The paper examines the success of Nike in the 1990s, identifying their core values, the elements of their competitive advantage and their subcontracting policies. The effects of the bad publicity caused by the poor conditions in their sweatshops are analyzed, the company's turn to the corporate social and environmental responsibilities is described. Recommendations are suggested about the strategic development of Nike over the next five years. The paper responds to the following tasks: Explain Nike's mission, vision and values in about 1990, and critically analyze the basis of Nike's competitive advantage at that time. Critically evaluate Nike's approach to the protests after 1990, taking into account the various stakeholders with which they had to deal. Advise Nike how to develop their business over the next five years, starting from the date of the case.
3 Analysis of Mission Statement
As stated in the case, the mission of Nike was to “increase brand awareness and foster consumer loyalty”. The mission statement states that Nike would produce a brand of shoes that would benefit its consumers, majority of whom are celebrity sport players and these celebrities would in turn endorse the product that would increase the publicity of the products.
Another of Nike’s missions was to produce a variety of goods for athletes and also be recognized in the fashion industry. Nike at the time was booming and they wanted their name heard in every part of the world. They wanted to make sure that each and every pair of shoe worn by an athlete or an individual was recognized. Another mission that was stated was to produce as much shoes as possible for less and to sell for more thereby making profit. This motive led to the outsourcing of the shoes for less and earning more than they would if these shoes were produced in the country.
4 Internal Environment Analysis
In the economic aspect, Nike exhibited many ways of improvising and flourishing. However, it is noted that it had a weak internal control. Nike lacked a strong base department responsible for overseeing production abroad. Whenever Nike moves production from one country to the next, different cultures are impacted and different guidelines and code of conduct should be adopted, this way it could have better managed the people who worked in such harsh conditions. Also Nike did not have a set of standard ethical guidelines in which its Subcontractors should follow and therefore these subcontractors were implementing rules and regulations as they pleased.
5 External Environment Analysis
External environment that escalated the case was the involvement of the University in the workers rights consortium union. This addition to the university triggered several factors that in turn led to the fallout between Nike and the university. Factors that include: students and faculty protesting against working in sweatshops, also stopping the selling of apparel in their bookstores and various stores around the...