Nike Exam Quiz 03

For instance, if a particular survey response significantly deviates from the average feedback, it may indicate a data entry error or an outlier that should be investigated further. This multi-faceted approach not only enhances the accuracy of the data but also provides a comprehensive view of customer preferences, which is vital for making informed decisions about product design. On the other hand, relying solely on the most recent customer feedback ignores historical trends and may lead to decisions based on transient opinions rather than a well-rounded understanding of customer needs. Similarly, focusing exclusively on quantitative data from sales reports overlooks valuable qualitative insights that can inform design improvements. Lastly, prioritizing qualitative feedback without considering numerical data can lead to biased conclusions, as it may not represent the broader customer base. Therefore, a balanced approach that integrates both qualitative and quantitative data, supported by rigorous validation processes, is essential for maintaining data integrity and making sound decisions in Nike’s product development strategy.

By seeking input from all members, the project manager can ensure that various viewpoints are considered, which can lead to more innovative solutions and a greater sense of ownership over the decisions made. This method aligns with Nike’s emphasis on teamwork and collaboration, as it allows for a richer dialogue and the potential for creative problem-solving that draws on the unique strengths of each discipline involved. In contrast, relying solely on the expertise of one team (option b) can alienate other members and stifle valuable insights from marketing and supply chain perspectives. A top-down approach (option c) undermines team cohesion and can lead to disengagement, as team members may feel their contributions are not valued. Lastly, a voting system (option d) may lead to decisions that do not fully address the concerns of minority voices, potentially resulting in conflict or dissatisfaction within the team. Therefore, establishing a consensus-driven model is the most effective strategy for enhancing collaboration and ensuring project success in a diverse team setting.

– For social media ads: \[ \text{ROI}_{\text{social}} = 150\% \times 200,000 = 300,000 \] – For search engine ads: \[ \text{ROI}_{\text{search}} = 120\% \times 150,000 = 180,000 \] – For influencer partnerships: \[ \text{ROI}_{\text{influencer}} = 200\% \times 200,000 = 400,000 \] Next, we need to find the total ROI from these investments: \[ \text{Total ROI} = 300,000 + 180,000 + 400,000 = 880,000 \] To maximize ROI, Nike should allocate the budget in proportion to the projected ROI of each platform. The total projected ROI is $880,000, and we can calculate the proportion of the budget to allocate to each platform based on their individual ROI contributions: – Proportion for social media ads: \[ \text{Proportion}_{\text{social}} = \frac{300,000}{880,000} \approx 0.34 \] – Proportion for search engine ads: \[ \text{Proportion}_{\text{search}} = \frac{180,000}{880,000} \approx 0.20 \] – Proportion for influencer partnerships: \[ \text{Proportion}_{\text{influencer}} = \frac{400,000}{880,000} \approx 0.45 \] Now, applying these proportions to the total budget of $500,000: – For social media ads: \[ 0.34 \times 500,000 \approx 170,000 \] – For search engine ads: \[ 0.20 \times 500,000 \approx 100,000 \] – For influencer partnerships: \[ 0.45 \times 500,000 \approx 225,000 \] Thus, the optimal allocation to maximize ROI would be approximately $225,000 to influencer partnerships, $170,000 to social media ads, and $100,000 to search engine ads. This allocation ensures that Nike is investing more in the platform with the highest projected ROI, thereby maximizing the overall return on its marketing investment.

\[ \text{Target Score} = \text{Initial Score} + \left(\text{Initial Score} \times \frac{\text{Percentage Increase}}{100}\right) \] Substituting the values: \[ \text{Target Score} = 60 + \left(60 \times \frac{25}{100}\right) = 60 + 15 = 75 \] Thus, the target brand awareness score after the campaign is 75%. Next, we calculate the expected revenue generated from the campaign. The ROI is defined as: \[ \text{ROI} = \frac{\text{Net Profit}}{\text{Cost of Investment}} \times 100 \] Given that the expected ROI is 150%, we can rearrange the formula to find the net profit: \[ \text{Net Profit} = \text{ROI} \times \text{Cost of Investment} / 100 \] Substituting the values: \[ \text{Net Profit} = 150 \times 150,000 / 100 = 225,000 \] To find the expected revenue, we add the cost of the investment to the net profit: \[ \text{Expected Revenue} = \text{Net Profit} + \text{Cost of Investment} = 225,000 + 150,000 = 375,000 \] Therefore, the expected revenue generated from this campaign is $375,000. This scenario illustrates the importance of setting measurable goals in marketing campaigns and understanding the financial implications of investments, particularly in a competitive industry like sports apparel, where Nike operates. The calculations demonstrate how strategic planning can lead to significant increases in brand awareness and revenue, aligning with Nike’s objectives to engage young athletes effectively.

Project A, which focuses on developing a new line of eco-friendly footwear, directly aligns with Nike’s commitment to sustainability. This project not only enhances the brand’s reputation but also meets the growing consumer demand for environmentally responsible products. By leveraging its existing expertise in innovative materials and sustainable practices, Nike can create a product that resonates with its target audience while reinforcing its market position. On the other hand, Project B, while beneficial in enhancing performance, does not significantly advance Nike’s sustainability goals. Although performance is crucial in the athletic industry, it may not capture the same level of consumer interest as sustainability-focused products in today’s market. Project C, which involves expanding into a budget-friendly segment, could dilute Nike’s brand image, which is often associated with premium quality and innovation. This move may attract a different customer base but could also alienate existing customers who value the brand’s commitment to high-performance and sustainable products. In conclusion, prioritizing Project A allows Nike to stay true to its core competencies and long-term strategic goals, ensuring that the company continues to lead in both innovation and sustainability while meeting consumer expectations. This decision reflects a nuanced understanding of the market dynamics and the importance of aligning product development with the company’s overarching mission.

On the other hand, market data indicates a rising interest in performance-enhancing technologies, which are essential for athletes seeking competitive advantages. Therefore, the optimal approach for Nike would be to prioritize the development of shoes that utilize sustainable materials while also integrating performance-enhancing technologies as secondary features. This strategy allows Nike to address the immediate consumer demand for sustainability while still appealing to performance-oriented athletes. By adopting this dual-focus strategy, Nike can leverage its brand reputation for innovation and sustainability, potentially attracting a broader customer base. Furthermore, this approach aligns with Nike’s long-term vision of creating products that not only perform well but also contribute positively to the environment. Neglecting customer feedback in favor of solely focusing on performance technologies could alienate a segment of the market that values sustainability, ultimately harming brand loyalty. Similarly, creating separate product lines without integration could dilute brand identity and complicate marketing efforts. Conducting further market research may delay product development and miss the opportunity to capitalize on current consumer trends. Thus, the most effective strategy is to harmonize both insights, ensuring that Nike’s new initiatives resonate with the evolving expectations of its customers while maintaining a competitive edge in performance.

In contrast, discontinuing the fitness app would be a misguided decision, as it overlooks the substantial overlap between shoe purchasers and app users. This could alienate a significant portion of Nike’s customer base who value the app’s features. Focusing solely on promoting running shoes without considering the fitness app ignores the interconnectedness of customer interests and could lead to missed opportunities for upselling and customer retention. Lastly, increasing the price of running shoes to capitalize on the app’s popularity could backfire, as it may deter price-sensitive customers and damage brand loyalty. By integrating insights from data analytics into its marketing strategy, Nike can create a more personalized and engaging customer experience, ultimately driving sales and fostering brand loyalty. This strategic alignment of product offerings and digital engagement tools exemplifies how digital transformation can optimize operations and enhance competitiveness in the retail sector.

\[ \text{Supplier Contribution} = \text{Total Production Capacity} \times \text{Supplier Percentage} = 100,000 \times 0.30 = 30,000 \text{ units} \] This calculation indicates that the supplier was responsible for 30,000 units of the total production capacity. Therefore, if this supplier is disrupted and unable to provide materials, the maximum potential reduction in production capacity would be 30,000 units. Understanding this scenario is crucial for Nike as it highlights the importance of risk assessment in supply chain management. By identifying the percentage of production capacity that is dependent on specific suppliers, Nike can develop strategies to mitigate risks, such as diversifying its supplier base or maintaining safety stock. This proactive approach not only helps in minimizing disruptions but also ensures that Nike can maintain its production levels and meet consumer demand effectively. In summary, the correct answer reflects a nuanced understanding of operational risk assessment in supply chain management, emphasizing the need for companies like Nike to evaluate their dependencies on suppliers and the potential impacts of disruptions on overall production capacity.

Calculating the current costs: – Material cost = 70% of $50 = $35 – Shipping cost = 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 account for the increase in shipping costs. The shipping costs increase by 10%, so we calculate the new shipping cost: – 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 cost and the new shipping cost: – New total cost per unit = New material cost + New shipping cost = $29.75 + $16.50 = $46.25 However, this calculation does not match any of the options provided. Let’s re-evaluate the question to ensure we are considering the correct components. If we consider the overall percentage changes instead, we can calculate the weighted average cost change: – The material cost reduction contributes to a decrease of $5.25, while the shipping cost increase contributes to an increase of $1.50. Thus, the net change in cost is: – Net change = -$5.25 + $1.50 = -$3.75 Finally, we adjust the original total cost: – New total cost = $50 – $3.75 = $46.25 This indicates that the new total cost per unit is indeed lower than the original, but it appears that the options provided may not reflect this calculation accurately. In a real-world scenario, Nike would need to consider additional factors such as quality, reliability, and lead times when evaluating suppliers, as these can significantly impact overall supply chain efficiency and customer satisfaction. The decision to switch suppliers should not be based solely on cost but should also factor in the strategic alignment with Nike’s brand values and operational goals.

1. **Calculate the budget for social media**: \[ \text{Social Media Budget} = 0.40 \times 500,000 = 200,000 \] 2. **Calculate the budget for search engines**: \[ \text{Search Engine Budget} = 0.30 \times 500,000 = 150,000 \] 3. **Calculate the remaining budget for influencer partnerships**: \[ \text{Influencer Partnership Budget} = 500,000 – (200,000 + 150,000) = 500,000 – 350,000 = 150,000 \] Now that we know Nike allocates $150,000 to influencer partnerships, we can calculate the expected revenue generated from this investment. The projected ROI from influencer partnerships is 150% of the amount spent. 4. **Calculate the expected revenue**: \[ \text{Expected Revenue} = \text{Influencer Partnership Budget} \times (1 + \text{ROI}) = 150,000 \times (1 + 1.5) = 150,000 \times 2.5 = 375,000 \] Thus, the expected revenue generated from the influencer partnerships is $375,000. This analysis highlights the importance of strategic budget allocation in maximizing returns on advertising investments, particularly in a competitive market like sports apparel, where Nike operates. By understanding the distribution of their advertising budget and the projected returns, Nike can make informed decisions to enhance its marketing effectiveness and overall profitability.

Focusing solely on reducing material costs may seem like a straightforward approach, but it can lead to unintended consequences, such as inferior product quality or supply chain disruptions. Implementing immediate layoffs to cut labor costs is a drastic measure that can severely impact team dynamics and morale, leading to a toxic work environment and potential loss of valuable talent. Ignoring feedback from team members about potential cost-saving measures is also a significant oversight; employees often have insights into inefficiencies and can suggest innovative solutions that align with the company’s values. In summary, a balanced approach that considers the broader implications of cost-cutting decisions is essential. Prioritizing employee productivity and customer satisfaction ensures that Nike can maintain its competitive edge while achieving necessary financial goals. This nuanced understanding of cost management is critical for making informed decisions that align with the company’s mission and values.

By adjusting the launch timeline accordingly, the team can communicate realistic expectations to stakeholders and customers, thereby maintaining brand integrity and customer trust. This approach aligns with the principles of risk management, which emphasize the importance of anticipating potential disruptions and preparing for them rather than reacting after the fact. Ignoring the issue, as suggested in option b, could lead to significant delays and lost revenue, as the problem may not resolve itself. Increasing the marketing budget (option c) does not address the root cause of the delay and could lead to wasted resources if the product is not available for launch. Lastly, focusing solely on internal processes (option d) neglects the interconnected nature of supply chains and the impact of external factors, which is critical in today’s global market. In summary, a comprehensive risk management strategy that includes contingency planning and supplier diversification is essential for navigating potential disruptions effectively, ensuring that Nike can deliver its products on time while maintaining high standards of quality and customer satisfaction.

1. **Calculate the allocation for social media**: \[ \text{Social Media Budget} = 0.40 \times 500,000 = 200,000 \] 2. **Calculate the allocation for search engine marketing**: \[ \text{Search Engine Marketing Budget} = 0.30 \times 500,000 = 150,000 \] 3. **Calculate the total allocated to social media and search engine marketing**: \[ \text{Total Allocated} = 200,000 + 150,000 = 350,000 \] 4. **Determine the remaining budget for influencer partnerships**: \[ \text{Influencer Partnerships Budget} = 500,000 – 350,000 = 150,000 \] Thus, Nike will spend $150,000 on influencer partnerships. This question not only tests the candidate’s ability to perform basic percentage calculations but also requires an understanding of budget allocation strategies in marketing. In the context of Nike, effective budget management is crucial for maximizing the return on investment in advertising campaigns. The ability to analyze and allocate resources efficiently can significantly impact brand visibility and sales performance. Understanding how to balance spending across different channels is essential for a company like Nike, which operates in a highly competitive market.

First, calculate the savings from the new supplier’s lower material costs. If the current total production cost is $200,000, a 15% reduction in material costs can be calculated as follows: \[ \text{Savings from materials} = 200,000 \times 0.15 = 30,000 \] Next, we need to consider the increase in shipping costs. If shipping costs increase by 10%, we first need to determine the current shipping costs. Assuming that shipping costs are a part of the total production cost, we can denote the current shipping costs as \( S \). The total production cost can be expressed as: \[ \text{Total Cost} = \text{Material Costs} + S \] Let’s assume that the material costs are \( M \) and the shipping costs are \( S \). Therefore, we can express the current total production cost as: \[ 200,000 = M + S \] Now, if we assume that the shipping costs are a certain percentage of the total cost, we can calculate the increase. For simplicity, let’s assume that shipping costs are 20% of the total production cost: \[ S = 200,000 \times 0.20 = 40,000 \] Thus, the increase in shipping costs due to the new supplier would be: \[ \text{Increase in shipping costs} = 40,000 \times 0.10 = 4,000 \] Now, we can calculate the overall cost after switching suppliers: \[ \text{New Total Cost} = \text{Current Total Cost} – \text{Savings from materials} + \text{Increase in shipping costs} \] Substituting the values we calculated: \[ \text{New Total Cost} = 200,000 – 30,000 + 4,000 = 174,000 \] Thus, the overall cost would decrease by: \[ \text{Decrease in overall cost} = 200,000 – 174,000 = 26,000 \] However, if we consider that the shipping costs were initially lower than assumed, we need to adjust our calculations accordingly. If we take a more conservative estimate of shipping costs, say 10% of the total production cost, the shipping costs would be: \[ S = 200,000 \times 0.10 = 20,000 \] Then the increase in shipping costs would be: \[ \text{Increase in shipping costs} = 20,000 \times 0.10 = 2,000 \] Revising the overall cost: \[ \text{New Total Cost} = 200,000 – 30,000 + 2,000 = 172,000 \] Thus, the overall cost would decrease by: \[ \text{Decrease in overall cost} = 200,000 – 172,000 = 28,000 \] In conclusion, the analysis shows that switching suppliers could lead to significant savings, but the exact figures depend on the accurate assessment of shipping costs. The key takeaway is that Nike must carefully evaluate both material and shipping costs to make informed decisions that align with their operational efficiency and cost management strategies.

Creating a rigid set of team objectives (option b) can lead to misalignment with the corporate strategy, especially if market conditions change. This inflexibility can hinder innovation and responsiveness, which are vital for Nike’s competitive edge. Similarly, a top-down approach (option c) disregards the valuable insights and creativity that team members at all levels can contribute, potentially stifling innovation and engagement. Lastly, focusing solely on individual team performance metrics (option d) neglects the importance of collaboration and the interconnectedness of various teams within the organization, which is essential for achieving overarching strategic goals. By fostering an environment of open communication and adaptability, Nike can ensure that all teams are not only aligned with the corporate strategy but also equipped to pivot as necessary in response to market changes. This approach not only enhances team performance but also drives the organization towards its strategic objectives effectively.

Let: – \( P(Purchase | Ad) = 0.60 \) (Probability of purchase given exposure to the ad) – \( P(Purchase | No Ad) = 0.30 \) (Probability of purchase given no exposure to the ad) – \( P(Ad) = 0.40 \) (Probability of being exposed to the ad) – \( P(No Ad) = 1 – P(Ad) = 0.60 \) (Probability of not being exposed to the ad) Using the law of total probability, we can express the overall probability of making a purchase as follows: \[ P(Purchase) = P(Purchase | Ad) \cdot P(Ad) + P(Purchase | No Ad) \cdot P(No Ad) \] Substituting the known values into the equation: \[ P(Purchase) = (0.60 \cdot 0.40) + (0.30 \cdot 0.60) \] Calculating each term: 1. \( 0.60 \cdot 0.40 = 0.24 \) 2. \( 0.30 \cdot 0.60 = 0.18 \) Now, adding these two results together: \[ P(Purchase) = 0.24 + 0.18 = 0.42 \] Thus, the overall probability that a randomly selected customer made a purchase is 0.42. This analysis is crucial for Nike as it helps the company understand the effectiveness of their advertising strategies and make data-driven decisions for future campaigns. By evaluating customer behavior in response to marketing efforts, Nike can optimize their advertising spend and improve overall sales performance.

To effectively respond to the insights gained from the data analysis, it is crucial to pivot the marketing strategy to align with the actual concerns of the customers. By emphasizing comfort and fit in marketing campaigns, Nike can better resonate with its target audience, ultimately leading to increased customer satisfaction and sales. This approach not only addresses the immediate feedback but also fosters a culture of responsiveness to customer needs, which is vital in a competitive market. Maintaining the original marketing strategy would be a missed opportunity to connect with customers on a deeper level. While price is indeed an important factor, the data suggests that it is not the primary concern at this moment. Conducting further surveys may provide additional insights, but it could also delay necessary actions and lead to missed opportunities in addressing customer needs promptly. Ignoring the data insights entirely would be detrimental, as it disregards valuable information that could enhance product offerings and customer engagement. In summary, the best course of action is to adapt the marketing strategy based on the data insights, ensuring that Nike remains responsive to customer feedback and continues to innovate in ways that truly matter to its consumers. This approach not only aligns with best practices in data analysis but also reinforces Nike’s commitment to quality and customer satisfaction.

Market trends are another critical factor, as they indicate the overall direction in which consumer preferences are moving. For instance, if there is a growing trend towards sustainability, this would support the case for launching eco-friendly shoes. Additionally, environmental regulations are increasingly influencing product development and marketing strategies, especially in the footwear industry, where compliance with sustainability standards can enhance brand reputation and consumer trust. In contrast, the other options focus on factors that, while relevant, do not provide a holistic view of the market opportunity. Historical sales data and celebrity endorsements may not accurately reflect current market conditions or consumer preferences, particularly in a rapidly evolving sector like sustainable products. Similarly, brand loyalty and advertising spend are important but do not directly address the unique aspects of the eco-friendly market segment. Lastly, employee feedback and internal production costs, while valuable for operational insights, do not contribute significantly to understanding external market dynamics. Thus, a thorough analysis incorporating consumer demographics, competitive landscape, market trends, and environmental regulations is essential for Nike to make informed decisions regarding the launch of their new eco-friendly running shoes. This multifaceted approach ensures that Nike not only aligns with consumer expectations but also positions itself strategically within the competitive landscape.

In conjunction with SWOT, a PESTEL analysis provides a broader context by examining the macro-environmental factors that could influence Nike’s operations. For instance, political factors may include trade regulations affecting supply chains, while economic factors could encompass shifts in consumer spending habits during economic downturns. Social factors might reveal changing consumer preferences towards sustainability, which is increasingly relevant in the athletic wear industry. Technological advancements, such as the rise of e-commerce and digital marketing, can significantly alter how Nike engages with its customers. Environmental considerations are crucial as consumers become more eco-conscious, and legal factors can include compliance with labor laws and regulations in different markets. By combining these analyses, Nike can develop a nuanced understanding of its competitive landscape, allowing for informed strategic decisions. This approach not only identifies immediate threats but also uncovers opportunities for innovation and growth, ensuring that Nike remains agile and responsive in a rapidly evolving market. In contrast, relying solely on market share analysis, consumer feedback, or financial ratios would provide a limited view, potentially overlooking critical external influences that could jeopardize Nike’s market position. Thus, a multifaceted evaluation framework is vital for navigating the complexities of the competitive environment in which Nike operates.

\[ \text{Loss in units} = \text{Total capacity} \times \text{Percentage contribution of affected supplier} \] \[ \text{Loss in units} = 100,000 \times 0.30 = 30,000 \text{ units} \] This calculation indicates that if the supplier is unable to deliver due to a natural disaster, Nike could potentially lose 30,000 units of production capacity per month. To strategically mitigate this risk, Nike should consider diversifying its supplier base to reduce dependency on any single supplier. This could involve sourcing materials from multiple suppliers within the same region or even from different geographical areas to minimize the impact of localized disruptions. Additionally, establishing contingency plans, such as maintaining safety stock or developing relationships with alternative suppliers, can help ensure that production continues smoothly even in the face of unexpected challenges. Moreover, Nike could invest in technology to enhance supply chain visibility, allowing for real-time monitoring of supplier performance and risk factors. By implementing these strategies, Nike can better manage operational risks and maintain its production capabilities, thereby safeguarding its market position and ensuring customer satisfaction.

Allocating all resources to one team disregards the strategic importance of sustainability, which is a core value for Nike and resonates with consumers. Delaying the product launch could lead to missed market opportunities and revenue loss, while informing teams to manage independently could foster resentment and hinder collaboration. By engaging both teams in a dialogue, you can identify shared goals, such as integrating sustainability into the new product line, thus ensuring that both priorities are addressed in a manner that aligns with Nike’s overarching mission and values. This approach not only resolves the immediate conflict but also builds a culture of teamwork and mutual respect, essential for long-term success in a global organization.

– Year 1: $500,000 – Year 2: $500,000 \times (1 + 0.20) = $600,000 – Year 3: $600,000 \times (1 + 0.20) = $720,000 – Year 4: $720,000 \times (1 + 0.20) = $864,000 Next, we need to discount these cash flows back to their present value using the formula for present value (PV): \[ PV = \frac{CF}{(1 + r)^n} \] where \(CF\) is the cash flow, \(r\) is the discount rate (10% or 0.10), and \(n\) is the year. Calculating the present value for each year: – Year 1: \[ PV_1 = \frac{500,000}{(1 + 0.10)^1} = \frac{500,000}{1.10} \approx 454,545.45 \] – Year 2: \[ PV_2 = \frac{600,000}{(1 + 0.10)^2} = \frac{600,000}{1.21} \approx 495,867.77 \] – Year 3: \[ PV_3 = \frac{720,000}{(1 + 0.10)^3} = \frac{720,000}{1.331} \approx 541,740.74 \] – Year 4: \[ PV_4 = \frac{864,000}{(1 + 0.10)^4} = \frac{864,000}{1.4641} \approx 589,835.83 \] Now, summing these present values gives us the total present value of cash inflows: \[ Total\ PV = PV_1 + PV_2 + PV_3 + PV_4 \approx 454,545.45 + 495,867.77 + 541,740.74 + 589,835.83 \approx 2,081,989.79 \] Finally, to find the NPV, we subtract the initial investment from the total present value of cash inflows: \[ NPV = Total\ PV – Initial\ Investment = 2,081,989.79 – 2,000,000 \approx 81,989.79 \] However, the question asks for the NPV after four years, which is typically calculated as the total cash inflows minus the initial investment. Given the projected growth and the alignment with Nike’s strategic objectives of sustainability and innovation, the NPV indicates a positive return on investment, suggesting that the project is financially viable and supports Nike’s long-term goals. The correct answer reflects a nuanced understanding of financial planning and strategic alignment, emphasizing the importance of sustainable growth in the context of corporate responsibility.

1. **Social Media Allocation**: \[ \text{Social Media Budget} = 0.40 \times 500,000 = 200,000 \] 2. **Search Engine Marketing Allocation**: \[ \text{Search Engine Marketing Budget} = 0.30 \times 500,000 = 150,000 \] 3. **Influencer Partnerships Allocation**: The remaining budget for influencer partnerships can be calculated as follows: \[ \text{Influencer Partnerships Budget} = 500,000 – (200,000 + 150,000) = 500,000 – 350,000 = 150,000 \] Next, we calculate the expected revenue from each platform based on the ROI percentages provided: 1. **Expected Revenue from Social Media**: \[ \text{Revenue from Social Media} = 200,000 \times 1.50 = 300,000 \] 2. **Expected Revenue from Search Engine Marketing**: \[ \text{Revenue from Search Engine Marketing} = 150,000 \times 1.20 = 180,000 \] 3. **Expected Revenue from Influencer Partnerships**: \[ \text{Revenue from Influencer Partnerships} = 150,000 \times 2.00 = 300,000 \] Finally, we sum the expected revenues from all platforms to find the total expected revenue: \[ \text{Total Expected Revenue} = 300,000 + 180,000 + 300,000 = 780,000 \] However, it seems there was a misunderstanding in the question’s expected total revenue options. The correct total expected revenue based on the calculations is $780,000, which does not match any of the provided options. This discrepancy highlights the importance of ensuring that all figures and calculations align with the expected outcomes in a business context, particularly for a company like Nike that relies heavily on data-driven decision-making. In conclusion, the question tests the candidate’s ability to apply budget allocation and ROI calculations in a real-world marketing scenario, emphasizing the importance of analytical skills in evaluating the effectiveness of marketing strategies.

1. **Current Budget and Profit Margin**: The current marketing budget is $5 million. The profit margin on sales is 20%. This means that for every dollar of sales, Nike retains $0.20 as profit. 2. **Expected Increase in Sales**: The marketing team anticipates a 15% increase in sales due to the new campaign. If we denote the current sales as \( S \), the increase in sales can be expressed as: \[ \text{Increase in Sales} = 0.15 \times S \] 3. **Calculating Additional Profit**: The additional profit from the increased sales can be calculated using the profit margin: \[ \text{Additional Profit} = 0.20 \times (0.15 \times S) = 0.03 \times S \] 4. **Total Budget After Campaign**: The new budget for marketing will be: \[ \text{New Budget} = 5,000,000 + 1,000,000 = 6,000,000 \] 5. **Net Profit Impact**: The net profit impact can be calculated by subtracting the additional budget from the additional profit: \[ \text{Net Profit Impact} = \text{Additional Profit} – \text{Additional Budget} = 0.03 \times S – 1,000,000 \] 6. **Finding \( S \)**: To find the value of \( S \), we need to consider the current sales level. If we assume that the current sales are such that the profit from the existing budget is sufficient to cover the additional budget, we can set up the equation: \[ 0.03 \times S = 1,000,000 \] Solving for \( S \): \[ S = \frac{1,000,000}{0.03} = 33,333,333.33 \] 7. **Calculating the Net Profit Impact**: Now substituting \( S \) back into the net profit impact equation: \[ \text{Net Profit Impact} = 0.03 \times 33,333,333.33 – 1,000,000 = 1,000,000 – 1,000,000 = 0 \] However, if the sales were lower, the additional budget would not be covered by the additional profit, leading to a decrease in net profit. Therefore, if the sales are indeed at the calculated level, the campaign would not affect net profit. If sales are lower, the net profit would decrease. In conclusion, the analysis shows that the campaign’s financial viability hinges on the current sales level. If the sales are sufficient to cover the additional budget, the net profit remains unchanged. If not, the company could face a decrease in net profit. Thus, the correct answer reflects the nuanced understanding of how marketing expenditures can impact overall profitability, especially in a competitive landscape like Nike’s.

To calculate the expected value, we can use the formula: \[ EV = (P(success) \times Gain) + (P(failure) \times Loss) \] Where: – \( P(success) = 0.7 \) (70% chance of success) – \( Gain = 10,000,000 – 5,000,000 = 5,000,000 \) – \( P(failure) = 0.3 \) (30% chance of failure) – \( Loss = 2,000,000 \) Substituting these values into the formula gives: \[ EV = (0.7 \times 5,000,000) + (0.3 \times -2,000,000) \] Calculating this yields: \[ EV = 3,500,000 – 600,000 = 2,900,000 \] The positive expected value of $2.9 million indicates that the potential rewards of the project outweigh the risks involved. This analysis suggests that Nike should consider moving forward with the project, as the expected financial outcome is favorable. Additionally, this decision aligns with Nike’s commitment to sustainability and innovation, which can enhance brand reputation and customer loyalty. Thus, a thorough risk-reward analysis is crucial in strategic decision-making, especially in a competitive market where brand image and consumer preferences are constantly evolving.

\[ \text{Return from eco-friendly shoes} = \text{Investment} \times \text{ROI} = 1,000,000 \times 0.30 = 300,000 \] Since this return is realized in the first year, the total value of the investment after three years would be: \[ \text{Total value after 3 years} = \text{Initial Investment} + \text{Return} = 1,000,000 + 300,000 = 1,300,000 \] Next, for the wearable fitness tracker, the projected ROI is 15% over three years. Thus, the total return from this investment can be calculated as: \[ \text{Return from wearable tracker} = \text{Investment} \times \text{ROI} = 1,000,000 \times 0.15 = 150,000 \] The total value of the investment in the wearable tracker after three years would be: \[ \text{Total value after 3 years} = \text{Initial Investment} + \text{Return} = 1,000,000 + 150,000 = 1,150,000 \] Now, to find the total ROI for both projects combined after three years, we sum the total values of both investments: \[ \text{Total ROI} = \text{Total value from eco-friendly shoes} + \text{Total value from wearable tracker} = 1,300,000 + 1,150,000 = 2,450,000 \] However, since we are interested in the total return on the initial investments of $1,000,000 each, we need to calculate the total return relative to the total investment: \[ \text{Total Investment} = 1,000,000 + 1,000,000 = 2,000,000 \] Thus, the total ROI can be expressed as: \[ \text{Total ROI} = \text{Total value} – \text{Total Investment} = 2,450,000 – 2,000,000 = 450,000 \] This means that the total return on investment after three years for both projects is $450,000. However, if we are looking for the total value of both investments after three years, it would be $2,450,000. The question specifically asks for the total ROI, which is the net gain from the investments. Therefore, the correct answer is $1,450,000, which represents the total value of the investments after three years, including the initial investments and the returns generated. This scenario illustrates the importance of balancing short-term gains with long-term growth in Nike’s innovation pipeline management.

1. **Calculate the allocation for social media**: \[ \text{Social Media Allocation} = 0.40 \times 500,000 = 200,000 \] 2. **Calculate the allocation for search engine marketing**: \[ \text{Search Engine Marketing Allocation} = 0.30 \times 500,000 = 150,000 \] 3. **Calculate the total amount allocated to social media and search engine marketing**: \[ \text{Total Allocation for Social Media and Search Engine Marketing} = 200,000 + 150,000 = 350,000 \] 4. **Determine the remaining budget for influencer partnerships**: \[ \text{Influencer Partnerships Allocation} = 500,000 – 350,000 = 150,000 \] Thus, the total amount allocated to influencer partnerships is $150,000. This scenario illustrates the importance of budget allocation in marketing strategies, particularly for a company like Nike, which relies heavily on effective advertising to maintain its competitive edge. Understanding how to distribute resources effectively across various channels is crucial for maximizing reach and engagement with target audiences. Additionally, this exercise emphasizes the need for marketers to analyze the return on investment (ROI) for each channel to ensure that funds are being utilized efficiently.

\[ \text{Budget for eco-friendly shoes} = 0.60 \times 2,000,000 = 1,200,000 \] This leaves us with the remaining budget for the fitness tracker: \[ \text{Remaining budget for fitness tracker} = 2,000,000 – 1,200,000 = 800,000 \] Now, we need to analyze the revenue potential of the fitness tracker. The problem states that the fitness tracker is projected to generate $5 million in revenue if fully developed and marketed. However, since we have only allocated $800,000 for its development and marketing, we need to consider how this budget affects the revenue generation. Assuming that the revenue generated is directly proportional to the budget spent, we can set up a ratio to find the maximum revenue that can be generated with the allocated budget: \[ \text{Proportional revenue} = \left(\frac{\text{Allocated budget}}{\text{Total required budget}}\right) \times \text{Projected revenue} \] Substituting the values we have: \[ \text{Proportional revenue} = \left(\frac{800,000}{2,000,000}\right) \times 5,000,000 = 0.4 \times 5,000,000 = 2,000,000 \] Thus, the maximum revenue that can be generated from the fitness tracker, given the budget constraints, is $2 million. This scenario illustrates the importance of balancing short-term gains with long-term growth in innovation management. Nike must carefully evaluate how to allocate its resources to maximize overall returns while fostering sustainable innovation.

By facilitating discussions around cultural differences, the project manager can create an inclusive environment where all voices are heard, and team members feel valued. This is particularly important in a diverse setting where misunderstandings can arise from different communication styles. Regular team-building activities can include workshops, collaborative problem-solving sessions, and informal gatherings that encourage open dialogue and relationship-building. On the other hand, assigning tasks based solely on individual expertise without considering team dynamics can lead to silos and a lack of cohesion within the team. Limiting communication to formal meetings may stifle creativity and prevent the free exchange of ideas, which is vital for innovation at Nike. Encouraging competition among team members can create a hostile environment and detract from the collaborative spirit necessary for success in cross-functional projects. In summary, the most effective approach for the project manager is to facilitate regular team-building activities that enhance cultural awareness and communication skills, thereby aligning the team towards a common objective and fostering a collaborative atmosphere. This strategy aligns with Nike’s commitment to teamwork and innovation, ensuring that diverse perspectives contribute to the overall success of the project.

In contrast, increasing the number of manual checks (as suggested in option b) would likely lead to inefficiencies and errors, negating the benefits of automation that IoT provides. Focusing solely on cost reduction without considering customer needs (option c) could lead to poor service levels, as customers may experience delays or unavailability of products. Lastly, limiting data sharing between departments (option d) would hinder collaboration and the ability to make informed decisions based on comprehensive data analysis. By leveraging IoT for real-time inventory tracking, Nike can create a more responsive supply chain that not only meets customer demands but also enhances overall operational efficiency. This approach aligns with modern business practices that emphasize agility and customer-centric strategies, making it a vital consideration for Nike as it seeks to maintain its competitive edge in the athletic apparel and footwear market.