International Trade and the Supply Chain Role
As a resilient and one of the most renowned and recognized international corporations, Nike has developed extended supply chains as part of its globalization strategy. According to Jiang (2018), the corporation has the largest share of the footwear market at 9.5%, and this figure reflects the company’s success in creating a sustainable competitive advantage (p. 86). International trade is one of the essential aspects of Nike’s operations, and since 1980, when the company went public, globalization has been one of its key development principles.
By strengthening supply chains, the corporation has become a leader in its industry, and its many manufacturing plants and outlets worldwide contribute to customer recognition and expand the target audience. Therefore, from the perspective of globalization, Nike’s development principles have allowed it to strengthen the brand value and make it globally recognizable.
Building supply chains has become part of Nike’s marketing efforts. As Distelhorst et al. (2017) argue, the corporation adheres to a lean manufacturing program and focuses on target consumers by creating diverse sports goods. The ability to supply products to different countries explains the current success of the company and its leadership in its segment. Distelhorst et al. (2017) compare Nike to such corporations as Coca-Cola, Apple, Walmart, and several other global brands that have a similar strategy.
By relying on globalization, Nike has managed to gain significant market share and partnerships with other companies. In addition, by conducting international business, the company responds to changes in its target market by adapting prices and creating stable demand in specific regions. Jiang (2018) mentions the Chinese market and notes that, through effective development strategies and resource production, Nike has maintained its leadership, despite the challenges caused by its eastern competitors’ activities. Thus, the strategy of globalization is not only a virtue but also a prerequisite for the company to conduct a successful business.
Today, Nike is focused on sustainable marketing strategies and brand strengthening through constant investments and enhanced logistics. Customer loyalty is an important aspect of the company’s work, and one of its approaches is reverse logistics. As Jiang (2018) notes, Nike engages with customers and meets them halfway, thereby enhancing the brand and creating tailor-made marketing solutions, such as the proper disposal and recycling of old shoes to create new ones. Such a strategy allows for meeting the interests of a wide target audience globally and creates an image of a socially responsible corporation interested in satisfying its customers’ needs.
To strengthen its position in the international market and enhance its supply chains, Nike should focus more on modern forms of communication with its target audience. Obtaining truthful feedback from buyers can be a valuable solution to increase corporate acceptance and social responsibility, which, in turn, correlate with a positive demand directly. The more the company focuses on the specificity of sales in each region, the higher the likelihood of sales growth due to a productive dialogue with customers. More attention to this factor will allow Nike to strengthen its position at the international level.
Summary and Recommendations
Based on the activities of the corporation in question, one can highlight Nike’s standards that the company adheres to in its supply chains. The strategy of globalization the company adheres to implies a comprehensive assessment of the market, including not only legal but also other aspects that influence demand and profit. The corporation has implemented a communication strategy successfully to interact with customers, thereby building on the current demand figures in specific regions.
In terms of the manufacturing process, Nike has secured stable resources supply to its factories to ensure that there is no stagnation and problems with the volume of goods. Effective interaction with suppliers is also the strength of the corporation. The company has a high status, and cooperation with Nike is usually beneficial, which explains the success in communication with partners. Finally, Nike has developed a robust system of collaborations with subsidiary industries, which drives product expansion and ensures significant gains in the context of profit capitalization. These factors reflect crucial improvement initiatives supported by the corporation in question to maintain its sustainable supply chains.
Through the use of relevant supply chain management elements, Nike has been able to achieve market advantage and leadership in its segment. For instance, as Ye (2020) remarks, logistics processes are the company’s strength, as evidenced by clear control over resources and an effective governance system. From the perspective of social work, Nike has been working to enhance its corporate social responsibility since 1996, with a focus on pressing human issues and funding to tackle them (Ye, 2020).
This, in turn, influences supply chains and determines the export share of related products. With regard to environmental initiatives, the company participates in environmental protection programs and follows the principles of harmless production (Ye, 2020). Emission reduction and production optimization principles impact supply chains since Nike controls the manufacturing process and is constrained by the existing legal conditions. Tariff fluctuations related to the economic aspects of work also influence the corporation’s supply chain and largely determine the share of product sales (Jiang, 2018). Thus, a number of elements are essential to take into account to optimize supply chain operation and maintain stable logistics.
At the same time, despite Nike’s success in its supply chain operation, some aspects of this work can be strengthened to improve the quality of logistics processes, thereby increasing profits. For instance, Nica et al. (2021) note the value of interaction with social media influencers as one of the development strategies. By focusing on online sales more, Nike can obtain more feedback and opinions from target customers, thereby collecting the necessary data to optimize marketing decisions.
In addition, such information can be useful as a source of data about a shortage or, conversely, a surplus of products to control the share of goods in warehouses. Consumers will be able to use convenient shopping channels because the absence of outlets in individual regions may be a real constraint and hinder successful sales. Therefore, more emphasis on online work is one of the potentially important recommendations.
As another option to implement to enhance Nike’s supply chain operation, the company can focus on third-party logistics as an approach aimed at increasing the range of partners. By providing logistics services to other organizations, Nike may gain more profits and strengthen brand value by engaging the corporation in areas other than sportswear, footwear, and accessories. Moreover, the company is one of the recognized leaders in its market segment, and cooperation with it is potentially beneficial for many firms. Therefore, implementing a third-party logistics strategy is a potentially valuable strategy to leverage Nike’s current supply chain operation.
References
Distelhorst, G., Hainmueller, J., & Locke, R. M. (2017). Does lean improve labor standards? Management and social performance in the Nike supply chain. Management Science, 63(3), 707-728. Web.
Jiang, W. (2019). Sustainable development of supply chain in footwear industry – Take Nike as the case. Asian Business Research, 4(3), 86-93. Web.
Nica, I., Chiriță, N., & Ionescu, Ș. (2021). Using of KPIs and Dashboard in the analysis of Nike company’s performance management. Theoretical & Applied Economics, 28(1), 61-84.
Ye, W. (2020). How does Nike’s supply chain work?. Clean Chain. Web.