Social Strategy at Nike SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Social Strategy at Nike
Nike, which first started experimenting with social media and networking in 2004, has been consistently reducing its spending on traditional advertising. Yet, Nike has not pulled back on its overall marketing budget, instead opting to focus on "nontraditional" advertising through new mediums. In doing so, the team hoped to build online communities to foster a closer relationship with its consumers. By 2012 Nike had committed to a social strategy that linked product with experience. Soon the company will discover if this strategic jump will be reflected on the bottom line.
Swot Analysis of "Social Strategy at Nike" written by Mikolaj Jan Piskorski, Ryan Johnson includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Nike Mediums facing as an external strategic factors. Some of the topics covered in Social Strategy at Nike case study are - Strategic Management Strategies, Marketing and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Social Strategy at Nike casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing, technology disruption, cloud computing is disrupting traditional business models, there is backlash against globalization, there is increasing trade war between United States & China, central banks are concerned over increasing inflation,
increasing energy prices, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Social Strategy at Nike
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Social Strategy at Nike case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nike Mediums, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nike Mediums 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 Social Strategy at Nike can be done for the following purposes –
1. Strategic planning using facts provided in Social Strategy at Nike case study
2. Improving business portfolio management of Nike Mediums
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Nike Mediums
Strengths Social Strategy at Nike | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nike Mediums in Social Strategy at Nike Harvard Business Review case study are -
Ability to recruit top talent
– Nike Mediums is one of the leading recruiters in the industry. Managers in the Social Strategy at Nike 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 Mediums has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Social Strategy at Nike 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.
High switching costs
– The high switching costs that Nike Mediums 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.
Analytics focus
– Nike Mediums 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 Mikolaj Jan Piskorski, Ryan Johnson 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.
Operational resilience
– The operational resilience strategy in the Social Strategy at Nike 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.
Learning organization
- Nike Mediums 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 Mediums is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Social Strategy at Nike Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Nike Mediums
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Nike Mediums does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Nike Mediums is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Nike Mediums 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.
Superior customer experience
– The customer experience strategy of Nike Mediums in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Strategy & Execution industry
– Social Strategy at Nike firm has clearly differentiated products in the market place. This has enabled Nike Mediums to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Nike Mediums to invest into research and development (R&D) and innovation.
High brand equity
– Nike Mediums has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Nike Mediums to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Social Strategy at Nike | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Social Strategy at Nike are -
Lack of clear differentiation of Nike Mediums products
– To increase the profitability and margins on the products, Nike Mediums needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Nike Mediums 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.
Increasing silos among functional specialists
– The organizational structure of Nike Mediums is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Nike Mediums needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Nike Mediums to focus more on services rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Nike Mediums 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 Mediums 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 bargaining power of channel partners
– Because of the regulatory requirements, Mikolaj Jan Piskorski, Ryan Johnson suggests that, Nike Mediums 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 Social Strategy at Nike 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 Social Strategy at Nike can leverage the sales team experience to cultivate customer relationships as Nike Mediums is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Nike Mediums 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.
Products dominated business model
– Even though Nike Mediums 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 - Social Strategy at Nike should strive to include more intangible value offerings along with its core products and services.
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 Mediums supply chain. Even after few cautionary changes mentioned in the HBR case study - Social Strategy at Nike, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Nike Mediums vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Nike Mediums 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Social Strategy at Nike, in the dynamic environment Nike Mediums has struggled to respond to the nimble upstart competition. Nike Mediums has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Social Strategy at Nike | 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 Social Strategy at Nike are -
Manufacturing automation
– Nike Mediums can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
Leveraging digital technologies
– Nike Mediums 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Nike Mediums can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Nike Mediums 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, Social Strategy at Nike, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Nike Mediums 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.
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 Mediums 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.
Building a culture of innovation
– managers at Nike Mediums 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 Strategy & Execution segment.
Developing new processes and practices
– Nike Mediums can develop new processes and procedures in Strategy & Execution 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 Mediums can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Social Strategy at Nike 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.
Loyalty marketing
– Nike Mediums 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.
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 Mediums can use these opportunities to build new business models that can help the communities that Nike Mediums operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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 Mediums in the consumer business. Now Nike Mediums 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 Mediums has opened avenues for new revenue streams for the organization in the industry. This can help Nike Mediums to build a more holistic ecosystem as suggested in the Social Strategy at Nike case study. Nike Mediums can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Social Strategy at Nike External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Social Strategy at Nike are -
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Nike Mediums can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Social Strategy at Nike, Nike Mediums may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Nike Mediums 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 Social Strategy at Nike .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Nike Mediums in the Strategy & Execution industry. The Strategy & Execution 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.
Stagnating economy with rate increase
– Nike Mediums 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.
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 Mediums.
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.
Regulatory challenges
– Nike Mediums 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 Strategy & Execution industry regulations.
Technology acceleration in Forth Industrial Revolution
– Nike Mediums has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Nike Mediums needs to keep up with the evolution of technology in the Strategy & Execution 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 Mediums is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Mediums business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Nike Mediums 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.
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.
Weighted SWOT Analysis of Social Strategy at Nike 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 Social Strategy at Nike 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 Social Strategy at Nike 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 Social Strategy at Nike 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 Social Strategy at Nike 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 Mediums needs to make to build a sustainable competitive advantage.