Question

1. Describe the factors that drive Nike’s decisions to stick with some form of network organizational structure rather than own its manufacturing operations.

2. Asses why Nike’s choice of a decentralized and networked organization structure worked well for them.

3. Summarize the current state of competition in this industry. Assess if Nike continuing to pull away from rivals, or if they are catching up.

Answer 1

Answer 1:- Nike being a global conglomerate that focuses on the production of sports gear to its global segmented market has focused on sticking to Network structure rather than do manufacturing by its own. A network organizational structure has strategic plans and connections that extend beyond its boundaries (Reagans et al, 2003). In this kind of structure, the general administrative tasks pertain to choosing whom to enter into business relations with in order to reach its extensive global market. A network organizational structure helps Nike to focus on its competences rather than juggling many tasks including administration, manufacturing, inventions etc. Nike emphasizes on its core competencies which include, research capabilities, marketing strategies as well as development capabilities. Without a network structural approach, Nike will definitely be distracted from this focus and they will not be able to optimize on their core capabilities. For instance, its ability to design and create shoes puts them in a more competitive position than most of its competitors. Moreover, Nike’s Networked structure helps the company to maximize its marketing strategies despite the fact that they don’t manufacture products themselves

Nike has majored on outsourcing its products to various sub-contractors who are specialists in a given line of production. This does not only enable the company to focus on its core capabilities but also a huge cost saving that would have been incurred on operational activities. Since the shoes are manufactured by an expert, the expectation on the standard of quality is high. Therefore, through network structure by outsourcing, Nike is able to control its costs more effectively and also experience an increase in efficiency

Further, despite serving the global market with its sports gear, Nike has all along successfully adopted the strategy of staying small. This enables the company to cut some of the unnecessary expenses which would otherwise have been incurred had the company adopted a big company structure. In addition, a network organizational structure enables Nike to tap into idea generation through internal competitions and thereby ensuring that time and capital resources are optimally towards meeting the central objectives of the business

Answer 2:- Nike Decentralized and network organization has worked well for them because individual business centers- such as research, production, and marketing are free to focus on their core competencies without worrying about the effects of corporate bloat. Nike remains successful because they have let other companies assist in business decisions. By allowing other companies that specialize in design assist, only makes Nike company more successful. Decentralized organizations rely on a team, and that's precisely why Nike continues to have a shoe brand that athletics and other individuals love

Answer 3:- Nike is well known worldwide for their footwear and apparel, no matter how many people love Nike, stiff competition is not far behind with Adidas and Jordan brand having its fair share of consumer attraction. Nike has a variety of sporting products for everyone. This includes sports equipment and apparel for baseball, ice hockey, track and field, soccer, surfing, yoga, tennis, basketball, lacrosse, skateboarding, combat sports, cycling, wrestling, volleyball, cheerleading, auto racing, aquatic activities, cricket, and golf. In addition to shoes and sports equipment, they also provide clothing (tracksuits, sports shorts, sports bras, and casual clothes such as shirts, jeans, jackets, socks, hats), watches, apps, backpacks, purses, wallets, gloves, sunglasses, hair-bands, scarves, belts, etc. Not only does Nike have a variety of options of products, but Nike also owns Hurley, Converse, and Jordan brands. By offering more products to more people, in more markets than any other sports company, they are able to capture a far greater market share of the market than any other company

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