Nike Superbrand Essay

Nike Superbrand
Uriel Guevara
MGT/230
March 18th, 2015
Timothy Sheaffer

Nike Superbrand
Nike is one of the most recognizable and successful brands in the world. Founded by middle distance runner Phil Knight and nationally respected track coach Bill Bowerman in 1964, Nike emerged a frontrunner in athletic shoe technology. Their goal was simple; make lighter better quality track shoes. The company started small. 300 pairs of shoes sold out of the trunk of a car. Nike has become a leader in athletic shoe technology and was one of the first companies to take start selling its merchandise online. Now a giant in sports apparel, Nike reported a $26 billion dollar profit in the last year. Nike sells merchandise in over 160 countries around the globe through independent retailers and Nike retail stores. Nike has captured a mind boggling 92% of the market share of basketball shoe sales around the globe and is still growing (Badenhausen, Forbes 2014). Most of the best pro teams and athletes are endorsed by Nike. The Jordan brand alone made $2.7 billion. Nike continues to find new ways to be innovative and lead a multi-billion dollar market.
Nike has adopted a matrix organizational structure. A matrix organizational structure uses teams of employees to complete tasks. Managers and staff report to two bosses; a functional manager and divisional manager. Nike has a President and CEO, a Chairman of the Board, and a board of directors. Nike employs over 30,000 workers on six continents and has an additional 800,000 factory workers indirectly employed. Nike owned affiliates include Converse, Hurley International, and the mega popular Jordan Brand. One of Nike biggest customers is the Footlocker chain. Footlocker sells about 10 percent of Nike shoes sold annually. Shoe and apparel production are outsourced to foreign companies while equipment is manufactured in and outside the U.S. (Brenner, 2013). There are too many different processes at work for a traditional organizational structure to be efficient.
There are several advantages attained by incorporating a matrix type system. 1). Decision making is made at a lower managerial level so results are usually faster. This saves time because decisions are made quickly by those in the “know” and are not subject to delays caused by a long chain of command. 2). Information is processed more quickly via extensive communication networks. 3). Upper management is not burdened with making lots of lower level decisions. This allows upper management to concentrate on the bigger picture. 4). Resources are used more efficiently since they are shared between divisions of the organization. 5). Employees learn to collaborate by working together frequently. 6). Employees cross train between departments and therefore have more career opportunities within the organization. The disadvantages of using the matrix system is that sometimes employees can get confused when reporting to more than one boss. Unhealthy competition can also arise from managers fighting for more power (Bateman, 2011). Tasks might not get accomplished because the chain of command is not clear. Managers might find it difficult to adopt and implement the matrix system because it changes the relationship between manager and employee. Implementation takes strong leadership from all levels of management to be successful. By using a matrix organizational structure, Nike incorporates some of the functional and divisional organization characteristics to gain the benefits of both. With this system leaders are able to get decisions made quickly. The organization moves and changes quickly instead of slow there is no top down approval that would take precious time. Nike needs the flexibility of a matrix structure to respond quickly enough to meet the global challenges that change daily. Nike continually tweaks its organizational structure two maximize its resources and

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