Enterprise Models
Project
The Transition of Nike
Group Eight
Danielle Clark
Rod Taylor
Peter Gioulos
Western Michigan University
Haworth College of Business
Kalamazoo, Michigan
April
2005
Table of Contents
Table of Contents .1
Introduction . .2
Company Over View ...3
Global Business Climate, Information and Technology .5
Work System . ...7
Work System Graph . 9
Executive Summary ...10
Reference .. .11
Self Evaluations .....12
Introduction
We have chosen to
do our enterprise models project on the manufacturing company Nike. We chose this company because not only do
they manufacture their own products but they also own several of their own
retail stores, train employees based on certain guidelines and keep their
information systems very up to date. We
will examine all of these aspects by first giving a general overview of the
company and how Nike as a whole works by showing their goals and current market
shares. Next we examined how Nike interacts
with the world community and how they use technology and information to
generate a larger market segment for themselves. We looked at this by seeing how they have started and joined
several organizations to help the world population. Finally we looked at several of Nikes work systems and broke
down the company one section at a time.
Nike is a very interesting company with several sections that make up a
large market share.
Company over View
Our group decided to choose a manufacturing company that
ensures performance for its customers and who have been committed to giving
athletes of every make, model and body style.
Therefore we decided to do our project on Nike who has been around for
many years and has not only sold millions of tennis shoes, but also clothing
and accessories for basketball, soccer, football, tennis and many more. They also launch campaigns to encourage
non-racist football fans to take a stand against racist abuse in stadiums. Nike also pays millions of dollars to famous
athletics who promote their products, such as football, legendary NFL
quarterback Brett Favre has teamed up with to endorse the brands full line of
athletic footwear and apparel. Another
way Nike improves its strategys are to come up with unique ways to make them
stand out from all the other shoe brands.
For instance last year Nike came up with what they call Reuse-A-Shoe
(RAS). They started recycling pairs of
sports footwear, with the intention of grinding it up for use in sports
surfaces around the planet. As of 2003, Nike has rounded up, ground up and
recycled 15 million pairs of post-consumer and defective athletic shoes (Nikes
and others) to help close a product lifecycle loop with a program that has
become a unique way to create new environmental, economic and community
benefits through recycling, according to the National Recycling Coalition in
the United States. Clearly, Nike is
one of the largest manufacturing companies out there because they donate their
time and money to help out others which in reality also improves their outlook.
Nike has one short and simple
mission and it is to bring inspiration and innovation to every athlete in the
world. This quote was from Bill
Bowerman who is a track and Field coach at the University of Oregon, and the
Co-founder of Nike. Their goal is to
serve its customers to the fullest and to provide them with the highest
quality. According to Bill Bowerman,
they are committed to give their athletes of every make, model and body style
who complete and recreate in ways never imagined.
Nike sells a variety of products
from the smart shoes to watches, socks, eyewear, carry gear and even
underwear. Nike tries to serve its
customers to the fullest by employing approximately 23,000 people worldwide,
from its World Headquarters in Oregon and European Headquarters in The
Netherlands, to nearly every region around the globe. Including manufacturers, shippers, retailers
and service providers, nearly one million people help bring Nike to athletes
everywhere. In order to serve their
customers they have to hire smart and outgoing people to sell their products.
Nike is a very profitable company
that is continually growing every year.
Nike reported revenues of $10.7 billion, an 8 percent increase from
FY'02. This was the best year of the
company's 31-year history. Nike not
only owns many chains in the United States in including Oregon, Tennessee,
North Carolina and The Netherlands, and operates leased facilities for 15 Nike
towns, over 80 Nike Factory Stores, 2 NIKE goddess boutiques and over 100 sales
and administrative office. They also
operated over seas in 23 countries. As
of April 1st, Nikes financial standing high was 84.24 and its low was 82.40.
Clearly, they are increases their sales and are continuously coming out with
products.
Therefore, Nike is a very popular company that sets its
mission goals, serves its customers to the extreme, increases their market
share every year, and profit performance.
Not only do they serve its customers but also their employees by giving
them the ability of working for the bust company out there. Nike will continually grow and build more
companies all over the world and exceed to its goals.
Global Business Climate, Information and Technology
Nike
was established 30 years ago, and today it is the world's most competitive
sports and Fitness Company. Nike is now
a very successful international company that has several key factors
contributing to its success. First,
Nike is a very diverse company and focuses a great deal on improving their
labor force. This company operates on
six continents, and employs around 23,000 people. Their suppliers, shippers,
retailers and service providers employ close to 1 million people. The diversity
inherent in such size is helping Nike evolve its role as a global company.
Therefore, Nike knows how every one of their employees is significant to their
mission of bringing inspiration and innovation to every athlete in the
world. They see a bigger picture today
than when we started, which includes building sound labor practices. For example, in 1999, Nike joined with the
International Youth Foundation (IYF) to form the Global
Alliance for Workers and Communities, a unique partnership of
commercial, public and non-profit organizations. Second, Nikes great customer service is another key factor to
its global success. One of Nikes
missions is to represent the highest service standard within and beyond their
industry, building loyal customer relationships around the world. Nike is training their employees how to
better serve their customer by training their employees how to think like
athletes. They arent saying you have
to be an athlete to work for them, but arent separating the thinking from the
doing. Nikes employees are performing
very well, and are they are given a lot power that enables them to be more
creative and make faster decisions. In
creating better employees, Nike is also creating better relationships with
their customers. Finally, Nike is successfully
satisfying an increasing number of shareholders. Just this March 2004, Nike released news that in the third
quarter, their share values increased by 36 percent and their revenues went up
by 14 percent to $3.3 billion. This was their sixth consecutive quarter of
double-digit revenue and earnings per share growth. Thus, shareholders are continuously being satisfied and this news
is encouraging to potential buyers.
Being that Nike is such a huge
corporation on a global level, they do face a few challenges that will
determine some of their degree of success for the future. Like many other companies, Nike is
outsourcing a lot of its operations and labor.
Manufacturing their shoes in China instead of the United States causes
the quality of the shoes to go down.
Thats because the supplies and materials are also being outsourced,
which means Nike is trying to find ways to cut costs in its manufacturing. Consequently, they are buying lower quality
materials that directly lower the overall quality of the product. Nike needs to keep buying the superior
supplies so their products wont become obsolete by higher quality products of
competitors.
With
Nike constantly expanding, especially spreading itself across the globe,
information systems are becoming a bigger role in the company. For one, Nikes multi-billion dollar annual
sales and international transactions are demanding better financial systems and
processes. Old software is becoming
obsolete for current business speeds, and Nike has been increasing their
investing in their financial technology.
With better computer systems that control and manage all the accounting
and bookwork, Nike is enabling better information to be process by managers and
other employees. In return with better
information, their managers can now make better decisions and choices. Plus, newer computer systems also make fewer
mistakes on financial calculations that Nike relies on to be accurate to base
their decisions on. For example, with
updated computer systems Nike can save millions of dollars in costs of labor
and service that would be eliminated through time-efficiency and automatic
tasks of the computers. Being a
manufacturer, its very important to have the most current and accurate
information on receiving, storing, material handling, warehousing, and
inventory control. Unlocking this
information to decision-making employees is critical to business of the 21st
century.
Another
reason why improved information systems are crucial to Nike is the role of
supply chain management (SCM).
Networked supply chains create flawless paths of communication among
partners, suppliers, manufactures, retailers, and customers. Enhanced communication builds strong
extranets that provide real-time information to all critical links in the
supply chain. Nikes SCM systems are
advanced, and when effectively integrated, they minimize waste and enable
dramatic reductions in system costs.
For example, SCM allows shorter engineering-to-production cycle time to
increase market share. Plus, faster
inventory turns throughout the production chain, reducing both inventory
carrying costs and overall product cost base.
If Nike continues to acknowledge the importance of the role of
information systems, they will easily continue to progress and maintain the
position of the worlds leading sports and Fitness Company.
Work Systems
In the first section, work organization of the work system division, we choose Computer Integrated Operations, Overseas Allocation, and Outsourcing. All three of these are a significant part of Nike as a whole. We think these all go hand-in-hand. In other words, they have to put a computer integrated system into their operations to help the business run smoother and more efficiently. This is the only way to successfully accommodate for the demands of the large scale company. In the same way, as the corporation grows to be a widespread business, outsourcing and allocations are common solutions for this expansion.
In the next part, control system, we found that Culture Management, Knowledge Management, and Relationship Management were a large focus for Nike. We found that Nike is interested in putting a lot of time and effort into making their company a diverse and enjoyable place to work. Being a global supplier of athletic apparel, they need to attract customers of all kinds. This is where the cultural aspect is vital. As for the knowledge management portion, Nike encourages a workplace that helps every individual employee to flourish. They hope to appoint staff who reflect and understand the needs of the patrons and athletes. Lastly, the relationships with their vendors are maintained by having annual conversations with them confirming their commitment to the new innovations and ideas.
The only relevant part of the next segment, industrial relations, was the High Trust Relations. This goes along with the previous section because the only way to be successful with the improvement of the company is by being able to trust the management you have in place. Your management is responsible for dealing with problems and also having the ambition towards new business opportunities.
In the human resource practice, the appropriate features were the Learning Organization: New skill formation system, Integration of thinking and doing, and Routine Workers. As previously mentioned Nike has implemented a training program to instruct their workers on how to think like an athlete but not necessarily having to be an athlete. They help their workers understand that anyone can be an athlete. This makes sense since in the mind of the Nike Company, anyone with a body is an athlete. So they coach their workforce on how to relate to the consumer as much as possible with the new skills and information provided. By implementing this, it helps the routine workers realize the impact that their contributions have on the companys success as a whole.
Now to look at the Business Organization division of the model, starting with the Business Strategy portion first. It may be obvious already but the pertinent characteristics of this part are Innovations, Productivity, and Growth. Nike has made it their goal to come up with new and interesting products all the time. They also find it important to keep improving on the foundation they have already set. By doing these two things, they have provided an opportunity for growth to take place.
Lastly, we looked at the Enterprise Organization segment; this identified Nike as a local, national, international, and global corporation. Also it recognizes that it is imperative for Nike to be integrated because of the diversity and culture that make up the business. Finally, this section distinguish that Nike needs to communicate comprehensively among the levels. In other words, the levels at which there should be communication are from local to global.
Work System Graph
Work System
Work Organization
Computer Integrated Operations
Overseas Allocation
Outsourcing
Control System Industrial Relations
Culture Management High trust relations
Knowledge Management
Relationship Management
Information Infrastructure
Human Resource Practice
Learning Organization: New skill formation system
Integration of thinking and doing
Routine workers
Information workers
Business Organization
Business Strategy Enterprise Organization
Innovations Local Integrated
Productivity National Informated
Growth International Communicated
Global
Executive Summary
In this project we have
gone over a lot of the aspects that has made Nike such a powerful company in
its thirty year history. Nike is a
company that has made servicing its customer its main priority and it defines
its customer base as anyone with a body.
We also showed how they train their employees to think like an athlete
to better serve anyone who enters any of their stores as well as help with the
creation of new products. We also went
over how Nike has become more of a global company in the years and how they
have taken an active role in the global community. Nike has done this by exporting jobs from the US to other
countries as well as combating unfair labor practices. Nike also keeps its information systems very
up to date by spending millions to keep them on the cutting edge. Lastly we looked at several of the work
systems Nike uses to keep there company on the top of their market segments as
well as creating new segments for themselves.
Nike has a rich history and a very bright future ahead of them.
References
1.) Targowski,
A., & Rienzo, T. (2004) Enterprise Information Infrastructure Fourth
Edition. Kalamazoo: Paradox Associates, Inc.
2.) CIS
Faculty. ( Spring 2005) Course Pack & Lecture Notes Templates Bus 270
Spring 2005 Information and Communication Infrastructure.
3.) Nike
(2005). Nike Lab. Retrieved April 2005, from www.nike.com
4.) Yahoo
(2005). Yahoo Finance. Retrieved April 2005, from www.finance.yahoo.com
Self Evaluations
Danielle Clark
In
our final project we decided to pick a manufacturing company who is one of the
North America's leading specialty manufactory company who has been around for
many years and has not only sold millions of tennis shoes, but also clothing
and accessories for basketball, soccer, football, tennis and many more. During this project I learned that Nike not
only sells shoes but it also sells watches, underwear, socks, and much
more. Not only do they run their
business to the extent, but they also help support campaigns on a variety of
issues from racist issues to Womens rights.
This project will Influence my
business way by being more familiar with Nike and knowing what their standards
are and how many stores they operate all over the word in which will influence
my business outlook. By researching
about Nike I have discovered their success of the business in the global
business climate in the present and in the future. Also, I now know the role of the company in the management office
and sales/marketing, and without this knowledge I would not know the hard work
they put into their products to bring inspiration and innovation to every
athlete in the world.
Therefore, not only will this
project influence my business outlook but also my personal. For instance, I learned that Nike started
reusing old shoes to create new environmental, economic and community benefits
through recycling. So, now instead of
throwing my old ones out in the trash I can send them in and have them
recycled. Also, now I am more familiar
with the Nike Corporation with its products, service, and even its market share
so if I ever decide to buy stock, I know Nike is a good one to choose.
Lastly, Nike is a very successful
company that is growing rapidly with 23 countries over seas and may here
located in the United States. Nike does
it best to provide the best quality to its athletics who depend on them for
support in their shoes. Not only are
they having engineers come in and brainstorm on new ideas for shoes to improve
them they are hiring scientist in which they designed the Smart Show which it
moves to the support of your feet so they are a perfect match for you only.
Therefore, Nike is a very successful
manufacturing company that will continue to improve on all of its products and
services all over the world.
Self
Evaluations
Peter Gioulos
I learned several things well doing
this project on Nike. The first thing
that I learned and thought was quite interesting is that Nikes goal is to
bring inspiration and innovation to all athletes and they define an athlete is
anyone with a body. I also found it interesting
that a company is able to record higher revenues after their main spokesman
(Michael Jordan) has retired. I will be
able to use the information I learned in this project in future business in
several ways. When in business it may
be necessary to look at competitive companies or even partnering companies to decide
what they are doing better or if it would be wise to form a partnership, a
company overview will be helpful when doing this. I will be able to use what I have learned in my personal life by
having to take a look at possible employers to make sure there company is
making money so that I can insure I will have a job for some time and the
company will not fold. I enjoyed
looking at Nike because it of how many markets it is in and how it keeps itself
informed of the newest technology available to best make there company
succeed. Nike was a very nice company
to study.
Self
Evaluations
Rod Taylor
In
reflection after completing this project of researching Nike, I have learned
many things about Nike and business enterprises in general. I have found that the key factors of
employee diversity and cooperation are important to global success. With business serving people in every corner
of the world, companies need to have employees who can communicate and
understand their different customers.
Nike is training its employees to adapt and be able to transfer to
different locations to interact with customers. Nikes actions are justified because they are essentially working
on creating better customer relationships that lead to more sales and longer
commitments. From this project, I also
learned about outsourcing and the impacts it has on the company. In the short run, outscoring can save the
company an incredible amount of labor and material costs. But, in return Nike is loosing their
standards of product quality. Simply
put, cheaper costs usually mean less durable, less-fixable, and shorter product
life. So right now the Nike is saving
money from outsourcing, but in the long run they will loose to higher quality
products of competitors. Thats mainly
the only negative thing about Nike I found.
I really glad I did do this research because now I learned a great deal
more about the actual company and not just its products. I really like the fact that they empower
more authority to decision making to their employees and encourage more
job-creativity. In addition, their
increasing stock values show they are a healthy company and show potential for
future investing. This project has
informed me about Nike, and I now I think I going to do more investigating into
their career opportunities in hopes of finding a good job.
Self
Evaluations
Rebecca Spanke
I
found this project to be extremely interesting and informative. It was helpful
in opening my eyes to the measures and extent that a company has to take to
ensure its success. Researching the procedures and processes of the real world
businesses is exciting to me because it gives me a sense of reality. Although
the business classes are imperative, they dont provide you with the whole
picture of the way a business runs. The classes usually are specific to one
aspect of a business. So this gave me a glance into the future of how working
for a business would be like.
I learned the way Nike provides its employees
with the knowledge necessary to assist its customers. Doing this project reminded
me of my job at Bath and Body Works and how they provide us with the essential
tools to do our job the best way possible. The managers inform us of any
changes and updates that occur across the business. The employees really feel
involved and important to the success of the business just like the employees
of Nike. I will be able to incorporate this new information and perspective to
my job with Bath and Body Works to help me grow to my fullest potential.
Being a global corporation, Nike illustrated that culture and diversity are an asset to a company but at the same time it can cause complications. As a business, you need to understand the society and the customs of the other countries around the world in order to provide services to them. This has influenced my personal ways because I have a greater appreciation for a variety of traditions to enhance a corporation. I will also now have the foundation to do more research for any other business that I am interested in.