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Organizational Development Business Letter
no plagiarism
read this case and write a business letter in business letter format answering all questions appropriately. It is to be a data gathering strategy.
Follow the instructions below to create a Business letter
Case Study 2: (Proposing a Data Gathering Strategy At TLG Solutions) in Organization Development.
Consider :
1. What is the client requesting?
2. What are the presenting problems?
3. What might be the root cause problems?
4. What data would give evidence of the underlying problems?
5. Which data collection method would you choose? (Review the method analysis in Figure 7.2)
6. What are the advantages and disadvantages of the method selected?
Write:
A business correspondence to Michelle Greenfield Chief Learning Officer at TLG. that :
1. Summarizes the situation as you see it.
2. Suggest a course of action that includes :
a. Proposed time line
b. Description of the data gathering method
c. Possible interview and/or survey questions, documents to gather, and/or observations to be made.
Case Study 2: Proposing a Data Gathering Approach at TLG Solutions
Read the TLG Solutions case and consider the following questions:
- What is the client requesting? What goal does the client have for this project?
- What are the presenting problems? What do you think may be any underlying problems? Which of these underlying problems is most likely, in your view?
- What data would illustrate whether these underlying problems are occurring? Which method of data gathering would you use and why? (Consider using the method of analysis shown in Table 7.2.) Write a proposal that explains what data you will gather through what means (interview, surveys, focus groups, observations, and/or unobtrusive measures). Include any questions you might ask, observations you would undertake, and/or documents you would want to gather.
- What are the advantages and disadvantages of your data gathering choice(s)? Include a rationale and proposed timeline for your approach and any details about the data gathering method itself, including possible interview or survey questions, documents to gather, or observations you would conduct. Finally, ensure that your proposal addresses any additional contracting needs you may have in your relationship with Michelle.
“I’m glad you’re here, and I have something important to discuss with you. Have a seat.”
Seth Burke had been called to Michelle Greenfield’s office. Just 18 months ago, Michelle had accepted the role of chief learning officer at TLG Solutions, a fast-growing provider of global human resources software for Fortune 1000 companies. Seth and Michelle had worked together in a previous company, and now that Seth was working as an independent external organization development consultant, Michelle was anxious to make use of his skills.
“Hey, I was really glad to get your call. It’s been too long,” Seth exclaimed as he took a seat at a round table in Michelle’s office while Michelle closed the door. TLG Solutions headquarters was located in a six-story building just outside of downtown in a suburban area for expanding technology companies. Michelle’s office had a panoramic view of the lake. “What great scenery,” Seth added. “How long has the company been in this location?”
“Just 6 months,” Michelle admitted. “We’ve been expanding so rapidly we outgrew the small office space that we had rented on the east side of town. Now that we are among the tech companies in this hub area on this side of town, we have a solid presence in the community and are showing that we are here to stay.”
“And how have things been going in your new role?” Seth asked, transitioning to the reason for his visit.
“It’s been crazy. The rapid growth means great things, but it’s also stressful sometimes. It’s really different from what we knew back with our old company. You and I were part of a very hierarchical, controlled, consistent, static company in a pretty stable industry. Everyone followed the process and the plan. A big change was when they replaced the carpet in the lobby. But here it feels like it’s just the opposite. It’s all about visionary innovation, constant change, reinvention. No 2 days are the same, and you get used to feeling like you’re on a roller coaster. Just yesterday our CEO announced publicly that we would use our expertise in HR to create new products for marketers. And our product groups didn’t even know that announcement was coming,” Michelle pointed out.
“Yes, that does sound very different from the experience we shared a few years back,” Seth laughed.
“The thing is, from my perspective we have changed things so fast, I don’t think we have created the ideal organization to help launch us into the next phase. I’ve definitely learned a lot managing this department, and I think there may be some opportunities for improvement,” Michelle said. “Basically, this training organization is a mess, and our chief HR officer, Vivienne, has told me that if I can’t get it cleaned up soon she’ll find someone who will. We are spending a ton of money on training and yet it’s not getting us the improvement we need. But I should back up. I’m getting ahead of myself.”
“Yes, maybe start at the beginning. Tell me a little more about TLG Solutions,” Seth asked.
“Well, the company was essentially founded on our flagship product, NewHireScan, a software program that can scan thousands of résumés for key indicators and predict whether the new hire will be successful in the job. Our proprietary big data approach means that we can save companies tons of money by hiring the best person for the job the first time, which we can tell by a number of data points. In the last few years, we have added or expanded products every few months so that we now have hundreds of products and variations on them for different industries. Since I’ve been here, revenue has almost doubled, if that tells you anything, and we are growing at a rate that is easily twice that of our nearest competitors. We just got a fantastic write-up in an industry-leading publication, and our CEO was just on the front page of the Wall Street Journal,” Michelle stated.
“I saw that article,” Seth added. “That was really impressive and had a lot of people talking. I bet that did a lot for employee morale as well.”
“It sure did. People around here are very motivated, driven, and work a ton of hours. It’s a competitive environment, and they pour themselves into their work,” Michelle said. “We are adding a lot of products to our portfolio over the next year since our goal is to expand into other areas of HR technology beyond hiring, and apparently we have this new marketing focus coming. Everyone seems to feel the urgency, and we all want to see it succeed. But the clouds are forming in our sunny skies. It’s like the theme from Jaws is always playing in the background. We have competitors that are ready to take us out, and we can all see that our cost models are not sustainable. Investors are getting nervous. We are looking to the next year or two and we know that we must be successful getting our new products to market quickly. We probably need to reduce costs as well. It’s not a crisis, but the leadership team is paying careful attention to the financials, as you would expect.”
“Sure, that makes sense in your industry,” Seth said. “Tell me more about where you think problems might exist on the horizon.”
“I’ll give you a list from my point of view, because there are a lot of them,” Michelle said. “We have many loyal customers and excellent customer relationships. Some of them have been with us since the beginning. But lately we are starting to hear customer complaints, even from our loyal base. Products aren’t working as promised. Salespeople are promising one thing and not delivering. I’ve even heard situations where salespeople have promised features outright that we never intended to put in the product just to make a sale. I’ve heard that sales reps can’t even demo the products accurately. The service department is getting complaints because they can’t accurately pinpoint the root cause of the problems the customer is experiencing. Those are common problems in many organizations, but we’ve done some investigating and it seems that time and time again the problem is training. Our salespeople and service reps don’t know enough about the products. Customer service technicians lack some of the foundational problem-solving knowledge to help them troubleshoot. And training, as you know, is my responsibility, so I am under a lot of pressure to get this right.”
“Tell me more about your department,” Seth asked.
“Let me give you the training organization chart and I can walk through it,” Michelle added, and handed Seth a piece of paper.
“This is the org chart for the training organization. I manage the global training teams that are responsible for needs assessment, training curriculum design, training technology design, rollout, and operations. Their focus is on the different populations they serve, so I have a group that designs training for our salespeople, a group that offers training to our external customers, and a group that focuses on developing training for service technicians. We serve a population numbering in the tens of thousands globally. To do this, I have about 65 people who work in these divisions, with the bulk of them in sales training and customer training, where there are 25 people equally divided in those two groups. Another 10 work in service training. The last group has about five employees in our learning technology and operations division. This is the group that creates online learning, video-based learning, and virtual training programs to supplement any of the courses that get developed, including refresher courses. They also run the operations of the group, such as deciding on the training schedule, communicating to participants, and interfacing with the trainers.”
“It’s pretty impressive that you can train tens of thousands of employees around the world with just these 65 people,” Seth concluded.
“We can’t, and actually we don’t,” Michelle corrected. “I should be more specific. While we sometimes deliver training directly to our customers, where we charge a fee for those classes, all internal training delivery for sales and service happens in the regions, and that’s what the right-hand side of this chart represents. We have four regions: North America, Europe, Asia/Pacific, and Latin America. The regional HR leaders have their own training resources, in addition to their other work with human resources representatives, recruiting, employee relations, compensation and benefits, payroll, and some other areas. Compared to mine, some of these departments are huge, like in Europe where there are 85 trainers, and some are small, like in Japan where there are only two people who do training for all customers, sales, and service. So all of the regional training resources report up to my peers, who are the heads of HR in each region. And like I said, for them, training is just one part of their job, in addition to everything else that regional HR is supposed to do.”
“You told me that most of your people work in sales and customer training. Tell me more about what they do,” Seth asked quizzically.
“Our products are very complicated. We need to invest as a company in our salespeople so they know how our products work and how our customers use them. Our sales and customer training curriculum designers are really the subject matter experts on our products. Whenever I hire a curriculum designer, they need to not only know all of the best practices with respect to adult learning and training design, they need technical product knowledge so that they can include it in their courses. My sales group, for example, develops sales training in areas such as communicating with customers, influencing the sale, or understanding a value proposition, but they also need to incorporate the newest product release information into product update training for sales. Service training is about providing technicians with the knowledge to fix products when they break. It’s a little like my curriculum designers are the translators who understand how to explain the products to different audiences,” Michelle said.
“And training technology? Seth asked.
“Similarly, our training technology group gets assigned to work on projects in the other groups on an as-needed basis, so if we want to create an online module for our customers, we will assign someone from that group to work with the customer training group,” Michelle summarized.
“So how does your group work with these other HR groups?” Seth asked.
“Do you want the ideal or the reality? The way the model is supposed to work is that we design the training and they deliver it. We produce everything from the training handbooks to the lecture notes and slides shown in class,” Michelle began. “It’s really designed to be an efficient model, so that we have one centralized global group doing all training design that can be used by the regions. That way we don’t duplicate resources developing the same thing in different regions. And it makes no sense for us to fly people around the world teaching classes when they could have someone do it locally.”
“From your perspective, how is this model working?” Seth asked.
“Well, the best way to put it is that we are all frustrated. My team spends months creating world-class training programs, using their expertise to design well-crafted courses that are intended to meet the needs of the various audiences that get training. I mean, I have seven PhDs in adult learning and instructional design in my department. We have designed pretests and posttests to confirm that students have learned the material, and then we have a manager observation program that occurs 3 months after the course to demonstrate that employees are using the knowledge on the job. We can also measure the return on investment of our training to demonstrate that the training pays for itself in sales many times over. These are some of the most sophisticated learning packages I have ever seen. And do you know what happens? They gather dust. The regions just do their own thing,” Michelle said, exasperated.
“Can you give me an example?” Seth asked.
“Yes. We found out recently that our Asia-Pacific region didn’t even use the most recent sales module we developed on how to conduct a customer demonstration of our new ZBS software product after we spent 6 months designing it. Instead, they developed their own and said that the program we developed ‘wouldn’t work’ for their employees, even though it has worked for everyone else in the world. And in Europe, they taught less than half of the service technician program and ran it as a half-day course, completely omitting a huge portion of the material that is absolutely critical for the technicians to learn. My team feels like their efforts are wasted, and they complain to me that the regions are developing shadow training organizations with their own resources. I think we have at least three different customer programs that have never been offered in Latin America, but in North America they have been offered successfully on quite a few occasions. I’ve been unsuccessful in getting our team’s solutions adopted with global consistency, and no one else so far has stopped the regions from doing things their way, even as inefficient as that is. The regions get high marks from customers, sales, and service about their programs,” Michelle said.
“Why don’t the regions want to use the programs that you have developed?” Seth asked.
“The politics here are unlike anything I’ve seen before. Seriously, that’s a good question, and I don’t have a consistent answer. I honestly think that several of the HR leaders are competing for a promotion to VP and they are trying to show that they could do this training job, too. In this company, the HR regions get a lot of power to do what they need to do locally, and they want to outdo each other. I sometimes hear complaints from them that the training programs didn’t meet their needs, or they didn’t have time, or some other generic reason. But I’ve seen their stuff. They have no proof that learning has occurred, and almost no metrics of success. The company gives a lot of control to the regions to manage as they see fit instead of directing everything from corporate,” Michelle said. “And the regions love having their own local training resources.”
“So in summary, it’s less efficient and sometimes frustrating for your central team, but on the other hand, the regions have the opportunity to customize what they need. How much do the regions really think there is a problem that needs to be solved?” Seth inquired.
“I don’t know if they do, but the other day Vivienne, our chief human resources officer, was looking at our budget and the number of people in HR globally who are involved in training in some way. She was astonished and demanded to know what all of these training people do. I tried along with my peers to explain how we divide up the various roles and responsibilities in training, but I don’t know how successful we were. She was unconvinced that we have the right model here, and based on how it’s working in practice, I think she may be right. Reading between the lines, I think a budget cut is coming. So far, no one has come up with any alternatives, and that’s where I’m hoping to get your support. I personally think I should own the whole thing. We should have all of the regional training resources report into my team. But I haven’t been able to convince Vivienne.” Michelle looked expectantly at Seth. “So that’s where we are. Any ideas about how we can move forward?”
Seth thought for a minute. “Tell me, Michelle. You have a robust and sophisticated HR organization here, from what you’re telling me. It sounds like you have some ideas about what you want to do. Why not use one of your own internal OD consultants to manage this project?” Seth asked.
Michelle paused. “I’m afraid that all of our internal consultants are too loyal to the existing system, and they report to the leaders who are involved in this problem. I need an outside partner who has no special stake in the outcome to provide an objective voice.”
“OK. I understand. You’ve given me some excellent background here. I have a good sense of your perspective about how the model ought to be working and how you see it working in reality. I also think I want to get more information and multiple perspectives on the situation. I’d like to come back to you with a proposal to gather additional data so I can learn more,” Seth concluded.
Michelle was relieved. “I knew that you’d have an idea about what to do next. I will anxiously await your proposal.”
Professional Writing #2, TLG, Due Week 4
Follow the instructions below to create a Business letter
Case Study 2: (Proposing a Data Gathering Strategy At TLG Solutions) in Organization Development.
Consider :
1. What is the client requesting?
2. What are the presenting problems?
3. What might be the root cause problems?
4. What data would give evidence of the underlying problems?
5. Which data collection method would you choose? (Review the method analysis in Figure 7.2)
6. What are the advantages and disadvantages of the method selected?
Write:
A business correspondence to Michelle Greenfield Chief Learning Officer at TLG. that :
1. Summarizes the situation as you see it.
2. Suggest a course of action that includes :
a. Proposed time line
b. Description of the data gathering method
c. Possible interview and/or survey questions, documents to gather, and/or observations to be made.
Work Product:
Your work product is a business letter.
Organization 5
Content 5
Language Used 4
Rubric
Professional Writing Rubric (1)Professional Writing Rubric (1)CriteriaRatingsPtsThis criterion is linked to a Learning OutcomeContent1pt • Purpose of letter is unclear • Main idea is not supported by explanations or facts • Letter rambles; hard to follow or understand • Tone is inappropriate for intended audience 4pt • Letter clearly states the purpose as assigned • Appropriate explanations or facts used to support the main idea • Easy to follow • Tone is appropriate for intended audience5.0 pts
This criterion is linked to a Learning OutcomeOrganization1pt • Several noticeable errors in use of correct business letter format (heading, greeting, introduction, body, closure, signature, enclosure, and copy) 4pts Accurately uses correct business letter format (heading, greeting, introduction, body, closure, signature, enclosure, and copy)5.0 pts
This criterion is linked to a Learning OutcomeLanguage used1pt • Incorrect use throughout the letter of punctuation or grammar • Frequent spelling errors distract from letter 4pt • Accurate use of punctuation and grammar • No spelling errors
The book being used for the business letter is;
Organizational Development ; The process of leading organizational change
Donald L. Anderson
case is pg 164
Faldo Corp Sells On Terms That Allow Customers 45 Days To Pay For Merchandise
“Faldo Corp sells on terms that allow customers 45 days to pay for merchandise. Its sales last year were $435,000, and its year-end receivables were $60,000. If its DSO is less than the 45-day credit period, then customers are paying on time. Otherwise, they are paying late. By how much are customers paying early or late? Base your answer on this equation: DSO – Credit Period = Days early or late, and use a 365-day year when calculating the DSO. A positive answer indicates late payments, while a negative answer indicates early payments.
5.18
4.86
5.29
5.34
5.40
——————————————————————————–
2. Stewart Inc.’s latest EPS was $3.50, its book value per share was $22.75, it had 215,000 shares outstanding, and its debt ratio was 46%. How much debt was outstanding?
$3,393,738
$3,572,356
$3,760,375
$3,958,289
$4,166,620
——————————————————————————–
3. Last year Harrington Inc. had sales of $325,000 and a net income of $19,000, and its year-end assets were $250,000. The firm’s total-debt-to-total-assets ratio was 37.5%. Based on the DuPont equation, what was the ROE?
14.71%
12.16%
11.92%
11.43%
13.74%
——————————————————————————–
4. Last year Ann Arbor Corp had $160,000 of assets, $305,000 of sales, $20,000 of net income, and a debt-to-total-assets ratio of 37.5%. The new CFO believes a new computer program will enable it to reduce costs and thus raise net income to $33,000. Assets, sales, and the debt ratio would not be affected. By how much would the cost reduction improve the ROE?
13.00%
14.17%
11.31%
10.14%
15.73%
——————————————————————————–
5. What’s the present value of a 4-year ordinary annuity of $2,250 per year plus an additional $2,950 at the end of Year 4 if the interest rate is 5%?
$11,133.74
$8,740.50
$10,405.36
$8,532.40
$12,590.49
——————————————————————————–
6. Last year Kruse Corp had $275,000 of assets, $403,000 of sales, $28,250 of net income, and a debt-to-total-assets ratio of 39%. The new CFO believes the firm has excessive fixed assets and inventory that could be sold, enabling it to reduce its total assets to $252,500. Sales, costs, and net income would not be affected, and the firm would maintain the same debt ratio (but with less total debt). By how much would the reduction in assets improve the ROE?
1.50%
1.23%
1.85%
1.13%
1.19%
——————————————————————————–
7. Wie Corp’s sales last year were $365,000, and its year-end total assets were $355,000. The average firm in the industry has a total assets turnover ratio (TATO) of 2.4. The firm’s new CFO believes the firm has excess assets that can be sold so as to bring the TATO down to the industry average without affecting sales. By how much must the assets be reduced to bring the TATO to the industry average, holding sales constant?
$202,917
$221,179
$213,063
$160,304
$184,654
——————————————————————————–
8. Assume that you own an annuity that will pay you $15,000 per year for 12 years, with the first payment being made today. You need money today to start a new business, and your uncle offers to give you $80,000 for the annuity. If you sell it, what rate of return would your uncle earn on his investment?
23.15%
16.17%
20.96%
19.96%
22.16%
——————————————————————————–
9. Last year Tiemann Technologies reported $10,500 of sales, $6,250 of operating costs other than depreciation, and $1,300 of depreciation. The company had no amortization charges, it had $5,000 of bonds that carry a 6.5% interest rate, and its federal-plus-state income tax rate was 35%. This year’s data are expected to remain unchanged except for one item, depreciation, which is expected to increase by $750. By how much will net after-tax income change as a result of the change in depreciation? The company uses the same depreciation calculations for tax and stockholder reporting purposes.
-463.13
-487.50
-511.88
-537.47
-564.34
——————————————————————————–
10. Pace Corp.’s assets are $625,000, and its total debt outstanding is $185,000. The new CFO wants to employ a debt ratio of 55%. How much debt must the company add or subtract to achieve the target debt ratio?
$158,750
$166,688
$175,022
$183,773
$192,962
——————————————————————————–
11. Last year Hamdi Corp. had sales of $500,000, operating costs of $450,000, and year-end assets of $350,000. The debt-to-total-assets ratio was 17%, the interest rate on the debt was 7.5%, and the firm’s tax rate was 35%. The new CFO wants to see how the ROE would have been affected if the firm had used a 50% debt ratio. Assume that sales, operating costs, total assets, and the tax rate would not be affected, but the interest rate would rise to 8.0%. By how much would the ROE change in response to the change in the capital structure?
3.79%
3.69%
3.18%
3.53%
2.48%
——————————————————————————–
12. Chang Corp. has $375,000 of assets, and it uses only common equity capital (zero debt). Its sales for the last year were $520,000, and its net income was $25,000. Stockholders recently voted in a new management team that has promised to lower costs and get the return on equity up to 15.0%. What profit margin would the firm need in order to achieve the 15% ROE, holding everything else constant?
10.71%
9.41%
10.82%
8.11%
12.66%
——————————————————————————–
13. Last year Rennie Industries had sales of $240,000, assets of $175,000, a profit margin of 5.3%, and an equity multiplier of 1.2. The CFO believes that the company could reduce its assets by $51,000 without affecting either sales or costs. Had it reduced its assets by this amount, and had the debt ratio, sales, and costs remained constant, how much would the ROE have changed?
3.55%
3.19%
3.66%
3.01%
3.59%
——————————————————————————–
14. Last year Kruse Corp had $355,000 of assets, $403,000 of sales, $28,250 of net income, and a debt-to-total-assets ratio of 39%. The new CFO believes the firm has excessive fixed assets and inventory that could be sold, enabling it to reduce its total assets to $252,500. Sales, costs, and net income would not be affected, and the firm would maintain the same debt ratio (but with less total debt). By how much would the reduction in assets improve the ROE?
5.67%
5.30%
4.40%
4.18%
5.98%
——————————————————————————–
15. Last year Ann Arbor Corp had $300,000 of assets, $305,000 of sales, $20,000 of net income, and a debt-to-total-assets ratio of 37.5%. The new CFO believes a new computer program will enable it to reduce costs and thus raise net income to $33,000. Assets, sales, and the debt ratio would not be affected. By how much would the cost reduction improve the ROE?
5.34%
5.82%
6.59%
8.67%
6.93%
——————————————————————————–
16. Last year Hamdi Corp. had sales of $500,000, operating costs of $450,000, and year-end assets of $355,000. The debt-to-total-assets ratio was 17%, the interest rate on the debt was 7.5%, and the firm’s tax rate was 35%. The new CFO wants to see how the ROE would have been affected if the firm had used a 50% debt ratio. Assume that sales, operating costs, total assets, and the tax rate would not be affected, but the interest rate would rise to 8.0%. By how much would the ROE change in response to the change in the capital structure?
3.17%
3.42%
3.48%
3.08%
2.99%
——————————————————————————–
17. Edwards Electronics recently reported $11,250 of sales, $5,500 of operating costs other than depreciation, and $1,250 of depreciation. The company had no amortization charges, it had $3,500 of bonds that carry a 6.25% interest rate, and its federal-plus-state income tax rate was 35%. How much was its net cash flow?
$3,284.75
$3,457.63
$3,639.61
$3,831.17
$4,032.81
——————————————————————————–
18. What annual payment must you receive in order to earn a 6.5% rate of return on a perpetuity that has a cost of $2,500?
$162.50
$164.13
$123.50
$185.25
$128.38
——————————————————————————–
19. Your father paid $10,000 (CF at t = 0) for an investment that promises to pay $750 at the end of each of the next 5 years, then an additional lump sum payment of $13,500 at the end of the 5th year. What is the expected rate of return on this investment?
12.91%
10.46%
11.49%
15.23%
12.39%
——————————————————————————–
20. You have a chance to buy an annuity that pays $2,350 at the beginning of each year for 3 years. You could earn 5.5% on your money in other investments with equal risk. What is the most you should pay for the annuity?
$6,688.85
$7,090.18
$7,825.96
$6,822.63
$6,956.41
Nike’s Global Women’s Fitness Business: Driving Strategic Integration
Nike’s Global Women’s Fitness
Business: Driving Strategic Integration
Contents
1. What are the key issues in the case?. 2
3. Describe the new strategy for global women’s fitness proposed by the Change the Game team. 3
7. What potential risks should the group seek to manage?. 6
9. Risks associated with recommendations. 6
10. Additional questions that would enhance the comprehensiveness of the case analysis. 6
12. What were the lessons learned from this case?. 7
Exhibit 2: Organizational Capabilities Model 8
Exhibit 3: Diamond E+C Framework. 9
Exhibit 4: Blue Ocean Strategy. 9
1. What are the key issues in the case?
The Nike faces several major issues necessitating the Change the Game initiative:
Prior to adopting a new strategy of integrating Women’s Fitness:
2. Prior to the Change the Game proposal for global women’s fitness, how would you describe Nike’s strategy in the women’s market? What important lessons had been learned through these efforts to help shape the Change the Game proposal?
As the team has looked at the trends in female market, it saw it as a great business opportunity, culminated with creating global women’s footwear division in 2001, addressing the differences of the women’s physique and style preferences. Creation of Nike Goddess retail marketing project has been another milestone in women’s direction. This limited chain of Nike stores with the 1-on-1 service philosophy (a la Starbucks for women) has given the nudge to see how the collection could be brought to life per customers’ demands. Thus, in 2003, when the Sport Lux collection sold out, this event served as a final lesson confirming the formation of the new strategy.
This break-through has alleviated the pressure of justifying the need to encompass the women’s fitness market, however the issues of developing product lines, broken down to various sports categories, synchronizing the product life cycles to deliver the line at the same time all around, sending the right message to the consumer posed a challenge of strategically formulating the new change to the senior management for launch approval.
3. Describe the new strategy for global women’s fitness proposed by the Change the Game team.
The Women’s Fitness strategy suggested the integrated women’s line, encompassing all items (footwear, apparel and equipment) dedicated to initially designated 5 types of sports, with the idea of expanding into more once the strategy proves it success. This idea implied addressing the entire market broken down in six categories: running, men’s training, basketball, soccer, women’s fitness and sportswear.
This strategy was a set out to be a start of the “dialogue and an emotional connection with women”. Creating such bond and communication pathway would lead to understanding the company offerings by their female clientele, turning them from window shoppers into loyalists. As indicated in the article, the vision that was presented (Exhibit 1) was a powerful strategic principle[1]:
4. What were the greatest internal and external barriers facing the team in implementing the new strategy? In what ways did they manage these challenges well? How are consumers’ needs taken into consideration?
Internal Barriers:
During the Women’s Fitness integration
– Frequent staff rotation
– Multitasking between 2 priorities
– No guarantee of success
– Not full back up of the senior management
– Creating a dialogue with women: message and its delivery methods not yet clearly defined
– Lack of HR: Emma Minto – the only full time associate assigned with strategic lead.
– Competing Priorities – lack of resources. Most had to take on double roles
– No additional financial compensation for adding on additional tasks affecting staff motivation
– Various degrees of centralization in Footwear and Apparel businesses, specifically in product design and development
– No firm backing by senior management, 51% favor showed a lot of reservations
Post Women’s Fitness strategy integration Challenges:
– Category-driven approach company-wide global integration
– Scheduling operations across departments to meet unified deadline to deliver the collection
– Breaking the stereotypes of evolving one product instead of all-encompassing line of products
– Sustainability of SCM: synchronized delivery to all the vendors (6000 doors at the same time)
– Investment in integrating SCM wasn’t scalable, therefore only temporary
– No integrated systems to capture the results of the Women’s Fitness Business
– Prioritization of styles: 20% of styles sustains 95% of business
– The change adaptation is slow
– Needed to make “Believers” out of supporters and skeptics
External Barriers:
– Lack of market data supporting women’s athletic habits to present in favor of Women’s Fitness category.
– Undefined competition (Old Navy vs Adidas) presented inability to process the trends and aspirations of women in fitness department
– Estimation of market growth potential was based on the trends, such as sports participation rates or gym memberships
– Uneven market opportunity split among footwear (25%), apparel (70%), equipment (5%) representing difficulty forecasting of the collection success
– Various global fitness trends and demands (consumer needs) necessitating different approaches to collection priorities in terms of sport (Dance vs Cardio)
In what ways did they manage these challenges well? How are consumers’ needs taken into consideration?
Company’s mission addresses athletes, but defines athletes as each and every individual. It had no longer dominated product markets and pushed forward with dominance in sports and masculinity.
To get to this integrated approach and overcome all the listed above challenges, Women’s Fitness Team has prioritized the styles to be available for delivery to selected retailers. It emphasized the women’s physique peculiarities (print ads: Thunder Thighs, Shoulders, Butt) and build the feel of originality on these. Nike spoke to women of all athletic degrees of involvement to provide them with desired alternative and deliver female product. Being male focused was starting to become a philosophy of the past as the company started to move into all encompassing, category-driven mindset. Although they had sparse human and physical resources, the team juggled between 2 jobs without extra compensation, demonstrating full commitment. They have experimented with the investments into the infrastructure to monitor sales and ROI as well as synchronizing the deadlines across the business units. Overall, the company has made a significant shift with outstanding results.
5. What are the advantages and potential disadvantages to Nike of shifting from a product-driven to a consumer or category-driven business in the women’s market? Across the company? What new skills/competencies does the new approach require? What skills/competencies must the organization be careful not to lose?
| Advantages: | Disadvantages: |
The skills/competencies new approach required
In order to distinguish among different skills and competencies the new approach of delivering integrated collection vs differentiated products, the resource identification model was considered, see Exhibit 2. The most evident skills and competencies are identified as following:
Organizational skills:
Business Competencies:
The skills/competencies the organization must be careful not to lose:
MVS (Most valuable skills) as outlined in the organizational capabilities model below and evidently utilized by Nike corporation to benefit during the re-organization of its business are:
6. How will Nike’s latest reorganization potentially help the global women fitness team moving forward?
The company will be able to tell a story with their product offering. It can, by means of advertising, campaigns, events, and other marketing tools, engage women in fitness, for various reasons (fashion, performance, self-image). From the business perspective this means the company will not only capture the new share of new market, but also take away market shares of the competitors. Secondly, Nike will be able to offer integrated fitness appeal based on the specifics of the country, not just follow the trends in particular product, but capture the gyms, tracks, studios members to full capacity in different corners of the world.
7. What potential risks should the group seek to manage?
Outlined below are the risks and challenges associate with the reorganization of the company and the addition of the Women’s Fitness Business
– Fears of success in women’s business would erode men’s business, therefore diluting the brand
– Finding the right strategy to communicate to the most current and trends-based needs of women
– Frame the collection appealing to ALL athletes, that is to retain sports enthusiasts seeking performance and address the casual fitness participants to address the fashion aspect
– Describe the collection approach to all the customers in 3 different tiers
– Establish Dance Category until it reaches profitability to ease the pressure on the less “sexy” supporting categories to allow their potential expansion
– Manage the complex matrix organization allowing room for innovation and creativity
– Incentivize employees to deliver based on double-tasking to sustain enthusiasm
– Watch out for the competitor counter moves in similar direction, or potentially capturing unexploited category/capitalizing on men’s fitness thus taking the market share away from Nike
8. What are your recommendations how to create and sustain a competitive advantage in the global women’s fitness?
In order to give the recommendation how to create and sustain a competitive advantage, Diamond-E (+c) framework should give the platform to oversee the factors contributing and detracting from the sustainability of the competitive advantage. Although the strategic principle has been addressed by the company in its vision (see question2), the Diamond E+C framework gives a more overarching presentation of the internal and external factors, see Exhibit 3.
Resulting from the framework, the recommendations to sustain the competitive advantage are the following:
9. Risks associated with recommendations
| Recommendation | Risk |
| Worldwide Expansion | Is there a World Athlete? How does Nike see Athletic Strategy worldwide, considering that sports and athletics vary significantly all over the world? Is there a unified direction? Would the company have benefitted better by retaining product driven approach in emerging countries? Will there be a joint movement of fitness expansion to support their categories? |
| Lifestyle Fitness | Athletic Brand vs Lifestyle? Where does Nike position itself when comes to differentiating between athleticism and fashion? It appeals to women seeking for self-expression in fitness, but what how does it message women seeking performance support from a company, is there a brand dilution loss or an alternative direction? |
| Woman’s Empowerment | Does the strategy threaten men’s performance market, following “Diet Coke footprints”, risking diluting the brand “losing some of the testosterone” or turning the company into women’s brand in men’s perception |
10. Additional questions that would enhance the comprehensiveness of the case analysis
11. Case summary that highlights key marketing principles as reflected in the learning objectives and how they were applied to the case
12. What were the lessons learned from this case?
13. Exhibits
Exhibit 1: The Vision
Vision presented to the senior management team at the end of phase one – April 2004:
| “To shift the focus of women’s fitness from a brand-strokes series of initiatives to a sustainable, profitable brand-enhancing portfolio of sports businesses that in combination make Nike the aspirational brand of choice for her.” |
Exhibit 2: Organizational Capabilities Model
| Resource Identification | |
| Implement New Goals | What are the most critical organizational capabilities required by the goals of the new strategic proposal? |
| Dedicated Management team, financial incentives, integrating tracking resources to validate profitability from the proposed initiative, integrated timelines for all of the business units, motivation and collaboration across business units, departments and cross- functions | |
| Implement New Value Propositions | What are the most critical organizational capabilities required by the value proposition of the new strategic proposal? |
| Appeal to the women, delivering fashion in fitness wear, allowing for self-expression in variety of “sports”. Promoting Dance category, gym wear and other supporting categories of women of all ages all over the world. Messaging, advertising, design of apparel, footwear and equipment, communication across the departments | |
| Implement New Product-Market Focus | What are the most critical organizational capabilities required by the product market focus of the new strategic proposal? |
| Delivering integrated collection, in targeted fitness categories in a timely, accessible manner, at major retailers, on-line and all over. Supply Chain, Value Chain and integrated planning are the most critical resources. | |
| Implement New Core Activities | What are the most critical organizational capabilities required by the key activities of the new strategic proposal? |
| Employee motivation, human resources, time, deadlines coordination, financial investment into R&D and new sales execution tools, software, ROI reporting programs | |
| Close Resource Gaps | What are the most critical organizational capabilities required to close the resource gaps identified in the resource analysis of the strategic proposal? |
| Data supporting advances in female fitness, support (51%) of the executive management, financial resources availability to sustain increased COGS, global presence and growing demand | |
| Close Performance Gaps | What are the most critical organizational capabilities required to close the management preferences gaps identified in the preferences analysis of the strategic proposal? |
| Capable and talented management, enthusiasm of the team to deliver the product in a new manner, sought out by the consumer, communication within virtual team and autonomy to produce test collection to gain more support from the executive team. |
Exhibit 3: Diamond E+C Framework
| Organization | Management Preferences | Resources | Customer | Strategy | Environment |
| – Fragmented business lines (equipment, apparel, footwear) representing varying market shares – Matrixed organizational structure – Executives rotating departments | – Desire to optimize innovation and execution around primary products – Seeking for sustainable competitive advantage – Adaptation to global changes – Strive for leadership across footwear, apparel and equipment simultaneously | – Virtual teams consisting of various dept. heads juggling 2 jobs – No compensation for extra tasks – Small designer team working on women’s shoes (3 vs 12 on men’s) – Nike Goddess stores – a success – Nike resonated with women more than any other sports brands | – Growing spending among women – Different view of fitness from men’s – Desire to express HERself – Varying approaches to fitness as a lifestyle – Seeking out the Goddess line | – Change the Game – several initiatives (5) – Focus on innovation – Exploring opportunities and new markets – Adapting to customer trends | – Growing number of gyms ( Curves franchise opened every 4 minutes) – Growing participation in every fitness category – Growing shopping trends in fitness |
Exhibit 4: Blue Ocean Strategy
| Blue Ocean Strategy | |
| Create uncontested market spaces: | Dance Category: “Nobody owned it” (p.9) |
| Make the competition irrelevant: | Creating the collection approach, something that other athletic companies have not delved into, being still fragmented per product lines |
| Focus on non-customers: | Being strictly athletics oriented company, offering dance collection would encompass those females that are in fitness not for sports but for self-actualization, offering them clothes to look and feel good, not simply performance efficiency |
| Create and capture new demand: | Dance market was new, nobody owned it, and it was abundant with celebrity athletes to provide the competitive edge and captivate the attention of those women who have not found themselves in the fitness world. It would offer the comfortable, non-threatening/competitive place where a woman could feel good and long for that, consequently contributing to the creating and capturing of the demand by Nike. |
| Break the value-cost tradeoff (seek greater value to customers AND low cost simultaneously): | Although the Dance category would be the break-through for the company, the foundation for its development would be built of “slightly less sexy stuff to pay the bills” (p.10). |
| Align the whole system of a firm’s activities in pursuit of differentiation AND low cost: | Creating the Women’s Fitness Strategy consisted of 3-tiered approach to market. Although Dance was the tier one category providing “sharp point”, promising good revenues, tier two was the financial platform for the time of the development of the new edge, while tier 3 was the all-encompassing aspect that would close the circle of addressing most of the fitness directions women’s category is broken down to. This way, the team created the approach where it provides the competitive edge, yet not overcompensates for it with the higher cost, making it unattainable to the customers. |
[1] HBR: Transforming Corner-Office Strategy into Frontline Action – by Orit Gadiesh and James L.Gilbert