Back in 2004, Nike Inc. came up with a training program known as the SPARQ Program. The main objective of this program was to ensure that the company’s gears produced reduced weight during training sessions. For instance, the shoes that were developed then contained Lunarlite and Flywire Foam to achieve the laid objective. Afterwards, Nike Inc. came up with groundbreaking innovations like the introduction of external heel counters, air cushioned soles, and Fit Frame technology in the apparel section. Most recently, Nike joined with Apple Inc. to come up with the apparel known as Everyday Bodysuit (AIHW Strategic directions, 2017). This is a measurement body suite developed to track the one’s performance via a radio device which is then linked to an iPod nano. On the contrary, as much as the product is able to generate statistical information that is very useful, many researchers have criticized it. Such is due to the fact that these researchers were still able to identify individual RFID devices from as far as 18 meters away. The identification process, in this case, involved the use of intelligence notes that were concealable in networks with wireless sensors (News, 2017).
- Problem Definition and Evidence
Every business organization in the current society understands that there are certain conditions hindering innovation and economic growth. One such issue is climate change; which needs global solutions. Other concerns that hinder innovation include fluctuations in raw material prices, resource scarcity, and supply chain disruptions. Raising the issue of climate change is important because it has a broader impact on sporting activities that Nike Inc. strives to deliver its products to promote. Since the only way to achieve an economy that is sustainable is to have a growth associated with low-carbon, the company ensures that it uses a carbon indicator for assessing sustainability. It is as a result of such environmental, economic and social implications that Nike Inc. ensure that its products are suitable for use. The same issue forms the basis of Everyday Bodysuit development (La Rosa, Loos & Pastor, 2016).
- Consideration of the broader context
The difference between Nike Inc. and other competitor companies in the market is that Nike understands that athletes require a head-to-toe system that is cohesive and works in a proper manner to eliminate possible distractions. In such a case, athletes are able to allow their bodies and minds to focus particularly on the task they have. With such an integrated approach, the company has been able to achieve its objective of designing equipment for all sporting activities from field and track to in-door activities. The new apparel is therefore an exemplary suite that fixates on speed. It is one of a kind; in the form that it is made from two recent technologies in the company (Rouse, 2017). These are the AeroSwift and Nike Vapor Kits. The kit is breathable, able to stretch more and lightweight. It is not only that, but also the fact that Nike integrated a new system that makes the kit very unique. The knitting process is new in the sense that it integrates double and single knit to increase breathability, properly fit and stretch more. It is such a marvelous kit that the legendary Cristiano Ronaldo also got impressed. He said the body suit made him more agile and feel lighter (PNMSOFT, 2017).
Everyday Bodysuit’s zero-distraction ethos happens to be extended to its hyper strong sleeve that matches in design. To ensure that one gets the best out of the gear, the sleeve is made to include additional pads for protection and reinforcements for help during use in areas considered to be of high-risk without necessarily having to inhibit agility. Everyday Bodysuit also happen to nicely pair with the NikeGRIP socks. These socks provide a solution which is two-sided through the integration of more traction at points regarded as key contact areas. Such is achieved via nano-fiber technology (Nike Innovation, 2017).
- Benefits to be delivered and evidence
Regardless of the area of use, Everyday Bodysuit is made from a design that is industry-defining. It is a gear that would carter for the needs of customers. It is the starting point for all the innovative designs likely to be made by Nike onwards. In other words, it is a game changer for Nike. When Nike is innovating to gain a competitive edge, we focus on building innovation partnerships, investing in start-ups, emerging technologies and new science. We test and prototype solutions, and then take them to market (Nike Innovation, 2017). When we see opportunities to create industry-wide change, we drive market shifts through sharing, open-sourcing, and creating coalitions and consensus. We work to influence standards and policies to drive innovation forward (Nike Innovation, 2017).
The manufacture and supply of Everyday Bodysuits depends on the work portfolio. This portfolio is all about reinvention of the company’s looks against the manner in which the sporting gears are made. Most of the kits currently manufactured by the company depend on the Flyknit technology. This technology helps designers to have every stitch micro engineered. All the stitches are then scientifically tuned for the purpose of meeting customers’ specifications. It is by this Flyknit technology that the company has realized a sixty percent waste reduction. Translated to monetary value, the amount of waste reduction since 2013 is $3.5 million.
To achieve the ultimate goal of sustainability, there are a number of key initiatives set by Nike. One of the strategies is to attain a $27 billion revenue target by 2018 from the sales of the new kits. On top of that, Nike Inc. believes that it has the potential of generating more than $12 billion by freely accumulating cash flow. It is expected that the bodysuit will contribute to the company’s revenue growth (Kissinger, 2017). According to the management of Nike, ushering in a new technological era begins with inspiration and innovation. With a powerful competitive advantage in its portfolio, Nike has always ensured that it develops distinct brands and compelling products relevant to the customers. It is the will to build and accelerate the company’s portfolio that forms the basis of the focus. The NIKE Brand happens to be the company’s most powerful asset with regards to its portfolio. It makes up to about 85% of the total revenue (Kissinger, 2017).
Strategic Response and Option Analysis
The company has identified an opportunity to have its performance enhanced in the athletic apparel and footwear market (NASDAQ, 2017). The opportunities identified, in this case, include:
- Improve employment or labor practices
- Enhance product mix
Regarding the improvement of labor practices, this opportunity will help in addressing controversies that are likely to arise. With the development of the strategies that are proactive, the new suit’s image is likely to be improved. Also, the improvement of product mix is a strategy that would help in the attraction of more customers particularly those who are non-athletes, to by the Everyday Bodysuit. By ensuring that it improves its presence in the in developing markets, Nike will be able to realize high potentials of growth. It is, therefore, necessary that Nike transforms its strategies and policies to ensure that it continues leading in the athletic apparel and footwear equipment market.
Nike has enjoyed a steady global leadership and a steady growth in the footwear equipment and apparel market for a long time. Such is due to the following factors:
- Having a brand image that is strong
- Rapid processes of innovation
- A proper network for product distribution
However, the company has an annual revenue target of over $3.5 billion every year after fiscal 2017 ends. In addition to that, the company has made an aggressive investment progression in the developing markets (NASDAQ, 2017). From the same, a double-digit growth is expected. With regards to the new gear, Nike will have to work with more retail partners to ensure that the customers enjoy different yet elevated experiences. Such experiences include having concepts that are category-segmented executed within certain markets. The production of Everyday Bodysuit is estimated to be the main long-term growth driver. On the contrary, the company intends to create and strengthen the gear’s retail presence globally by investing an approximated capital of $600 million for the purpose of developing the Direct to Consumer business (NASDAQ, 2017).
- Annual Financials
- Everyday Bodysuit Production costs
Every business organization has its own weaknesses. In this case, the setbacks associated with the company have the potential of disrupting its growth trajectory within the equipment and apparel market. Herein, we shall identify the strategic factors likely to reduce the performance of Nike Inc. The most outstanding factors that should be addressed are:
- Controversies associated with labor.
- Product mix limitations
- Presence in the developing markets being limited
Controversies in labor are among the issues that have caused influenced business operations of Nike Inc. This factor has largely contributed to the tarnishing of the brand image of the company. Secondly, in as much as the company has expanded its product mix, the product lines that crop cannot capture a large apparel and equipment market. In addition to that, Nike suffers from inferior presence in the markets still developing. Some of the issues that cause that inferior presence include imitation, pricing and patent protection. The mentioned factors should, therefore, be addressed by having the strategies and policies regarding employment and labor, developing markets penetration and product mix development changed.
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