Strategic Management Assignment: Contemporary Analysis of Nike

Question

Task: Context: The strategic management assignment supports students in developing their skills and knowledge in the foundational management topics that include external environmental assessment, problem diagnosis, strategy development, and the consideration of cultural and ethical contexts. Effective strategic management is designed to proactively respond to changes in technology, external environment, and market tastes. A contemporary understanding of the dynamic forces shaping strategic choices is essential for the successful execution and delivery of strategy.

Instructions:
1. Over the duration of the course, you are to monitor news and online sources of opinion to identify three (3) separate strategic influences that together impact on the outcomes of an organisation of your choice. These influential factors may be local, national or international in nature, but they must represent a changing or evolving story. For example, advances in battery technology, stricter emission controls, and a general move towards sustainable energy has resulted in General Motors (and indeed almost all car manufacturers) actively marketing electric or hybrid models for release in coming years. Note this example is not to be used in your submission.

2. You are to discuss how the practice of strategy categorises these strategic influences, and identify the implications for the organisation in question.

3. Drawing upon your understanding of theories, models and frameworks discussed in class, you are to identify a strategic course of action to address these circumstances (by either capitalising on positive influences, or minimising the impact of negative influence) in a way that will result in long-term benefit to the organisation. This should include a statement of the firm’s revised goals as a result of this change in strategy.

Answer

Introduction
In the present competitive business world, firms are embracing strategic management and core competencies to evolve strategically in the market. Besides, effective strategy formulation and its practices can certainly assist to influence both internal and external factors of business to sustain competitively in the business world. However, the need foraneffective implementation plan and change management processes has to be integrated and communicated at all levels to maintain strategic advantages and to exploit the market opportunities explicitly. In this report, a detailed analysis of three strategic influences that impact the outcomes of Nike,Inc. has been carried out. Likewise, the practice of the strategy of Nike for categorizing the strategic influences has been also investigated for in-depth understanding and knowledge. Lastly, a strategic course of action along with recommendations has been also put forward that can be adopted by Nike to enhance its strategic implications.

Aim
‘This report aims to analyze three major strategic influences of Nike and its implications on the business based on which a strategic course of action can be recommended.’

Discussion
As stated by (Arnold, 2017), strategic management and its formulation have gained significant attention in the present business world due to significant implications towards the external environment. Besides, the need for integrating strategic competencies to forecast sustainable measures and operations has been immense in the present market to gain a competitive edge and profits. Based on such context, it has been analyzed that the company has initiated sustainable business development and policies that have positively influenced Nike’s growth and competitive edge in the business world.

Three strategic influences that together impact on Nike
First, the launch of the program to reflect the sustainable design of Nike has been a strategic influence towards changing its business operations and attracting potential customers, (nike.com, 2020). This modern environmental movement of Nike has been an advancing move towards sustainability as well as highlighting long term growth and future. As put forward by (Baumgartner &Rauter, 2017), a sustainable business model has been a crucial part ofthebusiness to engage customers as the customers and external environment have become cautious about business operations. Based on such context, Nike has been promoting the concept of sustainable process and design as its strategic business practice for decades to maintain an environment-friendly process. Specifically, the new program initiated by Nike on Earth Day has made the shopping experience of customers at ease as each product displays sustainable features. The use of the ‘Sunburst’ logo on sustainable products at the online platform has gained significant attention of customers as at least fifty percent of sustainable materials by fabric weight is employed in its product. Second, the introduction of infinalon products within the yoga collection category has been a potential influence as it is a strategic move that reflects sustainability, (nike.com, 2020). Nike has always focused to develop a strategy that can assist to develop the product in a sustainable way. This has certainly gained the attention of customers around the global world. Likewise, the introduction of the new product in the market has gained significant attention from customers. It has been well suggested by (David & David, 2016), the use of chemicals or solvents can negatively impact the natural environment as well as can act as a negative influence on customer’s buying behavior. Concerning such context, it can be stated that the Nike infinalon products are made through heat which eliminates the need for solvents or chemicals, making the products environment friendly as well as sustainable. This has been a strategic influence on the business of Nike as it certainly increased customer’s attention and awareness. Third, Nike’s contribution towards the community specifically the strategic move towards partnering with the Boys & Girls Clubs if Chicago and Virgil Abloh to renovate the basketball court at East Garfield Park has gained significant attention from the market, (nike.com, 2020). This strategic move reflects the shared vision of Nike to support community building as well as sports access can assist kids to engage in sports activities that in turn can lead to a healthy lifestyle. In addition, the community can learn teamwork and analyze the need for success in the present world. As stated by (Durand et al. 2017), it is essential in the present business world for companies to act sustainably to maintain environmental balance as well as to contribute towards social issues. Therefore, in the case of Nike, this strategy can act as a potential strategic influencetowards reviving the community as well as can set a positive brand image in front of external stakeholdersof the company.

The practice of strategy and the strategic implications of Nike
As put forwarded by (Dyer et al. 2017), strategy as practice critically focuses on micro-level social activities, practices, and processes that certainly categorize organizational strategies. Based on the company Nike, the initiation of the ‘Sunburst’ logo within the online business world has been both macro and micro-level social activity as it creates awareness among the customers about its sustainable business practices. As a consequence, opportunities for Nike has been extensive as it contributes substantially to environmental issues. Besides, it has been identified that this practice of strategy has been an environment-friendly category that has the potential to attract customers as the brand is creating a positive image in the market. On the other hand, (Hahn et al. 2018) stated that the practice of strategy act as an alternative to mainstream strategy as it focuses primarily on strategy formulation, planning, and implementation rather than just focusing on performance and results. Based on such context, it has been analyzed that the introduction of infinalon products by Nike has been an effective strategy formulation, and categorizing the strategy in sustainable development is also commendable as it has significantly implemented a sustainable process to construct the product. Besides, it has been also analyzed that this product has the potential to gain customer attention as it not only offers flexibility and comfort to customers but also integrates sustainable materials. This practice of strategy has positively impacted the growth and success of the company sustainably. Other than that, (Hittet al. 2016) also suggested that the practice of strategy can assist to develop strategic decision-making processes for developing strategies and plans that can contribute towards social development as well as aligning with contemporary strategic management. In relation to Nike, the strategic decision to partner with the Boys & Girls Clubs if Chicago and Virgil Abloh have a positive influence on the company. This practice of strategy has a significant contribution towards social and community development through sustainable measures.

In addition, it has been identified that the strategic view of Nike’s management has acted as a potential plan to gain environment and socially responsible customers around the global world. Hence, it can be stated that the practice of strategy has been essential for managing the influence positively towards the growth and success of Nike gaining competitive edge and customer base.Refer to Appendix A to analyze the growth of Nike in the fiscal year 2019 and its expected growth for the next two years due to its strategic influences, (Golubevaet al. 2020).

The strategic course of action for Nike
As put forwarded by (Lasserre, 2017),to capitalize on positive influences, companies in the contemporary world must focus on sustainable measures and strategic management, contributing towards the external environment and to gain a long-term competitive edge. Based on such context, it has been identified that Nike has been focused to integrate sustainable practices in its core business operations and maintains stakeholder relations explicitly that has positively influenced its strategic decisions. However, the company needs to develop strategic plans for long term success and competitive edge. The company Nike needs to highlight its sustainable practices at its physical stores as well rather than just focusing on the online store. Besides, the company must focus on using sustainable raw materials for its entire product range to maintain sustainability and to reap the potential benefits of the contemporary business world.

It has been well suggested by (McIntyre &Srinivasan, 2017), in the contemporary business world, businesses need to identify approaches that contribute to environmental protection, economic development, and social wellbeing. Concerning the company Nike, it is highly significant for the company to focus on minimizing non-recyclable products or raw materials and integrate sustainable processes and raw materials to construct its products including footwear, clothing, and other accessories. This can ensure success and competitive edge while contributing towards the economy and environment explicitly.

Strategic goals and its implication on Nike
The first strategic goal of Nike is to highlight the products that are constructed with sustainable measures and raw materials in its physical stores similar to the ‘Sunburst’ logo at the online platform, as there are several customers who prefer to visit stores and identified company’s sustainable measures. This, in turn, would not only attract potential customers at the online platform but also increase the customer base at its physical stores, (Müller et al. 2018). Also, both visibility and brand image can be enhanced through this strategic goal influencing positively the business as well as long-term growth and competitive edge.

The second strategic goal of Nike is to integrate sustainable operations and production processes by using sustainable raw materials and policies for its stakeholders. As stated by (Pedersen et al. 2018), customers at present are highly influenced and attracted to the brand that is using sustainable business operations and policies to attain raw materials and construct relevant products. Hence, it is significant for Nike to integrate sustainable processes and business operations to construct the entire range of products and not focus on a particular category of products. This can positively impact the company gaining a wide range of customer base as well as higher customer loyalty. Likewise, such a strategy can result in a higher profit margin and long-term competitive edge in the contemporary business world.

Conclusion
Therefore, it can be stated that ‘Sunburst’- sustainable design, infinalon products within the yoga collection category, and partnership with Boys & Girls Clubs if Chicago and Virgil Abloh are the major strategic influences of Nike. This strategic influence highlights its appropriate practice of strategy contributing to its sustainability and growth in the market. However, to gain long-term benefits and success in the contemporary market, Nike needs to integrate sustainable process and business operations for constructing its wide range of products as well as must highlight sustainable design at its physical stores. This, in turn, would positively impact the company, resulting in growth in sales and customer loyalty along with higher visibility and brand image in the market.

Recommendations
To implement the strategic goals into action, it is recommended that the company Nike undergoes a complete change management process. As put forwarded by (Rees & Smith, 2017), it is essential to integrate change management procedures within the contemporary businesses to gain a competitive edge and long-term success. For Nike, the following is the recommended process to attain such strategic goals based on Lewin’s change theory, (Cummings et al. 2016).

Unfreeze- In this stage, each stakeholder of the company specifically suppliers must be communicated about the new strategic goals and the need for maintaining sustainable procurement and constructing product processes.

Change- In this stage, the reason behind the changes has to be communicated to each stakeholder for their acceptance and successful integration of sustainable measures ensuring the attainment of strategic goals.

Refreeze- The new strategic plan and policies would be integrated into the business model with acceptance of each stakeholder leading to the successful accomplishment of goals and long-term growth.

References
Arnold, M. (2017).Fostering sustainability by linking co-creation and relationship management concepts. Journal of Cleaner Production, 140, 179-188.

Baumgartner, R. J., &Rauter, R. (2017).Strategic perspectives of corporate sustainability management to develop a sustainable organization. Journal of Cleaner Production, 140, 81-92. Cummings, S., Bridgman, T., & Brown, K. G. (2016). Unfreezing change as three steps: Rethinking Kurt Lewin’s legacy for change management. Human relations, 69(1), 33-60.
David, F., & David, F. R. (2016). Strategic management: A competitive advantage approach, concepts and cases. Pearson–Prentice Hall.
Durand, R., Grant, R. M., & Madsen, T. L. (2017).The expanding domain of strategic management research and the quest for integration. Strategic Management Journal, 38(1), 4-16.
Dyer, J. H., Godfrey, P., Jensen, R., & Bryce, D. (2017). Strategic management: Concepts and cases. John Wiley & Sons.
Golubeva, H., Written Helen Golubeva Helen Golubeva, a., &Golubeva, H. (2020). Just Do It: What We Can Learn from Nike’s $39B Marketing Strategy.
Retrieved 27 April 2020, from https://www.singlegrain.com/marketing-strategy/nikes-39-billion-marketing-strategy-just-do-it-like-nike-does/

Hahn, T., Figge, F., Pinkse, J., &Preuss, L. (2018). A paradox perspective on corporate sustainability: Descriptive, instrumental, and normative aspects. Journal of Business Ethics, 148(2), 235-248.
Hitt, M. A., Ireland, R. D., &Hoskisson, R. E. (2016). Strategic management: Concepts and cases: Competitiveness and globalization. Cengage Learning. Lasserre, P. (2017). Global strategic management.Macmillan International Higher Education.
McIntyre, D. P., &Srinivasan, A. (2017). Networks, platforms, and strategy: Emerging views and next steps. Strategic management assignmentStrategic Management Journal, 38(1), 141-160.
Müller, J. M., Kiel, D., & Voigt, K. I. (2018). What drives the implementation of Industry 4.0 The role of opportunities and challenges in the context of sustainability. Sustainability, 10(1), 247. nike.com, (2020). Nike Introduces Infinalon in Latest Yoga Collection.
Retrieved 29 April 2020, from https://news.nike.com/news/nike-yoga-infinalon nike.com, (2020). Nike, the Boys & Girls Clubs of Chicago and Virgil Abloh Unveil Redesigned Basketball Facilities. Retrieved 29 April 2020, from https://news.nike.com/news/nike-boys-and-girls-clubs-chicago-virgil-abloh-basketball-court

nike.com, (2020). Nike.com Launches Program to Highlight Sustainable Design. Retrieved 29 April 2020, from https://news.nike.com/news/nike-earth-day-sustainability-2020 Pedersen, E. R. G., Gwozdz, W., &Hvass, K. K. (2018).Exploring the relationship between business model innovation, corporate sustainability, and organisational values within the fashion industry. Journal of Business Ethics, 149(2), 267-284.

Rees, G., & Smith, P. (Eds.). (2017). Strategic human resource management: An international perspective. Sage. Appendices

Appendix- A

Fig: 1 (Growth in revenue, Nike)
Source: (Golubevaet al. 2020)

Based on the figure above, it has been comprehended that by the fiscal year 2021, the revenue of Nike will grow by 25% and is expected to $45.4 billion due to its strategic decisions and sustainable business operations.