Case Study Description of Nike's Global Women's Fitness Business: Driving Strategic Integration
In the summer of 2006, Nike announced a major corporate reorganization that would shift the company's focus to a category-driven approach. The six major business categories were running, men's training, basketball, soccer, women's fitness, and sportswear. For years, Nike had organized its business around footwear, apparel, and equipment. Integration between these three business units was inconsistent at best. The goal of the reorganization was to take a more consumer-oriented approach to the market to give customers holistic collections of everything they want and need in a particular sports category. This would require the organization to break down its product-oriented silos and collaborate on a more formal, ongoing basis. The reorganization also reflected a change in Nike's corporate strategy. The elevation of women's fitness to a major focus for the company was a substantial victory for the team that had been fighting for the increased prominence of this market segment for years. Darcy Winslow, general manager of Nike's global women's fitness business, and a team of individuals across the company working across traditional boundaries within Nike's complex, matrixed organization to achieve the required level of cross-business integration to deliver cohesive collections of footwear, apparel, and equipment to the women's market. Focuses on Winslow and her team as they tackled challenges related to product development, operations management, organization structure, reporting relationships, change management, and stakeholder buy-in.
Swot Analysis of "Nike's Global Women's Fitness Business: Driving Strategic Integration" written by Robert A. Burgelman, Lyn Denend includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Nike's Women's facing as an external strategic factors. Some of the topics covered in Nike's Global Women's Fitness Business: Driving Strategic Integration case study are - Strategic Management Strategies, Gender, Leadership, Organizational structure, Strategic planning, Strategy execution and Organizational Development.
Some of the macro environment factors that can be used to understand the Nike's Global Women's Fitness Business: Driving Strategic Integration casestudy better are - – there is increasing trade war between United States & China, geopolitical disruptions, there is backlash against globalization, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, talent flight as more people leaving formal jobs,
cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Nike's Global Women's Fitness Business: Driving Strategic Integration
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Nike's Global Women's Fitness Business: Driving Strategic Integration case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nike's Women's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nike's Women's operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Nike's Global Women's Fitness Business: Driving Strategic Integration can be done for the following purposes –
1. Strategic planning using facts provided in Nike's Global Women's Fitness Business: Driving Strategic Integration case study
2. Improving business portfolio management of Nike's Women's
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Nike's Women's
Strengths Nike's Global Women's Fitness Business: Driving Strategic Integration | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nike's Women's in Nike's Global Women's Fitness Business: Driving Strategic Integration Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Nike's Global Women's Fitness Business: Driving Strategic Integration Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
High switching costs
– The high switching costs that Nike's Women's has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Learning organization
- Nike's Women's is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Nike's Women's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Nike's Global Women's Fitness Business: Driving Strategic Integration Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Nike's Women's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nike's Women's has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Diverse revenue streams
– Nike's Women's is present in almost all the verticals within the industry. This has provided firm in Nike's Global Women's Fitness Business: Driving Strategic Integration case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Analytics focus
– Nike's Women's is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Robert A. Burgelman, Lyn Denend can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Training and development
– Nike's Women's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Nike's Global Women's Fitness Business: Driving Strategic Integration Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Cross disciplinary teams
– Horizontal connected teams at the Nike's Women's are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Ability to recruit top talent
– Nike's Women's is one of the leading recruiters in the industry. Managers in the Nike's Global Women's Fitness Business: Driving Strategic Integration are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Nike's Women's is one of the most innovative firm in sector. Manager in Nike's Global Women's Fitness Business: Driving Strategic Integration Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Organizational Development field
– Nike's Women's is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Nike's Women's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Nike's Women's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Nike's Women's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Nike's Global Women's Fitness Business: Driving Strategic Integration | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Nike's Global Women's Fitness Business: Driving Strategic Integration are -
High cash cycle compare to competitors
Nike's Women's has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Capital Spending Reduction
– Even during the low interest decade, Nike's Women's has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High bargaining power of channel partners
– Because of the regulatory requirements, Robert A. Burgelman, Lyn Denend suggests that, Nike's Women's is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Nike's Women's supply chain. Even after few cautionary changes mentioned in the HBR case study - Nike's Global Women's Fitness Business: Driving Strategic Integration, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Nike's Women's vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Nike's Women's products
– To increase the profitability and margins on the products, Nike's Women's needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Nike's Women's has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Nike's Global Women's Fitness Business: Driving Strategic Integration should strive to include more intangible value offerings along with its core products and services.
Skills based hiring
– The stress on hiring functional specialists at Nike's Women's has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study Nike's Global Women's Fitness Business: Driving Strategic Integration has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Nike's Women's 's lucrative customers.
Low market penetration in new markets
– Outside its home market of Nike's Women's, firm in the HBR case study Nike's Global Women's Fitness Business: Driving Strategic Integration needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Nike's Global Women's Fitness Business: Driving Strategic Integration, in the dynamic environment Nike's Women's has struggled to respond to the nimble upstart competition. Nike's Women's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow decision making process
– As mentioned earlier in the report, Nike's Women's has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Nike's Women's even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Opportunities Nike's Global Women's Fitness Business: Driving Strategic Integration | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Nike's Global Women's Fitness Business: Driving Strategic Integration are -
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Nike's Women's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Organizational Development industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Nike's Women's can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Nike's Women's can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Nike's Women's can use these opportunities to build new business models that can help the communities that Nike's Women's operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Learning at scale
– Online learning technologies has now opened space for Nike's Women's to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Nike's Women's can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Nike's Global Women's Fitness Business: Driving Strategic Integration, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Nike's Women's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.
Leveraging digital technologies
– Nike's Women's can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Nike's Women's to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Nike's Women's to hire the very best people irrespective of their geographical location.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Nike's Women's in the consumer business. Now Nike's Women's can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Nike's Women's has opened avenues for new revenue streams for the organization in the industry. This can help Nike's Women's to build a more holistic ecosystem as suggested in the Nike's Global Women's Fitness Business: Driving Strategic Integration case study. Nike's Women's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Nike's Women's is facing challenges because of the dominance of functional experts in the organization. Nike's Global Women's Fitness Business: Driving Strategic Integration case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Organizational Development industry, but it has also influenced the consumer preferences. Nike's Women's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Nike's Women's has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Threats Nike's Global Women's Fitness Business: Driving Strategic Integration External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Nike's Global Women's Fitness Business: Driving Strategic Integration are -
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Nike's Women's business can come under increasing regulations regarding data privacy, data security, etc.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Nike's Women's.
Regulatory challenges
– Nike's Women's needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Organizational Development industry regulations.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Nike's Women's in the Organizational Development sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Nike's Women's can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Nike's Women's can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Nike's Global Women's Fitness Business: Driving Strategic Integration .
Environmental challenges
– Nike's Women's needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Nike's Women's can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Increasing wage structure of Nike's Women's
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Nike's Women's.
Consumer confidence and its impact on Nike's Women's demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Nike's Global Women's Fitness Business: Driving Strategic Integration, Nike's Women's may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Organizational Development .
Technology acceleration in Forth Industrial Revolution
– Nike's Women's has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Nike's Women's needs to keep up with the evolution of technology in the Organizational Development sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Shortening product life cycle
– it is one of the major threat that Nike's Women's is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Nike's Global Women's Fitness Business: Driving Strategic Integration Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Nike's Global Women's Fitness Business: Driving Strategic Integration needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Nike's Global Women's Fitness Business: Driving Strategic Integration is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Nike's Global Women's Fitness Business: Driving Strategic Integration is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Nike's Global Women's Fitness Business: Driving Strategic Integration is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Nike's Women's needs to make to build a sustainable competitive advantage.
