Strategic Horizons: Nike Investment Roadmap
Kai Tang
1. Objectives
The primary objectives of the study are:
Understand and prioritize investment initiatives: Gain a full-depth understanding of potential initiatives for Nike’s FY25 Corporate Stratetegy, identifying investment opportunities for Nike.
Justify investments: Conduct a comprehensive study to justify the value of these initiatives and align on a universal definition and prioritization scale across geographies.
Drive business outcomes: Ensure that investments are directly linked to business growth, cost avoidance, and operational efficiency.
2. Problems to Be Solved
The study aims to address several key challenges:
Financial challenges:
Decline in Nike’s stock price (longest losing streak since 1980 IPO).
Decline in net income (-16% YoY in FY23) despite revenue growth (+10% YoY).
Gross margin decline (250 basis points to 43.5%).
Increase in SG&A expenses (+11% to $16.4 billion).
Investment prioritization:
How to prioritize investments across regions.
How to ensure that investments drive measurable business outcomes (growth, cost avoidance, efficiency).
Alignment across geographies:
Lack of a universal definition and prioritization scale for initiatives across different regions.
3. Methodologies
The study employs a structured approach called Business Outcome Linked Planning, which includes the following steps:
3.1 Organization Mapping
What: Map out Nike’s business entities and their key components of work through interviews and workshops.
Why: To understand who GPS is serving and how their work contributes to business outcomes.
How: Conduct several rounds of interviews and workshops with business entities and athletes.
3.2 Business Process & Outcome Mapping
What: Define the key business processes and outcomes for each entity (e.g., product selection, assortment building).
Why: To understand how GPS can drive business growth or cost avoidance.
How: Conduct small talks with athletes and map out key components of work.
3.3 Define "Effectiveness & Efficiency"
What: Establish a framework to measure the effectiveness and efficiency of potential investments.
Why: To prioritize initiatives based on their direct or indirect linkage to business growth or cost savings.
How: Use a two-dimensional matrix:
Effectiveness: Direct or indirect linkage to growth or savings.
Efficiency: Quantifiable impact on cost avoidance or utilization improvement.
4. Desired Output
The study aims to deliver the following outcomes:
Corporate Org Mapping: A clear mapping of Nike’s business entities and their key processes.
Business Process & Outcome Alignment: A detailed understanding of how investment initiatives link to business outcomes (e.g., growth, cost avoidance).
Prioritized Initiatives: A list of prioritized initiatives for FY25, based on their effectiveness and efficiency in driving business outcomes.
Investment Recommendations: Specific recommendations for investments across regions.
Universal Definition and Prioritization Scale: A standardized framework for defining and prioritizing investment initiatives across all geographies.
5. My Role (Full-Time Employee)
Project Design, Project Control, Project Delivery, Socialization
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Posted Jan 31, 2025
Nike Investment: how to prioritize to drive growth, cost efficiency, and business outcomes through strategic planning and outcome-linked frameworks
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