Nike And The Athletic Shoe Industry example essay topic

NIKE 1.) Description of Nike. 2.) Definition of Total Quality Management and how Nike implements it. 3.) Definition of the Five Elements of Task Environment and how Nike. implements it. The company: 1-A brief history of the organization 2- Nike's goals 3- Nike's objectives 4-Markets 5-Size Compare theory with what we found Conclusion DESCRIPTION Basketball players want to be like Mike, but shoe companies want to be like NIKE. NIKE is the world's number one shoe company and controls more than 40% of the athletic shoe market. The company designs and sells shoes for just about every sport, including baseball, volleyball, cheer leading, and wrestling.

Nike doesn't only sell athletic shoes, but a wide variety of sporting goods and clothing; they design, develop, and market high quality active sports apparel, equipment, and accessory products. Their huge lines of products are designed for just about every sport in existence. Their products are made for men, women, and children of all ages. In addition, it operates NIKE TOWN shoe and sportswear stores and is opening JORDAN in-store outlets in urban markets.

NIKE sells its products to about 19,000 US accounts, in about 140 other countries, and online. Chairman, CEO, and co-founder Phil Knight owns about 36% of the firm. O TOTAL QUALITY MANAGEMENT Total quality management represents both a social revolution in the work place and a rigorously effective approach to professionalism and success. Total quality management is a management system that is an integral part of an organization's strategy and is aimed at continually improving products and service quality so as to achieve high levels of customer satisfaction and build strong customer loyalty. In other words, the true Total Quality organization will eliminate all competition other than from other Total Quality giants.

Many companies have benefited from an emphasis on TQM; however, it does require a considerable amount of company wide commitment to be successful. The customer doesn't know what is technically or organizationally feasible. So the key, challenge to a competitive organization, is to raise the expectations of the market place by providing goods and services at quality levels higher than those offered by the competition. We can now see that there are two principal elements to Total Quality: a business strategic element base on customer-related information, aimed at identifying the strengths and weaknesses of the competition; and an organizational improvement element aimed at ensuring a faster rate of performance improvement in all aspects of the business than cant be achieved by any competitor. The concept of Total Quality doesn't only apply to commercial organizations; it's applicable to any type of organization, even to individuals.

Further more, the use of a disciplined and structured approach to project-by-project improvement activities, on a company or organization-wide basis. Project-by-Project improvement activities are an essential element of Total Quality, where the goal is to achieve a faster rate of improvement than any competitor or rival. The fact that an organization is improving is irrelevant if it's competitor at a faster rate. Therefore, it is the rate of improvement, which is the critical factor. Nike achieves TQM by integrating principles of sustainability into all major business decisions. Scrutinizing their environment in their day-to-day operations and throughout every stage of the product life cycle.

Management Team developed Management planning and managing product portfolio and required human resources throughout the product development life cycle. Projected benefits include reduced time to market and improved profitability. Managed the creation of a functional prototype demonstrating improved efficiency and effectiveness of planning and designing a globally coordinated product line. Designed project approach and facilitated teams of employees, retail customers and manufacturing partners in analysis, redesign and implementation of new business processes. Managed information technology professionals and emerging technology exploration activities. Analyzed, redesigned and implemented new business processes, facilitating faster time to market and improved product and service quality.

Implemented pilot of new athletic footwear product creation process in running footwear division, applying learning's, process, tools and organization to entire footwear business. Athletes have a need, for instance, for the shoe to fit their feet. Another important detail is performance. The athletes want Nike shoes to help improve their performance in all aspects and there is also a need for injury protection to prevent serious injury. Nike is working to make sure that whatever footwear they are producing is going to meet the demands of the consumer and athletes. At Nike, athletes inspire creation.

For more than 25 years, Nike has been committed to giving all people who compete so it can be able to recreate the very best performance product - 'Products of the imagination,' meaning that these products should make a difference. The Nike Alpha Project is the modern day representation of what their mission has always been. The Nike Alpha Project is about design excellence. It symbolizes their commitment and dedicated ness to create products that perform in ways that far surpass the older creations.

Nike has designers that work with the athletes to gain the a detail of vital information in order to live up to the consumer's performance needs. Nike then develops footwear, apparel and equipment solutions with complete satisfaction for all consumers, which is a great accomplishment within itself. O IS OThe International Organization For Standardization is a worldwide federation of national standards bodies from some 130 countries, one from each country. ISO is a non-government organization, and its mission is to promote the development of standardization and related activities in the world with a view to facilitating the international exchange of goods and services, and to developing cooperation in the spheres of intellectual, scientific, technological and economic activity. Nike international chose ISO 14001, which is created by the international standards organization that help Nike to achieve its environmental obligations and broader environmental performance goals.

The Lebanese NIKE retail company implement ISO 9001. Based on that experience, Nike committed to further improving the indoor air quality of all footwear factories. By 1999, Nike is requiring all footwear factories to meet the air quality levels, based on personal exposure limits (PELs), to at least the levels required by the United States Occupational Safety and Health Administration (OSHA). In implementing these standards, they have since modified their goals to incorporate National Industrial Occupational Safety and Health (NIOSH) standards, which are even more strict.

Nike-designated industrial safety testers conducted indoor air testing of all footwear factories and follow-up testing where required. Nike is committed to maintenance of indoor air quality through continued testing, achievement of OSHA / NIOSH levels of performance, and the management practice necessary to ensure these goals are met on a continuing basis. In 1994, Nike began a program of shifting their footwear factory manufacturing process from petroleum-based solvents to safer water- and detergent-based processes. Today, 95 percent of Nike shoes are made using water-based adhesives. The difference is immediately apparent when you walk into a production space, rather like the difference between smelling kindergarten paste, and model airplane glue. There are parallel substitutions underway for water- and detergent-based primers, de greasers and cleaners used in the footwear production process.

By June 1999, the usage of petroleum-based solvents had been cut 80% from levels in 1995. Their goal is to reduce this usage to zero, and produce 100 percent of our footwear using this state of the art technology in the future. In the meantime, workers still using the older petroleum-based products will be assured of protection using proper forms of ventilation, worker rotation, Personal Protective Equipment and through other forms of management practices. They typically don't share breakthrough technology with their competitors. But there are no losers, only winners, when worker health and safety are at stake. In that spirit, they shared this information with Adidas, K-Swiss, Puma, Converse and Reebok.

Nike has a special commitment to the environment, not only in the factories where their products are made, but around the world. O TASK ENVIROMENT The Task Environment is the segment of the external environment made up of the specific outside elements with which an organization interfaces in the course of conducting its business. The Task Environment depends largely on the precise products and services that an organization decides to offer and on the locations where it chooses to conduct its business. Major elements in an organization is task environment typically include customers and clients, competitors, suppliers, labor supply and government agencies CUSTOMERS AND CLIENTS are those individuals and organizations that purchase its product ORGANIZATIONS' COMPETITORS are other organization that either offer or have a high potential offering rival products or services organizations not only need to concern with known competitors, but also need to monitor the competitive scene for potential newcomers.

While organizations need to concern themselves with who their competitors are, they also need to keep abreast of what their competitors are doing. ORGANIZATIONS's SUPPLIERS are those organizations and individuals that supply the resources, the organization needs to conduct its' operations. Companies are finding that they are better able to cut costs by reducing the number of suppliers they deal with and negotiating contracts with them. ORGANIZATIONS' LABOR SUPPLY consists of those individuals who are potentially employable by the organization. The ability to attract, motivate, and retain the human resources necessary to provide competitive products and services is a crucial variable for most organizations. At Nike, giving back to the community isn't part of what they do.

It's part of who they are, their commitment to community is also the mainspring of the Nike foundation. The mission of the of the Nike foundation is to promote youth action-on and off the field. The Nike foundation supports initiatives that empower young people to understand their ability to ignite positive charge and give them the tools, resources, and opportunity is to take action. In partnership with youth and community organizations, the foundation seeks to connect young people into the debate and decisions that impact their lives, Nike does this by providing an array of resources including cash grants. The Nike foundation also helps extend the reach of Nike employees' community involvement efforts by matching employee contributions to any non profit organization and by providing grants to recognize employee volunteered time in communities where Nike has a significant employee presence or a Nike town. Each year, Nike proactively donates product to nonprofit to nonprofit organizations serving young people and disaster relief efforts around the world.

Nike is a company involved in monopolistic type of industry. A monopolistic ally competitive industry consists of many firms producing small parts of the whole output. The industry Nike is in, the athletic shoe market, includes a countless number of companies such as., Reebok, , Adidas, Fila, Puma. Each of these firms produces a number of athletic shoes, marginally affecting the whole industry. Nike's competitors have brought in significant profits. In 1995, Reebok brought in $110.4 million.

Also, Converse brought in $383 million in sales in 1995. However, Nike brings in a lot more. Nike has a strong hold on the athletic shoe market. When firms, such as Reebok, design a new shoe, they enter the market, lowering the price of athletic shoes. Nike is continually striving for new innovations. When Nike comes out with a new shoe design, it experiences temporary economic profit.

Once its competitors discover this advanced product, they create a close substitute, erasing Nike's economic profit. The products athletic companies produce are differentiated. This can either mean the actual products are different, or that the consumers believe that one company's product is different, or better, than another company's. Nike takes full advantage of this concept. By enormous advertising, Nike leads consumers to believe that its product is better than its competitor's product. Nike is extremely successful at finding superstars to endorse its products in commercials.

Pete Sampras, Andre Agassi, Monica Sales, Anfernee Hardaway, Charles Barkley, Spike Lee, Tiger Woods, and Deion Sanders are all sports heroes that endorse sell more goods. Nike became the powerhouse it is when it came out with commercials involving Michael Jordan. The Air Jordan line of footwear brought in well over $100 million in new revenues in its first year. Because Reebok did not have superstars such as Michael Jordan in its advertisements, it fell way behind Nike in sales.

Nike is in a monopolistic competition, trying to convince consumers its product is better than its competitors. Nike successfully does so, earning increased fiscal year sales. This is why one sees the Nike logo, 'The Swoosh', everywhere. It has become a common emblem around the world. Nike has already made environmental performance a priority, reaching out beyond Nike-owned facilities to include its manufacturing partners and materials vendors. In an effort to reach their ultimate goal of a green supply chain; Nike seeks partnerships with ecologically-responsible suppliers who have made a commitment to sound business practices.

Facilities not meeting Nike are environmental and business standards are offered assistance through Nike Environmental Action Team (NEAT) representatives. Nike currently contracts with 25 factories in 8 countries in Central & South America - 22 apparel and 3 footwear factories. The contract factories employ more than 23,000 workers, approximately 70% are women and 30% are men. Honduras was the first country where Nike products were made, with Ecuador and Guatemala being the newest production countries. Nike has production-related employees who regularly visit the factories in Central & South America and conduct SHAPE inspections, as well as full-time Corporate Responsibility Compliance staff who oversee factory compliance.

The Nike Corporation is engaged in the design, development, and worldwide marketing of high quality footwear, apparel, equipment, and accessory products. It is the largest seller of athletic footwear and athletic apparel in the world. The mission of NIKE, Inc. is to promote youth action - on and off the field. Since the company's founding, Nike has focused its community involvement programs on education, sports and enterprises primarily benefiting youth.

In fiscal year 2000, NIKE, Inc. donated $28 million in cash and product to community based organizations globally. Nike believes that it's important to encourage young people to be proactive and empower them to make positive change for themselves and their communities Nike is implementing the idea of sustainability into their business practices, creating innovative products and processes that are resource efficient. Through the adoption of sustainable business practices Nike is also committed to securing inter generation quality of life, restoring the environment Bowerman once determined that every ounce shaved off a miler's shoe was 200 fewer pounds in a race. With that, he began crafting special shoes for his athletes. In 1964, he teamed up with former Oregon student and runner, Phil knight, to form blue ribbon sports, the forerunner of Nike.

Bowerman's innovative designs and Knight's business acumen were the perfect fit and by the time BRS became Nike in 1972 sales were at $1, 96 million which was far more then what they expected. In order to enhance Nike's brand image it is very important to look deeper into the company and within themselves by nurturing and leveraging professional and industry relationships with key external stakeholders. Some of these would include minority and women-owned business enterprises, national, regional and local economic development organizations, business leaders, opinion makers, the media and corporate peers. Developing goals and objectives for short and long-term strategy is a main concern at Nike in order they can obtain full positive results. Establishing metrics to determine results of program efforts, and implementing a structure, process and communication strategy for improved access of the business community to internal stakeholders / decision makers. The goal of Nike Sport Research Lab (NSRL) is to understand the needs of athletes and incorporate those findings into developing high-performance footwear, while maintaining strict adherence to Nike's three main objectives: performance, protection and comfort.

It accomplishes this with biomechanical testing, and by measuring consumer perception. NSRL is able to break down and analyze specific motions identified for specific sports, like running, cutting, shuffling, braking, forward motion, backward motion, lateral movement, and jumping. NSRL, at 12,500-square-feet, uses lab materials and machines that are worth more than $1.5 million. Critical aspects of motion are studied and analyzed using biomechanical testing with athletes performing specific skills. A battery of technologically advanced equipment is used, including foot scanners, high-speed video, electromyography machines, Pear in-sole pressure sensors and others. To support Nike's commitment to the consumer it must make decisions in creating and implementing a global strategy where Nike supply base Mirrors the Company's consumer base that strengthens stakeholder relationships and enhances brand image.

Establish and direct Nike's supplier diversity activities based on the demographic changes of the global marketplace, Nike business needs, Nike core values, and benchmark best in class minority and women-owned business programs. As a global corporation designing, developing, manufacturing, transporting, selling and marketing in more than 80 countries on six continents, Nike encourage partnerships with minority and women-owned companies. Given the shifting demographics of the U.S. population, staying in touch with consumer needs is essential when forecasting future trends. The demographics that Nike works in present a real opportunity for Nike to implement strategies that will impact the quality of our future. Minority and women-owned businesses are important to maintaining the economic viability in the communities in which they operate, and building long-range strategic partnerships to diversify our company's supplier base is critical to sustaining long-term growth. Nike currently employs 20,700 employees, with total sales of $8.78 billion.

Nike and the athletic shoe industry have evolved into one of the most competitive market in recent years. But, analysts believe that athletic shoe sales will slow down over the next few years. The slowdown will come with the change in consumer trends. For instance, the younger market is beginning to buy more casual shoes and work boots. Another reason for the slowdown is that people are buying more medium priced athletic shoes and not going for the high price brand name shoes. As a result, this is bringing Nike a lot more competition to surpass.

In order for Nike to remain on top of the athletic shoe industry they must establish an exceptional global strategy. If Nike penetrates the global market successfully than this will give the company an overall competitive advantage. Nike distributes one new shoe style every single day. Nike advertises its products in a variance of ways and targets its ads to particular groups or types of people.

The company continues to disburse advertising cash on TV ads during professional and college sports events, prime-time programs, and late-night TV programs. The advertising and innovative marketing in the industry should still leave it extremely competitive. The only problem that Nike worries about is customers becoming less brand-loyal and buying cheaper athletic shoe brands. Nike is trying to make the point that it is worth spending more money on better quality made shoe, than buying a cheap shoe that will only last a little while.

One major area that brings unlimited opportunities to Nike is the international market. In the United Sates, there are 4 people for every pair of Nike, France has 11, Japan has 50, China has 11,821, and Lebanon has 40 (reference from manager). Nike distributes to more than 40 branches in Lebanon and they have their own main branch situated in Mid-Beirut. Nike is by far the biggest organization in the shoe industry and far surpass its competitors in profits gained. Nike sells thought the world in more than 110 countries thought a span of six continents.

It is known by most consumers as the dominant power in the sports industry and is usually the ' top choice when it comes to sports apparel.