Nike, Inc.: Developing an Effective Public Relations Strategy SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of Nike, Inc.: Developing an Effective Public Relations Strategy

It had been almost a decade since the first article surfaced in the media alleging that factories subcontracted by Nike in China and Indonesia were forcing workers to work long hours for low pay and for physically and verbally abusive managers. The article was the seed of a media campaign that created a public relations nightmare for the company. A financial crisis in Asia and intense competition in the domestic market contributed to a decline in Nike's revenue and market share after three years of record performance. Though no direct correlation could be proven between the consumer's negative perceptions of Nike and the company's decline in market share and stock, it certainly did not help in its efforts to establish itself as the global leader in a hotly competitive industry.

Authors :: Kathleen E. Slaughter, Donna Everatt

Topics :: Organizational Development

Tags :: Public relations, Social responsibility, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "Nike, Inc.: Developing an Effective Public Relations Strategy" written by Kathleen E. Slaughter, Donna Everatt includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Nike Decline facing as an external strategic factors. Some of the topics covered in Nike, Inc.: Developing an Effective Public Relations Strategy case study are - Strategic Management Strategies, Public relations, Social responsibility and Organizational Development.

Some of the macro environment factors that can be used to understand the Nike, Inc.: Developing an Effective Public Relations Strategy casestudy better are - – technology disruption, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, increasing transportation and logistics costs, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, etc

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Introduction to SWOT Analysis of Nike, Inc.: Developing an Effective Public Relations Strategy

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Nike, Inc.: Developing an Effective Public Relations Strategy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nike Decline, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nike Decline 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Nike, Inc.: Developing an Effective Public Relations Strategy can be done for the following purposes –
1. Strategic planning using facts provided in Nike, Inc.: Developing an Effective Public Relations Strategy case study
2. Improving business portfolio management of Nike Decline
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 Decline

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Strengths Nike, Inc.: Developing an Effective Public Relations Strategy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Nike Decline in Nike, Inc.: Developing an Effective Public Relations Strategy Harvard Business Review case study are -

Digital Transformation in Organizational Development segment

- digital transformation varies from industry to industry. For Nike Decline digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Nike Decline has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.

Ability to recruit top talent

– Nike Decline is one of the leading recruiters in the industry. Managers in the Nike, Inc.: Developing an Effective Public Relations Strategy are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.

Training and development

– Nike Decline has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Nike, Inc.: Developing an Effective Public Relations Strategy 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.

Effective Research and Development (R&D)

– Nike Decline has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Nike, Inc.: Developing an Effective Public Relations Strategy - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

High brand equity

– Nike Decline has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Nike Decline to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Cross disciplinary teams

– Horizontal connected teams at the Nike Decline 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.

Organizational Resilience of Nike Decline

– The covid-19 pandemic has put organizational resilience at the centre of everthing that Nike Decline does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Learning organization

- Nike Decline 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 Decline is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Nike, Inc.: Developing an Effective Public Relations Strategy Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

Strong track record of project management

– Nike Decline is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Superior customer experience

– The customer experience strategy of Nike Decline in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

High switching costs

– The high switching costs that Nike Decline 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.

Diverse revenue streams

– Nike Decline is present in almost all the verticals within the industry. This has provided firm in Nike, Inc.: Developing an Effective Public Relations Strategy 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.

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Weaknesses Nike, Inc.: Developing an Effective Public Relations Strategy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Nike, Inc.: Developing an Effective Public Relations Strategy are -

Capital Spending Reduction

– Even during the low interest decade, Nike Decline 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 dependence on star products

– The top 2 products and services of the firm as mentioned in the Nike, Inc.: Developing an Effective Public Relations Strategy HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Nike Decline has relatively successful track record of launching new products.

Aligning sales with marketing

– It come across in the case study Nike, Inc.: Developing an Effective Public Relations Strategy that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Nike, Inc.: Developing an Effective Public Relations Strategy can leverage the sales team experience to cultivate customer relationships as Nike Decline is planning to shift buying processes online.

Lack of clear differentiation of Nike Decline products

– To increase the profitability and margins on the products, Nike Decline needs to provide more differentiated products than what it is currently offering in the marketplace.

Low market penetration in new markets

– Outside its home market of Nike Decline, firm in the HBR case study Nike, Inc.: Developing an Effective Public Relations Strategy needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Need for greater diversity

– Nike Decline has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.

High bargaining power of channel partners

– Because of the regulatory requirements, Kathleen E. Slaughter, Donna Everatt suggests that, Nike Decline 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.

Products dominated business model

– Even though Nike Decline 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, Inc.: Developing an Effective Public Relations Strategy should strive to include more intangible value offerings along with its core products and services.

Slow to strategic competitive environment developments

– As Nike, Inc.: Developing an Effective Public Relations Strategy HBR case study mentions - Nike Decline takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.

Skills based hiring

– The stress on hiring functional specialists at Nike Decline 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.

Ability to respond to the competition

– As the decision making is very deliberative, highlighted in the case study Nike, Inc.: Developing an Effective Public Relations Strategy, in the dynamic environment Nike Decline has struggled to respond to the nimble upstart competition. Nike Decline has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

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Opportunities Nike, Inc.: Developing an Effective Public Relations Strategy | 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, Inc.: Developing an Effective Public Relations Strategy are -

Building a culture of innovation

– managers at Nike Decline can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Organizational Development segment.

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 Decline 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 Decline 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 Decline can use these opportunities to build new business models that can help the communities that Nike Decline operates in. Secondly it can use opportunities from government spending in Organizational Development sector.

Loyalty marketing

– Nike Decline 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Nike Decline 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.

Developing new processes and practices

– Nike Decline can develop new processes and procedures in Organizational Development industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.

Buying journey improvements

– Nike Decline can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Nike, Inc.: Developing an Effective Public Relations Strategy suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.

Reconfiguring business model

– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Nike Decline to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Nike Decline is facing challenges because of the dominance of functional experts in the organization. Nike, Inc.: Developing an Effective Public Relations Strategy 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 Decline can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Using analytics as competitive advantage

– Nike Decline has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Nike, Inc.: Developing an Effective Public Relations Strategy - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Nike Decline to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Leveraging digital technologies

– Nike Decline 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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Nike Decline can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

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Threats Nike, Inc.: Developing an Effective Public Relations Strategy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats mentioned in the HBR case study Nike, Inc.: Developing an Effective Public Relations Strategy 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 Decline business can come under increasing regulations regarding data privacy, data security, etc.

Increasing wage structure of Nike Decline

– 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 Decline.

Instability in the European markets

– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Nike Decline will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.

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 Decline in the Organizational Development sector and impact the bottomline of the organization.

Technology acceleration in Forth Industrial Revolution

– Nike Decline has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Nike Decline 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.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Nike Decline in the Organizational Development industry. The Organizational Development industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Nike Decline with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.

Stagnating economy with rate increase

– Nike Decline 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 Decline 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, Inc.: Developing an Effective Public Relations Strategy .

High level of anxiety and lack of motivation

– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Nike Decline needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.

High dependence on third party suppliers

– Nike Decline high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.

Environmental challenges

– Nike Decline 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 Decline can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.

Shortening product life cycle

– it is one of the major threat that Nike Decline is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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Weighted SWOT Analysis of Nike, Inc.: Developing an Effective Public Relations Strategy 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, Inc.: Developing an Effective Public Relations Strategy 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, Inc.: Developing an Effective Public Relations Strategy 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, Inc.: Developing an Effective Public Relations Strategy 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, Inc.: Developing an Effective Public Relations Strategy 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 Decline needs to make to build a sustainable competitive advantage.

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