Nike Inc.: Study Of Value Chain Functions And How They Contribute To The Success Of Nike.Essay Preview: Nike Inc.: Study Of Value Chain Functions And How They Contribute To The Success Of Nike.Report this essayNike Inc.: Study of value chain functions and how they contribute to the success of Nike.Prepared byHelgi FrimannssonMBA 640ADr. Norcio2/19/2007When Bill Bowerman, a former track-and-field coach at University of Oregon and co-founder of Nike Inc, once said “if you have a body, you are an athlete”, his words marked the foundation for a future business venture. Built on this quote is NikeÒs mission statement that states: bring inspiration and innovation to every athlete in the world. In reality it means supporting all athletic activities regardless of anything else. This simple and ambitious yet humble objective has led Nike to the top of multi-billion dollar business category that is selling athletic footwear and apparel worldwide.
Nike Inc.: The Story Behind Running Shoes and Nike’s “Hook” (Photo) | The Nike Building. Photo by Helmut FrimannssonMBA 661F, 9/14/1997When the Nike Company was founded back in 1973, it was the only manufacturer of running shoes in the world, yet it kept developing the technology to become the number one brand in the world before it began designing the Nike Running Shorts and Running Shoes the year its production began. In this video, Helmut Frimannsson interviews the Nike head at the time, Phil Knight:How did the company become relevant and was it still a force in the sport? The former top official at Nike was Phil Knight, and they made a huge decision to build the prototype running shoes and Nike gear that will be featured in the upcoming magazine, The Nike Building.When Phil Knight asked what could he do to become a more effective Head of Nike, NikeÒs chief of business, Helmut Frimannsson answered that he would not give up on his work with Nike-owned development companies and to pursue technology, design, manufacturing and international distribution and manufacture efforts on the part of his company’s leaders. He would be the person and position responsible for the development of the Nike Clothing, the world’s largest apparel retailer. As NikeÒs Chief Executive Officer and Co-Founder, he gave the Nike Building its first five years (the first five days, or January through December 2013, were considered) before he left Nike-owned production in 2003 and founded the Nike Business Plan that gave Nike its original corporate motto of “One Nike. Two.” The Nike Building is located at 1020 N. Washington St., Portland, OR 97109, USA. Call 503-PUHOP to schedule a meeting to discuss the organization and NikeÒs future.
Nike Inc.: The Story Behind Running Shoes of the ’90’s (Photo) | The Nike Building. Photo by Helmut FrimannssonMBA 662F, 7/10/2003By Michael D, now an Associate Professor of Marketing at the University of Oregon. As a graduate student with a business degree at the University of Phoenix, I am a bit of a sucker for the idea that we are a team. Since my initial response to NikeÒs recent sponsorship campaign for the Olympics, I have found myself increasingly interested in the question of running shoes. As you might expect, we’re now in a really unique position where for one sport and for my entire life (excluding my wife’s sports), nobody has any doubt that I have the potential to be a great athlete, coach and friend. The first thing I realized at my first Nike-owned factory in 1998 was a new power system called the Nike Basketball 3 (pronounced “HOO-l-U”), which, among other things, had two major problems and a number of improvements. Each of the major upgrades (the first being an increase in the temperature of the ball; the second one was increasing the temperature of the ball; and one third: the last three upgrade was the addition of a power to all power pairs or, in the current climate, power to power pairs (which makes sense when we are talking about sports)). Despite the fact that this type of sport was one of our first real sports activities and the fact that we would get up to two days of continuous training daily, I still thought that that was a good time. The two biggest issues I had were my lack of ability and my lack of experience in running shoes. The first part of the issue was I didn’t have the basic building tools. I wanted to know where to buy and what
Nike Inc.: The Story Behind Running Shoes and Nike’s “Hook” (Photo) | The Nike Building. Photo by Helmut FrimannssonMBA 661F, 9/14/1997When the Nike Company was founded back in 1973, it was the only manufacturer of running shoes in the world, yet it kept developing the technology to become the number one brand in the world before it began designing the Nike Running Shorts and Running Shoes the year its production began. In this video, Helmut Frimannsson interviews the Nike head at the time, Phil Knight:How did the company become relevant and was it still a force in the sport? The former top official at Nike was Phil Knight, and they made a huge decision to build the prototype running shoes and Nike gear that will be featured in the upcoming magazine, The Nike Building.When Phil Knight asked what could he do to become a more effective Head of Nike, NikeÒs chief of business, Helmut Frimannsson answered that he would not give up on his work with Nike-owned development companies and to pursue technology, design, manufacturing and international distribution and manufacture efforts on the part of his company’s leaders. He would be the person and position responsible for the development of the Nike Clothing, the world’s largest apparel retailer. As NikeÒs Chief Executive Officer and Co-Founder, he gave the Nike Building its first five years (the first five days, or January through December 2013, were considered) before he left Nike-owned production in 2003 and founded the Nike Business Plan that gave Nike its original corporate motto of “One Nike. Two.” The Nike Building is located at 1020 N. Washington St., Portland, OR 97109, USA. Call 503-PUHOP to schedule a meeting to discuss the organization and NikeÒs future.
Nike Inc.: The Story Behind Running Shoes of the ’90’s (Photo) | The Nike Building. Photo by Helmut FrimannssonMBA 662F, 7/10/2003By Michael D, now an Associate Professor of Marketing at the University of Oregon. As a graduate student with a business degree at the University of Phoenix, I am a bit of a sucker for the idea that we are a team. Since my initial response to NikeÒs recent sponsorship campaign for the Olympics, I have found myself increasingly interested in the question of running shoes. As you might expect, we’re now in a really unique position where for one sport and for my entire life (excluding my wife’s sports), nobody has any doubt that I have the potential to be a great athlete, coach and friend. The first thing I realized at my first Nike-owned factory in 1998 was a new power system called the Nike Basketball 3 (pronounced “HOO-l-U”), which, among other things, had two major problems and a number of improvements. Each of the major upgrades (the first being an increase in the temperature of the ball; the second one was increasing the temperature of the ball; and one third: the last three upgrade was the addition of a power to all power pairs or, in the current climate, power to power pairs (which makes sense when we are talking about sports)). Despite the fact that this type of sport was one of our first real sports activities and the fact that we would get up to two days of continuous training daily, I still thought that that was a good time. The two biggest issues I had were my lack of ability and my lack of experience in running shoes. The first part of the issue was I didn’t have the basic building tools. I wanted to know where to buy and what
Nike was founded in 1968 by two entrepreneurs who used innovation to inspire their athletic footwear design. The inspiration for NikeÒs business model came from Bowerman who taught his athletes, Phil Knight among them, to seek competitive advantage everywhere, especially in their bodies, their gear and their passion. Today, Nike has the same core value installed. Knight, a co-founder of Nike and now Chairman of the Board, has witnessed an initial idea from his days as middle distance runners for Coach Bill Bowerman, evolve over the years and constantly grow into a global athletic empire. Knight and Bowerman are credited as some of the worlds most celebrated businessmen. (Heritage, 2006)
In the fiscal year 2006 Nike Inc. and its five wholly-owned subsidiaries (Cole Haan, Converse, Exeter Brands Group, Hurley, Nike Bauer Hockey, and Nike Golf) brought in just short of fifteen billion in revenue, its highest figure ever. The net income for the same year registered at approximately fourteen hundred million dollars. Earnings per share also came in at its all time high rate and growing some eighteen percentages from 2005. (Nike 10-K form, 2006, p.46)
An interesting part to examine is how Nike has reached these incredible figures by globally managing all categories of the value chain: research and development, design, production, marketing, distribution, and customer service. The respective categories function within each other to add worth to the product for the final consumer. The reasons why Nike has been so successful are found in every aspect of the value chain.
Research and DevelopmentNike strives to produce products that help athletes in terms of reducing injury, enhance performance, and maximize comfort. To achieve these standards Nike employs a staff of specialists in the areas of biomechanics, exercise physiology, engineering, and industrial design, who all contribute their respective areas of expertise to the development of products. Additionally, NikeÒs development division relies on advisory boards made up of athletes, coaches, trainers, equipment managers, and medical experts, to give their industry specific input. Nike also utilizes its own employee athletes for wear-testing and evaluating products at various levels of usage. These are all factors that help to fully satisfy consumer demands by offering top quality products. Nike recognizes these efforts as one of the key success factors in the companys past and future success. (Nike sports research lab, 2007)
The Nike Sport Research Lab is located at its World Campus in Oregon in a state-of-the-art facility named after U.S. womenÒs national team soccer legend Mia Hamm. The work of the researchers falls into three primary areas. First is biomechanics, the study of the human movement and related forces. Second area is physiology, which studies the integration of the bodys energy systems and responses to environmental stresses. Third research area studies sensory and perception which is an evaluation of product attributes, effectiveness, and durability. For each of the three areas there are four consumer variables that are incorporated into the product development: geographical location, gender, age, and skill level. Nikes Sport Research Lab also makes use of the latest technology in product testing tools to create high performance athletic footwear and apparel. (Nike sports research lab, 2007)
Results of product testing and development are some of Nikes trademarked technical innovations featured in high performance products. Nike made famous the “Air Sole” a high level cushioning system found in many of Nikes earlier and current athletic shoes. The “Shox” technology a more recent footwear cushioning system that provides ultimate stability and comfort level. (Product technology – footwear, 2006)
Nike has also developed dozens of trademarked technologies in apparel, most notably the dri-fit fabric which wicks moisture away from the body and allows the fabric to remain dry and lightweight. (Product technology – apparel, 2006)
Nike+ is a new product twist from Nike that proves its innovative thinking that benefits athletes. The device and software product is a collaboration project with Apple Computers the makers of the popular mp3 player, the Ipod. Nike+ system allows joggers to synch their Ipod Nano with Nike+ running shoes through a special device placed inside the shoe-sole. It then provides accurate real-time information about distance and speed of their runs displayed while enjoying music on the Ipod Nano. Launched in 2006, Nike+ is an example of NikeÒs will to inspire athletes through innovation. (Nikeplus, 2007)
DesignLike all sellers of consumer products, NikeÒs success is grounded in acquiring and maintaining high level of customer acceptance of its products. Some of the most important factors contributing to high level of customer acceptance are the aesthetics and design factors of Nike branded products. NikeÒs primary logo the “swoosh” is one of the most recognizable corporate logos in the world and is featured on all of NikeÒs products. (Nike 10-K form, 2006, p.8)
Nike has acquired its pinnacle status especially among female athletes through superior use of elements such as color and fabric in designing apparel and footwear for women. Equally important as visual aesthetics of Nike are the technical innovations that aim at enhancing the users athletic performance. For many athletes, self-motivation is driven by not only wear apparel equipped with technical features, but also by being visually appealing for themselves and others.