Book value chain analysis of nike

Value chain for nike the decision that would be made for the inbound logistics may include what level of inventory to hold. Ycharts book value of equity is the equivalent of total assets less total liabilities and preferred equity. The value chain also known as porters value chain analysis is a business management concept that was developed by michael porter. Its goal is to recognize, which activities are the most valuable i. Figure 1 amazon value chain analysis amazon primary activities. The key to nikes efficiency is its low overhead manufacturing costs. Influential work by michael porter suggested that the activities of a business could be grouped under two headings.

What are the primary activities of michael porters value. What are the primary activities of michael porters value chain. Now, with somewhere between 4347% of that market, nike is the undisputed leader. H ere is a fivestep method for discovering a customers particular strategic needs based on a unique application of value chain analysis. As a result of the shift in the sales mix to highermargin geographies and nike direct business, nike saw great margins. A company like nike target segments like athletes and sports so that they can create the greatest customer value for its customers and also create profit and sustain the value and profit for a long period of time. Porters value chain 1998 outlines the most important activities for a firm to identify its competitive. As stated in its annual report, nike is primarily a design and marketing company. Value chain analysis nikes value chain contains seven primary activities. By dividing book value by the total number of shares outstanding, you can find book value. Indeed, companies such as nike and the gap do very little of their own. The aim of this strategy is to reduce costs throughout the value chain and.

A comparative analysis of strategies and business models of nike. For a company that moves over 900 million units per year, these savings amount to a serious competitive edge. Find the latest book value per share for nike, inc. Book value per share is a widely used stock evaluation measure. The value chain as a strategicanalysis tool emerged when nike set a precedent in the. 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.

Pdf using valuechain analysis to discover customers strategic. Zara case study creating value chain with supply chain. In addition to examining value chains from a firm level, it is also possible to examine them at an activities level. Leveraging the value chain amazon case study medium. Value chain analysis is the process of looking at the activities that go into changing the inputs for a product or service into an output that is valued by the customer. Strategic analysis nike was swot analysis and value chain. Value chain analysis of nike value chain of nike is the best known example of business management concept. Nke, including valuation measures, fiscal year financial statistics, trading record, share statistics and more. Indepth view of key statistics and finances for nike, inc. Craddock kaplan university january 6, 2012 value chain analysis 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. Supply chain strategic management for nike marketing essay. Since nikes manufacturing strategy is based on outsourcing and contract manufacturing, growing protectionist actions could hit its supplychain process. You can apply the same method to get the book value growth rate using book value per share data. Because of nikes marketing research, the company has decided to revamp its apparel division to be more fashion savvy.

Nike sues adidas over soccer player zhengs contract. In the later works introduction when explaining the value chain perspective, burns observes that it analyzes the entire sequence from raw materials input market to final customer output market. Brand value chain brand value chain is a structured approach to assessing the sources and outcomes of brand equity and the manner by which marketing activities create brand value. 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. Value chain is used to analyze the flow of valueadding activities from the raw material.

Value chain michael porter was the first person who introduced the term value chain in his book competitive advantage. The book value is essentially the tangible accounting value of a firm compared to the market value that is shown. Value chain analysisvalue chain analysis is a systematic way of examining all the value ystematic organizations functional activities and how well. 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. Value chain and competitive forces models 1795 words bartleby. In this article well examine examples of how you can perform a firm level value chain analysis. Introduction value chain analysis describes the activities that take place in a business and relates them to an analysis of the competitive strength of the business. The companys gross profit margin grew by 150 basis points to 45.

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. However, the value chain analysis pioneered and illustrated by michael porter in his groundbreaking book, competitive advantage, remains an indispensable. Divya mishra school of management purdue university calumet submitted to. Read this business case study and over 89,000 other research documents. The value chain and competitive forces model 781 words. Michael porter defines value chain as a representation of a firms valueadding activities, based on its pricing strategy and cost structure. In his book competitive advantage 1985, michael porter explains value chain analysis.

Oct 17, 2019 since nikes manufacturing strategy is based on outsourcing and contract manufacturing, growing protectionist actions could hit its supplychain process. 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. Price to book value is a valuation ratio that is measured by stock price book value per share. This month the sportswear manufacturer published its first countryspecific supply chain report, revealing some problems. Nike manufacturing and supply chain strategies market. Value chain analysis is a useful tool for working out how you can create the greatest possible value for your customers. 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. Value chain and competitive forces models value chain analysis internal activities of an. 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. 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. The assets may be carried on the balance sheets at the original cost minus depreciation.

Value chain analysis of airasia the value chain analysis is used to evaluate the value of each particular functional activity that is added to the organisations products or services as seen in diagram 1 pic a logistics this involves all areas of receiving, storing of inputs when producing outputs. Nike manufacturing and supply chain strategies market realist. Pdf using valuechain analysis to discover customers. The term value chain refers to the process in which businesses receive raw. Using valuechain analysis to discover customers strategic needs. Strengths strong management team and good corporate strategy in both north american and overseas markets first movers advantage in ecommerce. Mgmt65000 strategic management spring 2011 test 1 by. It provides insights to support the various decision makers in the company and stresses that every member of the company contribute to this branding effort. The concept comes from business management and was first described and popularized by michael porter in competitive advantage.

A value chain charts the path by which products and services are created and eventually sold to customers porter, 1985. Value chain analysis is mentioned extensively in the first half of the book competitive advantage in 1985 by michael porter. 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. 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. 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.

Using valuechain analysis to discover customers strategic needs article pdf available in strategy and leadership 364 july 2008 with 7,453 reads how we measure reads. Dec 16, 2007 value chain analysis unit 4 individual project assignment gb570. Evaluate nike using the competitive forces and value chain models. Value chain and competitive forces models 1795 words. Value chain analysis for assessing competitive advantage. Another important decision may be transportation planning. Mar 27, 2008 nike has admitted its chinese supply chain is suffering from a lack of transparency, problems with wages and the use of underage workers. The purpose of this paper is to analyze amazons value chain. Value chain analysisvalue chain analysis is a systematic way of examining all the value ystematic organizations functional. Creating and sustaining superior performance porter 1985.

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. The value chain was first introduced by michael porter during the 1980s in his bestselling book, competitive advantage. 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.

Porters value chain analysis by michael porter toolshero. This may underestimate the true economic values of the assets. Value chain and competitive forces models value chain analysis internal activities of. Everything you need to know about value chain analysis. Its headquarter is located in washington country oregon united states. We said that based on our footprint across our entire supply chain we saw a number of key focus areas for nike. During the past years, the highest 3year average book value per share growth rate of nike was 165. Nike is a celebrity brand of sports shoes, apparel and equipment. Value chain and competitive forces models value chain analysis internal activities of an organization add value to the service and products that the organization produces and should be run at optimum level if the organization is to gain any real competitive advantage. Estimated total useful life over longer time periods, this ratio is a useful measure of companys depreciation policy and can be used for comparisons with competitors. 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.

Apr 02, 2020 figure 1 amazon value chain analysis amazon primary activities. Sep 12, 2016 the value chain was introduced by michael s. These activities are technology development, product design, component manufacturing, assembly, marketing, distribution and retail sales. Sales are also more stable than earnings and never negative. Nke book value per share explanation usually a companys book value and tangible book per share may not reflect its true value. Value chain analysis value chain analysis vca is a process where a firm identifies its primary and support activities that add value to its final product and then analyze these activities to reduce costs or increase differentiation. Book value reveals how much the company is worth if it were liquidated and all assets were sold for cash. Nike has a global procurement team to manage the procurement part of its supply chain management. Feb, 2018 value chain analysis is the process of looking at the activities that go into changing the inputs for a product or service into an output that is valued by the customer. In amazons core business of hardgoods retail, they own the entire value chain, and the business logic of profitable sales created the flywheel effect allowing them to.