Week 5 - Resource Based Strengths & Weaknesses

What I am assessing from our current chapter in analyzing an organization's strengths and weakness in direct relation to the resources available or unique to said organization.  Below is the VRIO Framework map.

When I think about Nike's greatest resource or capability, I immediately go to their corporate belief system that is ingrained in everyone.  Nike employee numbers are hard to come by; the competition is fierce.  Why?  Why do Nike employees (specifically at WHQ) become so insanely loyal especially in this day and age where loyalty to an employer is so rare?  I believe it is due to Nike's core belief that their employees are their greatest asset.  While the pay is par, sometimes even low as compared to other companies in a particular area, but the non monetary benefits are phenomenal.  On top of that, the most senior leaders believe everyone is a part of the success.  That's pretty unique, based on my personal experiences.    

As I break down Nike's employee structure in the VRIO framework, here's where I see it:

Nike Employees as a Competitive Advantage
VRIO Analysis
Valuable - Yes
Rare  - Yes
Costly to Imitate - Yes
Exploited by Org - Yes

By assessing their employee structure, I believe they very much value their employee resources, as well as a create the rarity in the belief structure of employees as part of something big.  I also believe this is very difficult and challenging, as well as expensive for other organizations to imitate.  Nike takes great steps to ensure they are fostering the right environment and culture for employees to continue to embrace and "drink the kool-aid" so-to-speak.

To me, it's an amazingly interesting way to look at what makes a company tick.  How does Nike continue to blow out their business?  How is it being sustained?  What's the secret sauce?  Hard to say for sure, but I do believe one key component is the value they have and see in their employee resource.

Week 4 - Evaluating Environmental Opportunities

One of the first sentences in our book talks about examining threats can be turned into opportunities, which I have ALWAYS thought in a similar fashion when analyzing any company in SWOT fashion or Porter's 5 Forces....

Nike has abundant opportunities to win it, even as competitors come out and compete for business.  This might sound odd, but sometimes I do believe companies need threats to drive innovation; need pressure to develop differentiation.  Also, while this might sound silly as well, but what fun is it to play baseball or soccer, OR FOOTBALL by yourself?  It's not.  You make better plays, someone pitches a ball, you develop strategies based on your opponent's position and moves.  Threats ARE opportunities.

I think this is possibly why Nike plays it so well.  Their people know all about threats and opportunities instinctively as most employees are incredibly passionate about sports.  Any kind of sports or game.  From my perspective, even when I see a personal struggle commercial for Nike, it still translates to an internal business threat of becoming complacent.  Nike's external threats such as UA, adi, and Lululemon are threats they combat by innovating and answering the customer calls to action with products offered.  The natural rivalry position Nike has with other sports apparel and equipment companies are opportunities to bring something unique and different to the same customer base.

I do see threats as opportunities...  across all industries.  This seems logical to try and neutralize a threat by seeing it as an opportunity and seizing that opportunity.

Week 3- Nike's Environmental Threats

Week 3 - Evaluating Environmental Threats

Nike's greatest offense is their great defense in the marketplace.  The world of sports, in any capacity, is competitive.  Athletic apparel, footwear and equipment channels of Nike are right up there in the arena of competitive.  Nike's closet competition is adi (Adidas) and Under Armour, Puma and other big brands, but that doesn't mean Nike can sit back and only strategize against just those entities.  Nike must remain vigilant against other, seemingly smaller brands that might crop up and out.

How might they combat against current and potential competitors?  By staying ahead of their game, innovations, first to launch lines, and continuous pulse on the consumer demands.  Nike's very well aware of their target market needs, and most importantly, wants.  They continue to evolve, in fact one of their 10 Maxims (or core beliefs) is to "Evolve Immediately".  The employees at every level of the "game" are always evolving immediately.  They push grassroots marketing, in which turn grants them direct access to the "field".

According to our textbook, one of the potential threats to an industry is directly related to the consumer buying power.  I believe this to be true, and time and again, we see in many industries the awesome power consumers hold.  In Nike's case, it would seem to me they take that power their consumers hold, and listen very carefully.  By focusing always on what their consumers want, they are rewarded with win after win in the athletic industry.

Week 2 -Nike's Competitive Advantage

Week 2 - Nike's Competitive Advantage

We've all heard the slogan, "Just Do It" and most all of us have heard the cool start up story about Bill Bowerman creating the first waffle sole for better comfort and performance using his wife's waffle iron in the kitchen.  What is so amazing to me about Nike's history is how so much of it lives and breathes today at their world headquarters, in Beaverton, Oregon.

What's truly amazing is the longevity of Nike's competitive advantage over say, Under Armour or adidas.  As noted in our textbook, there was a study performed on what types of industries or product segments were more likely to sustain a competitive advantage over the long haul several factors included, "industries that (1) are informationally complex, (2) require customers to know a great deal in order to use an industry’s products, (3) require a great deal of research and development, and (4) have significant economies of scale are more like to have sustained competitive advantages compared to firms that operate in industries without these attributes."

Barney, Jay B. (2014-01-17). Gaining and Sustaining Competitive Advantage (4th Edition) (Page 17). Prentice Hall. Kindle Edition. 

Personally, I would not identify Nike with many of the above factors, but what I would attribute Nike's sustained competitive advantage is their ability innovate and continue to create more significant economic value or perceived value.  One strong driver is their Branding; Nike continues to actively seek and market their innovative brands to a younger, diverse crowd across several sports categories where they gain brand loyalty.  There are many items that go into Nike's mix such as most every sport imaginable, as well as each gender and even age brackets.  The product assortment is vast and far reaching, but by specifically targeting the younger consumer, I believe Nike is able to "capture" that brand loyalty at a very early stage that can carry-on for many years.

Overall, Nike is committed to bringing innovative, highly functional sportswear and equipment with the under current mantra of "if you have a body, you are an athlete" (Bill Bowerman), which I believe resonates with the masses.