Management Of Nike

There is a well-known Nike Myth: in Beaverton, Oregon, four floors of Nike headquarters can not see a pair of shoes, employees are busy doing two things: one thing is to build the world.

The other thing is to manage its companies all over the world.

Without a production facility, Nike head has created an empire all over the world.

A pair of Nike shoes, the producers can only get a few cents of the proceeds, and by virtue of its global sales, Nike corporation can get tens or even hundreds of dollars in profits.

But those who have regarded Nike as an outstanding case of enterprises may forget that in 1982, Nike had experienced a difficult stage. Adidas, CONVERSE and Reebok were waiting for the enemy. Sales fell sharply. In the eyes of many people, Nike was just a "defeated, low morale second rate manufacturing enterprise".

Nike's response is to decentralize, increase the variety of products, and promote the differentiation of product lines.

From the original basketball shoes to the main line of golf products in recent years, and tiger Woods as spokesperson, at the same time strengthen football.

The promotion to cater for the increase of football population.

At present, the turnover of football sporting goods series has reached US $1 billion, occupying 25% of the world's market, and the market share of the football market is 35% higher.

Under the pformation of management strategy, the company stabilized the situation in 18 months. From 1993 to 1997, Nike's sales increased explosively from $2 billion to $9 billion.

In addition, like many other enterprises, Nike accelerated its expansion by acquiring other companies. After 1988, Nike acquired Cole Haan in succession, annexed skates manufacturer Bauer in 1995, and purchased Hurley and International from skateboard and apparel manufacturer in 2002, and purchased Converse, a sports shoe manufacturer in 2004.

The strategy of Nike's acquisition is to seek those products that can complement each other, have similar business style and have a certain R & D capability, and use acquisitions to suppress opponents.

In the current Nike business structure, Cole Haan shoes have achieved sales of about $300 million, while Nike initially bought the company for only $80 million. As for Converse, its sales have been declining before being acquired, but after the acquisition, it has increased by 25%.

Not only that, Cole Haan's footwear products can be integrated into Nike's advanced shoe making technology, but Bauer and Hurley International have their own R & D centers. When Nike launches new products, most of them refer to their professional design ideas, while Converse just makes up for Nike's blank in canvas shoes.

In the process of mergers and acquisitions, Nike also made many mistakes: after initially buying Cole Haan, Nike wishfully ran its own ideas into Cole Haan and followed extensive management mode, resulting in strong dissatisfaction among the latter. When the contradiction intensified, Cole Haan even asked Nike's managers to "get out of the factory".

After realizing their mistakes, Nike group adopted an open management mode for the companies that acquired them and gave them the right to be independent.

The company's timely feedback ensured Nike's ability to regain the market.

At the same time, as a business expansion mode, Nike continued to pform itself inside the company, and divided a large footwear department into several smaller departments. Each small department took charge of a sports shoes to speed up the product development process.

Nike is also making adjustments to the whole operation chain of enterprises, especially the inventory control system and overseas sales system.

Nike requires dealers to book 80% of their total sales volume in advance 6-8 months before giving a 10% discount.

This enables Nike to know the ordering situation well and has enough time to arrange, avoid excessive inventory, and keep the certificate with an ideal factory price.

In addition, Nike has adopted a virtualization strategy in production. All products are not manufactured by themselves, but are completely outsourced to other manufacturers.

Centralize all the resources of the company, such as talent, material resources and financial resources, and put it into product design and marketing.

Marketing capability.

The advantage of a virtual enterprise is "maximizing the power and power with the largest organization".

An enterprise has limited resources and limited organizational structure. In order to achieve a certain market strategy, each member only acts as part of the structure function. Through information network, it supports the complex logistic support work for the production of virtual enterprises in accordance with the spatial distribution. Compared with the traditional organizational structure, the enterprise structure has a large structural cost advantage, which greatly improves the competitiveness of enterprises.

With the implementation of virtualization production, Nike will hand over the design drawings to the manufacturers to make them strictly in accordance with the pattern of the drawings, and then sell the products by Nike, and sell the products through the company's marketing network.

This model fully realizes the role of complementary advantages.

The strategy of Nike has saved a lot of production investment and equipment acquisition costs, outsourced the production and processing of products to many developing countries in Southeast Asia and other places, and made use of the cheap labor force in the local area, which greatly saved labor costs. This is also an important reason why Nike mobile shoes can compete with other famous brand products at a lower price.

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Of course, what we need to see is that there are many special factors in the management of Virtual Enterprises:

The virtual enterprise has changed from the traditional power line system to the equal coordination system, and from the traditional superior subordinate relationship to the equal coordination relationship.

The manager of a virtual enterprise is no longer a command publisher, but a coordinator of each other. If a virtual enterprise wants to play its advantage, it must carry out knowledge management (KM) to conduct knowledge mining, development, value preservation and sharing among the virtual enterprises and related cooperative units, so as to pform individual knowledge into organizational knowledge and maximize the integration of resources.

At the same time, the negative impact of cultural conflict on virtual enterprises will make the globalization strategy of virtual enterprises fail.

Therefore, creating cultural synergy is particularly important.

Faced with uncertain and changing partners, how to avoid the lack of information in communication, cross-cultural, cross background and cross regional communication will play a key role in the success or failure of virtual enterprises.