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 - – technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, increasing commodity prices, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs,
central banks are concerned over increasing inflation, wage bills are increasing, 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 -
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.
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.
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.
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.
Low bargaining power of suppliers
– Suppliers of Love Nike in the sector have low bargaining power. Nike and Liu Xiang: Crisis Management in Celebrity Endorsement has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Love Nike to manage not only supply disruptions but also source products at highly competitive prices.
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.
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.
Ability to lead change in Sales & Marketing field
– Love Nike 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 Love Nike in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Love Nike in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Love Nike has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Nike and Liu Xiang: Crisis Management in Celebrity Endorsement HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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 -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Nike and Liu Xiang: Crisis Management in Celebrity Endorsement, it seems that the employees of Love Nike don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Love Nike is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Nike and Liu Xiang: Crisis Management in Celebrity Endorsement can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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.
Capital Spending Reduction
– Even during the low interest decade, Love Nike 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 cash cycle compare to competitors
Love Nike 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.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Love Nike needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
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.
Slow decision making process
– As mentioned earlier in the report, Love Nike 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. Love Nike 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Nike and Liu Xiang: Crisis Management in Celebrity Endorsement 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 Love Nike 's lucrative customers.
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.
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 -
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. Love Nike can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Love Nike can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
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.
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.
Creating value in data economy
– The success of analytics program of Love Nike has opened avenues for new revenue streams for the organization in the industry. This can help Love Nike to build a more holistic ecosystem as suggested in the Nike and Liu Xiang: Crisis Management in Celebrity Endorsement case study. Love Nike can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Love Nike 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 and Liu Xiang: Crisis Management in Celebrity Endorsement, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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.
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.
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.
Better consumer reach
– The expansion of the 5G network will help Love Nike to increase its market reach. Love Nike will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Building a culture of innovation
– managers at Love Nike 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 Sales & Marketing segment.
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.
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 -
Shortening product life cycle
– it is one of the major threat that Love Nike is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, 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.
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.
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.
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.
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.
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.
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.
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.
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. Love Nike 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.
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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Love Nike in the Sales & Marketing industry. The Sales & Marketing 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.
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.
