Nike Strategic Management

QUESTION 1

Prior to the “Game Changing” proposal for global woman's fitness where would you put Nike on the CSI chart? Why Prior to “Game Changing” initiative, I would categorize Nike as a scope-driven organization on the Complex Strategic Integration Chart. Generally, in a scope-driven strategy, resources are mobilized across business units to pursue major opportunities. Nike business strategy is centered on big events. Nike scope dimension indicates the magnitude to which pursuing a new business opportunity requires the collaboration of the existing business units with the corporate strategy.

Prior to the “Game Change” proposal, Nike was an initiative-driven organization, product group and business units work together on major marketing events but then go back to their silos as soon as the common goal is accomplished. Nike focus on product improvement, it has organized its core business around a product orientation, with primary business units focused on their main competencies.

In other words, Nike’s strategic integration contributes to the support of the strategic push of the company’s core business.

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Furthermore, Nike’s business units represented the lead dimension of the matrixed organization structure. Within Nike’s matrixed structure, the business units dominated decision-making and priority setting. Members of different business unit teams only collaborated across business unit boundaries commonly to support short-term projects as such World Cup and Olympics. The cross-communication, sharing, and transferring of resources among business units is conducted in order to meet Nike strategic desire to optimize innovation and execution around its primary products. As an example, prior Game changing, Nike ‘strategic integration did not support redirection; Nike’s marketing strategy was focus on products and product innovation.

According to Nike managers, it was difficult to gain the support of all the business units in ongoing strategy preceding the Game changing initiative. To make the matter even more challenging business units were much disintegrated; each business unit had its own timelines of bringing product to market, making collaboration harder. Functional representative were not always involved in vital business activities. Nike’s structure did not support ongoing strategy. This prevented Nike from recognizing opportunities.

QUESTION 2

How would you describe the new strategy for Global Woman's Fitness? The “Game Changing” strategy is crucial in the women’s fitness segment since it focuses on providing vertical integration of all products within the segment rather than having products developed separately without a common vision. The new strategy proposed by the “Game Change team put’s Nike in a strong position to capture significant market shares domestically, as well as in emerging markets where women had traditionally have not been allowed to participate in sports are now finding it acceptable to do so.

This new strategy gives women’s fitness its own category of focus, instead of the focus being on product divisions such as footwear and apparel. Nike had traditionally organized its business around footwear, apparel, and equipment. Integration between these three business units was inconsistent at best. The goals of the “Game Change” proposal was to reorganization and take a more consumer-oriented approach to the market to give customers holistic collections of everything they want and need in a particular sports category. This required Nike to breakdown its product-oriented silos and collaborate on a more formal, ongoing basis. The reorganization also reflected a change in Nike's corporate strategy. The elevation of women's fitness to a major focus for the company was a substantial victory to proponent of this initiative, those who recognized the potential of women market, and had been fighting for the increased prominence of this market segment for years.

For Nike female consumers are the core of a new organizational product and marketing strategy aimed at finding ways to capture the women’s sport market after years of failure.

QUESTION 3

What was the biggest external barrier facing Nike? Nike external barriers are its consumers, retailers, and competitors. Nonetheless, the biggest Nike’s external barrier was consumers, trying to be clear on what they wanted exactly, that would lead to want to buy from Nike. Nike discovered that they had to get much more specific regarding what is different about dance versus running and so forth. Nike faced off against a handful of traditional but well respected brands in the women’s footwear market, also a lot of new and smaller competitors. Nike led the market in some categories, but not other.

As an example, Reebok dominated the market in women’s aerobics, but Nike led in women running from the market share and revenue perspective. Fundamentally, no firm controls the market. For this reason, Nike competitors appeared to be rethinking their positioning in the space. Retailers were also other external barrier, the retailers Nike sale to are locked into their own of doing business. It would not be easy for them conform to Nike’s collection of creating “a store within a store” for Nike’s products. The game changing team would have to work with their supplier to make sure that they had the product available together.

REFERENCE

Burgelman, R, Christensen, C & Wheelwright, S 2009, 5th Ed., Nike’s Global Women’s fitness Business: Driving Strategic Integration, Mc Graw-Hill, America,pp. 1213-1234