with market differences. As one of the leading players in the athletic footwear, apparel and
equipment industry, Nike Inc. serves as an example of how regional variations must be included
in business strategies.
Nike has a geographic divisional organizational structure. This structure is based on the
company’s needs in its global organization and regional markets. The following characteristics
are notable in Nike’s organizational structure:
Nike Incorporation
10
1.
Global corporate leadership
2.
Semi-autonomous geographic divisions
3.
Global divisions for Converse and brand licensing
Entrance and Exit Strategies-
Entrance Strategie
There are seven entrance strategies in global business and they are:
1)
Export/Import Business is a relatively low-risk operation given the fact that
capital is not tied up and it is relatively easy to enter or exit out of this business.
2)
Licensing the practice in which a company or individual provides the foreign
partner with the technology (patented technology, copyright, process,
trademark, etc.) to manufacture and sell products
3)
Franchising the practice in which the parent firm is obligated to provide
specialized equipment and/or service
4)
Strategic Alliances is an agreement between two or more firms that do not
involve the creation of a separate entity with joint ownership and in which the
firms stand to gain revenues and maximize profits through cooperation for a
given period of time
5)
Joint Ventures a business that is jointly owned and operated by two or more
firms
6)
Foreign Acquisitions
7)
Wholly-Owned Foreign Subsidiaries new facilities built and operated overseas
that require large investment of capital because these new establishments are
tailored to the exact needs of the home country firm
(Gasper 2014)
For the Nike Corporation, they assume these entrance strategies by manufacturing and
selling a product that has higher quality at a lower cost.
Nike shoes stay in demand and generate
billions of dollars each year by targeting both the athletic audience and the everyday citizen that
appreciates a comfortable shoe.
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In the middle 1990s Nike began to include business with India and arranged an exclusive
license to maintain a percentage of the revenue where by this time the revenue reach 2 billion.
(Nike Inc. 2018)
Nike has acquired various other footwear brands such as Converse, Chuck Taylor, Cole
Haan, Hurley and Jordan brands.
(Nike Inc. 2018)
Exit Strategies
An exit strategy should be in place that enables the home company to leave the host
country and dispose of the foreign venture at a reasonable price without incurring significant loss
(Gasper, 2014).
Plenty of companies would merge with Nike because it is a famous brand
image, therefore If Nike goes bankrupt then there is the alternative for the brand to relocate to
other countries such as Brazil, Russia, India and China (Lazzara, 2014).
