Nike is a well-established sportswear company, headquartered in Oregon, US. Established in 1964, the company has now become one of leading sports shoes, apparel and equipment brand in the world. Over the decades, the company has expanded its business through diversification into various international markets and by extending its brand portfolio. At present, the brand of Nike is valued at USD 32 billion, with the largest market share in the global apparel sector.
Nike operates in nearly 170 countries with more than 75,000 employees, selling its products under a dozen of its own brands such as Air Jordan, Nike+, Nike Pro, Nike Golf, Air Force 1, among several others. The company also owns subsidiaries like Hurley International, Brand Jordan and Converse. Nike can be considered as a truly global brand which has been able to climb to the top position while facing steep competition from other market players like Adidas, Under Armour and Puma. The success of the company can be largely attributed to it product and marketing strategy, but it can be also attributed to its organizational structure. In this article, we have showcased the organization structure of Nike, which can be used as a case study for your college essay. Moreover, it can also help you to understand how a multi-nationally diverse company like Nike is structured.
The entire global business of Nike is segregated into key geographic regions such as North America, EMEA (Europe, Middle East and Africa), Greater China, and APLA (Asia Pacific and Latin America). The operations of the company are also segregated in terms of distribution channel (Wholesale and Nike Direct) and product category (Footwear, Apparel and Equipment).
Nike follows a matrix organizational structure which is a combination of horizontal and vertical structures. In a matrix structure, there are multiple reporting lines and responsibilities for the employee. Even though, this structure may seem complicated, but Nike has been able to leverage it for its own benefit. Employees often report to multiple supervisors, which can often get cumbersome in this type of organizational structures but for Nike this has worked in favor of the company. The company follows a highly standardized operational process, which helps the leaders to make quick decision and foster seamless communication. Even though there are multiple reporting authorities, the employees are well-aware of what is expected from them from their supervisors.
The hierarchical structure of Nike can be broken down into three key segments, which are Global Headquarters, Regional Headquarters and Subsidiaries.This hierarchical structure allows the company to maintain a globalized approach to managing its business while ensuring regional control. Learning about the hierarchical structure of Nike can be quite helpful for writing papers on the company and it will also give you a clear idea on how the company manages its own operations.Let us look at each of the hierarchical levels of the company.
The global headquarters is the top of the hierarchical ladder, where all the major decisions about the company’s business operations are taken. It also oversees all regional operations, expect the EMEA, which is managed by the regional headquarter in Europe. The centralized decision-making structure of Nike helps the firm to streamline its information processing and focus on areas which matter the most. It allows the company to prioritize its goals, as having the right structure leads to the right flow of information. The global headquarter allows the company to take a standardized approach to run its business across the entire global operation. It also enables the firm to establish an organizational culture which is universally accepted in the firm. This is only possible with a centralized structure. It allows the company to develop a brand image which is universally identical in all target markets, thereby creating a globalized brand.
The global headquarter also holds the responsibility of market research, and product development, especially for the footwear segment. The market demand is highly dynamic, which compels the firm to be constantly on the lookout for new design trends, which can be turned to a new product. It should be noted that the apparel design takes place locally, but the footwear design takes place at the global headquarters in Oregon.
The regional headquarters situated in the Netherlands, oversees the business operations in the EMEA region, which comprises of 27 nations. The geographic regions in the EMEA are segregated into subregions for better management and control.
The diagram shown above highlights the structure of Nike in terms of geographic distribution in different regions in the EMEA. The introduction of an additional layer in the hierarchy has helped the firm to foster better transparency, seamless flow of information and reduction in complexity. By creating sub-regions can help in streamlining the operations of the company. Moreover, it also reduces the reporting lines, which leads to better coordination and enhances decision making. It also makes it efficient for the company to filter the local demand trends based on the sub-regions. Sub-dividing the markets also provide better support for each individual markets. Each sub-region is overseen by a sub-regional manager. The local requirements of the individual markets in a sub-region is reported by the sub-regional manager to the EMEA regional headquarter in the Netherland. The regional headquarters are responsible for designing some of the marketing campaigns, which helps in localization of the communicational message sent to the target audience. The company realizes that even though it operates with a global brand image, some of the marketing communications need to be adjusted for cultural differences. The localization of the marketing activities has helped Nike to become more effective in attracting the customers.
The matrix organizational structure is also followed at the sub-regional level. The employees have two reporting authorities, one from the functional department and the other from the product category.
The diagram shown above clearly highlights the multiple reporting lines in the matrix organizational structure of Nike.
Nike own several wholly-owned subsidiary brands such as Cole Haan, Converse, Hurley, Umbro, etc. These subsidiaries operate with certain degree of autonomy, which clearly mentioned boundaries. These subsidiaries take most of the decisions themselves, with authorization from the headquarters. However, in terms of localization of the marketing strategies, the regional or sub-regional intervention is present. The independence of decision making and operational autonomy allows these subsidiaries to function free from the strict control of the global and regional headquarters. It is important to understand that each of these subsidiary brands appeal and cater to different groups of customers. Therefore, each of them will have to follow their own product development and marketing communication strategies.
By this time, you should have got a clear idea of how the entire business operation is spread out in the organizational structure of Nike. This can help you to prepare your own paper on Nike without any essay writer help.
The diagram above showcases the key individuals in operating in the global headquarters and are responsible for taking all the centralized decisions of the company. Needless to say, that the entire organizational structure of Nike encompassing every reporting authority in every market location, is extremely complicated. However, it should be noted that the what makes it beneficial for the company is the streamlined approach to running the business operations. The combination of standardization and localization has enabled the company to adopt marketing strategies which can seamlessly appeal to the local customers, while retaining the global Nike culture, which has helped the firm to bring itself closer to its customers.
It is important for you to understand that different companies have different organizational structure, which is responsible for respective growth and sustenance. The complex matrix organizational structure of Nike has worked out as expected for the company, but it does not necessarily mean that it would be good fit for another company. The success of an organizational structure largely depends on the leadership styles and the organizational culture.
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