Identify an Organization and Examine a Recent Problem-Solving Approach
Nike
Nike is an American multinational corporation that designs, markets and distributes athletic footwear, apparel, equipment, and accessories for men, women, and children worldwide. Nike was founded in 1964 by William Jay Bowerman and Phillip Knight. Originally known as Blue Ribbon Sports, Nike began as a distributor for the Japanese shoemaker Onitsuka Tiger (now known as Asics) (O’Reilly, L. (2014)). Nike Inc. was incorporated in 1971. Nike sells its products under Nike, Jordan, Cole Haan, and Converse. The company enters into license agreements that allow unaffiliated parties to manufacture and sell apparel, digital devices, applications, and other sports equipment under NIKE-owned trademarks. It sells its products through NIKE-owned retail stores, digital platforms, independent distributors, licensees, and sales representatives to footwear stores, sporting goods stores, athletic specialty stores, department stores, skate, tennis, and golf shops, and other retail accounts. Nike sold hockey equipment and related accessories under the Bauer and Nike brand names, in addition to performance equipment (sports balls, timepieces, eyewear, skates, and other equipment designed for sports activities). Hurley International LLC, a California-based designer and distributor of sports apparel for surfing, skateboarding, and snowboarding, as well as youth lifestyle apparel, was acquired by Nike in April 2002 (Essays, UK. (November 2018)). Nike also sponsors several high-profile athletes and sports teams worldwide, using its well-known trademarks “Just Do It” and the Swoosh logo.
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Problem Identification
Nike is widely regarded as the most valuable sports brand in the world. Nike is the most frequently counterfeited brand globally due to its high visibility. “This affects the brand’s overall image, and it might dilute the brand equity. Furthermore, counterfeit Nike merchandise in the market reduces revenue generation for the company, resulting in lower profits. Not only that, but such massive losses have a ripple effect on the economy as a whole. The total loss suffered by countries worldwide is estimated at $600 billion. “The rise of counterfeiting and its effects on Nike” (The Rise of Counterfeiting and Its Effects on Nike. (2017)).
Observation
Nike recognizes that their counterfeited goods have a sizable market. Because Nike is organized in a matrix-like structure, I observed that their solution to their problem appears multifaceted (Sobiya (n.d.)). This structure means a Nike employee will report to several departments rather than one dedicated area. Nike used a four-stage approach to solving their counterfeiting problem, with a focus on the second Stage (generating potential solutions) because the problem had multiple root causes (Mueller, Jennifer, Melwani, Shimul, et al. (2018)). During the first Stage of information gathering, it was discovered that most counterfeiting was done through third-party vendors and online. It was also discovered that most of Nike’s counterfeited merchandise was shipped from China. Nike’s strategy focused on reducing the number of items produced and shipped within these domains. Nike implemented a plan (3rd Stage) in which they actively engaged with law enforcement agencies and customs on a global level to reduce the likelihood of counterfeit products reaching the company’s consumers (The Rise of Counterfeiting and Its Effects on Nike. (2017)). “To combat the selling of goods through third-party vendors, Nike partnered with Amazon to cut down on third-party sellers who offer fake products by directly selling Nike products through Amazon’s Brand Registry program. Nike will not only be able to sell its products directly on Amazon, but it will also be able to reach out to vendors who sell Nike products and convince Amazon that its products are genuine and not counterfeit. This comes after Amazon acknowledged that “counterfeit products frequently erode trust in the marketplace” (The Rise of Counterfeiting and Its Effects on Nike. (2017)). Nike’s latest anti-counterfeiting strategy involves embedding QR codes on its merchandise to track inventory. This technology will provide Nike with a better view of inventory as it enters the hands of retail customers and will aid in the prevention of excess inventory (counterfeit goods) reaching sellers. This will also allow Nike to discover what it is selling and provide consumers with the products they want when they want them (Cosgrove, E. (2019)). Whether the implemented solutions met the proposed goal (Evaluation- 4th Stage) is still unclear. Due to the numerous avenues that must be overcome, critics believe that Nike will never be able to stop counterfeiting.
Alternative Measures
Because of Nike’s matrix corporate structure, several other options could have been considered when devising a solution to their counterfeiting problem. Nike’s options will include not looking for solutions through traditional channels. Nike comprises several different entities that are spread across the globe. When a corporation has so many different levels, it can be difficult to know which orders to follow; this is a weakness of a matrix-like structure. Nike’s organizational structure is rigid and mechanical. Employees are not given the authority to solve problems. According to the article Untangling Your Organization’s Decision Making (De Smet et al. (2017), Nike’s corporate structure needs to be more streamlined to eliminate the hierarchy’s confusion. Ideas from S.T. Hunt’s article can help Nike align their various departments and make their workforce more manageable. Another barrier that Nike may consider is not considering the ideas that regular employees may have regarding eliminating counterfeiting goods. They are ignoring the creative genius that can be obtained by listening to employees directly responsible for manufacturing and shipping products using Mueller’s article. This can be accomplished by using Round Robin’s brainstorming techniques and a Reframe Matrix to generate different perspectives on how to solve problems. Nike may also consider implementing epistemic games to teach managers and employees how to solve real-world problems in the context of Nike.
Nike has hundreds of manufacturing plants around the world. This is because of the scarcity of resources and the high labor cost. Because these facilities are independently owned, this is also a major issue in counterfeiting their goods. Nike should consider hiring an auditing firm to monitor these facilities for compliance. These teams can then collaborate to develop guidelines for how all Nike facilities will manufacture and ship Nike products. If a facility fails to comply, Nike should always be willing to locate facilities that are willing to comply, which may include relocating a facility. The dollars saved may be worth the cost. Nike should implement a strategy that deters would-be counterfeiters and those motivated to buy counterfeit goods. A marketing strategy that appeals to those interested in sneaker culture and understands that having authentically made merchandise creates value. The campaign would highlight the distinction between a counterfeit shoe and a genuine Nike product. Well-known’sneakerheads’ who help push the culture can be enlisted to help raise awareness about counterfeit shoes and the fact that true value is created when shoes are purchased from reputable retailers and are meticulously made and inspected. The campaign will also educate people on how to spot a fake shoe. Sneakerheads can create blogs, web pages, and YouTube channels to inform others about what to look out for. Some customers are expected to continue to refuse to pay retail for genuine Nike products, which is another disadvantage of launching this type of initiative. The good news is that education will be provided so that honest consumers can spot fakes and understand that purchasing authentic Nike gear is an investment.
Conclusion
I believe a single solution will not address Nike’s counterfeiting problem. There must be multiple solutions that address each aspect of the problem. I also believe Nike should not use traditional methods to solve the problem. According to De Smet’s article, Nike needs to loosen its structure and become more agile. This agility will help them remain true to one of their core values, innovation. Nike currently does not allow their facilities to be audited, so they are widely counterfeited. A successful outcome, in my opinion, will only occur when Nike decides to think outside the box and considers each of my suggestions. I believe my approach will assist Nike in increasing its bottom line and decreasing revenue lost due to counterfeiting.
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References
Cosgrove, E. (2019). When it comes to speed, Nike says RFID is key. Retrieved from https://www.supplychaindive.com/news/Nike-RFID-speed-inventory/557875/
Decision Making At Nike. (2016). Retrieved from https://elenyasblog.wordpress.com/2016/10/11/decision-making-at-nike/
De Smet, Aaron, Lackey, Gerald, & Weiss, Leigh M. (2017). Untangling your organization’s decision-making. McKinsey Quarterly, 68–80. Retrieved from http://proxy1.ncu.edu/login?url=https://search.ebscohost.com/login.aspx? direct=true&db=bth&AN=125907610&site=eds-live
Mueller, Jennifer, Melwani, Shimul, Loewenstein, Jeffrey, & Deal, Jennifer J. (2018). REFRAMING THE DECISION MAKERS DILEMMA: TOWARDS A SOCIAL CONTEXT MODEL OF CREATIVE IDEA RECOGNITION. Retrieved from http://proxy1.ncu.edu/login?url=https://search.ebscohost.com/login.aspx? direct=true&db=edswss&AN=000425376000006&site=eds-live
O’Reilly, L. (2014). 11 Things Hardly Anyone Knows About Nike. Retrieved from https://www.businessinsider.com/history-of-nike-facts-about-its-50th-anniversary-2014- 11
The Rise of Counterfeiting and Its Effects on Nike. (2017). Retrieved from https://soapboxie.com/economy/The-Rise-of-Counterfeiting-and-Its-Effects-on-Nike
Sobiya. (n.d.). Nike’s Organizational Structure: Pros & Cons. Retrieved from http://advergize.com/business/nikes-organizational-structure-the-pros-cons/
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Question 
The name of my organization is Physicians Regional Medical Center in Naples, FL.
Examine your organization and identify the structures of innovation currently in place.
Identify an Organization and Examine a Recent Problem-Solving Approach
Make your response with a minimum of three paragraphs with three sentences each. The response should have references and citations.