Nike’s Company Strategic Vision

In class, we discussed the following key takeaways from the cases we studied: radical decentralization, enfranchisement, digitalization/disruption, the Strategic Value Vision, Blue Ocean Strategy, Disruption (Christensen), Servitization, and value gaps.

Please select one of these frameworks and use it to analyze an organization with which you are familiar.  As a result of your analysis, what do you conclude about your organization?

Not to exceed 5 pages, 12 point font, standard margins.

ANSWER

Nike’s Strategic Value Vision

Nike is one of the largest shoe brands worldwide. The company specializes in athletic footwear, accessories, equipment, and apparel. In 2019, the company was worth $37.4 billion, while its competitor, Adidas, was valued at $12 billion (Liu & wang, 2021). According to Liu and Wang (2021), the company’s market share in the United States is three times that of its main rival, demonstrating its prominent market position (Liu & wang, 2021). These favorable business outcomes are attributed to its growth strategy, which is directly mentioned in the company’s mission statement and goals. This paper aims to analyze the company using the principles of strategic value vision.

A strategic value vision is a business practice that involves targeting customers for whom value is to be created. Its goal is to deliver maximum benefits to customers, partners, investors, employees, and other key stakeholders. According to Heskett et al. (2010), strategic value vision is based on the assumption that a company’s vision applies to customers, employees, and other key stakeholders. Nike uses a similar approach. Many stakeholders are involved in the company’s business practices. They can contribute and comment on the organization’s purpose, vision, values, and objectives.

For example, the organization consults the public and stakeholders when developing its corporate social responsibility (CSR). In 2019, Nike issued a statement saying:

“Early in our corporate responsibility journey, we learned the importance of engaging with and listening to multiple stakeholders. They help us prioritize key issues and develop our corporate responsibility policies and approaches. We see stakeholder engagement as a key enabler of risk mitigation and innovation.”

The company engages these stakeholders through one-on-one meetings, outreach efforts, memberships, etc. The stakeholders consulted are civil society, industry leaders, government leaders, shareholders, and consumers. Nike honors the principles of strategic value vision by engaging these stakeholders in their business practices. Companies are better positioned to provide maximum benefits to their stakeholders if they engage them in their core business practices and decision-making. Stakeholder engagement ensures the company’s business activities are customer-centered, an approach that could maximize the organization’s profits and lead to a competitive advantage.

Nike’s CSR vision is “to help our consumers thrive in a sustainable economy where people, profit and planet are in balance” (Sultan, 2017). This CSR vision statement includes consumers as active participants in the company’s future sustainability goal.

There are three major components in this vision statement:

• Help the company and consumers
• Balance people, profits, and the planet
• Achieve a sustainable economy

Typically, companies align their business practices to match their vision statements. By indicating that its future goal is to balance profits, people, and the planet, Nike demonstrates that it equally values people and the environment as it makes profits. Sultan (2017) points out that this CSR vision statement means that the company is committed to ensuring everyone benefits from its business practices. Heskett et al. (2010) indicate that when a company acts as an agent or advocate for the customer, its value permeates everything it does. This statement means that when a company is committed to benefitting a customer, its value increases. Therefore, it is logical to argue that Nike’s CSR vision statement increases its value.

The above statement is supported by empirical research. Lucchini and Moisello (2019) revealed that the company’s brand was once negatively affected by accusations of unfair pay, low wages, poor working conditions, and child labor practices. The authors postulate that the company’s CSR activities stem from these activities. Initially, Nike was indifferent to these accusations (Lucchini & Moisello, 2019). The company denied affiliation with locals who employed child labor and indicated that they had no legal obligation to control employment practices in those regions. This indifference was met by a surge of boycotts, pressure, and criticism from the media. Nike soon realized there was a gap between its business practices and the societal values of its stakeholders. According to Lucchini and Moisello (2019), this realization initiated the company’s CSR initiative. The company recognized that their business legitimacy depended on how best they met the values of their external stakeholders, including civil society, communities, and the public, in their business practices and decisions. These needs and values led to the company’s CSR vision, which obviously aims to satisfy

 Kissinger (2017) reported that the company has succeeded in satisfying its stakeholders’ interests through these CSR activities. For example, the company benefits its consumers by making significant R&D investments. It also uses innovative technology to provide these customers with reasonably priced high-quality products. Hence, its CSR activities effectively satisfy its customers’ needs.

The community is also a stakeholder, and the company delivers value to them as well. According to Kissinger (2015), Nike invests 1.5% of its pre-tax income in community development initiatives, e.g., girl empowerment programs. According to Kissinger (2015), these community programs align with the company’s mission and vision of bringing innovation and inspiration to the world. The company’s investments in these programs inspires or empowers the communities.

The company also delivers value to its employees. It recognizes the essence of employees as stakeholders. The company benefits its employees through leadership development opportunities, fair compensation, career developments, etc. (Kissinger, 2015). Recall that a strategic value vision is based on delivering maximum benefits to all stakeholders. The company supplies these benefits to its stakeholders by aligning its business practices with the vision statement.

An interesting finding of Nike is that it lacks an official vision statement. The mission statement is clearly stated on its website, but things are different regarding its vision statement. The company itself has not published any official vision statement, making it difficult for people to find out its future business conditions. Some of the vision statements associated with Nike include the CSR vision statement mentioned above. Other scholars report that its vision statement is:

“We see a world where everybody is an athlete — united in the joy of movement. Driven by our passion for sport and our instinct for innovation, we aim to bring inspiration to every athlete in the world and to make sport a daily habit.” Several other vision statements connected to the company exist.

It is possible that the company periodically changes its vision statement, explaining the conflicting information. Sultan (2017) indicates that the current CSR vision statement is a good starting point, but it does not reflect the activities of the business as a whole. Lack of a clear vision statement increases the risk of strategic misalignment, i.e., undertaking strategies that do not contribute to the organization’s primary goal.

Analysis

Nike’s long-term goal is a sustainable economy in which the planet, people, and profit are all in harmony. Rethinking past errors and practices will help the company continue applying sustainable principles by incorporating input from various stakeholder groups (Ditlev-Simonsen, 2022). Nike believes it can achieve its goals by working with all the stakeholders in the industry and sharing best practices (Cooper et al., 2021). Nike has developed closer ties with civil society, government, communities, and customers regarding environmental issues like consumer awareness, ecological labeling, recycling, and long-term sustainability (Ditlev-Simonsen, 2022). It is committed to working with others to find sustainable solutions throughout its entire supply chain to satisfy its consumers globally.

Nike’s values, mission, vision, and objectives are charged with upholding the company’s stated aims. Nike takes this obligation very seriously. The Nike Company is committed to providing an inclusive and diverse work environment where people, products, and profit may flourish. To rethink, modify and evaluate difficulties, the company has built systems that function together with its partners. Nike’s key objectives are to promote environment conservation and produce athlete-quality products.

Conclusion

Nike’s lack of a clear vision statement is a strategic issue. The company must have a clear strategic vision to retain its competitiveness. Failure to do so might cause the company to engage in activities that do not support its primary objectives. Additionally, the company might lose its focus when its future is undefined. Its CSR vision statement is a good starting point, but it needs one that reflects its entire business activities. Nike should create an official, appropriate vision statement to inform its stakeholders what its goals for the future are, with reference to the global sports market. It can capitalize on its distinctive brand, financial strength, and marketing capabilities to create an appropriate vision for its business and stakeholders. To determine whether the vision is per the expectations, it must identify the stakeholder needs and challenges, develop solutions and then take action to review, monitor, and reevaluate. All in All, the company has been able to satisfy its stakeholders through the CSR vision statement. Satisfying stakeholders’ needs and interests increases a company’s competitive advantage.

References

Cooper, J., & Davis, L. (2021). Strategy Analysis: Fancy Feet Running Gear. American Journal of Management, 21(6), 135-143. https://search.proquest.com/openview/3bdc4edad4fe0921c7266ba267ccd8c0/1?pq-origsite=gscholar&cbl=2028707

Ditlev-Simonsen, C. D. (2022). The business case for sustainability. In A Guide to Sustainable Corporate Responsibility (pp. 103-128). Palgrave Macmillan, Cham.

Heskett, J. L., Sasser, W. E., & Schlesinger, L. A. (2010). The value profit chain: Treat employees like customers and customers like. Simon and Schuster.

Kissinger, D. (2017, February 7). Nike Inc. Stakeholders: A CSR Analysis. Panmore Institute. http://panmore.com/nike-inc-stakeholders-csr-analysis

Liu, X., & wang, V. (2021). NIKE’s general company analysis based on it 2020 annual report. Advances in Economics, Business and Management Research, 166(6). https://www.researchgate.net/publication/350464757_NIKE

Lucchini, A., & Moisello, A. M. (2019). Stakeholders’ pressure and CSR engagement. A case in the apparel sector. American Journal of Industrial and Business Management, 09(01), 169–190. https://www.scirp.org/journal/paperinformation.aspx?paperid=89941

Sultan, A. (2017). Nike, Inc. vision statement & mission statement. Academia.edu. https://www.academia.edu/36198404/Nike

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