Business Report Fictional

INCONSISTENT SHOE QUALITY FROM NIKE INC.

INTRODUCTION

General Comments

Due to the continuous amount of complaints we have been receiving every week since the release of the new Jordan line shoes on November 1st, 2008, we can’t help but be concerned. Nike is currently the largest and most respected athletic wear company in the world, but we might lose our respectable reputation if we do not fix this problem. Over the past years, our revenues have been increasing on average of about 8% a year; but recently over the last 5 years, our revenue growth has slowed down and our competitor’s revenues have increased dramatically gaining more dividends in the market. With a slower projected growth, we can not afford to lose any more of our business to our competitors. Therefore, immediate action must be taken to solve this problem at hand to keep our reputation of being the best and at the top of the industry.

Mission Statement

We at Nike are here to serve our customers and the community. We have been considered as the industry’s best and we hope to continue to uphold that position by delivering the best to our customers. The purpose of this report is to investigate the complaints we have been receiving about the inconsistent shoe quality from Nike Inc. and find solutions and recommendations to solve this problem. This report addresses the root cause of the problem, the implications resulting from the problem, and the recommended plan of action our investigation team has concluded on. This report has been written so as to guide the reader through the problem, stress on the resulted implications, and recommend a solution for the problem.

Background

Nike Inc. was founded in 1964 by track athlete Phil Knight and his coach Bill Bowerman. The company initially started off as a distributor for a Japanese shoe manufacturer called Onitsuka Tiger. Nike first started selling their products out of coach Bowermans Dodge Caravan at athletic events such as track meets or football games. With the support of the top NCAA athletes in the Oregon area wearing Nike shoes, the shoes became very popular and in 1966, the company became independent and opened their own retail store in Portland, Oregon. During the 1970’s, the company’s revenue increased rapidly and soon the company had professional athletes endorsing their products. With all the mainstream success and recognition, Nike Inc. grew into the Fortune 500 company it is today.

The problem of the inconsistent shoe quality from Nike Inc. first started when the new Jordan line of shoes was released. From then on, the company has been receiving complaints from disgruntled customers about how awkward and uncomfortable the shoes were. With a high consumer demand for the new line of shoes, Nike decided to partner with Raptor Inc. to manufacture the new shoes to ease the burden on our currently overworked factories. With high pressure and demand for the shoes, Nike instantaneously relied on Raptor Inc. believing that they can properly manufacture our new line of shoes.

Approximately a week before the release of the new Jordan shoes, the shoes were given a quick inspection and were given the OK for release. It was anticipated that the shoes would give a big boost to revenues and since the release, demand has skyrocketed. But a week after the release, we have been a receiving a continuous amount of complaints. The complaints mainly stemming from the shoes manufactured by Raptor Inc. The Jordan line of shoes have become a great source of revenue and we must quickly resolve this problem before we lose the loyalty of our customers.

Sources and Methods

Both primary and secondary researches were used for this report. The primary research consisted of three evaluation test, which was given to every manufacturing worker from Raptor Inc. All 300 manufacturing workers were tested over a two week period and we received all 300 test results back. The workers were required to answer 30 multiple choice questions and provide 10 short answers on how to handle regular problems they would encounter during the shoe manufacturing process. The test results provided valuable insight into what went wrong with the manufacturing process and what should be done about it. The secondary research was obtained from industry reviews, journals, and magazine articles.

Constraints and Considerations

A total of two weeks and $3000 was devoted towards investigations of the problem. Since Raptor Inc. is a foreign branch company and many of the workers did not speak much English, it took a longer than anticipated time to translate and evaluate test results; increasing the budget from $2000 to $3000 and a planned one week period to two weeks.

This report primarily focuses on the inconsistent shoe quality from Nike Inc. and provides recommendations and solutions to solve the problem.

FINDINGS

The following are the results from the investigation we have conducted concerning the inconsistent shoe quality from Nike Inc.

Related Issue: Unregulated Workforce

The cause for the inconsistent shoe quality from Nike Inc. is the unregulated workforce.

Analysis: There are three main causes for the unregulated workforce.

• Rushed Work Order: Before the release of the new Jordan line of shoes, there has already been a high demand for the product. With many consumers pre-ordering, there was an anticipated shortage in quantity with respects to demand. Nike Inc. was forced to rush production at an abrupt rate so top officials decided to hire Raptor Inc. to ease the burden. Nike Inc. just simply handed over orders and guidelines to officials at Raptor Inc. with none of our own officials being deployed to enforce them at Raptor Inc.’s manufacturing factories. Because Raptor Inc. had a shortage of workers, they simply hired any one who applied with out proper assessment and evaluation of the applicants to see if they had the know how or skills to perform the job. In response to the pressure of high orders, Raptor Inc. simply just promoted the workers who performed the best to management even though they lacked previous work experience at the management position. The new workers were shown