Nike Exam

Presenting this data in a series of workshops allows for interactive discussions with key stakeholders, fostering a collaborative environment where concerns can be addressed, and suggestions can be integrated into the plan. This approach not only builds trust but also encourages stakeholder investment in the initiatives, as they feel their input is valued and considered. In contrast, launching a marketing campaign without stakeholder involvement may lead to skepticism and resistance, as stakeholders might feel excluded from the decision-making process. Focusing solely on immediate costs ignores the broader context of sustainability and the potential for long-term financial benefits, which can undermine the initiative’s credibility. Lastly, implementing changes without consultation can create significant pushback, as stakeholders may perceive this as a top-down approach that disregards their insights and concerns. Therefore, a comprehensive, data-driven, and inclusive strategy is essential for successfully advocating for CSR initiatives within Nike.

When consumers perceive a brand as ethical and responsible, they are more likely to develop loyalty towards it. This loyalty is often rooted in the belief that their purchasing decisions contribute to positive social and environmental outcomes. In contrast, if a brand were to hide information or engage in practices that are not transparent, it could lead to skepticism and distrust among consumers, ultimately harming brand loyalty. Moreover, transparency can also mitigate risks associated with negative publicity. For instance, if Nike were to face scrutiny regarding labor practices, having already established a transparent communication strategy would allow the company to address concerns proactively, rather than reactively. This proactive approach can foster a sense of confidence among stakeholders, including consumers, investors, and partners, reinforcing the brand’s reputation. On the other hand, while some may argue that transparency could lead to increased scrutiny and potential backlash, the overall trend indicates that consumers are more supportive of brands that are open about their practices. This is particularly relevant in today’s market, where consumers often conduct research before making purchases and are influenced by peer opinions and social media discussions. In summary, the most significant outcome of Nike’s transparency in its supply chain practices is the enhancement of consumer trust and loyalty, which is vital for maintaining a competitive edge in the market. This trust not only leads to repeat purchases but also encourages consumers to advocate for the brand, further solidifying its position in the industry.

\[ \text{Influenced Customers} = \text{Total Customers} \times \text{Percentage of Influenced Customers} = 1,000,000 \times 0.60 = 600,000 \] Next, we need to find out how many of these influenced customers are expected to make a purchase. If Nike anticipates that 10% of the influenced customers will buy the new shoes, we calculate: \[ \text{Expected Purchases} = \text{Influenced Customers} \times \text{Purchase Rate} = 600,000 \times 0.10 = 60,000 \] Now, to find the projected profit from this initiative, we multiply the expected number of purchases by the profit margin per shoe: \[ \text{Projected Profit} = \text{Expected Purchases} \times \text{Profit Margin} = 60,000 \times 20 = 1,200,000 \] However, the question asks for the projected profit based on the expected purchases, which is $1,200,000. The options provided seem to have a discrepancy, as the correct calculation yields a profit of $1,200,000, which is not listed. In this case, the correct answer should reflect the calculated profit based on the assumptions made in the question. The analysis highlights the importance of using data analytics to drive business insights, as Nike can leverage customer preferences to make informed decisions about product launches. This scenario illustrates how analytics can help companies like Nike understand market trends and customer behavior, ultimately leading to strategic initiatives that align with consumer values and enhance profitability.

1. **Current Costs**: – Material Cost = $200,000 – Shipping Cost = $50,000 – Total Current Cost = Material Cost + Shipping Cost = $200,000 + $50,000 = $250,000 2. **New Material Cost**: The new supplier offers materials at a 15% lower cost. Therefore, the new material cost can be calculated as follows: \[ \text{New Material Cost} = \text{Current Material Cost} \times (1 – 0.15) = 200,000 \times 0.85 = 170,000 \] 3. **New Shipping Cost**: The shipping costs increase by 10% due to longer distances. Thus, the new shipping cost is: \[ \text{New Shipping Cost} = \text{Current Shipping Cost} \times (1 + 0.10) = 50,000 \times 1.10 = 55,000 \] 4. **Total New Cost**: Now, we can calculate the total new cost: \[ \text{Total New Cost} = \text{New Material Cost} + \text{New Shipping Cost} = 170,000 + 55,000 = 225,000 \] 5. **Net Effect on Total Cost**: To find the net effect on the total cost, we subtract the total new cost from the total current cost: \[ \text{Net Effect} = \text{Total Current Cost} – \text{Total New Cost} = 250,000 – 225,000 = 25,000 \] This indicates a decrease in total costs by $25,000. However, since the question asks for the net effect considering the changes, we can summarize that the total cost will decrease by $25,000, which is a significant reduction. This analysis highlights the importance of evaluating both material and shipping costs when considering supplier changes, especially in a global supply chain context like Nike’s. It also emphasizes the need for a comprehensive understanding of cost structures in supply chain management, as decisions based solely on material costs without considering shipping implications can lead to misleading conclusions.

In emerging markets, consumers may face increased costs of living and reduced disposable income due to higher interest rates, leading to decreased demand for discretionary items such as athletic apparel and footwear. Consequently, Nike may reassess its expansion strategy, opting to delay or scale back its plans in these regions until economic conditions stabilize. Moreover, higher interest rates can lead to currency fluctuations, which may further complicate international operations. If the local currency depreciates against the dollar, Nike’s revenues from those markets could diminish when converted back to its home currency, impacting overall profitability. In summary, the interplay of increased borrowing costs, reduced consumer spending, and potential currency volatility creates a challenging environment for Nike’s expansion into emerging markets. Therefore, the company is likely to adopt a more cautious approach, prioritizing financial stability and risk management over aggressive growth strategies in the face of rising interest rates.

In contrast, conducting extensive market research before any development (option b) may delay the innovation process and stifle creativity, as it could lead to over-analysis and hesitation to experiment with new ideas. Establishing a rigid approval process (option c) can create bureaucratic hurdles that inhibit quick decision-making and responsiveness, which are critical in an innovative environment. Lastly, focusing solely on traditional materials (option d) contradicts the very essence of innovation, as it limits exploration and the potential for groundbreaking advancements in sustainable practices. Nike’s culture thrives on the ability to adapt and respond to new challenges, and the rapid prototyping process exemplifies this agility. It allows the company to stay ahead of trends and meet consumer demands for sustainability while maintaining a competitive edge in the athletic footwear market. By embracing risk and fostering an environment where experimentation is encouraged, Nike can continue to lead in innovation and sustainability.

Complementing focus group findings with quantitative sales data analysis is essential for validating these insights. By examining purchasing patterns, the team can identify which products are performing well and correlate this with consumer feedback to understand why certain features or styles resonate with customers. This dual approach not only highlights customer needs but also sheds light on competitive dynamics by revealing how Nike’s offerings stack up against competitors in terms of sales performance. In contrast, relying solely on sales data from competitors (as suggested in option b) lacks the depth of understanding that direct consumer engagement provides. It may lead to misinterpretations of customer preferences based solely on market performance without understanding the underlying reasons for those preferences. Similarly, targeting only existing Nike customers (option c) limits the analysis to a narrow segment of the market, potentially overlooking the needs of new customers who may have different preferences. Lastly, analyzing social media sentiment without correlating it with actual sales figures (option d) can lead to skewed conclusions, as social media trends may not always translate into purchasing behavior. Thus, the combination of focus groups and sales data analysis offers a comprehensive view that captures both the qualitative nuances of consumer preferences and the quantitative realities of market performance, making it the most effective approach for Nike’s market analysis.

Moreover, fostering open communication is essential. It encourages team members to share ideas, voice concerns, and provide feedback, creating an inclusive environment where everyone feels valued. This sense of belonging can significantly enhance engagement, as team members are more likely to invest their efforts when they feel their contributions matter. Collaboration is another key element. By promoting teamwork and encouraging cross-functional interactions, team members can leverage each other’s strengths, leading to innovative solutions and a shared sense of ownership over the project. This collaborative spirit can be particularly motivating, as it aligns individual goals with the team’s success. In contrast, implementing strict deadlines without flexibility can lead to burnout and resentment, as team members may feel overwhelmed and unsupported. Financial incentives based solely on individual performance can create unhealthy competition and diminish teamwork, while assigning tasks based on hierarchy rather than individual strengths can lead to disengagement, as team members may feel their skills are underutilized. Ultimately, a balanced approach that combines clear objectives, open communication, and collaborative efforts is vital for sustaining motivation and engagement in high-pressure environments like those at Nike. This strategy not only enhances individual performance but also fosters a cohesive team dynamic, essential for the successful launch of new products.

In contrast, focusing solely on creative aspects without considering market trends can lead to a disconnect between the campaign and consumer expectations, ultimately resulting in ineffective marketing efforts. Similarly, implementing a one-size-fits-all strategy ignores the diverse needs of different consumer segments, which can dilute the campaign’s effectiveness and fail to drive engagement. Lastly, relying on past successful campaigns without adapting to current market conditions can hinder innovation and responsiveness, which are vital in a rapidly changing industry like sports apparel and footwear. By prioritizing market research, the team not only aligns their objectives with Nike’s overarching strategy but also positions themselves to create a campaign that is both innovative and relevant, ultimately driving sales growth and enhancing brand loyalty among younger consumers. This approach reflects a nuanced understanding of strategic alignment, emphasizing the importance of data-driven decision-making in achieving organizational goals.

Following Project Alpha, Project Gamma should be prioritized as it aims to create a new digital platform for customer engagement. In today’s market, enhancing customer experience through digital means is vital for maintaining competitive advantage. This project can leverage data analytics to personalize customer interactions, thereby driving sales and fostering brand loyalty. Project Beta, while important for performance enhancement, may not align as closely with Nike’s immediate strategic goals of sustainability and customer engagement. Although improving product performance is essential, it may not yield as significant a return on investment in the current market context compared to the other two projects. In summary, the prioritization should reflect a balance between immediate market demands and long-term strategic goals. By focusing first on sustainability and customer engagement, Nike can ensure that its innovation pipeline is not only effective but also resonates with its brand identity and consumer expectations. This approach also allows for a more strategic allocation of limited resources, ensuring that the projects with the highest potential impact are given precedence.

For Campaign A, the increase in brand recognition is 25%. Therefore, the number of young athletes who recognized the brand due to Campaign A can be calculated as follows: \[ \text{Athletes recognizing brand from Campaign A} = 800 \times \frac{25}{100} = 800 \times 0.25 = 200 \] For Campaign B, the increase in brand recognition is 15%. Thus, the number of young athletes who recognized the brand due to Campaign B is: \[ \text{Athletes recognizing brand from Campaign B} = 800 \times \frac{15}{100} = 800 \times 0.15 = 120 \] Now, to find out how many more athletes recognized the brand due to Campaign A compared to Campaign B, we subtract the number of athletes recognizing the brand from Campaign B from those recognizing it from Campaign A: \[ \text{Difference} = 200 – 120 = 80 \] This calculation shows that 80 more athletes recognized the brand due to Campaign A compared to Campaign B. This analysis is crucial for Nike as it highlights the effectiveness of their marketing strategies and helps in making informed decisions about future advertising investments. Understanding the impact of different campaigns on brand recognition can guide Nike in optimizing their marketing efforts to better reach their target audience, ultimately leading to increased sales and brand loyalty.

By utilizing rapid prototyping, the team can explore unconventional materials and designs without committing to a final product too early in the process. This iterative cycle of design, test, and refine helps mitigate the risks associated with using untested resources, as it allows for adjustments based on performance and consumer feedback. Furthermore, this approach aligns with Nike’s commitment to innovation and sustainability, as it encourages the exploration of new materials that could lead to more eco-friendly products. In contrast, relying solely on traditional materials (option b) would stifle creativity and limit the potential for groundbreaking designs. Establishing a rigid timeline (option c) could hinder the team’s ability to explore innovative solutions, as it may pressure them to rush through the experimentation phase. Lastly, focusing exclusively on market research (option d) without allowing for experimentation would likely result in a lack of differentiation in the product line, as it would not leverage the creative potential of the team. Thus, the most effective strategy for balancing innovation with risk management while ensuring agility is to implement a rapid prototyping approach, which fosters a culture of experimentation and continuous improvement within Nike’s innovative framework.

Conducting regular market analysis allows the project team to stay informed about material price trends and potential supply chain issues, enabling them to make informed decisions. This proactive measure helps in anticipating changes rather than merely reacting to them. Furthermore, developing a contingency plan for regulatory compliance is vital, as sustainability standards can evolve rapidly. By preparing for potential regulatory changes, the team can avoid costly delays and ensure that the product meets all necessary guidelines. In contrast, relying on a single supplier introduces significant risk, as any disruption could halt production. Ignoring market trends can lead to unexpected cost increases, and focusing solely on cost-cutting without considering supplier reliability or regulatory impacts can jeopardize the project’s overall success. Lastly, implementing a rigid project timeline that does not allow for adjustments can lead to missed opportunities and increased vulnerability to unforeseen challenges. Therefore, a comprehensive risk management strategy that incorporates these elements is essential for navigating the complexities of the project successfully.

Regular assessments of material sourcing and technology integration are essential in an innovative project. This involves continuously evaluating the sustainability of materials and the efficiency of manufacturing processes. By doing so, the project team can identify potential bottlenecks early and make necessary adjustments, ensuring that the innovative goals are not compromised. In contrast, focusing solely on technological aspects without stakeholder engagement can lead to misalignment with market demands, resulting in delays and a product that does not resonate with consumers. Similarly, relying on traditional project management methods may hinder the project’s ability to adapt to the dynamic nature of innovation, leading to missed opportunities and ineffective solutions. Lastly, prioritizing cost reduction over innovation can undermine the project’s core objectives, ultimately affecting the quality and sustainability of the final product. Therefore, a comprehensive and collaborative approach is vital for successfully managing innovation-driven projects in a competitive industry like that of Nike.

The NPV can be calculated using the formula: $$ NPV = \sum_{t=1}^{n} \frac{C_t}{(1 + r)^t} – C_0 $$ where: – \( C_t \) is the cash inflow during the period \( t \), – \( r \) is the discount rate (10% or 0.10), – \( n \) is the number of periods (5 years), – \( C_0 \) is the initial investment ($2,000,000). Calculating the present value of cash inflows for each year: 1. For Year 1: $$ \frac{800,000}{(1 + 0.10)^1} = \frac{800,000}{1.10} \approx 727,273 $$ 2. For Year 2: $$ \frac{800,000}{(1 + 0.10)^2} = \frac{800,000}{1.21} \approx 661,157 $$ 3. For Year 3: $$ \frac{800,000}{(1 + 0.10)^3} = \frac{800,000}{1.331} \approx 601,073 $$ 4. For Year 4: $$ \frac{800,000}{(1 + 0.10)^4} = \frac{800,000}{1.4641} \approx 546,403 $$ 5. For Year 5: $$ \frac{800,000}{(1 + 0.10)^5} = \frac{800,000}{1.61051} \approx 496,585 $$ Now, summing these present values: $$ Total\ Present\ Value = 727,273 + 661,157 + 601,073 + 546,403 + 496,585 \approx 3,032,491 $$ Next, we subtract the initial investment: $$ NPV = 3,032,491 – 2,000,000 \approx 1,032,491 $$ This NPV indicates that the investment is expected to generate a net gain of approximately $1,032,491 over the five years when considering the time value of money. A positive NPV suggests that the investment is favorable and should be pursued, as it is expected to add value to Nike. This analysis aligns with strategic investment principles, emphasizing the importance of evaluating cash flows and the time value of money in decision-making processes.

Additionally, optimizing supply chain efficiencies becomes crucial. Nike may seek to reduce production costs by negotiating better terms with suppliers or streamlining logistics to minimize expenses. This could involve leveraging technology to enhance inventory management and reduce waste, ensuring that the company can respond swiftly to changing market demands without incurring unnecessary costs. Furthermore, marketing initiatives would likely pivot towards value-oriented messaging. Instead of promoting high-end products, Nike might emphasize the durability and versatility of its offerings, appealing to consumers looking for quality at a reasonable price. This strategic shift can help maintain market share and customer engagement during economic hardships. Regulatory changes may also play a role in shaping Nike’s strategy. For instance, if governments implement stimulus packages or adjust tariffs, Nike would need to adapt its pricing and supply chain strategies accordingly. Understanding these macroeconomic factors is essential for Nike to navigate the complexities of the market effectively and ensure long-term sustainability. Thus, the interplay of economic cycles, consumer behavior, and regulatory changes necessitates a comprehensive and adaptive approach to business strategy.

Establishing data quality metrics is another critical component. These metrics can include accuracy, completeness, consistency, and timeliness of the data. For instance, accuracy can be measured by comparing sales figures against inventory records to ensure that reported sales align with actual stock levels. Completeness involves checking that all relevant data points are captured, such as customer demographics and purchase history, which can provide deeper insights into trends. Conducting regular audits of the data is also vital. This process involves systematically reviewing data entries and processes to identify any anomalies or errors. For example, if a significant drop in sales is reported, an audit can help determine whether this is a genuine trend or a result of data entry mistakes. In contrast, relying solely on the most recent sales reports ignores the broader context and may lead to skewed insights. Using only online sales data overlooks valuable information from in-store transactions, which can be significant for a company like Nike that operates both online and brick-and-mortar stores. Lastly, focusing exclusively on customer feedback without validating it against sales data can lead to misguided conclusions, as feedback may not always accurately represent purchasing behavior. By implementing a robust data validation framework, Nike can ensure that its decision-making is based on accurate and reliable data, ultimately leading to more effective strategies and improved business outcomes.

For Campaign A: – The total cost is $300,000. – The percentage increase in brand awareness is 5%. – Therefore, the cost per percentage point increase can be calculated as follows: \[ \text{Cost per percentage point for Campaign A} = \frac{\text{Total Cost}}{\text{Percentage Increase}} = \frac{300,000}{5} = 60,000 \] For Campaign B: – The total cost is $400,000. – The percentage increase in brand awareness is 3%. – Thus, the cost per percentage point increase is calculated as: \[ \text{Cost per percentage point for Campaign B} = \frac{\text{Total Cost}}{\text{Percentage Increase}} = \frac{400,000}{3} \approx 133,333.33 \] Now, comparing the two campaigns: – Campaign A costs $60,000 per percentage point increase, while Campaign B costs approximately $133,333.33 per percentage point increase. From this analysis, it is clear that Campaign A is more cost-effective, as it provides a greater increase in brand awareness for a lower cost per percentage point. This evaluation is crucial for Nike as it allows them to allocate their marketing budget more efficiently, ensuring that they maximize their return on investment in advertising efforts. Understanding the cost-effectiveness of different campaigns can significantly influence future marketing strategies and budget allocations, ultimately impacting Nike’s market presence and brand recognition among young athletes.

Calculating the current costs: – Current material cost per unit = 70% of $50 = $35 – Current shipping cost per unit = 30% of $50 = $15 Now, if the new supplier offers materials at a 15% lower cost, we calculate the new material cost: – New material cost = $35 – (15\% \times 35) = $35 – $5.25 = $29.75 Next, we need to calculate the new shipping cost, which increases by 10%. The current shipping cost is $15, so: – New shipping cost = $15 + (10\% \times 15) = $15 + $1.50 = $16.50 Now, we can find the new total cost per unit by summing the new material and shipping costs: – New total cost per unit = New material cost + New shipping cost = $29.75 + $16.50 = $46.25 However, we need to ensure that the calculations reflect the correct proportions of the costs. The new total cost per unit is calculated as follows: – Total cost per unit = Material cost + Shipping cost = $29.75 + $16.50 = $46.25 This indicates that the new total cost per unit is lower than the original cost of $50. Therefore, the new total cost per unit after considering the changes is $48.50. This scenario illustrates the importance of evaluating both material and shipping costs in supply chain management, especially for a company like Nike, which relies heavily on efficient logistics and cost management to maintain its competitive edge in the athletic apparel and footwear market. Understanding the interplay between different cost components is crucial for making informed decisions that can impact overall profitability.

By ensuring that all claims about sustainability are accurate and verifiable, Nike can build a strong foundation for its marketing strategy that resonates with increasingly environmentally conscious consumers. This approach not only mitigates the risk of backlash from consumers and regulatory bodies but also positions Nike as a leader in ethical business practices within the athletic apparel industry. On the other hand, proceeding with the exaggerated campaign could lead to significant short-term gains but poses substantial risks, including potential legal repercussions and loss of consumer trust. Modifying the campaign to include some truthful elements while still emphasizing sustainability could be seen as a compromise, but it still risks misleading consumers. Conducting a market survey may provide insights into consumer preferences, but it does not address the ethical implications of the proposed marketing strategy. Ultimately, the best course of action for Nike is to commit to ethical marketing practices that reflect the company’s values and foster long-term relationships with consumers, thereby aligning business goals with ethical considerations.

For instance, the North American product launch could incorporate sustainable practices that align with the European team’s goals, thereby enhancing the product’s marketability while also addressing environmental concerns. This approach not only supports both teams but also reinforces Nike’s brand values, which are increasingly important to consumers. Moreover, exploring resource reallocation strategies can help in finding a balance between immediate financial impacts and long-term sustainability goals. This might involve temporarily reallocating marketing resources or personnel to support both initiatives, ensuring that neither team feels neglected. On the other hand, prioritizing one team over the other or delaying both initiatives could lead to dissatisfaction and a lack of trust among teams, which can hinder collaboration in the future. Therefore, a solution that emphasizes joint problem-solving and resource optimization is essential for maintaining team morale and achieving Nike’s strategic objectives.

To effectively integrate these insights, Nike should prioritize lightweight materials but also ensure that durability is not compromised. This can be achieved through innovative design techniques, such as using advanced composite materials that provide both lightweight characteristics and enhanced durability. By leveraging technology and material science, Nike can create a product that meets customer preferences without sacrificing performance, thus addressing both aspects of the feedback. Ignoring market data in favor of customer feedback could lead to a product that fails to resonate with a broader audience, potentially harming Nike’s brand reputation and sales. Conversely, developing two separate product lines may dilute brand identity and complicate inventory management. Conducting further market research could delay the product launch and may not yield actionable insights in a timely manner. Ultimately, the best approach is to synthesize both customer feedback and market data, leading to a product that embodies the best of both worlds. This strategy not only enhances customer satisfaction but also positions Nike to capitalize on market trends, ensuring long-term success in a competitive landscape.

On the other hand, focusing solely on the end goal can lead to burnout and disengagement. Limiting team interactions may prevent the sharing of ideas and collaboration, which are vital in creative industries like fashion and sportswear. Additionally, while encouraging independence is important, completely delegating responsibilities without guidance can lead to confusion and a lack of accountability. Team members may feel overwhelmed without proper support, which can diminish their motivation. Lastly, implementing a rigid structure that discourages creativity stifles innovation, which is essential for a brand like Nike that thrives on fresh ideas and dynamic marketing strategies. A balance between structure and flexibility is necessary to foster an environment where creativity can flourish while still meeting project deadlines. Therefore, the best approach is to create a motivating atmosphere through clear goals and regular recognition of achievements, ensuring that the team remains engaged and productive throughout the project.

To effectively integrate these insights, Nike should prioritize the development of a new footwear line that incorporates both sustainable materials and performance-enhancing technologies. This approach not only addresses the immediate concerns of environmentally conscious consumers but also aligns with the performance expectations of athletes. By leveraging advanced materials that are both sustainable and high-performing, Nike can create a product that appeals to a wider audience, thus maximizing market potential. Moreover, this strategy aligns with Nike’s brand ethos of innovation and sustainability. It allows the company to position itself as a leader in both areas, enhancing brand loyalty and attracting new customers who value corporate responsibility. Ignoring one aspect in favor of the other could lead to missed opportunities and potential backlash from consumers who prioritize sustainability or performance. In contrast, focusing solely on sustainable materials or delaying product development would not only limit Nike’s market reach but could also result in losing ground to competitors who are more agile in responding to market demands. Therefore, a balanced approach that synthesizes customer feedback with market data is essential for Nike to thrive in a dynamic marketplace.

\[ \text{ROI} = \frac{\text{Net Profit}}{\text{Cost of Investment}} \times 100 \] Given the projected ROIs, we can express the expected returns for each platform as follows: – For social media: \[ \text{Expected Return} = 150\% \times \text{Investment in Social Media} \] – For search engine marketing: \[ \text{Expected Return} = 120\% \times \text{Investment in Search Engine Marketing} \] – For influencer partnerships: \[ \text{Expected Return} = 180\% \times \text{Investment in Influencer Partnerships} \] Let \( x \) be the amount allocated to social media, \( y \) to search engine marketing, and \( z \) to influencer partnerships. The total budget constraint is: \[ x + y + z = 500,000 \] To maximize the overall ROI, we need to maximize the total expected return: \[ \text{Total Expected Return} = 1.5x + 1.2y + 1.8z \] Substituting \( z = 500,000 – x – y \) into the total expected return equation gives: \[ \text{Total Expected Return} = 1.5x + 1.2y + 1.8(500,000 – x – y) \] Simplifying this, we get: \[ \text{Total Expected Return} = 1.5x + 1.2y + 900,000 – 1.8x – 1.8y = -0.3x – 0.6y + 900,000 \] To maximize this function, we need to allocate more funds to the platform with the highest ROI, which is influencer partnerships. Therefore, the optimal allocation would be to invest $200,000 in influencer partnerships, $150,000 in social media, and $150,000 in search engine marketing. This allocation ensures that Nike leverages the highest potential returns from its advertising budget, aligning with the company’s strategic goal of maximizing ROI across its marketing efforts.

This approach aligns with the principles of data-driven decision-making, where insights derived from analytics inform strategic choices. Ignoring the data and maintaining the original strategy would likely result in missed opportunities, as the team would be neglecting a segment that has shown a higher propensity for engagement. Increasing the budget without changing the target demographic would not address the underlying issue of misalignment with customer interests. Additionally, while conducting further research may seem prudent, it could delay action and allow competitors to capitalize on the identified opportunity. Ultimately, the most effective response is to leverage the data insights to refine the marketing strategy, ensuring that Nike’s campaigns resonate with the most engaged audience, thereby maximizing the impact of their marketing efforts. This approach not only enhances customer satisfaction but also aligns with Nike’s commitment to innovation and responsiveness in a competitive market.

1. **Calculate the social media budget**: The budget allocated to social media is 40% of $500,000. This can be calculated as follows: \[ \text{Social Media Budget} = 0.40 \times 500,000 = 200,000 \] 2. **Calculate the search engine marketing budget**: The budget for search engine marketing is 30% of $500,000. This is calculated as: \[ \text{Search Engine Marketing Budget} = 0.30 \times 500,000 = 150,000 \] 3. **Calculate the total spent on social media and search engine marketing**: Now, we add the two amounts together: \[ \text{Total Spent} = 200,000 + 150,000 = 350,000 \] 4. **Determine the remaining budget for influencer partnerships**: To find out how much is left for influencer partnerships, we subtract the total spent from the overall budget: \[ \text{Influencer Partnerships Budget} = 500,000 – 350,000 = 150,000 \] Thus, the amount allocated to influencer partnerships is $150,000. This analysis is crucial for Nike as it helps the company understand where its marketing dollars are going and how effectively they are being utilized across different channels. By evaluating the return on investment (ROI) from each platform, Nike can make informed decisions about future budget allocations, ensuring that they maximize their marketing effectiveness and reach their target audience efficiently.

\[ \text{ROI} = \frac{\text{Profit} – \text{Investment}}{\text{Investment}} \times 100\% \] 1. **Eco-friendly running shoes**: Profit = $500,000 Investment = $200,000 \[ \text{ROI} = \frac{500,000 – 200,000}{200,000} \times 100\% = \frac{300,000}{200,000} \times 100\% = 150\% \] 2. **Smart fitness tracker**: Profit = $1,200,000 Investment = $800,000 \[ \text{ROI} = \frac{1,200,000 – 800,000}{800,000} \times 100\% = \frac{400,000}{800,000} \times 100\% = 50\% \] 3. **Subscription-based training app**: Profit = $300,000 Investment = $100,000 \[ \text{ROI} = \frac{300,000 – 100,000}{100,000} \times 100\% = \frac{200,000}{100,000} \times 100\% = 200\% \] After calculating the ROI for each product idea, we find that the eco-friendly running shoes have an ROI of 150%, the smart fitness tracker has an ROI of 50%, and the subscription-based training app has an ROI of 200%. Given these calculations, the subscription-based training app has the highest ROI at 200%. This indicates that for every dollar invested, Nike would receive a return of $2, which is significantly higher than the other options. Therefore, prioritizing the subscription-based training app aligns with Nike’s goal of maximizing profitability while also fostering innovation in a rapidly evolving market. This analysis underscores the importance of evaluating potential investments not just on projected profits, but also on the efficiency of those investments in generating returns, which is crucial for maintaining a competitive edge in the sports and fitness industry.

Research indicates that consumers are increasingly making purchasing decisions based on a brand’s ethical stance. By being open about its supply chain, Nike can mitigate concerns about labor exploitation and environmental impact, which are critical issues in the apparel industry. This proactive approach not only fosters a positive brand image but also builds a loyal customer base that appreciates the company’s efforts to operate responsibly. Moreover, transparency can lead to enhanced stakeholder confidence. Investors and partners are more likely to engage with a brand that is open about its operations, as it reduces perceived risks associated with unethical practices. This can result in stronger business relationships and potentially better financial performance. On the contrary, a lack of transparency could lead to negative consequences, such as decreased sales if consumers discover unethical practices through third-party sources. Additionally, if Nike were to face scrutiny from regulatory bodies due to hidden labor issues, it could result in negative publicity that damages the brand’s reputation. However, the proactive sharing of information typically leads to a more favorable perception among consumers, reinforcing the idea that transparency is a key driver of trust and loyalty in today’s market.

The most effective next step for Nike would be to develop a new line of sustainable products. This approach aligns with the identified consumer preferences and positions Nike as a leader in the sustainable athletic wear market, potentially attracting new customers while retaining existing ones who value eco-friendly practices. On the other hand, increasing marketing efforts for existing products without changing their material composition would not address the expressed consumer demand for sustainability, potentially leading to customer dissatisfaction. Focusing solely on traditional advertising methods ignores the insights gained from social media analysis, which indicates a shift in consumer interests. Lastly, conducting further surveys may delay action and allow competitors to capitalize on the trend first, which could result in lost market opportunities. In summary, the integration of consumer preferences and market trends into product development is crucial for Nike to maintain its competitive edge and meet emerging customer needs effectively. This strategic alignment not only enhances brand loyalty but also contributes to the overall sustainability goals that are increasingly important in today’s market landscape.