Nike and Liu Xiang: Crisis Management in Celebrity Endorsement SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Nike and Liu Xiang: Crisis Management in Celebrity Endorsement
On 18 August 2008, Liu Xiang, China's biggest celebrity sports icon, withdrew from the 110-meter hurdles event at the 2008 Beijing Summer Olympic Games due to an Achilles injury. Liu was China's first-ever Olympic gold medalist in men's track and field; his victory at the 2004 Athens Olympics had made him an instant national hero. Since then, he had become the most marketed individual in China. Liu's withdrawal from the Beijing Olympics not only caused disappointment among Chinese people who had high expectations for him defending his title on their home soil, but was also a blow to his sponsors, including Nike, who had invested millions of dollars in his celebrity. As soon as the news broke, Nike tweaked its advertising campaign and launched a new tagline: "Love competition. Love risking your pride. Love winning it back. Love giving it everything you've got. Love the glory. Love the pain. Love sport even when it breaks your heart." Would Nike be able to turn Liu's withdrawal from the Beijing Olympics into an opportunity to further boost its brand image? Against the backdrop of increasing nationalist sentiment in China, what were the implications of Liu's withdrawal? How could Nike avoid or minimize the losses that might result from Chinese consumers' disappointment?
Swot Analysis of "Nike and Liu Xiang: Crisis Management in Celebrity Endorsement" written by Kineta Hung, Isabella Chan, Penelope Chan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Love Nike facing as an external strategic factors. Some of the topics covered in Nike and Liu Xiang: Crisis Management in Celebrity Endorsement case study are - Strategic Management Strategies, Marketing and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Nike and Liu Xiang: Crisis Management in Celebrity Endorsement casestudy better are - – central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings, increasing energy prices, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy,
competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Nike and Liu Xiang: Crisis Management in Celebrity Endorsement
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Nike and Liu Xiang: Crisis Management in Celebrity Endorsement case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Love Nike, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Love Nike 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 and Liu Xiang: Crisis Management in Celebrity Endorsement can be done for the following purposes –
1. Strategic planning using facts provided in Nike and Liu Xiang: Crisis Management in Celebrity Endorsement case study
2. Improving business portfolio management of Love Nike
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Love Nike
Strengths Nike and Liu Xiang: Crisis Management in Celebrity Endorsement | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Love Nike in Nike and Liu Xiang: Crisis Management in Celebrity Endorsement Harvard Business Review case study are -
Successful track record of launching new products
– Love Nike has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Love Nike 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.
Analytics focus
– Love Nike 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 Kineta Hung, Isabella Chan, Penelope Chan 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.
Organizational Resilience of Love Nike
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Love Nike does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Love Nike 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 and Liu Xiang: Crisis Management in Celebrity Endorsement - 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 switching costs
– The high switching costs that Love Nike 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
- Love Nike 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 Love Nike is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Nike and Liu Xiang: Crisis Management in Celebrity Endorsement Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Love Nike digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Love Nike 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.
High brand equity
– Love Nike has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Love Nike to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Love Nike is one of the leading recruiters in the industry. Managers in the Nike and Liu Xiang: Crisis Management in Celebrity Endorsement are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Love Nike 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.
Innovation driven organization
– Love Nike is one of the most innovative firm in sector. Manager in Nike and Liu Xiang: Crisis Management in Celebrity Endorsement Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Sales & Marketing industry
– Nike and Liu Xiang: Crisis Management in Celebrity Endorsement firm has clearly differentiated products in the market place. This has enabled Love Nike to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Love Nike to invest into research and development (R&D) and innovation.
Weaknesses Nike and Liu Xiang: Crisis Management in Celebrity Endorsement | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Nike and Liu Xiang: Crisis Management in Celebrity Endorsement are -
Slow to strategic competitive environment developments
– As Nike and Liu Xiang: Crisis Management in Celebrity Endorsement HBR case study mentions - Love Nike 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Nike and Liu Xiang: Crisis Management in Celebrity Endorsement, in the dynamic environment Love Nike has struggled to respond to the nimble upstart competition. Love Nike has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– After analyzing the HBR case study Nike and Liu Xiang: Crisis Management in Celebrity Endorsement, it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Need for greater diversity
– Love Nike 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Nike and Liu Xiang: Crisis Management in Celebrity Endorsement 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 Love Nike has relatively successful track record of launching new products.
Products dominated business model
– Even though Love Nike 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 and Liu Xiang: Crisis Management in Celebrity Endorsement should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners
– Because of the regulatory requirements, Kineta Hung, Isabella Chan, Penelope Chan suggests that, Love Nike 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.
Aligning sales with marketing
– It come across in the case study Nike and Liu Xiang: Crisis Management in Celebrity Endorsement 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 and Liu Xiang: Crisis Management in Celebrity Endorsement can leverage the sales team experience to cultivate customer relationships as Love Nike is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Love Nike 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Nike and Liu Xiang: Crisis Management in Celebrity Endorsement, is just above the industry average. Love Nike needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Increasing silos among functional specialists
– The organizational structure of Love Nike is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Love Nike needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Love Nike to focus more on services rather than just following the product oriented approach.
Opportunities Nike and Liu Xiang: Crisis Management in Celebrity Endorsement | 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 and Liu Xiang: Crisis Management in Celebrity Endorsement are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Love Nike can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Love Nike 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 Love Nike 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 Love Nike in the consumer business. Now Love Nike can target international markets with far fewer capital restrictions requirements than the existing system.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Love Nike 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. Love Nike 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.
Learning at scale
– Online learning technologies has now opened space for Love Nike 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Love Nike can use these opportunities to build new business models that can help the communities that Love Nike operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Love Nike is facing challenges because of the dominance of functional experts in the organization. Nike and Liu Xiang: Crisis Management in Celebrity Endorsement 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.
Developing new processes and practices
– Love Nike can develop new processes and procedures in Sales & Marketing 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.
Loyalty marketing
– Love Nike 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.
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 Love Nike 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Love Nike can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Leveraging digital technologies
– Love Nike 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.
Using analytics as competitive advantage
– Love Nike 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 and Liu Xiang: Crisis Management in Celebrity Endorsement - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Love Nike to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Nike and Liu Xiang: Crisis Management in Celebrity Endorsement External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Nike and Liu Xiang: Crisis Management in Celebrity Endorsement are -
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Consumer confidence and its impact on Love Nike 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.
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 Love Nike business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Love Nike has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Love Nike needs to keep up with the evolution of technology in the Sales & Marketing 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.
Environmental challenges
– Love Nike 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. Love Nike can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Love Nike with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Love Nike in the Sales & Marketing sector and impact the bottomline of the organization.
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. Love Nike needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Love Nike can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Love Nike
– 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 Love Nike.
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 Love Nike.
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 and Liu Xiang: Crisis Management in Celebrity Endorsement, Love Nike may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
High dependence on third party suppliers
– Love Nike 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.
Weighted SWOT Analysis of Nike and Liu Xiang: Crisis Management in Celebrity Endorsement 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 and Liu Xiang: Crisis Management in Celebrity Endorsement 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 and Liu Xiang: Crisis Management in Celebrity Endorsement 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 and Liu Xiang: Crisis Management in Celebrity Endorsement 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 and Liu Xiang: Crisis Management in Celebrity Endorsement 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 Love Nike needs to make to build a sustainable competitive advantage.