Nike is one of the most well-known brands in the world. It is a dominant competitor in athletic apparel and equipment market. The company grows from a $500 investment by both two men to a global corporation with approximately 26000 employees. The sales of Nike’s fiscal year 2006 reached $15 billion and net income was $1.4 billion.
Although Nike has achieved a huge success, it is essential to make innovation for keeping competitive strength in the market. Therefore, in the summer of 2006, Nike changed its approach from product orientation to a category driven approach to focus more on customer needs and the female fitness market in particular. This change led to a major reorganization within the organization which itself created some major problems resulted in the slow change. Thus, this paper will analyze the issues that impede the growth of Nike’s female market and provide some theoretical solutions which significantly influence and assist Nike to obtain its successful innovation into the female niche market more quickly. This document also contains new challenges, barriers and trade-offs for the female fitness business.
After analysis, it can be found that there are four major issues which obstruct Nike’s female business, including ineffective organizational structure, inferior supply chain management, unsuited market focus and unrecognized products. Refer to these issues, key theoretical concepts such as cross functional integration, collaboration between suppliers and customers (supply chain management), absorptive capacity and sustainable development are chosen to solve these problems.
Organizational structure is the most important issue. It is unable to run the business efficiently without an effective structure. Therefore, Cross-functional Integration is recommended to utilize in this condition. Clear vision (obtained by effective communication), effective organizational structure, ability to make trust and belief among team members (organizational culture) and effective use of people (HRM) can be organized by cross-functional integration.
Secondly, the key issue to solve the problem of supply chain management is forcing retailers change their traditional sales way. Incentives can be used to reward the effective retails for encouraging them their mind and business strategy.
The third issue is lack of customer focus in the market. Nike needs to enhance its absorptive capacity to collect useful information and knowledge from external environment and use it effectively to improve its level of market orientation and its competitiveness.
Finally, the new product that seems to be unrecognized by customers is also an important problem, because Nike did not focus on the women’s market before. This requires Nike to build a good sustainable development and brand management in a long term.
For new challenges and barriers, there also lists the main barriers, challenges and trade-offs needed to face and overcome from several aspects in the future such as Strategy, Market, New product development, Supply chain, Human resource and Sustainability for accelerating the change and on a large scale. The detail recommendations according to the barriers are mentioned in the paper.