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Nike Inc.

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Mikael Rissanen

on 18 September 2015

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Transcript of Nike Inc.

Nike Inc.
Was founded in 1960´s

Nike started manufacturing only track shoes and since then it has grown for a multinational company

Has over 40 000 employees


Nike Inc. global environment
Customs between manufacturing country and markets
Regulations such as EU's
Crisis (Ukraine)
Strikes (2014 April In China demonstration for unpayed social welfare)
Sanctions (Russia)
Nike´s ability to adapt to growing cultures (finding right markets)
Nike has to be aware of ongoing inflation and exchange rates

Nike Golf
Other brands of Nike
Where to Produce (China, other Asian country or Africa)
Customer preferences (Differences between cultures)
Competition (Air technological patents about to expire)
Maintaining reputation and brand images
Constant improvement
Risk of not finding right materials in producing countries
Data security, privacy risks and reliance on information technology
Extreme weather conditions, such as tsunamis or floods in manufacturing areas
New market areas such as winter clothing and waterproof products
Ck Prahalad award for Nike in 2013 for creating products with lower environmental impacts
Product safety regulations all over the world mainly in manufacturing areas
Strict labor laws ( earlier example from strikes considering unpaid social welfare's)
Global factors
Local factors
Multidomestic strategy
Minkkinen w101439
Mikael Rissanen v99804
Milla Heikkilä x103125
Sini Kerttula x103131
Manufacturing in low-cost countries

Worldwide brand

Global competition
Local responsiveness

Differences in legal factors (for example anti-dumping measures in Brazil)

Seasonal changes and weather conditions of target markets

Products sold via retailers as well as official stores
-> standardization of sales
Manufacturing and distribution
Local responsiveness
Response to local needs
Production close to market
Management (decentralized federation)
Structure (area-based)

Matrix structure replicated at the regional level
HQs in Europe and Asia
-> coordinates country&region strategies
Horizontal cooperation across business units and manufacturers of the same category of products
Massive impacts on both local and global environment
NIKE, Inc. is one of the most famous
ethical turnaround stories
-criticized constantly in the press
-nowadays taking stakeholder
demands seriously
Sustainability is the key to survive and
grow in today’s business world
Future challenges from the management perspective?
Numerous auditing tools for environmental
and social issues (MSI, SMSI etc.)
Collaboration with organizations like
the Fair Labour Association
Following proactive responsibility strategy
Decentralized corporate culture when it
comes to ethics and relationship management
Strategic positioning through health and
How to coordinate foreign operations,
which are all over the world?
Concern over the quality of products
manufactured in third-party factories
How to reduce the dependency on
external factories?
How to keep the good image and brand?

Potential problems and opportunities?
Increasing competition in the market
Fake products
Changes in labour costs and raw material prices
The ethical dilemma:
interests of the company vs. employees and other interested stakeholders
The concept of a living wage
Possibility to grow in India
New sustainable innovation opportunities (“LAUNCH”)

Managing responsibly
Manufacturing: 44 countries, 715 factories, 984 136 workers
Independent contractors
Mostly outside USA, primaly in Asia
Distribution centers
In USA, five primary centers
Outside USA: 16 centers in Europe, Asia, Australia, Africa and Canada

The strategic roles of factories and
distribution centers
Cheap labor
Raw materials
Contract manufacturers:
Enables ’moving around’ quicker and easier
Market access
Around the world →-> saves from having all eggs in one basket

More than 850 NIKE retail stores
Leased facilities
Access to local markets
Knowledge of local markets
Regiocentric orientation between HQ's & retail stores
decisions made in regional HQ’s
information high between regional HQ’s
and stores
Multi-domestic overall role in the MNC

Supply chain strategies
Future trends
Corporation structure
International strategy
Full transcript