Its headquarter is located in washington country oregon united states. The value chain also known as porters value chain analysis is a business management concept that was developed by michael porter. Added value measures what each player, in each role, brings to the table. Nike is a celebrity brand of sports shoes, apparel and equipment. The term value chain reflects the fact that, as each step of this path is completed, the product becomes more valuable than it was at the previous step table 4.
Value chain analysis of nike value chain of nike is the best known example of business management concept. Evaluate nike using the competitive forces and value chain models. Indeed, companies such as nike and the gap do very little of their own. You probably dont need to include every word of the title and authors name.
A firm that generates higher roic % than it costs the company to raise the capital needed for that investment is earning excess returns. A conceptual framework 75 structural and dynamic components in which the structure of the value chain influences the dynamics of firm behavior and this dynamic persuade how well the value chain performs. Around 450 million clothing items are produced by zara on yearly basis. Nov 24, 2019 ikea valuechain analysis is an analytical framework that assists in identifying business activities that can create value and competitive advantage to the global furniture retailer. Any changes in structure impacts supply chain and proper analysis should be done before making. By partnering with the greatest roster of athletes on the planet, we can transform their insights into products that empower every athlete, everywhere. Nike is the leading sports clothing and footwear company in the world and it provides various varieties of designs and product development. Aug 17, 2019 the book value per share is a market value ratio that weighs stockholders equity against shares outstanding. May 26, 2019 the primary activities within michael porters value chain are used to provide a company with a competitive advantage in any one of the five activities so it has an advantage in the industry in. The strategic analysis that i choose for nike inc which are swot analysis and value chain. Each step in the manufacture of a product or the delivery of a service can be thought of as a link in a chain that adds value to the product or service. Zara case study creating value chain with supply chain. A value chain is a chain of activities for activities for a firm operating in a specific industry. Porter has dedicated much of his career to studying competitive advantage.
Generally, amazon does not have longterm contracts or arrangements with its vendors to guarantee the availability of merchandise, particular payment terms, or the extension of credit limits. By the value chain analysis method, it is identified that the main value chain of bus company starts with petroleum and iron ore. It is easily to track the athletes progress and measures one athlete activities against others than other nike competitors. Book value is the total value of a business assets found on its balance sheet, and represents the value of all assets if liquidated. Evaluate nike using the competitive forces and value chain. Book value per share is a widely used stock evaluation measure. Nike has a distinguishment then other its competitors.
Dec 24, 2016 adidas company value chain analysis, we can clearly see that primary activities are more important that supportive activities. By leveraging a company s internal needs and strategically playing with the value chain, new core businesses and distribution channels can be created. This month the sportswear manufacturer published its first countryspecific supply chain report, revealing some problems. It is more appropriate to value the equity based on current market value. A value chain charts the path by which products and services are created and eventually sold to customers porter, 1985. Nike s supply chain sources most of its raw materials in the. Competitive forces and value chain models for nike. Nike inc study of value chain functions and how they contribute to the success of nike. If the market value per share is lower than the book value per share, then the stock price may be undervalued. Its goal is to recognize, which activities are the most valuable i.
Divya mishra school of management purdue university calumet submitted to. For this reason it is difficult for competitors excel nike. The aim of this strategy is to reduce costs throughout the value chain and reaching. It sells products for basketball, soccer, running training for girls and boys, and help in other sports. Nke, including valuation measures, fiscal year financial statistics, trading record, share statistics and more. Coca cola company report contains more detailed discussion of coca cola valuechain analysis covering analysis of support activities. Value chain analysisvalue chain analysis is a systematic way of examining all the value ystematic organizations functional. In other words, the value of all shares divided by the number of shares issued. The fact that nike is working in numerous regions of the world requires for a critical analysis of the value chain. The book value of equity represents the equity of shareholders from a balance sheet perspective less the preferred stock. Strengths firstly, nike inc was leader of sports equipment industry, which also top suppliers of sports equipment around the world.
Nikes value chain and competitive forces in 1984, nike owned just 16% of the athleticshoe market, and for much of the 1980s it was running neckandneck with reebok wilson 1. Coca cola value chain analysis researchmethodology. Strategic analysis nike was swot analysis and value chain. The purpose of the company was to make highperformance athletic shoes for the u. Now, with somewhere between 4347% of that market, nike is the undisputed leader. Nike just do it campaigns and their commercials are well known throughout the. Value chain for nike the decision that would be made for the inbound logistics may include what level of inventory to hold. Because of nikes marketing research, the company has decided to revamp its apparel division to be more fashion savvy. Nike just do it campaigns and their commercials are well known throughout the sports community. Are there any ways in which you could combine forces in order to add value for suppliers or to. Book value reveals how much the company is worth if it were liquidated and all assets were sold for cash.
To find book value, add up everything the company owns in terms of assets, then subtract everything the company owes, such as debts and other liabilities. Identify and provide an example of the use of lateral collaboration and vertical collaboration within the organization, and prepare an. Value chains place a great amount of focus on things such as product testing. Nike has admitted its chinese supply chain is suffering from a lack of transparency, problems with wages and the use of underage workers. The book value is essentially the tangible accounting value of a firm compared to the market value that is shown. I never hesitate to recommend bicycle blue book when someone asks me a good choice to buy a bike. Capital is an approximation of the economic book value of all cash invested in goingconcern business activities. A comparative analysis of strategies and business models of nike. Delivery precision is important for a multiproduct and multijurisdictional company like nike, inc. The easiest way to know how much your copy of a book is worth on the open market is to check on how much similar copies are currently being offered for.
Pdf using valuechain analysis to discover customers. Under swot analysis categories into four part that are strengths, weaknesses, opportunities, and threats. Using valuechain analysis to discover customers strategic needs. H ere is a fivestep method for discovering a customers particular strategic needs based on a unique application of value chain analysis. Nke book value per share explanation usually a company s book value and tangible book per share may not reflect its true value. Nike manufacturing and supply chain strategies market. In this article well examine examples of how you can perform a firm level value chain analysis. Value chain analysis is a strategy tool used to analyze internal firm activities. Ps ratio an rationale for the ps ratio is that sales, as the top line in an income statement, are generally less subject to distortion or manipulation than other fundamentals such as eps or book value. State the primary reasons for nike s existence from an analysis of the mission, vision, values, and goals. This may underestimate the true economic values of the assets. Nike, inc was founded in 1964 in the state of oregon, us.
The value chain was first introduced by michael porter during the 1980s in his bestselling book, competitive advantage. Conclusion after discounting cash flows provided in exhibit 2 with the calculated wacc of 9. Adidas company value chain analysis, we can clearly see that primary activities are more important that supportive activities. Porters value chain analysis by michael porter toolshero.
Nike is the largest seller of athletic footwear and apparel in the world. Price to book value is a valuation ratio that is measured by stock price book value per share. Fill out this form with enough information to get a list of comparable copies. Lowcost provider value chain analysis focuses on costs and how a company can reduce those costs. At nike, innovation is a mindsetone that challenges us to dream bigger and get better, everyday. Nike company has quite an edge over its competitors. Nike aims to be a brand with purpose that moves the world forward. Nike inc study of value chain functions and how they. It provides sport products for children in more than one field in sport. We bring together diverse perspectives scientists and shoe designers, coders and quarterbacksto share knowledge of the body in motion. Apr 02, 2020 figure 1 amazon value chain analysis amazon primary activities. Value chain analysis is mentioned extensively in the first half of the book competitive advantage in 1985 by michael porter.
The value chain gives companies a competitive advantage in the industry, while. Instead, nike outsources its manufacturing to third parties. In this paper a value chain model for steel manufacturing sector is developed considering five primary. Among those primary activities, we could still point out three parts of the value chain that are directly responsible for competitive advantages that adidas have. The purpose of this value chain analysis was to explore the dynamics of in terms of looking at the intricate foundation value chain the company has created to serve its millions of satisfied customers. Swot analysis is similar as pest analysis to understanding the corporation but swot analysis is to understanding between own corporation and competitors, to getting the information which part nike should improve to become better than other competitors. Diversification and vertically integrated models enable the company to design, manufacture, distribute and retails the stores within only two weeks from the days it appears on catwalks. Specialization value chain analysis focuses on the activities that create a unique product or differentiation in service. Value chain also goes beyond the firmspecific analysis of much of. Book value per share compares the amount of stockholders equity to the number of shares outstanding. Nike s competitive forces and value chain models bartleby. Nike s value chain and competitive forces in 1984, nike owned just 16% of the athleticshoe market, and for much of the 1980s it was running neckandneck with reebok wilson 1. Pdf using valuechain analysis to discover customers strategic.
Also, nike alway tries to develop its product which gives nike a strong reputation. Indepth view of key statistics and finances for nike, inc. By dividing book value by the total number of shares outstanding, you can find book value. Value chain analysis for assessing competitive advantage. Enterprise value is total company value the market value of common equity, debt, and preferred equity minus the value of cash and shortterm investments. Thats about an eighth of the company s stock price, showing the premium that investors put on the company. Supply chain strategic management for nike marketing essay. Analyzing the events that add value and those that are not important, because the company can achieve high returns, if the value created is more than the costs incurred for the specified value. An analysis of the mission, vision, values, and goals. Nike manufacturing and supply chain strategies market realist. Nike inc faced margin deterioraten, primarily through cost pressure. In his book competitive advantage 1985, michael porter explains value chain analysis. Value chain the value chain also chain as value chain analysis is a concept from business management that was first described and populated by michael porter in 1985. Value chain analysis smi strategic management insight.
Norcio 2192007 when bill bowerman, a former trackandfield coach at university of oregon and cofounder of nike inc, once said if you have a body, you are an athlete, his words marked the foundation for a future business venture. Nke wacc % explanation because it costs money to raise capital. Nikes value chain and competitive forces in 1984, nike owned just 16% of the athleticshoe market, and for much 1,194 words 5 pages nike inc study of value chain functions and how they contribute to the success of nike. Apr 25, 20 value chain analysis is a strategy tool used to analyze internal firm activities. Thus, this measure is a possible indicator of the value of a company s stock. Yet nike owns no factories for manufacturing its footwear and apparel. Value chain analysis value chain analysis is a systematic way of examining all the value ystematic organizations functional activities and how well. Read nikes mission statement and find information about nike. To achieve that, we need all parts of our value chain to understand and deliver on our goalsfrom our leaders to product designers, to the employees in our stores, and workers in contracted factories who make our products. Value chain analysis is a useful tool for working out how you can create the greatest possible value for your customers. The vrio framework or a value chain analysis could help with this. Mgmt65000 strategic management spring 2011 test 1 by.
Nikes management analyzes its internal environment and makes decisions based on that analysis. Ycharts book value of equity is the equivalent of total assets less total liabilities and preferred equity. Competitive advantage for a company means not just matching or surpassing. The value chain as a strategicanalysis tool emerged when nike set a precedent in the athleticfootwear industry by outsourcing the manufacturing and assembly of athletic shoes.
Porter suggested that activities within an organisation add value to the service and products that the organisation produces, and all these activities should be run at optimum level if the organisation is to gain any real competitive. The report also comprises application of swot, pestel and porters five forces analyses on coca cola company, along with analysis of coca colas marketing strategy and company s approach towards corporate. Find the latest book value per share for nike, inc. Value chain structure includes the five elements like end market, business and enabling environment, vertical linkages. This is the fourth bike i have bought from your company and every transaction has been excellent and every bike has been as good or better than described.
Nike sues adidas over soccer player zhengs contract. Because, as our cofounder said, if you have a body, youre an athlete. Another important decision may be transportation planning. The assets may be carried on the balance sheets at the original cost minus depreciation.
Conditions in the sports equipment industry and available resources term paper business economics operations research publish your bachelors or masters thesis, dissertation, term paper or essay. The value chain as a strategicanalysis tool emerged when nike set a. Oct 17, 2019 the company s footwear and apparel make up about 96% of nikes branded revenues. The information and secondary data of nike and adidas were collected from published books, case. Depreciation is the reduction of an items value over time. The company s footwear and apparel make up about 96% of nike s branded revenues. Book value of an asset refers to the value of an asset when depreciation is accounted for. The value chain model developed by porter is extended to a steel manufacturing sector due to expansions of steel plants has become a continual process for their growth and survival. What are the primary activities of michael porters value chain. Pest or pestel analysis is a simple and effective tool used in situation analysis to identify the key external macro environment level forces that might affect an organization. These forces can create both opportunities and threats for an organization. While products like fuelband, a wearable technology that monitors physical activity, may not have been as successful as hoped, nike still has its eye on the next big thing. In addition, think about your own company s sources of value competitive advantage or usp. One of his bestknown concepts is the value chain, which is used to deliver a product or service to the market and has three key objectives.
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