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Strategic Management and Marking

EDENZ Zealand Collages

Learning Outcomes Assessed:

This assessment covers the topics relating to the following learning outcomes of the course:

LO 1:

Evaluate a marketing plan for an operation with reference to contemporary theories, concepts and tools.

LO 2:

Compare and contrast the effectiveness of contemporary marketing theories, concepts and tools as applied to current marketing scenarios.

LO 3:

Evaluate a pragmatic investigation/research methods associated with strategy, strategic management, and/or strategic marketing.



Answer

Introduction 

Strategic marketing management is a type of workbook that helps in producing a definite management program for the process of strategic marketing. The main objective of using strategic marketing and management process is to provide an opportunity for getting grapefruit marketing style individually. In order to apply wide range of production and marketing styles it is necessary to improve and strategic marketing plans identically. Strategic marketing management consists of four goals that are highly essential for obtaining the profit of the market. This includes selection of reality-based accomplishments for example goals and objectives, to study the effective development of the business strategies, to set out the priorities and to improve the performance of the organization. 


This present study focuses on the Nike Company in order to build the strategies marketing management plan of this Company. Nike in New Zealand is the high priority of the customers as it sells branded products for example sports equipments, shoes and jersey. Nike also provides signature shoe for men and woman in effective price rates of $ 130 - $ 150. The featured shoes produced by this Company especially for women ranges between $ 18 - $ 130. Hence, it has been found that Nike Company is famous for its innovative shoes and price ranges that satisfy the customer. The market competition of Nike as a best brand for sports equipment shows its brand quality and best product. The competitors of Nike such as Adidas also produce shoes and sports equipments. However, the price range of Adidas and Nike differs like this $ 150 and $ 3,350 respectively. Therefore, people in New Zealand prefer to choose Nike as their best suitable brand for comfortable use (Nike.com, 2017). 


This current study draws the attention of the readers towards the introduction or background of the Company that has been selected as Nike. The background highlights the products, its style and price ranges in New Zealand. The competitors of Nike have also been discussed in the introduction section. Furthermore, analysis of strategic foundation of Nike has been mentioned. The prime focus of this study is to throw light on the analysis of market environment of Nike Company. This includes PESTEL analysis, SWOT analysis and Porter’s five forces in order to analyse the environment market goal of this Company. In this current assignment PESTEL analysis of Nike Company has been focuses in order to focus on the macro environment, whereas SWOT analysis has been outlined for the purpose of analysing the micro environment. Analysis of potential effects of the organisation with respect to various factors has been done using Porter’s five forces model.  In order to evaluate the strategic directives and issues it has been discussed about the key strategies issues of the organisation and analyse them for better implementation. Finally, conclusion and recommendation have been made to draw out the factors specifically and analyse their issues for making better plans for future. Recommendation of the strategies have been done to improve its strategic functions and processes such as maintaining high price rates, focusing on customer demand and improving quality products. 


Analysis of the Strategic Foundations  

Values

The values of Nike Company in New Zealand focus on the intention of bringing inspiration and innovation to everyone’s life in the world of athlete. Their main headline is ‘IF YOU ARE A BODY, YOU ARE AN ATHLETE’. The profile of this Company strongly highlights the innovative invention and culture of the creative products for the process of bringing new change in the life of athlete. Nike Company raised their voice by saying that they make creative products in order to make people experience today’s world and solve problems of future generation. Nike also creates bright leaders for the purpose of creating an opportunity to inspire others for best work. The leadership team of Nike have the courage to inspire people for using their products (About.nike.com, 2017). 


Vision

The vision statement of Nike Company is a matter of speculation that considers scarcity of information regarding the corporate vision of the Company. The vision of Nike Company focuses on the process of helping people to thrive their customers into the world of innovative change. Their intention is to create sustainable economy by maintaining the profit and balance of the people in systematic mode. In the year 2010, Nike Company has extravagantly used the principle of rethinking in order to pass their mistakes and process with good sustainable principles. This principle have make Nike to make changes in their industry and in their Company. Due to the process of this principle Nike Company have identified their challenges and brainstorming solutions by decision correct actions in order to evaluate, monitor and re-evaluate the functions (About.nike.com, 2017). 


Mission

The mission of Nike is to bring inspiration and innovation in the lifestyle of every athlete to make them wonderful for their athletic functions. Their main mission is to supply everyone in the world of athlete with good quality shoes, equipments, apparel in order to bring a potential change in the mind of an athlete. The mission of Nike Company is successfully because people have understood that in order to merchandize the world of athlete it is necessary to use the products of Nike. Nike rose up their voice for dominating their products they said that the mission of the organisation world as a catalyst that helps in driving out the organisation towards the path of success (About.nike.com, 2017). 


Objectives

The main objective of Nike Company to believe in the partnerships by forming values and opportunities to work together with all stakeholders in order to bring good reputation for the industry. In order to share best practices it their motto is to consider the legislative issues for the purpose of forming the future of clothing industry. Nike Company highly supports the goal of partnerships that helps in solving their problems and brings sustainable solution throughout their supply chain management in the world (About.nike.com, 2017). 


Evaluation of short-term actions to long-term goals

Nike goes for reinvent management in order to make a game plan for improving growth that is good for all. The short term goal is to make their products at the top of the reputation and bring success to the present condition. On the other hand, the long term goal is to bring an adaptive change in the suture for creating sustainable innovation. Therefore, Andersen & Andersson, (2017) cited Nike should follow the demand of the customers for creating long term goals and hence, they need to stick to their principles of changing the world. Nike’s short term goal is good to change the long term goal of innovation. 


Analysis of the Market Environment Scan 

PESTEL ANALYSIS 

Political

Tax policies of New Zealand are Tax administration Act 1994 focuses on targeted consultation section 81BA. Another tax policy that New Zealand government focuses on the LTCs that helps in maintaining a business together in a form of partners. New Zealand government also highlights the tax policies of business tools that help in accumulating all the business tools quickly. The main taxation policy of this country is claiming business expenses that help in generating income and most of the expenses including profit rates. Fiscal policies of New Zealand are tax revenue and public spending (Andersen & Andersson, 2017). Therefore, in this case Nike should follow the fiscal policy of this country in order to bring a good framework of the economy. These two fiscal policies will help Nike to balance their desirable increase and spending revenues. 


The political stability of NZ shows a strong indicator of an average of 1.28 points in the year 2016. Therefore, in this case Nike should explore their business in this country as they have high political stability. As per Barney (2014), the trade policies of New Zealand over the past 20 years ensure agile and continuous international trade. They follow free trade agreements (FTAs). As New Zealand provides free trade access therefore NIKE should go for it. It has been found that New Zealand is considered to be the least corrupted country and it is in the second rank of non corrupted countries.  


Economical

The CPI of New Zealand's inflation rate is around 2.7 percent. Interest rate of New Zealand is 6 percent and labour charges rates in New Zealand are measured up to 1.7 % in the year 2016. Private sector labour charge is 1.5%, therefore Nike can easily decrease the labour cost as it is in a proper ratio. According to Bull et al. (2016), unemployment rate in New Zealand edged down to 4.8% in the year 2017. Hence, it can analysed that though the unemployment rate in this country is not that much high, therefore Nike can easily suspend the employees from over negligence or poor work. Poverty rate has been increased up to 60% in the year 2016 due to overcrowding and inadequate housing facilities. Hence, Nike can maintain the sustainability according to the poverty rates and they should make their price rates reasonable so that almost middle class people can buy the products. New Zealand focuses on mixed economy that operates on free market principles that helps in manufacturing service sectors which is highly efficient (Charter, 2017). 


Social

Lifestyle trends of New Zealand people goes for branded quality, they prefer fashionable products. Similarly, people have also changed their choices for sports; they prefer outdoor fits and traditional garments like rugby, league, cricket slip back and many others. As per David, David & David (2017), consumer attitudes focuses on high quality products and their opinions goes for innovation and change in their lifestyle and taste. Hence Nike should focus on these factors and change accordingly.


Technological

Competing development focuses on high demand of fashionable products and high taste of new food items. New Zealand presents a statistical data on R&D 2010. As stated by David & David (2017), it has been found that R&D activity in New Zealand focuses on originality and systematic increasing of goal. In the year 2016, it has been found that New Zealand has implemented many technological types of equipment such as digital technologies, intelligent transport systems and integration of ICT. Therefore, Nike can freely develop its business operations in this country as they have extravagant technologies to communicate with people. 


Legal

Consumer laws are consumer guarantees Act 2010, that focuses on equal rights of consumer automatically expressed in series. Fair trading Act highlights the right of customers regarding any difficulties with their products. Online safety is another consumer law that helps in avoiding harmful digital communications. As cited by Eden & Ackermann (2013), industrial safety suits with the help of high risk hierarchy, high product security principles and safety and security act 2004. Product labelling for Nike as the sport product will require high attraction on their brand quality, product manufacturing kits and material used to make the products. These factors will help in enabling Nike to process their business accordingly.  

Environmental

Climate change is sustainable in New Zealand, and it manages resources. It has been found that New Zealand is pollution free area and its rank is in the 3rd position of the pollution free area. As it has been found that New Zealand people not acquire recycling procedures therefore Nike should not have to recycle their products. New Zealand has developed different policies for waste management such as Chem treatment for removing hazardous waste treatment (Foxall, 2014). 


SWOT ANALYSIS


Strength
  • Designs 
  • Fast service
  • Quality products
  • Product range
Weakness
  • Selling facilities
  • Price competition 
Opportunities
  • Product development
  • High value
Threat
  • International nature of trade
  • Competitive 

Table 1: SWOT analysis

(Source: Nike.com, 2017)


Due to the elevated brand, Nike has experienced the maximum vote of good standard. Its exclusive design and instant creation has made its strength very strong. Low cost manufacturing has helped this Company to bring the range of the product to a standard level. With the help of effective communication and research development fast service delivery has become a major strength for Nike. Effective innovation, creation and change in the current environment, Nike has improved their functions to deliver good quality products to their customers. The manufacturing cost of Nike Company is 28% and thus it has developed to become a good brand for the customers because of their low price rates (Nike.com, 2017). The branded footwear of Nike Company have given majority of the customers a feel of comfort and relief in their athletic world and thus their products are no doubt a space to have greater strength. Nike Company produces and sells their products at low cost and bottom line margin in order to give full satisfaction to their customers. 


Due to the effect of ongoing practice of poor labour practices, it has experienced poor selling facilities. Lack of extrinsic labour, skilful workers and efficient employees has failed to deliver their products in good amount. Lack of mobile applications and innovative technologies like online refund and online repay acts Nike Company has failed to sell their products in large amounts. The major competitor of Nike Company is Adidas who sells its products at low price and thus creates a market of competition (Nike.com, 2017). Hence, in this case in order to overcome the competition Nike Company should sell their products at a bottom line margin. Due to high price of some products which has good materials of manufacturing Nike Company has increased their price tag and therefore it has experienced a low income and customer focuses on low price. 


Nike Company already has developed innumerable products however, for the purpose of making their products more useful for their customers they need to emerge their marketing facilities and potential rates. Innovation and creation of Nike Company will help them to develop their products very frequently as they are a good example of sports products customers trust them for their brand quality (Nike.com, 2017). Moreover, 9% of people dislike Nike because of their high price rates and cost structure on the other hand, the rest of 91% believe them for their creation. Nike Company should think more and develop their products based on their innovation such as fuel brands, wearable technology and physical activities. Hence, in this case Nike Company Can improves their product quality and high value by increasing their activities and innovation processes (Nike.com, 2017). 


Due to increasing competition and among the competitors of Nike Company it has become a major threat to satisfy the customers with good products. 91% of customers those who; like Nike Company only satisfy with the quality of the products. However, in the current world of increasing competition it has been found that currency volatility can improve their sales growth and product quality (Nike.com, 2017). International nature of trade has become the major threat due to lack of modern technologies such as online facilities, global marketing and mobile applications. 


PORTER’S FIVE FORCES

Bargaining power of suppliers

Bargaining power of suppliers of Nike Company is low it is because the products are made globally and are delivered in 42 countries all over the world. Through it has been found that individual suppliers are small in size, it has been found that bargaining power is low due to the effect of forward integration and stability (Hill, Jones & Schilling, 2014). This condition reduces the chance of competition of the suppliers. Moreover, it has been found that the number of suppliers is high and therefore they scattered throughout the world, hence, the bargaining power of the suppliers is low in case of Nike Company. 


Bargaining power of buyers

Bargaining power of buyers in case of Nike Company is moderate because the level of competition is neither too small nor not too large. As per Las Casas & Silverio (2015), in case of Adidas, it has been analysed that both Nike and Adidas sells more or less same products with variant price ranges and hence, it becomes moderate for the buyers to bargain as they also trust their projects. Among the competitors like Reebok, Puma it has been found that customers prefer Nike because of their own creation or ideas and innovation. In this case, there are many local and brand competitors who compete with Nike with respect to their price range and product quality.  


Level of competitive rivalry

This industry has grown saturated and thus the existing players are engaged in tough competition for the purpose of deeper market provision and penetration in order to snatch away market share. The level of competition in the sports industry is very strong this is because, major competitors of Nike Company like Adidas tried to take a share of their profit by motivating customers to use their products (Morden, 2016). 


Threat of substitutes

Threat of substitutes is low to moderate in case of Nike Company. In this condition it is analysed that the manufacturing system and ideas of Nike Company is different from that of any other brand companies and hence the threat of substitute product is low or in some case it is moderate. Due to the style, quality and design of the products manufactured by Nike Company, it is less threat to have substitute product for Nike Company (Nike.com, 2017).  


Threat of new entrants

While the investment for starting the business for Nike Company is not that much high or large however, other requirements were ought to get achieved hence, the threat of new entrants is low. The factors that includes in this threat of entrants are marketing, distribution, brand image and supply chain management that requires skilled labours, and time. Hence, these factors moderated the threat of new entrants. As per Peppard & Ward (2016), it has been observed that it is not possible for any brand to create similar products like that of Nike Company overnight. 


Analysis of Key Strategic Issues 

Strategic issues must be analysed in order to improve strategic functions and systems of the organisation. As cited by Renz (2016), the major key issues of strategic functions of Nike Company highlight the relationship status with buyers, customers and suppliers. Issues occur due to the low communication systems between the people of different departmental sectors. In case of customers dealing with online marketing creates problem due to the behaviour of online executors and thus relationship issues occurs frequently (Rothaermel, 2015). Nike Company also faced geographic issues that highlight the major strategic issues such as market area, service location which are highly useful for developing business operations. Issues related to the providers such as the need of the Company in order to become a brand of high quality. 


The use of specialised workers such as having adaptive skills for product designing for the process of making distinctive designs creates issues because of labour charges. As per Shim, Kim & Altmann (2016), external strategic issues for Nike Company arise due to fact of controlling power of the organisation. On the other hand internal strategic issues occurs due to the cause of internal factors such as low level monitoring, low cooperation and high issues regarding position establishments. Due to the unemployment rate of people in New Zealand is low therefore, Nike Company has openly suspended many workers and thus the issue created with the process of monitoring. As the number of labourers decreased and thus large number of issues increases (Slack, 2015)


External condition of Nike Company also focuses on political, economic, technological and social such as trade market, unemployment rates, lack of communication systems and lack of mobile applications (Slater, 2015). As New Zealand has developed its technological factors to great extent therefore, technological issues are not great factors of Nike Company. However, due to low communication between the high level managers and employees the level of productivity decreases and communication gap created and this becomes a major issue. According to Song, Sun & Jin (2017), the issues that occur with the stakeholder also come under the external issues as they do not agree with the decisions of the managers rather they create their own views. 


There are some factors that typically produce strategic issues includes strategic focus, strategic competencies, culture modifications and organisational change and resource limitations. The main issue that creates big problem in strategic management plan is the E-commerce products such as mobile, internet facilities and mobile applications. This is because they have not incorporated E-commerce systems for their innovation. In order to analyse the strategic issues faced by Nike Company it is necessary to develop SWOT analysis that has already been done in the above section (Stephen, 2016). 


Recommendation and Conclusion 

Product quality

Nike Company already has developed innumerable products however, for the purpose of making their products more useful for their customers they need to emerge their marketing facilities and potential rates. Innovation and creation of Nike Company will help them to develop their products very frequently as they are a good example of sports products customers trust them for their brand quality. As influenced by Tantalo & Priem (2016), they need to develop their products in a level so that 99% of the customers focus on their production. 


Increase large number of customers

In order to increase large number of customers they need to focus on their quality and make it a standard of high creation with the help of their innovation and distinctive creation. As it has been discussed above that 91% people trust Nike however, the rest 9% should also come and join and for that Nike Company should incorporate extra strategies like E-commerce systems, communication policies and technologies.


Incorporation of E-commerce systems

Nike Company should incorporate E-commerce systems such as internet facilities for global marketing. Moreover, mobile applications for gathering information from the customers and vice a versa and adaptive use of fast technologies such as online cash payment systems. The use of E-commerce systems will help them to develop their business strategies significantly. 


Thus from the above discussion it can be concluded that Nike Company should identify their strategic issues and incorporate best measures to solve their problems. This present study throws light on the fact of developing the products of Nike Company with the help of innovative technologies. 

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