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Exection and Implementation Of Blue Ocean Strategy

Timeline of Implementation

Phase 1

 

Acquisition of Paragon Labratories (01/02/2015 – 28/06/2015)

  • Whilst conduting the neccessary due-dilligence Nike is looking to absorb Paragon in a fast and efficient manner.

  • Incorporation of the new entity into the company, proactively seeking to create synergies and reduce fragmentation.

  • Active Resource and Knowledge sharing.

  • Instilling of a congruent strategy.

  • Increase supply chain management, seeking to erradicate logistic inefficincies.

  • Creation of Nike Nutrition.

 

Research and Development (01/02/2015 – 12/10/2015)

  • Extensive research with regard to the flavours, blends and products that would best allow Nike to penetrate its consumer base.

  • Further absorption of the knowledge and expertise from Paragon, to ensure the optimal product design.

  • Based on the market research and specialism of Paragon, Nike will design a portfolio of products that will best capture the needs of the diverse consumer base.

  • Extensive training will be given to Nike sales staff, to ensure an extensive and holistic knowledge of the proposed products, and their plethora of benefits.

  • Huge emphasis on process improvement

 

 

Phase 2

 

Contruction of Marketing Mix (01/06/2015 - 01/02/2016) 

  • Focus of the on the education of the consumer base on the benefits of sports nutrition, utilising Nike's marketing reach.

  • Transparent sharing of knowledge, with the aim of attracting the tier 2 and 3 non-customers.

  • Penetrating the interest of the everyday user, again utilising the commercial channels whilst also ensuring excessive visibility in the key demographic environment (gyms, health clubs, supermarkets).

  • Use of its corporate contacts in both the NFL and NBA, using stars such as Lebron James to boost the image of the Nike Nutrition and its products.

 

 

Phase 3

 

Distribution Channels (01/07/2015 - 20/01/2016)

  • Isolate the distribution channels that Nike will use to penetrate the market, with an early focus on Brick and Mortor marketing to promote consumer exposure to tangible products.

  • Utilisation of the expansive delivery network that Nike possesses, with emphasis on E-Commerce.

  • Look to form relationships with sector-specialist companies such as GNC to penetrate the current sports nutrition consumer. However, Nike will only look to release a limited selection of products to such companies in a bid to reduce B-B marketing, and prompt consumers to access Nikes products via their own websites and stores.

  • Forge partnerships with general wholsalers, such as Walmart.

  • Nutritional Products will be sold within Nikes stores, as it is important to present customers with the tangible product.

  • Whilst larger products, such as protein shakes will be placed around the store, convenience products such as bars, gels and drinks will be placed by the till.

Execution of Blue Ocean Strategy

For the Blue Ocean Strategy to attain optimal success, Nike must identify and confront the organisational risk that could occur from its transition into the Sports Nutrition maket. Nike's Blue Ocean Strategy is representitive of Tipping Point Leadership owing to the dynamic nature of the strategy, and the manner in which it runs congruent with the ambitious and innovative nature of Nike as an organisation.

 

Barriers of Execution

 

 

Internal Barriers

 

Cognitive

  • The cognitive hurdles should be diminished, as the breakout strategy is very much coherent and congruent within the current strategy of Nike.

  • As Sports Nutrition is a complementary good, the breakout strategy actually presents an opportunity to increase market share in their traditional industry, which should incentivise performance and conformity.

  • The absorption of Paragon has the potential to create friction, owing to the clear difference in size and culture of the two entities.  However, via Skill Transfer, resource sharing and the new value chain, the synergies between the companies will promote substantial growth.

  • The charecteristic of innovation and sustainable competitive advantage that runs through Nike as a corporation in itself justifies the Blue Ocean Strategy, due to the opportunity to further its ambition to maximise market share over the whole sporting industry.

  • Promote atomomisation to ensure that all employees understand that the goals of the strategy are attainable.

 

 

Limited Resources

  • As Nike is cash rich, and is already in possession of significant marketing and distributive capabilities, its ability to leverage such capabilities nullifies the possibility to infrastructure limitations.

  • The acquisition of a Paragon closes the resource gap previouslt identifies, and almost iminent market penetration.

 

 

Politics

  • The acquisition of Paragon creates a risk of a culture class and internal social division and fragmentation. However, significant time will be spent aligning the stratic ambition of the new employees, and extensive effort will be made to bridge the cultural gap between the two previously seperate institutions.

  • Nike will look to leverage those individuals that look to benefit the most from the strategy.

 

 

Motivation

  • Motivational issues will be diminished by the mutual posperity that will manifest from the formation of Nike Nutrition.

  • As a growth market, Sports Nutrition presents a dynamic opportunity, and the clear potential to gain a large market share.

  • Nike will present a clear balanced scorecard at the very centre of the business, presenting all employees with the potential prosperity that the Blue Ocean Strategy provides. 

  • Nike will activley pursue a transparent and holistic policy of "Fair Process" (Fish Bowl Management)

 

 

External Barriers 

 

Rules and Regulation

  • Moving into the Sports Nutriton Industry will mean  Nike is forced to adhere to new rules and regulation. Nike will look to hire new individuls within compliance that are familiar with these rules and regulation, and employees will be educated on these new regulatory norms in training.

 

 

 

 

 

Blue Ocean Strategy. (2014). Blue Ocean Strategy Tools. Retrieved February 11, 2015, from Blue Ocean Strategy: http://www.blueoceanstrategy.com/

 

Grant. (2014). Contemporary Strategic Analysis. Chichester: Blackwell.

 

Porter. (1985). Competitive Advantage. New York: Free Press.

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