Efficiency - enhancing practices that Nike is pursuing are as following:
a) Economies of scale – defined as “reduction in unit costs attributed to a large output” (Hill, Jones & Schilling 2015, p.119). Nike is the single largest producer of athletic footwear and apparel. This allows Nike, through the large scale of outputs, to achieve a large cost advantages over its competition.
b) Learning effects – defined as “cost saving that come from learning by doing” (Hill, Jones & Schilling 2015, p.120). Nike is not a manufacturing company. The whole production of footwear and apparel is outsourced to independent subcontractors in 12 low labour cost countries (Appendix 3: Outsourcing strategy). In 1992 Nike created a Code of Conduct for all outsourced factories and started monitoring production aiming to increase labour productivity.
c) Mass Customization – defined as “the use of flexible manufacturing …show more content…
Question 2: What business-level strategy is your company pursuing?
Business-level strategy is “the way a company positions itself in the market to gain to gain a competitive advantage” (Hill, Jones & Schilling 2015, p.154). Nike employs a broad differentiation strategy. This strategy is based on “differentiating its product in some way such as recognising different segments or often different products to each segments” (Hill, Jones & Schilling 2015, p.164).
Question 3: a) How is your company executing its business-level strategy through action at the functional level, and through organisational arrangement? b) How well is it doing? c) Are there things it could do differently?
a) Nike succeeds in its business level strategy through its well-organised implementation: action in function level (as discussed in Module 4), and organisational arrangement -multidivisional structure (Appendix 5: Nike Multidivisional
a) Economies of scale – defined as “reduction in unit costs attributed to a large output” (Hill, Jones & Schilling 2015, p.119). Nike is the single largest producer of athletic footwear and apparel. This allows Nike, through the large scale of outputs, to achieve a large cost advantages over its competition.
b) Learning effects – defined as “cost saving that come from learning by doing” (Hill, Jones & Schilling 2015, p.120). Nike is not a manufacturing company. The whole production of footwear and apparel is outsourced to independent subcontractors in 12 low labour cost countries (Appendix 3: Outsourcing strategy). In 1992 Nike created a Code of Conduct for all outsourced factories and started monitoring production aiming to increase labour productivity.
c) Mass Customization – defined as “the use of flexible manufacturing …show more content…
Question 2: What business-level strategy is your company pursuing?
Business-level strategy is “the way a company positions itself in the market to gain to gain a competitive advantage” (Hill, Jones & Schilling 2015, p.154). Nike employs a broad differentiation strategy. This strategy is based on “differentiating its product in some way such as recognising different segments or often different products to each segments” (Hill, Jones & Schilling 2015, p.164).
Question 3: a) How is your company executing its business-level strategy through action at the functional level, and through organisational arrangement? b) How well is it doing? c) Are there things it could do differently?
a) Nike succeeds in its business level strategy through its well-organised implementation: action in function level (as discussed in Module 4), and organisational arrangement -multidivisional structure (Appendix 5: Nike Multidivisional