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  • B2C: Nike’s official regional or national webshops are supported by Demandware e-commerce

    technology solution platform globally. In specific wholesale markets like China, Nike collaborates with TMall

    merchandising and selling in the local preferred way. Its owned and operated brick-and-motars

    (includes full-price stores and outlets) managed by the company’s retail sector.

     

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    Homegrown:

     

    Asian dominance, European Excellence

     

    Nike operates 5 owned and operated factories and 5 tanneries globally. In Asia, China, Thailand and

    Indonesia have state-of-the-art production facilities include a factory and a tannery respectively. In

    Europe, Portugal and Slovakia factory were established due to its unique industry history on shoe

    production. At the same time, a fully operated Dutch tannery sitting in Southern Netherlands plays as

    the leather business headquarter. Emerging countries will improve their specialty in industrial manufacturing

    and the EU will strengthen its technological leadership (Europeanskills council, 2018).

     

    Production Map, Source from Nike corporate website

    Leather production:

    Leather production is a strategic business unit for Nike’s current setup (Fitzroy, Hulbert &

    Ghobadian, 2012). In 2014, Apple introduced Apple Watch to the world with reference of Nike

    leather, which tremendously brought this hidden business to the front end. Nowadays, Nike leather

    procured raw materials from local area (slaughter houses in Europe and Indonesian Jungle) and import

    rare material like Yak raw hides from Tibet under the legal permission. Raw hides go through a series

    of tanning process, turn out to be various leather groups catered for different needs of the final

    products. The leather is widely used to supply its own shoe business and other high-end customers like

    fashion labels Louis Vuitton and Alexander Wang (Nikeleather, 2019).

    Shoes production:

     

    Shoe production plants were dedicated built for Nike’s own shoe lines, each factory is mainly

    responsible for a specific product category, such as Ladies, Mens, Kids, Golf divisions and soles. The

    groundbreaking Direct Injection technology is Nike’s unique selling point which other factories are

    very difficult to copy and implement. Direct Injection is a method that attaching the outer sole when

    liquid polyurethane is injected into a foot shaped mould forming a sole and bonding directly without

    glue and stitching and drastically improve the durability and comfort of Nike shoes (Annual Report

    2010, 2011).

    Outsourcing:

     

    The degree of Nike’s external supply chain dependency is significantly lower than most of the other

    shoe companies.

    In China: http://niketrainershot4sale.com/906-Nike-Air-Max-97-China-Wholesale-Cheap-Nike-Tn-Shoes-China-Air-Force-Nike-Air-ForceOFF-WHITE-COMPLEX-CON-Crossover-AF1-Skate-sho.html A trustworthy partner Stella factory in Dongguan is responsible for producing Nike’s

    cemented shoes and accessories business, which Nike’s own factories are not capable to produce.

    Stella also provides final products to other big global players like Prada, Nike and Adidas. (Chun Han,

    2015)

     

    In UK: A British shoe care company in Oxfordshire is commissioned to manufacture Nike’s shoe care

    range, include clear, care, protect and tools.

     

    The indirect procurement department is responsible for sourcing other necessary bill of materials like

    machines and equipment.

     

    Internal:

    Based on McKinsey 7-s framework model(Robert, H & Tom, P, 1980) to analyze Nike’s internal

    organization traits.

     

    Figure 1: The McKinsey /S Model

    Strategy: Nike is in the transition of moving toward the ideal scenario of the 2020 strategy, which is

    an official guideline to drive Nike to be a consumer-centric, retail-driven, Omni-channelly premium

    shoe and leather goods company. The strategy will be evaluated later.

     

    Structure: The organization is designed in following departments in the matrix organizational structure

    (Bierman, G & , 2006, pp 180): Brand and Product(DK), Global Production(NL), Global Sales(NL),

    Group Finance(DK), Group Supply Chain(SG), Group IT(DK), Group HR(DK), Group Strategy and

    Planning(DK), Group Communication(DK), Legal and Compliance(DK) and Indirect

    Procurement(DK). It is consistent with the overall need of Nike globally.

     

    The governance is dependent on the supervisory board and managing boards who represent Product,

    Sales, Finance, Production departments respectively, managing boards have extensive background in

    the industry and work for Nike for at least 10 years. Nike has three core business management

    regions includes EMEA (Europe, Middle East and Africa) based in Netherlands, EAM (America) based

    in USA, and EAP (Asia Pacific) based in Singapore and China. Business units under each region have

    its own general manager or president.

     

    Systems: SAP Enterprise Resource Planning system has been rolled out globally, this is the internal

    website for Nike all business activities, master database, employee services and so on.

     

    Shared value: passion, heritage, excellence, innovation, care.

     

    Staff: Nike employs more than 18500 employees from more than 50 nationalities. Employees are

    from different cultures, who expect different motivation and reward systems. English is the corporate

    language, which significantly simplifies the business exchange within the company. But Nike is in

    shortage of highly-skilled workers in some functions.

     

    Skills: Skills aligned with company’s operations. But Nike is lack of resources in certain departments.

    Style: Nike’s managerial style can be described as democratic, approachable but chaotic management

    style. Danish communication is pretty straightforward and equal, there is no hierarchy issue in Nike’s

    headquarter. Board meetings occur every two weeks, however, the decision making process is

    centralized and internal. According to Witcher and Vihn (2010), strategy plans should be implemented

    incrementally rather than pre-determined by top-down master plan.

     

    Managerial attitude towards risks shows actively, as an example of 2012 Nike Thailand flooding, the

    whole management team fast reacted and united, physically visited Thailand to determine the rescue,

    renovation and contingency plans (Annual Report 2012, 2013)

     

    Key strategic drivers nowadays to achieve 2020 Strategy:

     

    A strategy involves a goal and an orientation for an organization, would determine the organization

    revolution (Robert, 2006, pp33). In the annual report 2014, Nike came up a 2020 strategy looking

    ahead of company’s future outlook last year.

     


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