Fashion Operations Report a Case Study on Nike

Executive summary

Operation management is the practice of transferring the raw materials into final output as well as manage the organisational structure and operational activities to manage transportation, distribution and customer management so that the brand can provide the best quality products and services to the customers. The report is about discussing the operational management and organisational tactics in the fashion and sport brand Nike which is one of the reputed brands in the sport industry across the globe. Through this report, it is possible to acknowledge the market condition and analyse micro and macro environmental analysis for the fashion and sport industry as well as analyse the strategic planning of Nike. The operational strategies and the latest technology will also be discussed, where Nike is successful to implement the latest technology to operate in the international market and fulfil its objectives and organisational mission. The computerised programming, database management system, operational system software and Nike application will have crucial impacts on the operational strategy and activities of the brand.

Introduction

Operation management provides a scope to the business to manufacture the high quality products and services and distribute it among the end customers to maximise the sales volume and profitability of the business firms and secure future sustainable development (Jiang, 2019). The study provides a scope to analyse the operational strategic planning for the business firms in order to analyse their market condition and identify the strategies to run the business. The organisational strategies of Nike will be explored further where the operational activities are effective for the brand to manage their global business and serve the customers efficiently. Through this report, it is possible to analyse the external and internal business environment of Nike through PESTLE and SWOT analysis as well as identify the market condition for Nike. The report also provides a scope to analyse the operational strategies of Nike in order to manage their activities and run the business sustainably. The technological advancement has crucial impacts on the fashion operations and this study is also important for discussing the impacts on latest technology on Nike’s operational activities in the recent years.

Organisational background

Nike is the American multinational corporation, engaged in designing, development and manufacturing the footwear, apparel, equipment and accessories. The company is one of the reputed firms in the sport industry for manufacturing and selling the high quality products and services to the players. The major products, which Nike provides are such as Athletic footwear & apparel, athletic & recreational products and sports equipments. Total asset of the company in the rennet year 2020 is US$31.34 billion and the revenue of the firm in this year is US$37.40 billion (Nike, 2020a). The company is reputed for the quality of their products which are sustainable and in good quality to provide comfort to the athletes. The design of the products is unique and these are manufactured with high quality raw materials (Nike, 2020a).

Figure 1: Brand logo of Nike

The brand logo of the company is one of the effective ways of marketing and promoting the brand where the mission of the company is to bring inspiration and innovation to every athlete in the world. The brand slogan is ‘Just Do it’ is also one of the effective tagline and marketing strategy to encourage the athletes and inspire them further to achieve success in near future and fulfil their dreams. This further attracts the customers for the quality products and services of the brand where Nike is one of the successful brands to strengthen their customer’s base and run their business internationally. Total employees in the company are 75400, who are efficient to manage the operational excellence and ensure high quality services for the customers (Nike, 2020b).

Industry and market analysis

Industry and market analysis is effective for understanding the position of the company and through the PESTLE analysis, it is possible to analyse macros environment of Nike as well as the SWOT analysis is effective for conducting micro analysis through which it is possible to acknowledge the internal strengths and weaknesses of Nike as well as explore future market opportunities and threats.

PESTLE analysis

Political

Political stability is one of the contributing factors in the sport industry, where the brands such as Nike, Adidas are working efficiently and expanding their business sustainably. Intra country relationship as well as the government support is effective for the brand Nike to expand their business and operate globally.

Economic

Economic growth and stability in GDP are also effective for the brands in the sport industry to operate efficiently and secure future sustainable development. Increasing purchasing power parity and moderate inflation rate further boosts the market condition and it helps the firms to operate internationally and grab the mare opportunities in near future (Childs & Jin, 2018).

Social

Social development through education and developmental projects are good for the societal communities. Apart from that, the individuals become concern about staying healthy and fit and it further influence others to make effective purchase decision after judging the actual quality of the organisational products.

Technological

Technological advancement has its crucial impacts on the operations of Nike and other brands in global sport accessories industry where the latest technologies such as computerised system, cloud computing, ERP and CRM software are effective for the business to run their operations efficiently and maximises business excellence in long run (PANDEY, 2017).

Legal

Legal compliances are there in the fashion industry where safety and security is controlled as well as copyright and intellectual property rights are there to support the business firms and provide them the chance to run their operations safely.

Environmental

Environmental activities such as creating positive footprint, social community development, arranging awareness campaign and protecting natural resources are also mandatory for the business firms to reshape their operational activities and secure future sustainable development (Jiang, 2019).

SWOT analysis

Table 2: SWOT analysis

Market condition

Market condition of the firm can be analysed through recent market trend, sales volume and demand for the products of the brand Nike. In this regard comparative analysis is mandatory to identify the market share as well as the demand of the Nike by comparing with other competitive firms such as Adidas, Forever 21, Vans, American eagle and converse etc.

Figure 2: Brand value of Nike

As per the above figure, the brand value of Nike is increasing over the period of time, due to its quality products, mainly footwear and other sport accessories. It reveals that the market share of Nike is increasing and there is adequate demand for the products of Nike as the brand is reputed and successful to deliver high quality footwear and other accessories to the athletes (Statista, 2020a).

Figure 3: Market position of Nike

The above figure also reveals that, Nike is at its top position in the market as compared to the competitive brands such as American Eagle Adidas, Forever 21, where in the clothing and other sport accessory industry, the company Nike is successful to gain competitive advantage. On the other hand, in the footwear industry, Nike is the best brand and the ultimate choice of the athletes due to its quality shoes, unique design and light weight, which are comfortable for the athletes to carry and achieve success.

Figure 4: Brand value on sneakers

Accordingly, the demand for the sneakers in the market for the brand Nike is the highest as compared to the competitive brand such as Adidas, Puma and others, which indicates that, the company Nike is successful to secure future sustainable growth and run the business internationally (Statista, 2020b)

Business strategy

Business objectives

The objective of the business Nike is to minimise the environmental footprint and maximise the profitability of the firm in near future. The mission and slogan of Nike is inspiring for the athletes to choose the right and comfortable products of Nike. On the other hand, the purpose of the company is to unite the world through sport to create a healthy planet, active social communities and an equal playing field for all. This is the major objective of the business through which the company tries to run their operations sustainably (Hemphill & WHITE III, 2016).

Brand competitive advantage

The company Nike is successful to gain high competitive advantage and in this regard, the major strategic planning of Nike to secure future sustainably in the global sport market is such as,

Enhancing innovation in the company to design the new products and maintain the highest quality of their products

Technological implementation and IT framework of the company are effective which provide a scope to the brand to technically advanced and improve business excellence

The team is empowered, diverse and inclusive in the organisation where all the team members are encouraged to show their creativity and apply technical knowledge and skill to manufacture high quality products

Arranging social campaign for encouraging the athletes as well as other social communities to create equal field for the players

Investing in social developmental projects is also effective strategy to run the business sustainably

These are the major tactics of the company, through which Nike tries to create values for all the stakeholders, engaged with the business operations and run the business sustainably across the international markets (Nike, 2020a).

Importance of leadership, management and team communication

The business model of the company is effective where the leader and management team are cooperative to support the staff and suppliers to manage their manufacturing and distribution activities so that the customers can get authentic and quality products as per their choice and preferences. Leadership and management are hereby effective for Nike, where the leader tackles the decision after arranging meeting with the board members and the managers (Childs & Jin, 2018). There are different functions of the organisation and accordingly the departments are developed for doing their operations successfully. As per the hierarchical structure, the departments of the brand Nike are such as reduction and manufacturing, research and development, marketing and sales, finance, operations, human resource (KAL & ABED ALGHANI, 2019). These are the major departments where the organisational structure is maintained efficiently and the business leader is successful to manage the staff members and other stakeholders of the business, the major stakeholders of the business Nike are such as sponsors, shareholders, suppliers, distributors, employees and managers, government, customers, and social communities. These are the major stakeholders, where the leader tries to motivate them and encourage their creativity to run the business sustainably. Moreover, internal communication and collaboration is another strategy of leaders where they try to develop strong teamwork and encourage the team members to achieve success by contributing in the company with their full potential and skill.

Operational planning

Operation management is important for the global brand Nike to satisfy the customers by delivering high quality products safely. The operational activities are described further

Product design and manufacturing

The company is successful to design the high quality and unique footwear and other accessories related to sport fashion, where the major strategy of the brand is to design the latest product on the basis of advanced technology and current market preferences, availability of quality raw materials and latest technology further help the firm to design and manufacture the products.

Process and capacity design

Prioritising streamlining and efficiency of the production technology are the strategy of Nike to maximise effectiveness and efficacy of the organisation in delivering high quality products to the customers. Continuous improvement strategy through research and development, implementing latest technology, monitoring and improving the manufacturing process are the ways of capacity design. Kaizen method is applied in the organisation to fulfil the aim of achieving high quality, low cost and effective delivery of the products to the customers (KAL & ABED ALGHANI, 2019).

Layout Design and supply chain management

ERP [Enterprise Resource Planning], supply chain, and CRM [Customer Relationship Management] software are the major technological advancement at Nike, which is effective for running the operations successfully. The suppliers are engaged with the supply chain and ERP software where automated system and process are beneficial to manage the products and distribute it successfully.

Inventory management

The stock of the products and inventory are also managed through the automated computerised process and bar code reading activities where the stock of the products is handled efficiently. On the other hand, the organisation is able to handle the software including ERP and cloud computing to monitor and handle the stock of the products successfully (Distelhorst, Hainmueller & Locke, 2017).

Distribution to end customers

Distribution channel of Nike is strong and the Nike+ application as well as the CRM software is the best solution through which the brand is successful to satisfy the consumers and deliver high quality products safely (Ivanov, Tsipoulanidis & Schönberger, 2017).

Technologies utilised by Nike

Technology plays a crucial role in the business and Nike is one of them, which is successful to implement the latest technology and develop Information Technology framework at the organisation in order to manage their operational activities, from product design, manufacturing to ultimate distribution of the products in the market. In this regard, the ERP or Enterprise Resource Planning system is effective to develop synchronised system of handling the stock at warehouse and managing the distribution through tracking the orders in the market. On the other hand, there is computerised database management system and could computing, through which the organisational sales data, profit information, and other financial data, as well as employees personal information and consumer data are managed through automated system (Nguyen et al., 2018). This is also efficient for the company to do fast operations and manage the stakeholders as well in the market across the globe. On the other hand, Nike+ application is also innovative software, through which the customers can connect with the company and make effective purchase from the brand. The product category and the organisational activities and available services are designed efficiently for the benefits of the customers. in addition to this, the website of the company and Nike digital world are also other latest technology which are beneficial for the business to run their operations and manage their end consumers successfully across the international markets.

Conclusion

It can be concluded that, Nike is one of the successful brand in the global fashion sport industry, where the company is able to develop their operational activities and manage their business sustainably. The operations are handled efficiently where the suppliers and distributors, employees are playing important role to run the business and distribute the final goods in the market as per the customers demand. On the other hand, technological advancement, leadership practice and organisational structure are also effective for Nike to run their operations efficiently and maximise organisational objectives in long run.

Reference List

Childs, M., & Jin, B. (2018). Nike: An Innovation Journey. In Product Innovation in the Global Fashion Industry (pp. 79-111). Palgrave Pivot, New York.

Distelhorst, G., Hainmueller, J., & Locke, R. M. (2017). Does lean improve labor standards? Management and social performance in the Nike supply chain. Management Science, 63(3), 707-728.

Hemphill, T. A., & WHITE III, G. O. (2016). The world economic forum and Nike: Emerging ‘shared responsibility’and institutional control models for achieving a socially responsible global supply chain?. Business and Human Rights Journal, 1(2), 307-313.

Ivanov, D., Tsipoulanidis, A., & Schönberger, J. (2017). Global supply chain and operations management. A decision-oriented introduction to the creation of value, 2.

Jiang, W., (2019). Sustainable Development of Supply Chain in Footwear Industry–Take Nike as the Case. Asian Business Research, 4(3), p.86.

KAL, O., & ABED ALGHANI, K. H. A. L. E. D. (2019). Changes and challenges promoted by the social commerce in the sportswear industry. Evaluation of Nike and Adidas' cases.

Nguyen, K. T., Van Nguyen, P., Le, K. A. N., & Bui, T. D. D. (2018). Identity Representation in Customization. A Case of Nike Shoes. Int. J Sup. Chain. Mgt Vol, 7(5), 582.

Nike, (2020a). About us. Accessed from: https://about.nike.com/

Nike, (2020b). Purpose. Accessed from: https://purpose.nike.com/

PANDEY, B. C. (2017). Nike Inc-Complete Analysis: SWOT, PESTLE and Marketing strategy. BookRix.

Statista, (2020a). Brand value of the sports company Nike worldwide from 2016 to 2020(in million U.S. dollars. Accessed from: https://www.statista.com/statistics/632210/nike-brand-value/

Statista, (2020b). Nike Still on Top of the Sneaker World. Accessed from: https://www.statista.com/chart/13470/athletic-footwear-sales/

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