21227 Innovation and Entrepreneurship

The aim of the paper is to look into the aspect of ecosystem innovation in the context of Nike, one of the leading multinational corporation selling sports and athletic wear in the market. This particular segment would thereby draw upon the analysis that had been conducted in the earlier course of discussion in respect to the external and internal environment of Nike. From the environmental analysis of Nike that had been conducted two of the recommendation that had been suggested for Nike was that the organization should indulge in collaborative with high end fashion and improving upon the usage of technology. Such a recommended solution would be considered in this segment of the paper in an effective manner where the implication of making the changes on the effectiveness of Nike’s operation would be discussed in advertently.

There has been a current trend among the industries and companies in developing an ecosystem of their own. In shorter terms the attempt of these organizations is towards reaching out to the success of the big players in the global market like the Apple or the google. The initial step that they undertake in order to achieve the same is to unite the firms that exist around them. However, in order to do so the presence of unique and financial resources becomes crucial in dealing with the development of this business-based ecosystem (Hsu and Ziedonis, 2013).

The sudden growth of the ecosystem business is thereby changing the ways in which firms used develop their strategies as well as align the organization in respect to the requirement of the market. Thus the contemporary market in the global world is experiencing the presence of business ecosystem where the players like Alibaba, Uber and Amazon are presenting themselves as (Mohit. 2020).

The term business ecosystem is not a new idea rather they had been in use for the last 20-25 years as companies like Toyota and Volkswagen orchestrated a huge network of suppliers and distributor for a huge period of time. However, the contemporary market is experiencing the presence of players like Amazon and others who are considering themselves to be developing a business ecosystem of their own and thereby to be have placed themselves between the network of customers, producers of complementary services and suppliers. Theses organizations that had developed the new way of operating in the market has also devised the ways of competing that has challenged the conventional perspective of the business creating and capturing values in an effective manner (Nike, 2018).

The business environment nonetheless have considerable amount of enduring advantages. Despite of the success and the advantages that the firm has established for the market it can be understood that business ecosystem is enabling the firms with gaining a considerable amount of strategy that is different from the traditional ones.

One of the approaches in this respect is to develop a positioning of the organization and determine an industry with a high-end barrier. Another approach that has been undertaken by the firms is directed towards developing the existing assets and invests on those that are rare and difficult for the competitors to imitate. These two have dominated the domain of strategic thinking in the market which has however been challenged at the onset of business ecosystem that has developed in the contemporary time. The value in the ecosystem is thereby created through the development of the values through relationship and networks. The positioning is based around the ownership of the asset which is challenging as the firms has been looking forward to grow the market with the increase in the flow of the people and the goods. The logic based approach towards competitive advantages as it has been the scenario in the traditional strategic management of the market it can be expected that the scenario has underwent crucial changes with the business ecosystem in place (Nike, 2021).

The implementation of developing a collaboration with the high-end fashion should reflect the concern of the organization thereby beginning a search for the organizations that operates with similar values as Nike. One the connection in made the clause and conditions of the joint ventures should be developed effectively whereby the concern of the organization should be developed in terms of selling the products of Nike through the high end fashion organization with whom the collaboration has been developed. Such an affect is going to be impactful as this would allow the organization to enter the markets where it has earlier never set a foot to. This would also allow Nike to enhance its sale without taking all the logistic burden on itself.

On the other hand, the implementation of the technological advances is reflected in the ability of the organization to bring about advances in terms of technology to enhance the efficiency of the operation as well as make the impact on the environment degrade to a greater extent. As noted in the earlier segment it can be understood that advances in technology also assists in developing a greater connection with the customers.

The earlier course of discussion had been considered with developing an understanding of the competitive position of the market with Nike in the center of its concern. Nike had been effective in maintaining its role as a world leader in the footwear athletic. The manufacturing of Nike had been done through vertical integration followed by extensive research on the market and the motivation in order to extend the nature of the operation (Rothaermel. 2017).

The operation of Nike has elucidated the ways in which Nike can utilize its diverse resources along with the experience, abilities and expertise which in turn has allowed Nike in innovating in its domain of footwear along with the sports equipment in order to improve upon its results.

The strategic growth of Nike in sectors that are new to its operation required Nike to intervene effectively. An expectable mode of entry which is effective for the market has allowed Nike in both dealing with endogenous as well as exogenous factors (Tanya, 2015).

Collaborating in high end fashion

The operation of Nike happens in the dynamic market with the concern of being in sync with the current trends in the customer buying preferences, especially in the highly competitive market like the one of Nike. The current time has experienced Nike in developing an allowance with Yeezy, Raf Simons and Off white in order to spread their presence in the market. As such the Nike can continue its collaboration with this high-end company in order to mark itself successful in terms of promoting Nike as a brand. The Nike brand had been successful in entering a new market with the collaboration with the high-end fashion. As it has been discussed earlier it has been noted that the aim of business ecosystem is directed towards developing an athlete footwear which is 100% recyclable which allows Nike to participate in regular innovation as it has been done by them as a crucial part of their operation. It has been recommended in the earlier course of discussion that business ecosystem can be developed by Nike through its collaboration in other high end fashion brand in order to bring about innovation in its operation.

Collaboration with high end fashion not only allows the organization in enhancing its brand image but it also contributed effectively in making profit. The collaboration with the high end partners contributes in the organization in expanding the sales of their products. The collaboration with the concerned organization has also allowed Nike in reducing the emission to the environment and thereby reducing its impact. The innovation of Nike also includes the development of AI in order to enhance the innovation of the product in the market. There has been an improvement in the innovation of Nike whereby the organization has brought about to use new level of creativity through the employment of machine learning, data science, vision, algorithm and artificial intelligence. Data and information system had been introduced by Nike in order to enhance new level of creativity. The usage of the system has allowed Nike in increasing global revenue in the industry of Athletic footwear (mckinsey.com, 2020).

The usage of the technology has affected the development of Nike air technology which has been used in the production of shoes. The technology involves the usage of pressurized air in the production of the lightweight bag but at the same provide stability along with unstructured pins in its process. The usage of the technology contributes in retaining the shape along with minimizing the impact while keeping the shoes lightweight and snug. The production range of Nike also includes shoes where footwear is manufactured using automatic lace training.

The frame work that can be evoked in case of digital innovation of Nike is the THRIVE framework.

The framework stands for aspects like transformation, holistic, response, innovation, value and enterprise. The transformation as the initial aspect would assist Nike in developing an understanding of the areas where the innovation or transformation is required by Nike. Holistic aspect of the innovation requires Nike in dealing with the holistic understanding of the implication of the technological intervention in the organization. Response is the next step of the framework that Nike requires to consider in terms of the innovation. The development of the innovation comes under the next step of the consideration which is followed by an analysis of the value that the innovation creates for the firm along with the entrepreneurship implication of the measures in terms of technological advances that had been done by Nike. All the measures mentioned in the course of the framework allows Nike to develop an analysis of the aspects that associates its technological innovation and also estimate the implication of the measures in the context of the organization. The concern of Nike in this respect should be directed towards developing a holistic approach in terms of integrating its operation along the line of the technological development. In the contemporary market, integration of technology in the development of the innovation both in the process of operation along with the manufacturing of the products (Birkinshaw, 2019).

The framework reflects the ways in which in Nike can bring about collaborative innovation in order to develop connection and relationship with the collaborative organization and the bodies involved in the process. The process involved in the collaborative innovation is not a linear one but a cyclic one where the collaboration is supposed to empower, educate and enable the development of the organization. In the case of Nike the collaboration requires to be developed between the high end fashion brands dispersed globally. This would have allowed Nike in developing an understanding of the market that will ensure a greater sales-based profit for Nike to be earned in the global market. It has thereby been reflected in the fact that the brand market-based collaboration is crucial for Nike in developing its brand identity along with increasing its revenue. The first implication of the collaborative innovation should be reflected in the ability of innovation to empower its operation. The aim of the organization should be directed towards enabling its operation as well as educating. Education hereby refers to the knowledge that requires to be developed in the context of the concerned innovation as well as development as brought about in the organization. The collaborative innovation should bring about the opportunity for the firm in bringing about collaborative learning as well as ensure ways in which the knowledge of the firm is developed in terms of the management of the operation (deloitte.com, 2019).

The collaborative innovation for Nike through other players of the high end fashion in the market would not only empower the organization by increasing the sale but at the same time it would also enhance the operation of the organization. The collaboration would enhance the knowledge of Nike about the foreign market as well as ensure the development of financial performance along with a developed brand name for Nike which is already noted in the global world for its luxury sports apparel and footwear.

Ecosystem strategies can generate significant value both by growing the core business and by expanding the portfolio into new products and services. By Miklos Dietz, Hamza Khan, and Istvan Rab

The importance of the Digital interaction has been amplified under the impact of the COVID 19 crisis which has highlighted the importance of the business adopting to digital model of ecosystem-based business as well as focus on the digital interaction. The recent areas of researches have indicated that the online e commerce is going to flourish itself for a considerable period of time despite of the fact that the Crisis is over in certain parts of the world.

As a leading global brand in sports luxury apparel Nike had been effective in producing high end product which can be otherwise enhanced with the collaboration being developed between Nike and other organization which would allow Nike in utilizing their base and customer group effectively.

References

Birkinshaw, J. (2019) Ecosystem Businesses Are Changing the Rules of Strategy by Julian Birkinshaw. https://hbr.org/2019/08/ecosystem-businesses-are-changing-the-rules-of-strategy

deloitte.com, (2019) https://www2.deloitte.com/content/dam/insights/us/articles/platform-strategy-new-level-business-trends/DUP_1048-Business-ecosystems-come-of-age_MASTER_FINAL.pdf

Hsu, D.H. and Ziedonis, R.H., 2013. Resources as dual sources of advantage: Implications for valuing entrepreneurial?firm patents. Strategic Management Journal, 34(7), pp.761-781.

mckinsey.com, (2020). How do companies create value from digital ecosystems? https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/how-do-companies-create-value-from-digital-ecosystems

Mohit. (2020). Nike’s Target Markets: Everything You Need to Know. Market Realist. https://marketrealist.com/2019/10/nikes-target-markets-everything-you-need-to-know/

Nike. (2018). Gear Up . Nike. https://www.nike.com/gb/

Nike. (2021). FY19 NIKE, INC. IMPACT REPORT EXECUTIVE SUMMARY. Nike. https://purpose.nike.com/fy19-nir-executive-summary

Rothaermel. (2017). Strategic Management. McGraw Hill Education. https://textflowprod-cf.prod.mheducation.com/prod/assets/1259760545/roth_3e_fm.pdf

Tanya. (2015). PEST analysis. Research Gate, 12. https://www.researchgate.net/publication/257303449_PEST_analysis

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