Management accounting--business strategy: Jerome Payne focuses on Nike, the world's biggest sportswear manufacturer, to demonstrate some common business strategy models.
| Author | Payne, Jerome |
| Position | Study notes: PAPER P6 - Company overview |
The strategic models that P6 candidates need to be able to use can initially seem rather dry and difficult. The best way to understand how they work is to apply them to a real business. In this case, let's use Nike.
Corporate strategy is all about the overall scope and direction of an organisation. It also indicates how managers are to add value, addressing topics such as product diversity, geographical coverage and owner expectations. It is vital that decision-makers are clear about their strategy, since it forms the basis for all other decisions.
The need for clarity has made mission statements increasingly popular. These general expressions of the organisation's overall purpose are intended to reflect stakeholders' expectations and communicate the corporate values back to them. They can be thought of as the business's raison d'etre.
Nike's mission statement is "to bring inspiration and innovation to every athlete in the world", together with a quote from the company's late co-founder, Bill Bowerman: "If you have a body, you are an athlete."
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The company has expanded on its mission statement with 11 maxims that every employee can use to guide the decisions they make (see panel, page 55). It integrates these into the development of its entire workforce.
Nike is the most successful sportswear company in the world. According to Naomi Klein in No Logo (Flamingo, 2001), the Nike "swoosh" is more widely recognised around the world than the US flag. Its "Just do it" marketing campaign, launched in 1988, is one of the most famous ever produced. The slogan is still familiar to millions. For strategy students--future business leaders hoping to emulate the success of Nike--a detailed examination of the connection between mission and strategy is crucial to understanding this success.
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A company's vision is the desired future state of the organisation. Along with the mission, it is crucial to the strategic planning process. Strategists try to focus the energies of the workforce on the corporate vision. Nike's maxims are an excellent example of how to communicate the mission and vision throughout an organisation.
In essence, the traditional strategic planning process entails finding answers to three key questions: where are we now, where do we want to be and how are we going to get there? Various models of this process have been defined by different academics. One of the most familiar of these is represented...
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