Research paper!

timer Asked: Oct 16th, 2018
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Question Description

For the assignment I'd like you please to prepare me a research paper from the PowerPoint I posted, pages 15,16 and 17 almost about three pages. As well as prepare a brief or explanation (or like an outline just a little longer) of these pages so that I can present that in class while I am playing the PowerPoint. Please the professor has a very high expectation for this work ....... Thank you

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SOURCING & STRATEGY IN ATHLETIC FOOTWEAR Marco Mosquera Julissa Duran Christopher Ortiz Deanna Mansueto Luisa Torres AGENDA • Situation Analysis • Key Sources of Competitive Advantage • Financial Overview • Cost Advantages of Outsourcing • Advantages and Disadvantages of Outsourcing • Reasons to Vertically Integrate • Core Resources and Capabilities • Preventing Subcontractor Competition • Maintaining Nike’s Competitive Advantage 2 SITUATION ANALYSIS Case Highlights About Nike World market share leader in athletic footwear (44%) • Nike’s outsourcing strategy • Combating slow sales growth • Brand alone is market valued at US $10.7b • Overcoming social issues • Operating profit-to-sales is 10.1% • • Endorsed by highly recognized athletes Facing technological threats and the emergence of a strong competitor: UA • A sponsor for athletes and sport teams around the world • Competitors: Adidas, New Balance, Skechers and Under Armour (UA) • 3 Marco SITUATION ANALYSIS Now that Nike's competitors use similar sourcing strategies, how can they maintain a competitive advantage moving forward? 4 Marco KEY SOURCES OF COMPETITIVE ADVANTAGE Endorsements Product Design & Marketing Focus Outsourcing Strategy • Placed the Nike brand in the spotlight • Allowed Nike to penetrate different sporting markets • Enhanced marketing campaigns • A well-known brand with differentiated products was built • 100 new designs released annually • Stimulated new customer purchases • Successful marketing campaigns were created like “Just Do It.” • Manufacturing their products in Asian countries allowed Nike to produce high quality shoes at a low cost • Multiple subcontractors were used • Product expansion was an easy transition 5 Julissa NIKE VS. ADIDAS FINANCIAL OVERVIEW: TOTAL REVENUES • Nike’s total revenues have consistently surpassed Adidas’ • In 2016 Nike’s total revenues were 58% higher than Adidas’ 6 Julissa NIKE VS. ADIDAS FINANCIAL OVERVIEW: NET INCOME • Nike’s net income has also consistently surpassed Adidas’ • In 2016 Nike’s net income was 269% higher than Adidas’ 7 Julissa COST ADVANTAGES OF OUTSOURCING • Capabilities • Avoids large capital investment • Focus attention and resources on design and marketing • Strategy is to pit factories against each other • 1:68 8 Chris COST ADVANTAGES OF OUTSOURCING 9 Chris ADVANTAGES OF OUTSOURCING • Flexibility § To quickly move activities to suppliers that offer lower costs or better technology § Valuable when economic conditions or technologies change rapidly § A disadvantage of vertical integration • Focus § Allows firms to focus on a narrow range of activities § Also a disadvantage of vertical integration • Lower costs and better performance § Especially if they cannot attain economies of scale with in-house manufacturing § In-house manufacturing would also be limited in total volume • Minimizes capital investment 10 Marco DISADVANTAGES OF OUTSOURCING • Loss of Capabilities § To innovate and create competitive advantage in the future • Lack of Control Over: § Critical assets or activities § Supplier bargaining power • New Balance’s experience § Questionable labor management practices • Nike’s criticism for outsourcing in Asia 11 Marco KEY REASONS TO VERTICALLY INTEGRATE ✓ Capabilities Control Coordination 12 Deanna NIKE’S RESOURCES • Nike Designers and R&D Labs § Create more than 100 new shoe styles and colors annually § Cutting-edge shoe designs for multiple/specific uses • Celebrity Marketing Contracts § Marketing campaigns feature well-known athletes (eg. Tiger Woods) • Global Supplier Network § Allows Nike to create cutting-edge shoe designs at the lowest possible cost § Allows Nike to widen its product categories 13 Deanna NIKE’S CAPABILITIES Nike’s suppliers have developed capabilities to manufacture athletic footwear, equipment and apparel at a very low cost Manufacturing Nike focuses on designing athletic shoes that deliver the best possible performance Nike’s Capabilities Design Marketing Nike focuses on developing the world’s best marketing capabilities 14 Deanna BENEFITS OF NIKE’S CAPABILITIES & RESOURCES • Design and Marketing ­ Barriers of imitation ­ Product differentiation ­ Strong brand image • Outsourcing ­ Flexibility to move its shoe production to the world’s lowest cost supplier ­ Saves capital investment ­ Full focus on marketing and design capabilities ­ Can move quickly into new product categories 15 Deanna HOW NIKE PREVENTED SUBCONTRACTOR COMPETITION Barriers To Imitation Were Built • Nike’s focus on branding and cutting edge design allowed them to create more than 100 new shoe styles and colors yearly creating competitive advantage for Nike and serves as an entrant barrier • Annual design changes kept subcontractors out and unable to keep up • The established Nike brand is a barrier to subcontractors because they would have a hard time competing with the worldwide leader Knowledge Of The Full Product Was Limited • Nike writes contracts with suppliers that prohibit them from making shoes based on Nike’s designs or intellectual property • Practices make it difficult for subcontractors to imitate out of fear of being sued • Nike limits supplier knowledge and ensures that no supplier is provided with full knowledge necessary to easily produce a competing product Multiple Subcontractors Used • Avoids dependence on small number of suppliers and has many manufacturers in different countries • Nike pits suppliers against each other and selects the one with the cheapest bid, thereby diminishing subcontractors’ bargaining power, allowing Nike to maintain control 16 Luisa MAINTAINING COMPETITIVE ADVANTAGE Outsourcing Automation Outsource production to suppliers that utilize automation technologies § Allows Nike to continue to build high-quality shoes while cutting labor costs § Increases product production § No cost associated with the development of the innovation labs Backward Vertical Integration Strategy Develop innovation lab and automate the process of building its own high quality shoe ­ Allows Nike to continue to build high-quality shoes while cutting labor costs ­ Control over operations ­ Eliminates bad public relation associated with low wage and child labor issues ­ Increases product production ­ Eliminates threats by subcontractors that sell unlawful knockoffs 17 Chris QUESTIONS? 18 ...
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Tutor Answer

School: University of Virginia


Running Head: NIKE


Nike’s Sourcing and Strategy in Athletic Footwear



Situational analysis
Nike is an American corporation and a global leader that manufactures and supplies
athletic and athletics-related apparel and equipment. The company’s products are marketed
through the Nike brand as well as through other brands like Nike Golf, Nike Pro, Air Jordan,
Nike Blazers, Air Force, Nike CR7, and other smaller brands such as Brand Jordan and Hurley
International. The company benefits from endorsements by high-profile sports personalities like
Cristiano Ronaldo, Rory Mcilroy, LeBron James, and Roger Federer. The endorsements are
conducted through Nike’s trademarks of “Just Do It” and the Swoosh logo and are aimed at
enhancing the company’s marketing campaigns. They allow the company to penetrate different
sporting markets such as golf, football, and basketball. Nike has also diversified into sponsoring
sports teams across Europe such as Barcelona, Manchester City, and Paris Saint-Germain.
Key competitive advantages
1. Product design
Nike’s product designing allows differentiation of products hence the company is capable of
producing a wide array of sports apparels such as shoes, jerseys, baselayers, shorts, etc. for use in
different sports. It has made it possible for the company to release over 100 new apparels and
equipment every year. Most of the products are specificall...

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