8Week 6 Assignment 2April MonkStrayer University.docx
- 1. 8 Week 6 Assignment 2 April Monk Strayer University BUS499 Business Administration Capstone Dr. Grizzell 02/10/2019 Introduction The Nike Company is a giant company whose operation are influenced by a number of factors. The environment under which the company operates influence its level of production, sales and marketing. Additionally, the environment is an important function of the company’s human resource management. The industry which the company operates in is highly competitive due to existence of other companies. The company has come up with extensive strategies which increase its ability to compete and increase its customer base. The five forces of competition are a major ingredient of the company’s competitive design. The management in the company understand the importance of adopted a well-structured design to enhance future improvements and control external threats and opportunities. The strengths and weaknesses of the company also influence production and marketing. The available resources, capabilities and core competencies are integral in achieving a vantage position in the sports merchandise industry. General environment Sports merchandise industry is made up of different components which directly influence the existing company. The world of
- 2. sports has grown in popularity during the last few decades. This has prompted the growth of a robust industry which focuses on manufacturing and selling sportswear and other accessories. The environment in this industry is highly competitive due to existence of many company which produce similar products. Companies such as Adidas, Puma, and Mikasa among others offer competition to Nike. Therefore, the existence of a highly competitive nature within this industry ranks as the most influential part of the environment. Technological advancement also plays a huge part in influencing this industry. The world of sports has embraced application of new and innovative technologies which improve performance. The company has to adapt to the change in customer preference in terms of the choice of technology. This is because a customer influences the company’s level of sales and production. Five forces of competition The five forces of competition are important to the company since they influence its operations. The factors determine how much the sportswear industry is attractive thereby influencing the strategies laid out by the company. The forces also determine the attractiveness of this industry in terms of favorable competition and likely profit margins. The factors also directly influence the company’s ability to give good services to its customers thus gaining loyalty. These microenvironment forces help the Nike Company to apply core competencies and resources to achieve high profits. Item 1 The onset of new sportswear companies whose products are almost autonomous creates a threat to the firm. These products are a good customer substitute. Some customers go these products since they solve the same economic need. The availability of such close substitute combined with the customer’s ability to bargain imposes a threat to the company’s profits. The company has come up with new strategies to ensure that prospective customers opt to purchase a Nike brand. The threat of substitutes is minimized by the company ensuring that
- 3. their products are simple and well designed to fully satisfy the customer needs. Nike has built affordable sportswear with modern features and easily accessible to potential customers thus neutralizing the threat of substitutes. Item 2 Among the potential impediments of making profits in the organization is the threat created by new entrants in the industry. Within the last two decades, there has been an upsurge of new sportswear companies. These new companies have led to the deduction of profits as previously made by the company. Though there is no perfect competition, profitability must be above zero so that the business can stay afloat. These factors has been neutralized by customer loyalty to the Nike Company. The company has also switched the cost of some products while ensuring that it takes full advantage on its access to the market channels. Nike has a strong brand which has been in existence for decades. The popularity and effectiveness of Nike products ensure that it enjoys a larger part of the existing customers. Individuals who have previously used Nike brand remain loyal to the company thus the threat of new entrants is minimized (Porter, 2008). Evaluation The Porter’s five forces framework is an integral tool used to look into enhancing completion ability of the organization. The framework creates an in-depth analysis of the profiting making ability of any organization therefore painting the goal driven competition. Profit making is associated with the microenvironment forces. Unlike the macro environment forces which are inclusive of the external factors, microenvironment factors are those factors which surround the firm but these forces adversely affect the profit making prowess of the firm. A single alteration of any of these factors prompts the company to rearrange its marketing strategies so as to reach the profit ceiling. The Nike Company has dealt with the threat of substitutes and new entrants by ensuring that its products are quality, assessable and affordable. The company has intensified
- 4. its advertisement with signed deals with major sports federations such as the NBA together with major athletes. This makes the brand popular thus attracting more customers. Future improvements The company should improve its performance by increasing its production to other sports accessories. Additionally, Nike can reinforce their dominance in future by fully sponsoring major leagues such as English Premier League or any other sport league. The company’s management should work to minimize competition by buying smaller companies to increase customer base. External threats and opportunities The major external factor affecting Nike Company is its customers. Individuals who are willing to purchase the company’s products influence how Nike performs. Additionally, customers are Nike computer consumers which means that their preference in consumer sportswear directly affects the company. Apart from customers, the company operations are affecting by the market forces. Existence of similar products in the market results into higher competition. Companies such as Adidas, Puma among others develop similar consumer electronics. This lowers Nike’s products consumption resulting into lower profits. Threats and opportunities strategies The company should come up with a feasible design of satisfying its customers. The company should increase customer satisfaction and create active online platforms to receive comments, suggestions and complaints from customers. The company should also made strides in ensuring that it stays relevant in the market. The company’s structure, human resources and management should provide a strong foundation for operation. The company’s philosophy of creating simple, unique and reliable products will ensure that Nike remains dominant in the market even in the future. Strengths and weaknesses Nike has been involved in numerous controversies in the past.
- 5. Its involvement in such scenarios is the company’s greatest weakness. The company also has experienced strikes and go- slows from employees demanding better working conditions. The greatest strength in this company is existence of a highly organized management which is able to coordinate production, human resources and marketing. This ensures the company runs smoothly without major setbacks. The company also enjoys a robust communication network between all stakeholders. Threats and opportunities Strategy. The company should adopt a well-defined organizational structure so as to maintain effective competition within the consumer electronic industry. There is a strong product rivalry in the market propagated by cheaper and more reliable products. Nike’s success in the market lies within its goal, mission and structure. The company was founded with a goal of providing well designed and reliable products. This is should be seen in the company’s unique products. Additionally, the company should minimize involvement with controversial characters and issues in the sports industry. This will ensure that it maintains all its customers thus maintaining profit margins. Resources, capabilities and core competencies Nike Company has the ability of growing its profits to unimaginable levels. The sports industry is robust with discovery of new game platforms and an increase in the number of people participating in sports. The company has numerous assets includes a stable financial position, competent and skilled employees, many offices and plants spread across the world and numerous shops in different countries. With these resources the company can increase production and improve marketing. Although the company has been named as the most robust in sportswear industry, proper utilization of the resources will increase profits and dominance in the industry (Nike, 2010). References
- 6. Nike. (2010, May 23). Nike Inc.'s Website. Retrieved from Nike: http://www.nike.org Porter, M. (2008). The Five Competitive Forces that Shape Strategy. Harvard Business Review, 78-93. Running Head: HR CLOUD TECHNOLOGY HR CLOUD TECHNOLOGY 7 HR Cloud Technology January 30, 2019 Marketing Plan Targets the Market Segment HR cloud technology is becoming a basic requirement for most companies within the consumer goods industry. The industry is mainly composed of firms which deal in food production, beverages, clothing, electronics, and automobiles, among other major goods directly purchased by customers. The marketing plan, therefore, targets the market segment by showing the major reasons why HR cloud technology is significant in the consumer goods industry through conducting a needs analysis. Most of the activities in which the consumer industry companies engage in require a centralized location from which various HR functions should be conducted. Cloud computing technology provides the best platform to ensure there is consumer satisfaction, effectiveness in sales and also better employee engagement that is crucial to the success of various organizations (Buyya & Venugopal, 2008). Positioning Statement The HR cloud technology will be a combination of both customer and employee information system. In many occasions, organizations only have a cloud technology which strictly deals with matters associated with the employees. Others will strictly
- 7. have information related to customers, but fail to show the link between the two. For this project, both customers and employees are crucial to the success of an organization. If employees are not happy, there is a likelihood they will interfere with service delivery to the customers (Graham, 2008). With this HR cloud technology, firms will be able to see the interactions between customers and the employees. In addition to that, the management of employees will become easier as all data will be centralized within one system. Management of customers will as well be made better due to the centralization of all consumer data. The project, therefore, aims at providing an efficient system for the management of employees and customers and also provides the opportunity for the organization to have a better view of the relationship between employees and customers, who form part of major stakeholders within organizations. Products and Services The main product that will be offered is the HR Cloud software in which various firms in the consumer industry will have to purchase. Once the product has been purchased, there are different services the company will offer. For instances, constant improvement of the software is expected; firms will thus be charged with the role of downloading updates to ensure their software is working in the best manner possible. The project will also offer security services to the different firms that will acquire the HR Cloud technology. The shift to the internet and web-based activities have attracted various issues related to security. Hacking among other cyber related crimes has drastically increased hence the need for security services for such software. The company will, therefore, be constantly monitoring the systems to ensure there no chances for unwanted parties to access information stored in the databases. In case the software develops problems, the company will have a way to respond to issues from the clients and also provide repair services depending on the situation. Pricing Strategy
- 8. Pricing strategy plays an important role in the determination of the success of a product. The target market has a major influence on the kind of pricing strategy a firm adapts. If the firm, for instance, has its target market as people in the high socioeconomic class, then premium pricing would be the best pricing strategy to use. People in such economic status are associated with expensive commodities and may not be interested in cheap products despite the fact they can satisfy their needs. In this case, the product in question has firms in the consumer industry as the target market. As it is known, most organizations strive to reduce their expenses while ensuring they gain as much revenue as possible. Secondly, there are organizations already within the market who are also vendors of cloud technology. The best pricing strategy that should be embraced in this case is penetration pricing, which is significant for organizations striving to create a market share. As the name suggests, penetration pricing involves setting low prices, which acts as the main attraction to clients for the product or service offered by an organization (Hinterhuber, 2008). With penetration marketing, the product could gain a large market share within a short period, especially if the product is of high quality and effectively provides solutions to the various clients’ needs. In addition to penetration marketing, the project also focuses on price skimming, which will come once the company has gained a sizeable market share. Price skimming is a strategy where goods are charged higher due to the competitive advantage they have against other similar products in the market. The HR cloud computing technology proposed by this company will not only be software for employee management but will also have features for customer management. This is a unique feature the software will be accompanied with and, therefore, requiring the need for price skimming if the firm is to gain more revenue from the target market. The main pricing strategy will, however, be penetration marketing and once the customers have become
- 9. loyal, then, price skimming will be introduced to enhance the revenue and profits of the company. Promotion Plan Promotion plays an important role in the creation of awareness of products and services and also in the quest of an organization to expand its customer base. A successful promotional campaign requires a promotion plan that must consider certain steps. For this case, the first step would be the determination of the marketing communication opportunities. Assessment of these opportunities is mainly dependent on the target market. The results obtained from this assessment is crucial in ensuring the firm understands the best communication channels it should use. For this case, for example, the use of television media could prove to be expensive bearing the people targeted, who are mainly the Chief Executive Officers or other big influencers within organizations. Print media such as business magazines, business newspapers and direct mails could be better strategies to consider for this case. The next step should involve the determination of the objectives for the promotional campaign. The main objective for this case is awareness creation which is expected to lead to customer attraction to the product. The next step involves the determination of promotion mix the campaign will utilize, which will be followed by the development of the promotion message. A promotion budget should be determined, and finally, it would be important to assess the effectiveness of the campaign in achieving its main objective (Westwood, 2013). Target Locations Most consumer goods companies are located in the cities and, therefore, New York City will be used as one of the target locations for the product in question. The HR cloud technology will be significant for small, medium and large-sized companies. The technology will, however, have more impact in medium to large sized companies which handle lots of data. Small companies could not have much data, and this could lead to the failure for small organizations to perceive the benefits of
- 10. having the HR cloud technology. It is, however, important to help the small organizations to understand that they are in a growth process and would with time require the cloud technology for data storage, manipulation, and retrieval. References Buyya, R., & Venugopal, S. (2008). Market-oriented cloud computing: Vision, hype, and reality for delivering it services as computing utilities. In High Performance Computing and Communications, 2008. HPCC'08. 10th IEEE International Conference on (pp. 5-13). Graham, H. (2008). Marketing strategy and competitive positioning. Pearson Education India. Hinterhuber, A. (2008). Customer value-based pricing strategies: why companies resist. Journal of business strategy, 29(4), 41-50. Westwood, J. (2013). How to write a marketing plan. Kogan Page Publishers. Running Head: THE SIMPLIFIED FINANCIAL PLAN 2 The Simplified Financial Plan 7 The Simplified Financial Plan: HR CLOUD Technology Argosy University February 6, 2019 The Simplified Financial Plan The success of HR Technology cloud implementation is heavily dependent on capital requirements. The start-up requirements
- 11. will obviously be higher than the subsequent use the project. First, funds will be required in the development of the centralized HR cloud technology which is expected to be sold to the different firms in the consumer goods industry. The cost for the system development is estimated to be $150,000. The cost also includes testing of the system to ensure it is working as required. Other than the development of the software, the project would also incur costs in adverts that will lead to firms adopting the system for their daily use. The project aims at using $25,000 for adverts and finally incur an expense of $20,000 for training the different firms on how to effectively use the software. The initial trainings are expected to be free, as it will serve as a way of market penetration bearing the product will still be new to the market. In total, the project is, therefore, expected to cost a total of $195,000 with an additional $5,000 for miscellaneous hence making it a total of $200,000. Identify the sources of financing As a result of starting cost being high, various sources of finance were considered. The first source is personal savings; from a personal perspective, I intend to have a strong stake in the project, with my personal savings providing half of the entire budget needed kick off the project. Fundraising through friends and families will be another major source of finance for the project (Burns, & Dewhurst, 2016). . Bank loans will also be considered as a possible source of funding for the project. Finally, if the finances will not be enough, investors, who will have a stake in the project will act as the third major source of finance. Define a Payback Period Payback period refers to the time needed for an investment to fully recover the original outlay with regards to savings or profits. In this case, for instance, payback would be the time in which this HR Cloud technology investment would recover the $200,000 initially invested as profits or savings.
- 12. Prepare Cash Flow Projections The following cash flow projections consider the first quarter of the operation phase, and it assumes that the software has been developed with the initial marketing also conducted. Jan Feb Mar Apr Total Cash Inflow Sales 5,000 6,000 8,000 10,000 29,000 Cash Outflows Marketing
- 13. 2,000 2,000 1,000 1,000 6,000 Training 500 500 500 500 2000 Total Outflows 2500 2500 1500 1500 8000 Net Cash Flow 2500 3500 6500 8500 21000 Within the first four months, the project is expected to have a
- 14. positive net cash flow $21,000, with the sale of the HR cloud technology software expected to rise in the course of the year. Projected Balance Sheet Balance Sheet, December 31, 2019 Assets Liabilities Cash (current) 20000 Accrued Expenses (current) 50000 Software (long-term) 100000 Bank Loan (long-term 50000 Common Stock 20000 Total Assets 120,000
- 15. Total Liabilities 120,000 Above is the projected balance sheet for the year 2019, thus showing the company’s financial health by the end of the year. Income Statement Projections Income Statement, for the year end December 31, 2019 Revenues Total monthly Software Subscription 170000 Total 170000 Expenses Wage expense 15000 Marketing and adverts 30000 Rent 500 Training 20000 Software updates 25500
- 16. Total Expenses 91000 Net Income 79000 The above income statement shows the project’s expected revenue and the different expenses that will be incurred during the year. In the end, the project is expected to gain a net profit of $79000. Break-Even Analysis Break-even analysis is used in finding out the point at which a business neither makes a loss of a profit (Kaplan & Atkinson, 2015). It takes into account fixed and variable costs, which are compared with sales revenue. Ratio Analysis Various ratios could be used in the determination of financial health of the company. Net sales to working capital ratio, for instance, is used in determining how efficient the project will use the working capital. It is obtained by dividing net sales by the working capital. Working capital turnover = sales/working =250000/200000 = 1.25 Current ratio shows the ability of the business to pay its long- term and short-term obligation (Vogel, 2014). It is obtained by dividing the current assets by current liabilities.
- 17. Current ration = Current assets/current liabilities = 20000/50000 = 0.4 Possible Risks Associated with the Implementation and Future Operation There are various risks associated with the HR cloud technology with regards to its implementation and the future operation. First, being a software of its own kind in the industry, there is likelihood that it could be termed as ambiguous in terms of its usage. Ambiguity could not, however, be of major significance as it only takes a matter of time before the users fully understand how to use the technology. Secondly, there is the threat of quick evolving technology (Sanders & Kelly, 2008). There is a possibility of the technology becoming obsolete with time as a result of new inventions, which could make this technology outdated. This risk is of outmost significance as it could to the fall of the project. If the technology does not focus on new updates and improvements, it could become of no major help to the users. The project involves software development which could be affected by viruses, hence affecting its usage. This is a significant issue as it could play a role in chasing away potential clients for the product. The issue must thus be solved to ensure it does not become a hindrance to marketing and customer loyalty. References Burns, P., & Dewhurst, J. (Eds.). (2016). Small business and entrepreneurship. Macmillan International Higher Education. Kaplan, R. S., & Atkinson, A. A. (2015). Advanced management accounting. PHI Learning. Sanders, R., & Kelly, D. (2008). Dealing with risk in scientific software development. IEEE software, 25(4). Vogel, H. L. (2014). Entertainment industry economics: A guide
- 18. for financial analysis. Cambridge University Press. Running head: WEEK 3 ASSIGNMENT 1 1 WEEK 3 ASSIGMENT 1 2 Week 3 Assignment 1 Strayer University BUS499 Business Administration Capstone Dr. Grizzell 01/20/2019 April Monk Introduction The Nike company is a giant multinational company whose mission is to produce and market footwear together with other accessories. Additionally, the company offers services and sells other equipment. the company is affected by both external and internal factors. Given that the company is a leading supplier in athletic apparel and footwear, it records huge revenues. The company was listed in 2018 as number 89 in the Fortune 500 category of giant companies in the United States. The list is based on how much revenue a corporation makes. Nike is the most expensive sportswear company with a net worth of approximately $29.6 billion as at 2018.the corporation supplies sportswear worldwide. additionally, the company has embraced technology which ensures that it maintains its sales. The company has more than 74,400 employees worldwide. Although the company makes huge profits, application of industrial-based model and resource-based model can increase returns to above average. The company’s vision and mission contribute to its success (Nike, 2010). Globalization
- 19. Change in global trends has hugely affected the Nike Corporation. The company has opened a total of 45 offices all over the world excluding offices located in the United States. The company has spread it tentacles to other continents becoming a member of almost all sport events. Nike products are distributed through the contracted shops spread all over the world. In total, the company has 700 shops outside United States. Globalization has expanded the company’s net worth by increasing sales. This ensures that the company is able to compete with other similar sportswear firms. The company is able to reach its customers all over the world due to its marketing designs. Nike has embraced globalization as a marketing strategy and this ensures that its products reach all potential customers. additionally, the company has entered into marketing agreements with global marketing companies such as Amazon and Sweatshops. Globalization has also affected the way this company undertakes its advertisement campaign. The company has now embraced global trends of advertisement such as celebrities and international athletic teams. The company has also entered into official contracts with major leagues such as the National Basketball Association (NBA) to become their official uniform supplier. Technology Nike has incorporated new technology in its production process. The company applies new and innovative technology in manufacturing, marketing and customer services. The company was among the first global corporations to adopt marketing using the internet, managing its operations and communications via email technology and applying advanced communication technologies such as Broadcast. Application of such technologies in marketing has been instrumental in increasing sales. Through internet marketing the company is able to advertise its brand to potential customers. This advertising model has also increased the number of purchases since willing buyers can shop online. The company’s products can be located
- 20. and purchased online. The company’s embrace of online shopping is an integral factor in the evident growth in Nike brand and increased customer satisfaction. The manufacturing process at Nike adopts new technology. Most of the merchandize are in line with global trends such as incorporation of footwear with Bluetooth. The company also produces products which can be incorporated with a chip that efficiently controls numerous functions. The products are incorporated with new technology such that the new features allow users to perform less functions. The company simply makes it easier to enjoy sports while ensuring that the products control user functionality. Embracing such technology has led to more individuals preferring Nike products. This has eventually led to growth in customer base thereby increasing Nike’s revenue. Industrial-Based Model The company strategic actions are influenced by external factors. These are the factors outside the company which directly affect the company’s operations. Nike company is highly influenced by its customers. This is the biggest external factor affecting this company. The company should come up with new methods of improving customer satisfaction while ensuring that it attracts more customers. This can be achieved through an intensive social media campaign advertising its brand and attracting potential customers. The company also operates in different countries thus it is highly affected by different governmental policies. Nike should understand government policies in different countries to ensure easy ways of doing business. The company can also fund some government projects to improve their marketing strategy in those specific countries. Nike faces huge competition from similar companies such as Adidas. The company has embraced new technology to improve customer satisfaction. The decision-makers in the firms also ensure that all their designs are such that they improve the corporation’s social and financial position.
- 21. Resource-Based Model The resource-based model is purposed to look into how a company can apply its resources and other internal factors so as to increase returns to above average (Scott, 2016). The model is founded on the idea that the company’s strategies are based on its resources and unique features. additionally, the model assumes that each company has in the past been involved in developing unique capabilities and resources which improve its ability to compete with other similar corporations. Nike company should employ individuals with unique skills and knowledge which embrace new innovations to increase competitiveness. The company has numerous resources in terms of finances, productions lines, management and human resource. Nike should use this specialized resources within its internal environment to increase production. The company should also contract more firms in its manufacturing and marketing strategy. Vision Nike’s vision is an important ingredient to its success. The vision is an exact representation of the fact that the company is a giant athletic sportswear company. Nike’s vision statement is “to remain the most authentic, connected, and distinctive brand (Nike, 2010).” Nike works around this vision with its major aim being to continuously grow its brand. The company’s vision has particular words which shift focus towards brand development. This statement poses the idea that Nike’s brand is already authentic and relevant to the customer needs. The company also poses to continue producing better products. This has catapulted Nike into increasing sales since customers are satisfied with its products. The vision statement is central to Nike’s marketing strategy. Mission The mission statement is important in ensuring that a company competes well and increases its global reach. Nike’s mission
- 22. statement is, “to bring inspiration and innovation to every athlete in the world (Nike, 2010).” the company attracts individuals into buying its products by positing that every human being is an athlete. The company’s mission is aimed at ensuring that individuals are interested in athletics by inspiring and creative innovative products. This mission statement is pivotal increasing growth and competition. Nike’s mission is designed to target every individual as a potential customer Stakeholders Company stakeholders determine the level of success. These individuals are instrumental in supporting the company’s new and existing policies. Nike’s stakeholders include investors, management and employees. These individuals act in ways which favor the growth and development of the company’s brand (Abiodun, 2010). The stakeholders are also integral in managing Nik’s resources, marketing finished products and advertising their Barns. The success in the production process and marketing is directly proportional to the actions of stakeholders.References Abiodun, A. (2010). Interface between corporate vision,mission and production and operations management. Global Journal of Management and Business, 10(2), 18-22. Nike. (2010, May 23). Nice Inc'.s Website. Retrieved from NIKE: http://www.nike.org Scott, J. (2016). Empowering your teams will help you successfully implement your corporate vision. Strategic Finance, 12-13.