market.
Through much primary and secondary consumer research, Nike has found an inevitable gap between the target market and the product/services they provide. Nike has made most of the bulk of their sales and revenue in footwear designed for athletic use. They have invested much time on the innovative designs, and quality construction. However, there is a large market that are buying most of Nike products for leisure and casual purposes. Nike sells and markets a wide range of products, which includes targeting men, women, and children for many specific purposes. As technology continues to advance and become an integral part in daily activities, Nike must invest in wearable sporting technology. “Nike designers and engineers worked with scientists in the world-class Nike Sport Research Lab (NSRL), and with members of Nike’s Advanced Innovation Team, to gain valuable information about how the body behaves in motion and responds to materials of varying weight, composition and thermal properties.” (Nike, 2013) In what this means is that products such as watches, headphone, and Bluetooth mobile devices are important to consumers. Technology has significantly upgraded all these devices, in which Nike is still trying to play catch up. Where Nike excels in sports apparel and shoes, it fails in maximizing on the technology that many sports and other athletes would benefit from. The new product in development for Nike centers on Nike’s own line of Bluetooth headphone and sports watches.
The proposed solution to helping Nike tapped into the wearable technology market is to develop their own line of Bluetooth devices. These can range from Bluetooth watches, headphones, and heart/health monitors. In hoping to achieve with this new product launches is to welcome a new audience that will drive the revenue and sales. Nike is aware that there is a huge market for sportswear and technology integrated, as evidenced in their research, “The new products are designed to enhance runners’ natural abilities and were guided by Nike’s “Nature Amplified” design ethos, an approach that is focused on designing for the body in motion and fueled by scientific data and athlete insights.” (Nike, 2013) Nike values innovation, and creating products that provide a purpose. As they specialize in athlete and sports, they are constantly trying to develop products that services the needs of those in the sports industry. In developing and progressing this project, it will help to complete the organization’s person to provide innovative products for the betterment of the sports industry, and their athletes.
Looking at the Nike’s SWOT analysis, we can see that Nike is involved in a very competitive market. Their strengths lie in the founder and CEO Phil Knight, which has helped to transform the company from the small shoe company, to a multinational corporation. Nike provides a competitive edge over their competition, as has the backings of multiple celebrities, and sports figures. Nike provides sponsorship to the top athletes, which has increased their brand recognition and loyalty.
Nike has a strong customer base, and brand name. Due to this, they can be seen as greedy or exploitative to their athletes and smaller shoe companies. High advertising costs are also detrimental to the company’s marketing strategy, which includes endorsement deals of high profile athletes. According to their annual report, their total promotion and advertising expenses were almost $2.7 billion in 2013. (Nike Annual Report, 2014) Over time, the endorsement costs of expenses for demand creation will steadily increase. These expenses will impact their margin, and counteract the sales leverage and productivity advances.
Nike has favorable industry trends in which they have global recognition, which allows them to grow in popularity. Nike has also had a boost in sales, as many people are beginning to wear their apparel and shoes for leisure, along with sports purposes. They have a direct to consumer ecommerce that for Nike represents a big opportunities, in which in the next few years will drive the business annual sales to well over $2 billion. Nike should continue to expand their factory stores and retail shops, as they are able to win new wholesale accounts, effectively manage their inventory, and control their brand. Nike continues to emerge their market growth, as they expand into China’s market, which has an emerging middle class, and a huge population for a long-term opportunity.
The threats to Nike includes the elements of international trade, as it continues to buy up foreign currency, as the value of the dollar fluctuates. The rising raw material costs are continuing to use more commodities. Nike needs to maintain productivity improvements, as labor inflation becomes an issue. Nike will face heightened competition from Timberland, The North Face, and many other edgier competitors. Other companies that are beginning to grow their market share includes Under Armour, Sketchers, and New Balance that target younger consumers.
Four Parts of a Business
In looking at the four parts of a business, we look at first the Business Knowledge Management (BKM), in which Nike comprehensively and consciously analyzes, shares, organizes, and collects its knowledge for people skills, documents, and resources. The BKM for Nike relies on data entry on customer inputs, cataloging and indexing their inventory and sales. Nike invests large amount of funds into innovation and knowledge development. They analyze supply chain management, marketing, product development and design, and buying behavior. They rely on test tracks and laboratories in order to test out their new products for their customers. The Supply Chain Management (SCM) of Nike is also critical to their operations. Their extensive SCM capabilities incorporate strong connection by outsourcing to Asia. They implement a unique business model that pushes brand dominance, quality, and product innovation. They involve global sourcing throughout 44 countries, with over 715 contract factories, and almost 1 million contract workers. In order to reduce costs, and provide better integrated organizational structure, they have utilized a sustainable supply chain management within their traditional corporate functions. They work closely with marketing and finance organizations, strategy, product creation, product design, manufacturing, and sourcing. (Porteous, Rammohan, 2013)
Nike’s Enterprise Resource Planning (ERP) is also integral in their SCM and operations. Their ERP provided by SAP, provides greatly flexibility, which provides real time of contains, and enhancing their ability to reduce inventory and capital investment risk. It has created an efficient global supply chain, and improved services. The Management Information System (MIS) of Nike is also a benefit in the company’s reliance on technology, data, and human resources. They all serve to be essential components of their goal of innovation, quality, and design. MIS helps in exploiting the skills of their employees, and providing them with best services and benefits, which helps them with continuing to add their ideas to new product developments.
The solution for Nike to be profitable and cost effective, while also utilizing their employees, is to invest in their R&D and MIS in order to provide innovative products for their company. The new products that cater to the advances in technology, as well as to their customers is reliant on their employees, and their ability to create products that satisfy a need to their core markets. The return on investment (ROI) of investing in both new technologies and Research and Development (R&D) helps to spark creativity, as well as research the growing trends of wearable sportswear. The ROI will provide increased sales and profits, as well as secure more athletes and overall industry sponsorship from leading technology companies, and sports teams. The market for wearable technology such as sport watches. Bluetooth monitors, and headphones, is steadily increasing, and open for new and sustained companies to enter to grab a large market share. For the feasibility of this project, it provides a unique and profitable opportunity that will help Nike enter new markets, as well as maintain their position in sports footwear and apparel.
Nike has continued to have success in the sports footwear and apparel market. They have explored their opportunities by entering into larger international markets, as well as expanded their endorsements to include sports figures from different fields. Their reliance on satisfying the needs of their athletes remains a priority. For this reason, the proposed solution to the problem of wearable devices which helps monitor the body, as well as provide a hands free device for athletes creates a wide range of opportunities. The accomplishments and lessons learned, is that Nike should continue to research their consumers’ needs, and invest in R&D and human resources so they are able to sustain a competitive edge against a growing market infiltrated by younger companies. By utilizing these tools, Nike will continue to be profitable, as well as expand their product services, and product lines for the future.
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