Name- Nikki Parekh

Id- 23000680
MBA SEM -3

1. Supply chain network of NIKE

The biggest retailer of athletic clothing and running shoes worldwide is Nike.
Arguably the most powerful force in the contemporary textile business, the American
multinational is also one of the most recognisable trademarks in the world. Nike has
an extremely intricate supply chain that goes behind the hundreds of millions of
sneakers and other products it sells annually. Many people attribute Nike's
extraordinary success to their proactive approach to supply chain management, even
though there are unquestionably major obstacles in managing this complexity.
Nike's supply chain operates by putting several plans into place to guarantee that
necessities for consumers are constantly available at stores. They employ a make-to-
stock, forecast-driven supply chain strategy that enables retailers to submit weekly
orders to a distribution center's on-hand inventory position. Nike is investigating
direct shipping options and quickening the order flow process at distribution facilities
in an effort to cut lead times and boost productivity. Additionally, they must manage
long-life, highly seasonal products like fleece clothing and soccer equipment, and
they are weighing the advantages and disadvantages of keeping inventory of these
items. Nike is also emphasising sustainable development in its supply chain, taking
social and environmental factors into account. Working conditions in Nike's supplier
factories are mostly determined by management style; lean production and worker
empowerment lead to better working conditions.
Nike's supply chain is a complex network that spans the globe, from raw material
sourcing to product distribution. Here's a breakdown of its key components:

 Raw Material Sourcing:

Global Reach: Nike sources materials from various regions worldwide, including
Asia, Europe, and North America.
Diversity: To mitigate risks and ensure supply continuity, Nike works with multiple
suppliers for each material.
Sustainability: The company has a strong focus on sustainable sourcing, prioritizing
materials with minimal environmental impact.
 Manufacturing:
Outsourcing: Nike outsources 100% of its manufacturing to independent suppliers.
Global Factories: These factories are located primarily in Asia, particularly in
countries like Vietnam, Indonesia, and China.
Quality Control: Nike has stringent quality control measures in place to ensure that its
products meet high standards.
 Distribution:
Regional Distribution Centres: Nike maintains a network of regional distribution
centres around the world.
Efficient Logistics: Advanced logistics systems and transportation methods are used
to ensure timely delivery of products to retailers.
Direct-to-Consumer: Nike has also been expanding its direct-to-consumer channels,
including online stores and retail outlets.
 Retail:
Global Network: Nike products are sold through a vast network of retailers, including
department stores, sporting goods stores, and Nike-branded stores.
Online Sales: The company has a strong online presence, allowing customers to
purchase directly from its website.
Key Features of Nike's Supply Chain:
Agility: The company's supply chain is designed to be agile and responsive to
changing market conditions.
Sustainability: Nike has made significant strides in improving the sustainability of its
supply chain.
Innovation: The company continuously seeks to innovate and improve its supply
chain processes.
2. Location of all Nike’s facilities like Plants, Warehouses, and Retail
Stores etc.
The Nike Worldwide Headquarters is the global headquarters for Nike, Inc., located
in an unincorporated area of Washington County near Beaverton, Oregon, in the
United States. The campus has more than 75 buildings on 286 acres, as of 2018.
Nike operates numerous facilities worldwide, including manufacturing plants,
distribution centres, and retail stores. However, Nike doesn’t own most of the
manufacturing plants where its products are made. Instead, it contracts with factories
in different countries, particularly in Asia. Here’s an overview of Nike's facilities:

1. Manufacturing Plants
Nike's products are primarily manufactured in:
- Vietnam (Nike's largest manufacturing hub for footwear)
- China (a major producer of both apparel and footwear)
- Indonesia (primarily footwear)
- Thailand
- India
- Bangladesh
2. Distribution Centres
Nike owns several distribution centres located in strategic locations around the world,
including:
- North America:
- Memphis, Tennessee: This is Nike's largest distribution centre in the U.S.
- Other regional distribution hubs in California, Pennsylvania, and Indiana.
 - Europe:
- Laakdal, Belgium: This is Nike's European Logistics Campus, serving Europe, the
Middle East, and Africa.

- Asia-Pacific:
- Distribution centers in China, Japan, and South Korea serve Asian markets.

3. Retail Stores
Nike operates a combination of company-owned stores and franchise locations
globally:
- North America: Numerous flagship stores, including New York, Los Angeles, and
Chicago.
- Europe: Key cities such as London, Paris, Berlin, and Milan.
- Asia-Pacific: Stores in cities like Tokyo, Shanghai, Beijing, and Seoul.
- Latin America: Stores in Brazil, Mexico, and Argentina.
In addition to its physical stores, Nike has a large e-commerce platform that delivers
to most countries worldwide.
These facilities and locations play a crucial role in Nike's global operations.

3. What is Nike’s competitive priority? How do they achieve their

strategic fit?
Nike Inc. uses a combination of generic strategies for its competitive advantages. The
situation of the athletic footwear and apparel industry and the diversity of regional
markets support such a combination. These generic strategies are linked to the
sporting goods company’s intensive growth strategies. The following are the generic
competitive strategies of Nike Inc.:

1. Differentiation (Sporting goods for the general population)

2. Differentiation Focus (Sports-specific or activity-specific products)
3. Cost Leadership (Cost minimization in manufacturing)
Differentiation is Nike's main general business plan for increasing profitability
and competitive advantages. The development of products that set them apart
from rival athletic goods is the strategic goal. Nike products are marketed to the
whole market as exclusivity or uniqueness in this general competitive strategy.
For instance, the brand's fashionable and athletic trainers appeal to mainstream
consumers while making references to celebrities or professional athletes. In terms
of the product mix and celebrity-endorsed advertising, Nike's marketing mix, or
 4Ps, must complement this generic strategy for it to be implemented successfully.
Differentiation helps the business compete in the sporting goods sector by
highlighting the exclusivity and originality of its items. The firm competitive
advantages and strengths listed in Nike Inc.'s SWOT analysis are strengthened by
this general approach. Additionally, as this article's description of the aggressive
growth strategy of product development shows, this general competitive strategy
is related to it.
Differentiation Another general competitive tactic used by Nike in their business
practices is focus. When it comes to the distinctiveness or exclusivity of the
sporting goods brand and its merchandise, this general strategy and the
differentiation strategy are comparable. Nike's strategy goal, however, is to target
consumers in a subset or section of the global athletic goods industry through
differentiation focus. For example, the company has shoes that are especially
designed for soccer and football, featuring studs not suitable for use on the streets.
Such focus is achieved through research and development, with this generic
competitive strategy associating Nike brands to athletic use. The generic strategy
of differentiation focus influences product development, which is one of Nike’s
intensive growth strategies for enhancing its products’ competitive advantages.

Cost leadership focusses on Nike's strategic goal of cutting production costs to

increase profit margins. The business outsources to low-cost contract
manufacturers, including those in Asia, in order to carry out this general plan.
Increased profit margins from this strategic strategy, along with the relatively high
selling prices of Nike products, provide the company a competitive advantage. A
generic competitive strategy of cost leadership fortifies the company against
aggressive rivals like Adidas and Puma as well as regional shoe and clothing
companies. The Five Forces analysis of Nike Inc. indicates that competition is a
major external force influencing the company’s strategies, including its intensive
growth strategies.
Major Nike’s competitive advantages.
 Incredibly Strong Brand Recognition
Nike is one of the most recognizable brands in the world. The company has built up a
strong reputation for quality and innovation over the years. This has resulted in a large
number of loyal customers who are willing to pay a premium for Nike products.

They have partnered with iconic athletes like Michael Jordan and Tiger Woods, which
has helped to increase their brand awareness even further. In addition, Nike’s
marketing is often seen as being very creative and effective.
 A Diversified Product Line
Nike sells a wide range of products, including clothing, shoes, and equipment for a
variety of sports. This diversification helps to protect Nike from fluctuations in any
one particular market.
If sales of one product type slow down, Nike can make up for it with increased sales
in another product category. This diversification also gives Nike a large number of
potential customers to target.
 A Strong Focus on Innovation
Another great competitive advantage is their speed of iteration and innovation.
Nike is always looking for ways to improve their products and stay ahead of
the competition.

They have invested heavily in research and development over the years, which
has helped them to create some of the most innovative products on the market.
In addition, Nike’s use of cutting-edge technology often gives them a
significant advantage over other brands.
 A Global Presence
Nike has a strong presence in countries all over the world. This gives them a
larger potential customer base to sell their products to. In addition, Nike’s
global supply chain allows them to source materials and produce products at a
lower cost than many of their competitors.

 A Strong Financial Position

They are also a financially very strong company. They have been consistently
profitable over the years and have a large cash reserve. This financial strength
gives Nike the ability to invest in new products and marketing campaigns, as
well as take advantage of opportunities that may arise.
 A Large and Loyal Customer Base
There is no other fan base like Nike's. They're fiercely loyal, dedicated, and
passionate. Nike has built up a large customer base of individuals who love
their products and brand.

This loyalty has been earned through years of producing high-quality products
and delivering on their promises. In addition, Nike’s customer base is also
quite diverse, which gives them a broad reach to sell their products.
 A Strong Relationship with Suppliers
Nike has built up strong relationships with their suppliers over the years. This
gives them an advantage in terms of cost and availability of materials. In
addition, Nike’s supplier relationship management team is very effective at
managing these relationships and ensuring that Nike always has access to the
best materials at the best prices.
 An Excellent Marketing Strategy
Nike’s marketing strategy is very effective and has helped them to achieve a
high level of brand awareness. In addition, Nike’s use of celebrity
endorsements, social media, and innovative advertising campaigns have also
been very successful in driving sales.
 Strong Online Presence
They have a very strong online presence. Their website is easy to use and
navigate, and they have an extensive online product catalog. In addition, Nike
offers a great online shopping experience with fast shipping and easy returns.

Whether it is social media or SEO Nike has a very strong online presence that
helps them reach a large number of potential customers.
  A Great Place to Work
Nike is often ranked as one of the best places to work. This attracts top talent
to the company and helps to create a positive working environment. In
addition, Nike’s employee retention rate is very high, which saves them
money on training and recruitment costs.

These are just a few of the many competitive advantages that Nike has over
other brands. Their strong focus on innovation, global presence, financial
strength, large customer base, and great marketing strategy are just a few of
the things that make Nike one of the most successful companies in the world
4. Sourcing plan (Make Vs Buy decision)
Nike's approach to making or buying things is simple: they focus on what they do best
and let others handle the rest.
 Outsourcing Production (Nike "Buys"
Nike doesn't own factories. Instead, they *outsource* most of their product
manufacturing. This means that they work with other companies, mainly in countries
like Vietnam, China, and Indonesia, to make their shoes and clothing. By doing this:
- *Costs stay lower* because these countries have cheaper labor.
- *Nike can focus* on what they’re great at—like designing cool products, marketing,
and innovating new technologies.
- *Production stays flexible*, so Nike can easily increase or decrease how much they
make depending on demand without the heavy costs of owning factories.
 In-House Focus (Nike "Makes" in Certain Areas)
While Nike lets others handle the physical making of their products, they *keep
control over the creative and important stuff*. This includes:
- *Designing and inventing new products* like the Nike Air or Flyknit shoes. Nike
invests a lot in research and development to stay ahead in innovation.
- *Managing how things get from the factory to stores*. They have big distribution
centers, especially in places like the U.S. and Europe, which helps them quickly
deliver products to customers.
 How Nike Decides to Make or Buy
Nike makes decisions based on a few simple factors:
- Cost: If someone else can make their products cheaper, they let them.
- Control: If something is important to the brand—like innovation or design—Nike
keeps that in-house.
- Flexibility: Outsourcing lets them easily switch manufacturers or scale production
up and down based on what’s needed.
-Quality: For special products, like the Nike Air soles, Nike sometimes makes these
themselves to ensure high standards.
  A Few Exceptions
Though Nike outsources most of their production, they do own a few facilities:
- Nike Air Soles: Nike actually makes their own Air soles at factories in the U.S.
because it’s a key part of their product innovation.
- Sustainability Efforts: Nike is also trying to create more eco-friendly materials, and
they sometimes handle the production of these materials to make sure they meet their
goals.
 Strong Supplier Relationships
Even though they don’t own the factories, Nike works closely with the companies that
do. They’ve built long-term relationships with these suppliers, especially in Asia.
They also have strict rules to make sure these factories treat workers fairly and are
environmentally responsible.
 Looking to the Future
Nike is starting to use more technology and automation in its production process.
They’ve invested in new ways to make shoes, like using knitting machines (Flyknit),
which makes production faster and uses less material. This helps Nike reduce waste
and could shift some production back in-house in the future.
5. Distribution network/channel and mode of transportation.
Nike’s distribution network is all about getting their products from the factories where
they’re made to the stores or customers who buy them. Here’s a breakdown of how
they do it and the ways they get their shoes and clothes to people.
 How Nike Moves Its Products (Distribution Network)
Nike has a big, well-organized system to make sure their products get from factories
to customers as quickly and efficiently as possible. Here’s how it works:
- Factories in Asia: Most Nike products (like shoes and clothes) are made in factories
in countries like Vietnam, China, and Indonesia. From there, they need to be shipped
to different parts of the world.
- Distribution Centres: Once the products leave the factories, they go to distribution
centres (big warehouses) that Nike operates in different regions. Some key centres
are:
- Memphis, Tennessee (USA): This is the main hub for distributing products across
North America.
- Belgium: Nike uses this as a central point to serve Europe.
- Asia: There are several centres here, like in China and Japan, that make sure
products get to the Asian market quickly.
Nike’s distribution centers help make sure products are organized, stored, and then
shipped out to either stores or customers who order online.
  Getting the Products to Stores and Customers
Nike uses different ways to transport its products depending on how fast they need to
get there and where they’re going:
- Shipping (Sea Freight): For most of its products, especially when they’re being sent
from factories to distribution centres across the world, Nike uses ships. It’s slower but
cheaper for large quantities of goods.
- Air Freight: When Nike needs to get products to market faster, especially for special
releases or during high-demand times (like holiday seasons), they use planes. This is
more expensive but much faster.
- Trucks: Once products reach distribution centres, Nike uses trucks to transport them
to stores or to local delivery hubs. From there, they either end up in Nike stores or go
out for delivery if you order something online.
 Selling Nike Products (Channels)
Nike sells its products through different channels, meaning various ways of getting its
items into the hands of customers:
- Nike Stores: Nike has its own stores (like Nike Town and Nike Factory Stores),
where customers can buy directly from the brand.
- Retail Partners: Nike also works with other big stores like Foot Locker, Dick’s
Sporting Goods, or JD Sports. These stores sell Nike products as part of their
offerings.
- Online (Nike.com and Apps): A big part of Nike’s strategy today is selling through
their website and apps. You can order directly from Nike online, and they’ll ship your
products to your home.
- Other Online Retailers: Nike products are also sold through other major online
retailers like Amazon or Zalando.
 E-Commerce and Direct Delivery
With more people shopping online, Nike has focused heavily on its e-commerce
business. When you order from their website or app, Nike uses:
- Local couriers (like UPS, FedEx, or DHL) to deliver your products. These couriers
pick up the products from the nearest distribution centre or a local Nike warehouse
and deliver them right to your door.
In some places, Nike even offers same-day or next-day delivery for certain products,
using faster local networks to meet customer demand quickly.
REFRENCES
How does Nike's Supply Chain Work? - ADEC Marketplace (adec-innovations.com)
An Insight Into Nike's Supply Chain Strategy -A Comprehensive Guide- 2023
(dfreight.org)
Supply Chain Analysis of Nike - SCM Insight
Analysis of Nike’s the Supply Chain - Issuu
Nike Supply Chain Distribution Centers