Date of Submission:
To resolve problem of complex global networking across limited number of countries, the company must enter into new foreign markets that are emerging rapidly. We believe that this is the best course of action given that the quality of the product and its authenticity is unhampered. The cost and benefits of this proposed course of action are it will help in increasing the global reach of Nike Company and its popularity across the globe would increase on a large scale. There is an initial investment, but with payback over the next 5 years, it would be earning huge revenues from it as shown in the following section or Exhibit.
There have been serious consequences of the Nike’s decision to manufacture its products in the developing countries like China. There have been many issues developed that are related to the health and safety of the workers as well as the pay that is provided to them. In the emerging markets like India, Brazil and China, there is a shortage of employment options. Hence, the workers are ready anything for working at a firm. Due to this, there is a gap between the demand of the industries and the supply of the laborers in these markets where there is a tremendous boost in the population.
The industries and other employers tend to take advantage of these workers by getting extra work done from them and at the same time provide less pay to them. This largely affected the brand image of Nike across the globe. In order to avoid it, it developed plants that ensured high standards of living for the workers and also kept a steady track on the overtime that the workers were asked to do. At the same time, there has been a fixed standard pay that has been developed for the workers in these markets by the Nike Company (Banjo). This will avoid the exploitation and unfair treatment carried over the workers. Hence, there is a huge scope available to the Nike Company for establishing a firm base in these new markets across the globe by efficiently maintaining the processes and the internal human resource management that is observed in these markets (Locke and Romis).
Targeting the Emerging markets
In order to target the emerging markets, Nike has to customize its operating and human resource strategies to accustom to the rules and policies that are existing in the emerging markets. It needs to develop sportier designs for the people in Brazil and the advertising should focus on football promotions as it is very famous in Brazil. In India, it has to connect through cricket as it has a huge influence on the people in India. In China, they need to focus on the athletic section of the promotion as they are very much engrossed in it in China.
Nike should evaluate the strategies in terms of new products and promotional developments that are carried by the rivals. It should then innovate and develop a counterstrategy for them. There should not be direct battle with the rivals. However, the promotions should be enough to compete with the rivals in these emerging markets.
There would be high potential costs involved as the company would be investing in a foreign market. There would be many charges that would be imposed by the government in the form of taxes and other permissions. These costs have to be calculated in advance and on the basis of that, they should be able to forecast the revenue that it has to generate in the coming years. There are many risks which are to be assessed and after the risk assessment, these processes have to be developed and executed in these markets. The biggest rivalries of the Nike Company tends to be the Adidas, Reebok and puma across the globe. The strategies that have been developed by them has to be evaluated and then suitable plan has to be developed for the same to ensure a considerable amount of market share of the Nike company in the global market and also to attain an extensive amount of market penetration in the markets of the emerging countries like China, Brazil and India (Locke, The promise and perils of globalization: The case of Nike).
The benefits that it would be able to generate over a period of time has to be calculated and evaluated. It will also help in developing suitable structure for Nike in terms of the business planning and investment that it has to make in developing the plants and providing customized products for these emerging markets that have a huge potential to absorb new things in them.
Activity Estimated time
Selecting the target market after analysis Week 1
Identifying the various means available to enter the market and if necessary then develop new means for the same. Week 2- Week3
Developing effective market strategy for entering the market Week 4
Assembling the developed plan Week 5
Testing the plan in the market through pilot test Week 6
Evaluating the impact on the market Week 7
Developing modifications if necessary and then relaunching or developing extensive marketing plans for generating greater market share and customer base. Week 7- Week 8
Banjo, Shelly. Inside Nike’s Struggle to Balance Cost and Worker Safety in Bangladesh. 21 April 2014. online. 21 April 2016.
Locke, R. M. and M. Romis. “Improving work conditions in a global supply chain. .” MIT Sloan Management Review (2007): 54. Print.
Locke, R. M. “The promise and perils of globalization: The case of Nike.” Management: Inventing and delivering its future (2003): 40. Print.