Production

How will you produce your product?

Nike has emerged as the world's largest manufacturer and supplier of athletic apparel. In 2018, its global revenue reached $36.4 billion. The company has over 73,000 employees and 1,182 retail stores worldwide. Like other popular brands, Nike produces shoes and other goods in factories located overseas in order to keep the costs low. However, the number of products manufactured in China and other Asian countries is rapidly decreasing in an attempt to prevent unfair labor practices. https://bizfluent.com/how-does-4987751-how-nike-shoes-produced.html [accessed 18 Jun. 2019]

What value will you create and capture with your product?

Nike high quality and prestige keep consumers coming back.

What is your competitive advantage?

Nike is well known and very strong. The customization for consumers on the Nike.com website helps consumers create an account that stores their data and designs.

What processes will you use to produce products?

Nike will outsource their products to be produced.

What growth options will you use to develop the business unit?

Nike will push growth on a new sneaker line to reach consumers with foot ailments through advertisement, word of mouth, social media, TV and paper ads as well as, finding podiatrists to help with marketing the product.

B. Resource Needs

In order to effectively organize your business you need to insure the resources are available. Assess those needs here.

Nike will need to have employees who can run machinery to build such a high-tech sneaker/shoe. Doctors/Techs that can help design this program to produce the correct fitting to the consumer. The have plenty of resources to fulfill in this area.

Sourcing/Procurement Strategy

Problem-solvers. Status quo-challengers. Connectors. The roles of NIKE, Inc. Procurement employees stretch far beyond conventional procurement. The company’s relentless pursuit of product innovation and sustainable growth demands bold new ways of doing business – including supplier engagement. Nike Procurement partners with teammates around the world, securing the best supplier relationships to drive business success. The team maximizes the value and reach of the company’s investments in external resources: product materials, marketing services, digital tools, temporary labor, high-tech manufacturing equipment and other products and services to fuel business growth and sustainability. With expertise in market analytics, sourcing strategies, negotiation, supplier relationship management and more, the team brings procurement excellence to the rest of NIKE, Inc.

D. Marketing Strategy

What is your sales plan?

Nike has one of the best sales plans in the marketing business. They have meaningful story, they are selling more than a product, they are selling aspiration.

What advertising and promotion will be used to increase sales/awareness?

Pamphlets in podiatrist offices and possibly doctors’ offices. TV ads & newspaper ads, ads on social media, direct email with existing customers on the data base. To reach out to a professional athlete and non-athlete who has foot ailments to push the product.

Where will you sell products/services?

I will sell products in Nike retail stores, on-line, and with the help of podiatrist offices.

Will you use the open market or contracts?

Nike will use both open market and contracts.

Do you have a preferred market outlet?

Nike retail stores would be the preferred market outlet as consumers will have to step on a machine to make a mold of their feet. Nike.com could do an at home mold kit as well.

How will you price the product?

a) Hedging, forward pricing, options

How will you use these to mitigate your risk?

Nike is mitigating the risks by have the doctors invest in the project.

Nike will be leasing the machines to doctors’ offices. The lease will cover the machine costs with a profit to Nike.

b) Contracting

I will be using marketing contracting to reduce risks.

c) Insurance

How will you use crop, liability and other insurance?

Nike is a well-established company that has many insurances to cover items of this nature.

E. Performance Standards

What performance standards will be used to monitor this enterprise or business unit?

Nike last year issued a new set of performance standards by 2015 that included a 20% reduction in C02 emissions per pair of running shoes by from 2011 levels; an increase in water efficiency by 15% and a 10% reduction from manufacturing waste. By 2020, Nike has also set a target to eliminate the discharge of hazardous chemicals from all products across its supply chain, following a Greenpeace campaign that exposed dangerous levels of toxins at Chinese apparel factories. https://www.theguardian.com/sustainable-business/blog/nike-deliver-2015-performance-innovation [accessed 18 Jun. 2019]

What are acceptable performance standards?

When it comes to business and sport, we value fair play. We believe world-class manufacturing is grounded in standards that respect the environment, the people who work in factories, and the principles of a healthy and safe workplace.

We have a responsibility to run our business in an ethical way, and that responsibility extends to the contract manufacturers who make our products.

Our Code of Conduct and Code Leadership Standards set our expectations for suppliers. They respect the rights of the people who work in factories, including requiring at least minimum wage or prevailing wage (whichever is higher), equal pay for equal work, and a commitment to safe and healthy work environments. https://purpose.nike.com/sourcing-manufacturing-standards [accessed 18 Jun. 2019]

What yield or output levels could you attain?

In the first three years, Nike will have to monitor the performance of the new product. Committees will be formed to monitor all aspects and make recommendations and adjustments as needed.

What efficiency levels will you reach?

By creating committees to monitor the activities of the new product, Nike’s goals are to have the highest efficiency level.

What procedures will be used to monitor performance?

Nike will create a tracking program to keep track of how many machines are leased, what areas they are in and where could they benefit in other areas, how many storefronts and doctor offices they are in.

Who is responsible for monitoring performance?

Each committee will be responsible for monitoring their area of concern: cash flow, active leases, new leads, etc.

What industry benchmarks will be used to assess performance?

Nike will actively monitor our competitor, New Balance.