Value Chain Analysis of Nike 

Nike is a sportswear brand; Phil Knight and Bill Bowerman established the company in 1964. The main objective of running is to amplify the value of doing over the running cost. Today, we’ll discuss the value chain analysis of Netflix; and the primary and supporting activities involved in the process of value chain analysis. They’re inbound and outbound logistics, operations, marketing, and services; infrastructure, HRM, technological development, and procurement of the sportswear brand as an application of value chain analysis.

Products and services of sportswear brand Nike

  • Accessories
  • Sporting goods
  • Apparel
  • Athletics
  • Shoes

Key statistical figures and facts about Nike are as follows;

  • Annual revenue – 51.22 billion USD (2023)
  • Net income – 5.07 billion USD (2023)
  • Employees – 83700
  • Asset net worth – 37.53 billion USD (2023)

Subsidiaries brands of Nike are as follows;

  • Canstar Sports
  • Converse
  • Cole Haan
  • Air Max
  • Nike Dunk
  • Skateboarding Nike
  • Foamposite
  • Nike CR7
  • Nike Blazer
  • Air Jordan
  • Nike Plus

Top competitors of Nike

  • New Balance
  • Under Armour
  • Anta
  • Lululemon
  • VF Corporation
  • Puma
  • Adidas
  • ASICS

The value chain analysis of Nike would analyze the primary and supporting activities in the process of value chain analysis. They’re inbound and outbound logistics, operations, marketing, and services; infrastructure, HRM, technology, and procurement. Here’s Coca-Cola value chain analysis company example as follows;

Value Chain Analysis of Nike

Let’s discuss the primary and supporting activities involved in the process of value chain analysis of Nike. It is an application of value chain analysis based on Porter’s model; some of the key elements and components of value chain analysis are as follows;

Primary Activities of Nike 

Some of the five main primary activities in the value chain analysis of Nike are as follows;

Inbound Logistics of Nike

I-Quality Supplies

Sustainable and quality supplies play a key role in the growth and success of Nike and you will see them in the inbound logistical processes of the company. Nike has a network of 567 factories and industries in more than 42 countries across the world. The inbound supply chain and logistics comprise of following activities and processes;

  • Supplier relationship
  • Transportations
  • Internal delivery
  • Quality analysis
  • Delivering updated products and services

II-Sustainable Suppliers

The focus of Nike’s inbound logistical activities is decreasing pollution and emphasizing environmental safety. The sportswear brand deals with those suppliers that follow the same strategic approach of sustainability, quality, and environment. However, various independent contractors manufacture most of the products and goods of Nike; the finished goods have to follow strict quality regulations.

Outbound Logistics of Nike

I-Distribution Network

Distributing the finished sportswear goods and accessories to the end customers is the main outbound logistical activity. Nike has established a very large network of distribution and manufacturing factories, and they deliver the products to the following channels after manufacturing;

  • Regional offices
  • Distribution centers
  • Retail stores

The objective of regional offices and distribution centers is to ensure the availability of products to the customers soon after their release. The biggest distribution center is in Tennessee; the European logistical center is in Belgium for the distribution of finished goods of Nike.

Operations of Nike

I-Production Operations

Production and manufacturing is the main operational area in the Nike value chain analysis and they help the sportswear and athletic to add unique value to its products and gain a competitive edge. Some of the main operational activities of the company are as follows;

  • Production and manufacturing
  • Assembling
  • Packing and packaging
  • Product testing
  • Equipment repair and maintenance

II-Manufacturing & Services

Along with the production and manufacturing of sportswear products and goods; service is also the main element of operations. The focus of service operations is on the value chain, efficiency, and productivity; so that it decreases the cost and improves the overall profitability of the company.

Marketing & Sales

I-Quality Attracts Approach

The unique brand identity, distinct features, and high quality of Nike’s products attract the attention of many customers. Some of the main marketing and promotional activities of Nike are as follows;

  • Salesforce
  • Promotional campaigns
  • Advertisement
  • Pricing
  • Channel selection

II-Integrated Marketing

Nike employs integrated marketing activities and implements them at different channels like social media platforms, print media, physical marketing, and television. The sportswear brand has expertise in marketing and promotional campaigns and it helps the company in the following ways;

  • Celebrity endorsement for Nike’s products
  • Connecting and engaging with customers
  • Sensitive storytelling ads

Service

I-Customer Service

In order to retain customers and offer a better experience, Nike offers pre- and post-sale customer service. Nike has established a very large loyal database of customers, and it helps the company to run various rewards programs to retain the attention of customers.

For instance, Nike had a network of more than 100 million loyal customers by 2017. According to a study, existing customers spend more time on the company’s websites than the new ones.

Supporting Activities of Nike 

Some of the four main supporting activities in the Nike value chain analysis are as follows;

Infrastructure of Nike

The infrastructure of Nike comprises broader activities and processes like strategic management, planning, accounting, financing, managing legal matters, and quality management. The overall activities involved in the company’s infrastructure help the company to improve the performance of the system, decreasing the cost, and increasing efficiency.

Human Resource Management

Nike has a very large database of employees comprising more than 83000 employees across the world. The function of the HR department of the sportswear brand is to ensure a diverse culture, guiding employees to utilize their talent at the optimum level, and a healthy workplace environment. However, the HRD offers reward programs and incentives to retain its employees based on their performance.

Technological Development

Technological development is highly significant to the company for improving the quality of its sportswear goods and items. It helps the company to achieve and maintain the market leadership position by employing the following;

  • Research and development
  • Latest technology
  • Upgrading equipment and machinery for product development
  • Waste control management

Procurement

The procurement process of Nike comprises buying raw supplies and materials, equipment, machinery, and packaging materials to manufacture sportswear products. The focus of the company is to procure the best quality material at the optimum level by following environmental safety and sustainability standards.

Conclusion: Nike Value Chain Analysis Example Company | Application of Value Chain Analysis Process

After an in-depth study of the value chain analysis of Nike; we have realized that Nike is the world’s leading sportswear brand and it efficiently adds value. If you are learning about Nike value chain analysis company example; then you should keep in mind the abovementioned primary and supporting activities involved in the process of value chain analysis. They’re inbound and outbound logistics, operations, marketing, and services; infrastructure, procurement, HRM, and technology as an application of value chain analysis.

References 

  1. https://swotandpestleanalysis.com/swot-analysis-of-nike/
  2. https://en.wikipedia.org/wiki/Nike,_Inc
  3. https://strategicanalysishub.com/bcg-matrix-of-nike/
  4. https://fdra.org/latest-news/athletic-footwear-market-dominated-by-asia-pacific-with-42-share/
  5. https://runrepeat.com/nike-shoes-statistics
  6. https://www.statista.com/topics/1243/nike/#topicOverview
  7. https://www.statista.com/statistics/216821/forecast-for-nikes-global-market-share-in-athletic-footwear-until-2017/
  8. https://www.investing.com/academy/statistics/nike-facts/
  9. https://panjiva.com/Pakistani-Manufacturers-Of/nike
  10. https://csimarket.com/stocks/suppliers_glance.php?code=NKE
  11. https://about.nike.com/en/newsroom/resources/supplier-relationships
  12. https://fashinza.com/brands-and-retail/news/who-manufactures-nikes/
  13. https://www.alibaba.com/nike-suppliers.html