Case Study Documenting Nike’s Success and Challenges.
The key reasons for the success of Nike are associated with its global brand promotion. Due to its extensive advertising campaigns the Nike’s brand is known in almost every household worldwide.
Considering the major revenue increase over the last decade, the company has proved its popularity and high demand for its products among people. Nike’s brand management strategy as a key of its global success is based on the sponsorship agreements with the world-class athletes, including individual performers and sport clubs. Mainly all kinds of sportswear equipment are branded with Nike’s logo which reminds people of success and associates it with the achievements of star performers. In such a way, Nike not only expands its corporate image worldwide, but also enhances the healthy lifestyle and devotion to sport activities.
Unfortunately, despite million-dollar promotional and advertising campaigns, the original Nike’s products remain unavailable to most people worldwide. The price for individual items is rather high and so the overwhelming majority of purchasers buy franchise copies holding Nike’s logo. However, this is one of the justified and reasonable business strategies applied under the conditions of globalization.
In the recent years, Nike was reported to apply unfair working practices, involving child labour, insufficient working conditions, under-standard wages etc. In addition to this, the company was subject to legal claims for unfair public campaigns associate with the advertisement of corporate brand. Therefore, Nike’s further business success necessitates changes and reconsideration of its business strategies. To this end, recently Nike has ceased its irrelevant practices and tries to lead socially and environmentally responsible business operations.
It also comes as no surprise that the company constantly challenges anti-globalization claims. To this end the company should emphasise on transparent practices, considering human rights and social concerns. In this respect, the company should regain the image of more socially-oriented player on a global scale. Therefore, Nike’s management is fully aware that large corporate revenues gained from multinational operations should be combined with socially-oriented projects aimed at recycling and environmental campaigns.
In the foreseeable future, Nike’s facing great opportunities backed up with the company’s 2008 financial success. The company will continue to implement its corporate projects and programmes to suit the demand and social needs of its worldwide customers. Though, the main emphasis will be put on promotions and so new sponsorship agreements will be concluded with the rising stars.
It is rather difficult to predict corporate challenges to be faced by the company considering the overall adverse affects of global financial crisis. Most likely, as many other multinational businesses, Nike will close its subsidiary offices in a number of countries and/or shorten manufacturing rates in Asia.
Overall, it is apparent that Nike has a solid potential background to hold strong competitive stance in the foreseeable future. Hopefully, in terms of further business orientation strategy, the company will become more socially responsible in the eyes of average consumers, and so the availability of its brand products will further increase.
Source: ChinaStones - http://china-stones.info/guides/case-studies/nike-case-study.php