Business
Global Strategies
The Nike Company operates on a global front. It has competitions and operations in the global sector. That is; numerous aspects link the Nike Company to the global sector. Nike has various business strategies including global strategies that have enabled it to prosper in the global arena. With the increasing market share and the emergence of new markets, the Nike Company has different measures that link it to the establishment of global strategies to suit in the changing fortunes of time in the business environment.
The global strategies of the company address its needs to expand operations outside its home country and to compete on a global forefront. The Nike Company applies this strategy to the fullest extent to reach its customers in all the six continents. These areas include the Americas, Asia Pacific, Africa, the Middle East, Europe and USA (AGUILERA, RUPP, WILLIAMS, and GANAPATHI 20). It is clear that the competition of the Nike Company is on a global aspect. The measures to extend its operations to all the continents are evidence that the competition is becoming more global. There are various conditions of the national context that have significant influence on the industry that Nike operates in. The factor conditions, demand conditions, supporting and related industries and the intensity of the rivalry in the country of operations play an important role for the formation of strategies in the company.
Nike has had good relations and collaborations with other companies in the home country within the fitness and sports industry. Some of these companies include the Bauer Nike Hockey. Moreover, Nike deals with divisions among the industry competitors. With its products, Nike has an increased emphasis on the fashion by consumers in relation to the sportswear. The company makes strides to the appeals in the perceptive fashion market.
The apparel line of the Company is challenged by stiff competition from Reebok and Adidas and other accessories and clothing retailers such as Abercrombie & Fitch, and the Old Navy. These are competitions from the home country competition. In order to manage well in the industry, Nike has a global strategy and plans to initiate five structures in its apparel division of products in areas including women, men, kids, sports graphics and caps, and strategic response independently.
The responsive manner of Nike in relation to the differences among the nations is independent. The response of the company is similar across its products and the messages across the countries (AGUILERA, RUPP, WILLIAMS, and GANAPATHI 24). This responsive should vary across the countries because different regions have different approaches towards their strategies. There are intensive cost pressures in the international business in the industry that Nike is based.
With the increasing globalization in industries, there are stiff rivalries and completion from other companies including Puma and Adidas. These cost pressures are extensive and affect the adoption of strategies among individuals. As such, the Nike Company adopts a mixture of strategies and approaches especially global and international. For the international strategy, the Nike Company creates value by transferring its products and competencies to the foreign markets in the six continents where the indigenous competitors lack the products and competencies.
This strategy is essential for the Company because Nike has valuable competencies that the indigenous competitors in their foreign markets lack and face weak pressures of the cost reductions and local responsiveness. Its global strategies enable the company to increase the profitability by reaping the cost reductions that originate from the experience curve impacts and the local economies (AGUILERA, RUPP, WILLIAMS, and GANAPATHI 30). This global strategy is essential because it provides the company with the ability to exploit the experience curve effects and the local economies.
Corporate Strategies
For the past five to ten years, the Nike has carried out major diversifications in its operating businesses. The diversifications have been to increase its apparel to include the women, men, and other sportswear products. This diversification has been important and wise for the company because it has increased the market value and overall propensity of the company. Based on this analysis, I would recommend that the company embarks on other diversifications. These diversifications would be to include other products in its sportswear such as medications and services such as customer relations. There are various dangers that the costs of bureaucratization or the failure to comprehend the competencies needed for the new business to the company (Donaghu and Barff 22). First, the company could lose its marginal income from the issue. The costs of bureaucratization will put pressure on the intensive costs of production and operation at the company, which means that there will be less amount of company revenue to be saved.
Recently, Nike has carried out horizontal integrations in its operations. For instance, Nike acquired Converse in 2005 for expanding market share. It was important for a company to acquire the converse. This acquisition was important because it increased the marginal income of the company (Frisch 16). The company extended its market share, which had significant in influences in its operations. There was an increase in its income from the activities of the acquisition. Additionally, the company was able to secure potential market areas to expand its operations and diversify its products.
Nike has a strategy towards vertical integration. The vertical integration of the company is to expand operations backward into the industries that produce inputs for the company. Moreover, it focuses forward on the industries that distribute the products of the company. The company seeks to improve its operations by diversifying the products across the various regions anticipated to create new operations (Frisch 27). The creation of the new operations will promote the functions of the company in relation to its programs of vertical integration.
The company seeks to benefit in various methods by formulating strategies of vertical integration. With its vertical integration, the company will increase its profitability through its vertical integration ("Nike | Economist - World News, Politics, Economics, Business & Finance"). The company seeks to build barriers to entry and facilitate the investments in the specialized assets. Additionally, the company seeks to protect product quality and improve scheduling.
I would recommend that the company should increase its vertical integration and develop more objectives of vertical integration. With the increase in vertical integration, the company will increase its profitability. The increase in profitability will have essential benefits on the company. There will be an increase in the marginal propensity of the company and an increase in the income level in the company. With the increase, it will be important for the company because it will have more revenue to carry out its operations. Some of the operations that the company will carry out in relation to the increased revenue, and vertical integration will be to diversify its operations in the anticipated areas of operations in the continents.
Works Cited
AGUILERA, RUTH V., DEBORAH E. RUPP, CYNTHIA A. WILLIAMS, and JYOTI GANAPATHI. "PUTTING THE S BACK IN CORPORATE SOCIAL RESPONSIBILITY: A MULTILEVEL THEORY OF SOCIAL CHANGE IN ORGANIZATIONS." (2007): Print.
Donaghu, Michael T., and Richard Barff. "Nike just did it: International Subcontracting and Flexibility in Athletic Footwear Production." Regional Studies (2009): n. pag. Print.
Frisch, Aaron. The Story of Nike. Mankato: Creative Education, 2009. Print.
"Nike | Economist - World News, Politics, Economics, Business & Finance." The Economist. N.p., n.d. Web. 30 Nov. 2014.
