MINISTRY OF EDUCATION AND TRAINING

FPT UNIVERSITY

GROUP ASSIGNMENT
THE ANALYSIS REPORT

CASE STUDY: NIKE INC

Lecture La Thi Cam Tu (FE FPTU HCM)

Class MC 1703
Semester Summer 2022
Subject MGT 103
Group Member
Name of Student Student Code
Lương Nhật Thi SS170945
Trảo Nhật Hằng SS171162
Cao Huy Quốc An SS171104
Nguyễn Võ Gia Huy SE161188
 Table of Contents
INTRODUCTION......................................................................................................................... 3
OVERVIEW OF NIKE..................................................................................................................3
The Company........................................................................................................................... 3
History and Development......................................................................................................... 4
Organizational Structure........................................................................................................... 4
Products................................................................................................................................... 5
Mission, Vision, and Core Values (2).........................................................................................6
THE MANAGEMENT ISSUE.......................................................................................................7
Issues:...................................................................................................................................... 7
1 Slow problem resolution time.............................................................................................7
2 Partially dependent on outsourcing businesses for timely supply of goods and input
materials............................................................................................................................... 7
3 The departments struggle greatly to support one another..................................................7
4 Expensive management....................................................................................................7
Causes:.................................................................................................................................... 7
ALTERNATIVES GENERATION AND EVALUATION...............................................................12
1. Issue 1:.............................................................................................................................. 12
2. Issue 2:.............................................................................................................................. 13
3. Issue 3:.............................................................................................................................. 13
4. Issue 4:.............................................................................................................................. 14
RECOMMENDATION and IMPLEMENTATION:.......................................................................14
1. Issue 1:.............................................................................................................................. 14
2. Issue 2:.............................................................................................................................. 15
3. Issue 3:.............................................................................................................................. 16
4. Issue 4:.............................................................................................................................. 16
CONCLUSION:.......................................................................................................................... 17
References:............................................................................................................................... 18
INTRODUCTION

The purpose of this paper is to analyze the Fortune 500 Organization alongside our main chosen
subject, Nike, Inc. Which is ranked 321st according to the Fortune 500 ranking in 2021.
Furthermore, the aim of this analysis is to bring the knowledge learned in Introduction to
Management (MGT103) into practice to solve management issues in a tangible company.
Nevertheless, this report discusses the background of Nike Corporation, the mission and vision
statement of the company, the management issues, alternatives generation, and evaluation,
finally, this report recommendations and implementation what actions to improve the problems
encountered in the article.

OVERVIEW OF NIKE
The Company

Nike is an American multinational corporation headquartered in Washington County, Oregon,

USA. Nike has manufacturing plants in many countries with over 70,000 employees. This
corporation once ranked 89th in the top 500 largest corporations in the US (2018 ranking). Nike
is considered a giant in the sportswear industry, customers can position Nike's brand through
high-quality products, sleek designs, and appeal to the public's tastes. Nike is a leading
manufacturer of sports-related products, including shoes, apparel and gear. The Nike logo has
become a globally popular symbol as it appears in almost every country in the world.
 Nike’s “Swoosh” Logo (Figure 1) Nike’s net Income Data (1) (Figure 2)

History and Development

Nike, headquartered in Beaverton, Oregon, is the world's leading designer, marketer, and
distributor of sports footwear and clothing. In addition, the firm creates, develops, and distributes
sports clothes, equipment, and accessories. The corporation has a variety of companies, including
Cole Haan, Converse, Hurley International, and Umbro Ltd, in addition to its iconic Nike brand
footwear and Nike Golf (David, Strategic Management, 2009). In January 1964, Nike
Corporation was founded by University of Oregon track athlete Phil Knight and his coach Bill
Bowerman. It was formerly known as Blue Ribbon Sports (BRS). The firm primarily served as a
distributor for Japanese footwear Onitsuka Tiger, which met Knight's automobile Nike Inc.
(2016a) Nike, Inc. is an American multinational business that designs, develops, manufactures,
and markets and sells footwear, clothes, equipment, accessories, and services worldwide. The
corporation is headquartered near Beaverton, Oregon, in the Portland metropolitan region of the
United States of America. (2015) (Hussain A. Ali Mahdi M. A.).

Organizational Structure

Nike's organizational structure is a matrix, which is a blend of horizontal and vertical structures.
Which comprises of various specialists, including some who report to at least two managers. In
the organization, the staff alerts a team of managers, who forward the development report to the
department manager. Each product inside the corporation has its own division and department
that works independently of the CEO. Furthermore, supervisors are fully responsible for their
personnel.

Despite the fact that this structure appears difficult, Nike has been able to use it to its advantage.
Employees frequently report to many managers, which can be inconvenient in this sort of
organizational structure, but for Nike, this has worked in its benefit. The organization adheres to
a highly structured operating approach, which allows management to make swift choices and
cultivate continuous communication. Despite the fact that there are several reporting authorities,
employees understand what their superiors expect of them.

Nike Executives:

Figure 3
 Products

Nike's flagship product is shoes. The

firm makes shoes for several sports,
including basketball, football, golf,
soccer, baseball, snowboarding,
hockey, tennis, and volleyball.

Figure 4

Nike Air Jordan

Nike also makes clothing for athletics as well as other

hobbies like as dancing and yoga. It offers a variety of
clothing lines, including Livestrong, Nike Pro, Nike
Free, and SPARQ.

Figure 5
 Mission, Vision, and Core Values (2 )

Nike's mission and vision statements mirror exactly what the corporation has been renowned for
since its inception in 1964. Nike's mission statement will stay unaltered in 2020 and 2021.

Nike’s vision statement can be summarized as:

Do everything possible to expand human potential.

Nike’s mission in detail is described as:

To bring inspiration and innovation to every athlete in the world.

Nike’s Core Values include:

“Inspiration, innovation, every athlete in the world, authentic, connected, and

distinctive.”

Nike’s slogan is:

Just Do It
 THE MANAGEMENT ISSUE
Issues:

1 Slow problem resolution time

2 Partially dependent on outsourcing businesses for timely supply of

goods and input materials.

3 The departments struggle greatly to support one another.

4 Expensive management

Causes:

Because they rely on information at the head office, problems brought up by customers and
agents frequently take a long time to receive and handle. Due to the COVID-19 epidemic, a
study offered statistical insights about Nike's customer services in recent years. Issues with the
Nike management system that began in January 2020 and seem to still be present are shown in

Table 1. Nike response time and the phenomenon's occurrence time, Sorted by Country

Country Response time Occurrence of the phenomenon timeline

Vietnam 60-90 days July 2020 – Present

China 90-120 days January 2020 – Present

Indonesia 60-90 days May 2020 – Present

Taiwan 25-30 days March – October 2020

 Thailand 25-30 days March – July 2020

Additionally, Table 2 demonstrates that Nike's revenue fell dramatically as a result of the
aforementioned problems, and sales fell in comparison to the first two quarters of the prior fiscal
year.

Table 2. Nike Revenue Comparison of Fiscal Years 2019 and 2020, in Millions of the US Dollars

Fiscal Year 2019 2020

First Quarter 10,096 9,417

Second Quarter 9,844 8,946

Third Quarter 9,616 9,148

Fourth Quarter 6,012 10,200

The findings assisted in determining how satisfied Nike's supply chain was with the information
processing method used to address SERVICE concerns.

Partially dependent on outsourcing businesses for timely supply of goods and input materials. Up
to 70% of raw materials are imported from China, accounting for most of those imports.
However, several legitimate factors are preventing this market's supplies from flowing. About
50–52 percent of the raw materials and accessories used to make NIKE's sporting goods are
sourced from China. Although many factories in China are boosting their efficiency, they are
currently overloaded, which limits their ability to export goods. Additionally, because there
aren't enough containers at the ports, manufacturing operations are also severely constrained.
output is adversely impacted.

Nike's supply delays are another factor contributing to the sportswear industry's problems.
Numerous US consumers complain that Nike frequently experiences delivery delays of a few
weeks to a few months. Some orders aren't even ever fulfilled by the agreement. Nike's inability
to produce on time is mostly the result of observable factors, which leads to a sharp rise in the
company's inventory. According to data from the most recent quarters, Nike's inventory has
grown by 11%, mostly due to the wholesale product sector.

Figure 6

Nike's production process is arranged in an orderly and orderly manner since every component is
independent of every other component. Department leaders are in charge of each link in the
supply chain. It is quite difficult for the group to support one another as the productivity
increases when events or cooperative initiatives occur. For instance, the complete production
process is located in NIKE factories around the world and is managed by a group of staff
members from the business. This team of workers will keep an eye on the production process
and the caliber of the final output. Nike is only involved in the steps of product development,
prototyping, distribution, and promotion.

Figure 7

After creating a new product model, Nike will send it to a facility for manufacturing. Nike will
enter into a contract with the plant for mass manufacturing if this product model passes the
requirements. Nike employs the buy-and-sell outsourcing strategy, which means that the plant
will order the production materials independently of Nike. The management team and the
organization as a whole won't be able to forecast the effects this will have on product quality and
cost. Because there is no shared basis between the parties, handling new difficulties becomes
challenging.
Exorbitant administrative expenditures resulting from the hiring of numerous individuals to
oversee the outsourcing firms' final products and production process. Although in the past NIKE
was embroiled in a scandal over making big profits while paying minimal wages, the company's
senior staff, including..., are handsomely paid due to their responsibilities. They provided global
management services, necessitating the hiring of numerous individuals to work alongside the
company's executives. Nike, the largest sportswear company in the world, has paid Mark Parker
a salary and bonus totaling more than $47 million. One of the top 20 CEOs in the world in terms
of pay is him. The company's CEO, Mark Parker, has helped the brand dominate the sportswear
industry. The CEO's impressive contribution earned him a sizable salary and bonus. The
incentive he received in 2015 was more than three times as much as the 2016 number that Nike
announced (more than 16.5 million USD).

Figure 8

In 2016, the bonus was worth much more since Mark Parker received shares of the company he
founded, which were then converted into the previously specified comparable new cash value.
Indeed, this is a truly enormous number in the sportswear industry and the number that many
people all around the world aspire to.

ALTERNATIVES GENERATION AND EVALUATION

From the previous analysis of the problem that Nike is facing in responding to the issues, it is
still slow and not flexible. Here are some alternative generations along with an analysis of how
that solution will benefit Nike. 

1. Issue 1:

It goes without saying that information may make or break a firm in the current business
environment. Almost any business information can be referred to as "strategic intelligence,"
which is defined as the systematic and timely collection, synthesis, and dissemination of strategic
and tactical information for the development of a shared information network (6). If a company
wants to grow and not make bad decisions, it needs to have the most current, fastest and most
accurate source of information possible. Every company's strategic team needs a department to
take care of this. When we encounter a problem, we need to know what the problem is, how it
affects us, who has the right to solve the problem, and how to solve it reasonably. We take a long
time to answer these questions, so we often respond to problems and problems slowly.

To remedy this situation, for companies:

There should be an intelligence team, updating the latest information, ensuring the accuracy of
the company. When having accurate information, the company can make predictions about the
market, grasp the market to have reasonable adjustment strategies with possible problems, until
problems arise. If the problem occurs, the company has the basis to solve it proactively and
quickly.

Another part is because people in the company are faced with an incident, the problem that
arises will not know how to solve it, or do not dare to handle that incident for fear of being
responsible. Therefore, it is recommended to increase training or set requirements for employees
to be able to handle situations and be flexible. Regarding responsibility, it is possible to do
ideological work, that employees are allowed to handle problems and incidents that arise to some
extent without taking responsibility so as not to make things go further.

2. Issue 2:

Nike is the most famous company in the world in the field of sports shoes, and Nike's strategy is
not to directly manufacture but outsource.

To be able to solve the problem of input materials, especially in the cost of transporting
materials, Nike has a strategy that only big companies can do, which is to build a series of
processing factories. With its position, Nike is difficult to meet direct competitors, so it always
ensures the source of input materials, can collect materials from everywhere, directly processing.
in the home country and when delivering the product to the customer without spending too much
on shipping. Thanks to that, Nike always receives the materials quickly and delivers them to
customers in the shortest time.

3. Issue 3:

In order for the departments to support each other easily and quickly, there needs to be a
connection between the different departments, especially between the marketing department and
the production department.

Employees of one department often do not have much information or even know nothing about
the work of another department, leading to time-consuming communication and support from
other departments. Nike should have training sessions, introductions so that employees can have
general information about the parts of the company, so that it can be easier to work together. For
example, marketers need to know detailed information about products to be able to do marketing,
and if they want to know that information, they must have the support of the production
department.

4. Issue 4:

High administrative costs to hire multiple supervisors to ensure contract outsourcing companies
adhere to established guidelines.
- Instead, it is necessary to train and recruit highly qualified managers. Quality is still better than
quantity.

- Invest in a strict and reasonable management and evaluation system for companies, and those in
management roles will rely on this system to assess whether a company meets and complies with
the standards. principles set forth in the contract or not.

- In order for each employee to be a manager, create free meetings for all employees to express
their thoughts and point out shortcomings and weaknesses in the management system for
management. Religion can be remedied. Managers will be able to collect information based on
employee opinions for evaluation.

- Thus, the number of managers can be reduced.

RECOMMENDATION and IMPLEMENTATION:

To implement these solutions, here are the ways to do it.

1. Issue 1:

Phase 1: Corporate Awareness

Corporate awareness may be challenging to build depending on a number of variables, including

the organization's culture, mission, and present financial situation. The actions taken by a
"internal" organization could determine if the need for an intelligence network is understood and
accepted.

Phase 2: Establishing a Department or Information-Gathering Process

During this stage, the company designates a division, team, or functional area that will be in
charge of acquiring both internal and external intelligence. Integrating internal and external
information sources in a way that is economical, simple for management to access, and most
crucially, actionable, is the most challenging challenge during this phase.

Phase 3: Development of an Electronic System

The network incorporates several user departments and, in general, has a complicated
information architecture because its goal is to make intelligence accessible throughout the
organization. The business actually has a functioning system at this point with a small group of
users.

2. Issue 2: 

Step 1: Market research

Nike needs to research whether the market it chooses is convenient enough to fully meet the raw
materials, space for processing, is it convenient to receive goods and transport to other places, is
it near people's houses or not. far from the city center...

Step 2: Analyze the market

Nike needs to analyze whether that market matches the criteria set by the business, and if there
are any competitors competing with the business in the nearby area.

Step 3: Assess company capacity

With any business, when expanding the market, it is also necessary to determine how the internal
capacity of the company can meet the needs to enter a new market or not. A company with
sufficient capacity to expand the market must possess a good workforce and ensure that the
outsourcing process takes place continuously and efficiently.

Step 4: Choose the right market

Nike needs to choose a potential market suitable for outsourcing. When choosing a market, Nike
also needs to consider the issue of stable input materials and not cause any difficulties, predicting
risks.

Step 5: Implement market entry strategy

The last step before entering the market to expand the outsourcing market share, Nike needs to
develop specific plans and goals for the campaign.
 3. Issue 3: 

The leader now plays an important role to be a bridge to coordinate the departments together.
They need to clearly define the destination of each department. Organized, transparent and
flexible management is a must. It is necessary to build an open communication environment so
that employees across departments have the opportunity to interact and talk with others. It is
necessary to pay attention to the key individuals of each department to understand the problems
they are facing and their desires, from which to give reasonable directions. Take advantage of the
flexibility of each department to coordinate smoothly and effectively. Take advantage of the
information system that has been built from the solution of problem 1 to ensure that departments
can grasp information in a timely manner and support each other.

4. Issue 4:

Step 1: Review the employee system

Only retain the people who are really necessary, capable and suitable for their positions, cut out
the unimportant and redundant positions.

Step 2: Improve employee efficiency More employees and more hours doesn't necessarily make
your business go faster. Nike should instead switch to more flexible plans. Effective cross-
training can allow a limited number of employees to get more done. It eliminates downtime,
excessive overtime and protects employees from burnout.

Step 3: Automate certain tasks

Try to optimize the modern advances of technology to replace unnecessary human parts, thereby
saving a large amount of money.

CONCLUSION:

Overall, as we have seen, Nike is a big company, it can be said that the big brother in the field of
sports shoes and accessories. However, Nike still has some management problems, so we have
investigated their problems and come up with solutions to them. Nike should reorganize its
information network to ensure it can adapt to unexpected fluctuations. Expanding the
outsourcing market from market research to market selection will help Nike no longer depend on
certain outsourcing markets. Re-systematize all parts of the business so that they can make the
best use of available resources to coordinate smoothly with each other. Nike should also
implement solutions to cut costs for personnel. From the solutions that we research, we hope to
help Nike grow more and stronger.
REFERENCE LIST:

(1) Source: https://www.statista.com/statistics/241685/net-profit-of-nike-since-2005/

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https://mission-statement.com/nike/#Vision_Statement

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APPENDICES

1. Figure 2: Nike’s Net Income Data

Source: https://www.statista.com/statistics/241685/net-profit-of-nike-since-2005/

2. Figure 3: Nike Executives

Source: https://penmypaper.com/knowledge-base/organizational-structure-of-nike

3. Figure 8: Nike CEO - Mark Parker

Source: https://snkrvn.com/giam-doc-dieu-hanh-ceo-cua-nike-mark-parker-nhan-luong-va-
thuong-khung-trong-nam-tai-khoa-2016