Nike, Inc. Exam Quiz 02

$$ EL = P \times L $$ where \( P \) is the probability of the event occurring, and \( L \) is the loss incurred if the event occurs. In this scenario, the probability \( P \) of an earthquake is 0.1, and the loss \( L \) is $5,000,000. Thus, the expected loss is: $$ EL = 0.1 \times 5,000,000 = 500,000 $$ This means that without the contingency plan, Nike, Inc. can expect to lose $500,000 annually due to potential earthquake disruptions. Next, we compare this expected loss to the cost of the contingency plan, which is also $500,000. Implementing the plan would effectively eliminate the expected loss, as it mitigates the financial impact of the disaster. Therefore, the expected value of not implementing the plan is $500,000, while the cost of implementing the plan is also $500,000. However, the key consideration here is that the contingency plan not only prevents the expected loss but also provides a safeguard against the full financial impact of a disaster, which could be catastrophic. Given that the expected loss equals the cost of the plan, it is prudent for Nike, Inc. to implement the contingency plan. This decision aligns with risk management principles, which advocate for proactive measures to mitigate potential risks, especially in industries heavily reliant on global supply chains, like Nike, Inc. In conclusion, the expected loss justifies the implementation of the contingency plan, as it protects the company from significant financial repercussions and ensures business continuity in the face of unforeseen natural disasters.

\[ FV = PV \times (1 + r)^n \] Where: – \(FV\) is the future value (projected market size), – \(PV\) is the present value (current market size for sustainable footwear), – \(r\) is the annual growth rate (25% or 0.25), and – \(n\) is the number of years (3). First, we need to determine the current market size for sustainable footwear. Given that the demand for sustainable materials has increased by 25%, we can assume that sustainable footwear currently represents a portion of the total market size. If we assume that the entire market is shifting towards sustainability, we can calculate the current market size for sustainable footwear as follows: \[ PV = 50 \text{ billion} \times 0.25 = 12.5 \text{ billion} \] Now, we can apply the compound growth formula: \[ FV = 12.5 \text{ billion} \times (1 + 0.25)^3 \] Calculating this step-by-step: 1. Calculate \( (1 + 0.25)^3 = 1.25^3 = 1.953125 \). 2. Now, multiply this by the present value: \[ FV = 12.5 \text{ billion} \times 1.953125 = 24.4140625 \text{ billion} \] However, this calculation is based on the assumption that the entire market is shifting towards sustainable footwear. To find the projected market size for the entire athletic footwear market, we need to apply the growth rate to the total market size: \[ FV = 50 \text{ billion} \times (1 + 0.25)^3 = 50 \text{ billion} \times 1.953125 = 97.65625 \text{ billion} \] Thus, the projected market size for sustainable footwear, assuming it captures the entire market growth, would be approximately $98.4375 billion. This analysis highlights the importance of understanding market dynamics and consumer preferences, especially for a company like Nike, Inc., which is increasingly focusing on sustainability in its product offerings. By recognizing and adapting to these trends, Nike can position itself strategically in a competitive market.

Once the infrastructure is assessed and upgraded if necessary, implementing change management strategies becomes vital. Change management involves preparing, supporting, and equipping individuals to adopt new technologies and processes. This is particularly important in a company like Nike, where employees may be accustomed to traditional methods. Effective change management ensures that the workforce is aligned with the new digital strategies, reducing resistance and fostering a culture of innovation. While customer experience design and data analytics are indeed crucial components, they should not be the starting point. Customer experience design relies heavily on insights derived from data analytics, which in turn requires a solid technological foundation. Therefore, addressing technology infrastructure first allows for a more informed and effective design of customer experiences, ultimately leading to enhanced customer engagement. In summary, a successful digital transformation at Nike, Inc. necessitates a methodical approach that begins with technology infrastructure, followed by change management, ensuring that the organization is well-prepared to leverage data analytics and enhance customer experience effectively. This structured pathway not only mitigates risks but also maximizes the potential for achieving strategic business objectives in a competitive market.

On the other hand, allowing team members to work independently without structured meetings may lead to a lack of cohesion and misalignment on project objectives. While independence can foster creativity, it can also result in fragmented efforts that do not contribute to the overall team goals. Focusing solely on technical aspects while neglecting team dynamics can create a disengaged team environment, where members may feel their contributions are not recognized or valued. Lastly, implementing a rigid hierarchy can stifle innovation and discourage open communication, which is detrimental in a creative industry like athletic footwear. In summary, the most effective strategy for the project manager is to prioritize communication and collaboration, ensuring that all team members are aligned and engaged in the project. This approach not only enhances team dynamics but also drives successful project outcomes, which is critical for Nike, Inc. in maintaining its competitive edge in the global market.

\[ \text{Expected Loss} = \text{Cost of Downtime} \times \text{Probability of Occurrence} \] Substituting the values provided: \[ \text{Expected Loss} = 500,000 \times 0.02 = 10,000 \] This means that without any contingency plan, Nike, Inc. can expect to incur a loss of $10,000 annually due to the risk of a natural disaster. Now, if Nike, Inc. invests in a contingency plan that costs $1,000,000 and reduces the likelihood of the disaster to 0.5%, we can recalculate the expected loss: \[ \text{New Expected Loss} = 500,000 \times 0.005 = 2,500 \] The annual expected loss after implementing the contingency plan is $2,500. To find the net benefit of the contingency plan, we need to consider the cost of the plan and the reduction in expected losses: \[ \text{Net Benefit} = \text{Expected Loss without Plan} – \text{Expected Loss with Plan} – \text{Cost of Plan} \] Substituting the values: \[ \text{Net Benefit} = 10,000 – 2,500 – 1,000,000 \] This calculation shows that the contingency plan results in a significant upfront cost that outweighs the reduction in expected losses. Therefore, the net benefit of implementing the contingency plan is negative, indicating that the investment may not be justified based on the expected losses alone. In conclusion, while the contingency plan reduces the expected loss significantly, the high cost of the plan itself leads to a net loss when considering the overall financial impact. This scenario illustrates the importance of evaluating both the costs and benefits of risk management strategies in a complex global supply chain like that of Nike, Inc.

\[ \text{ROI} = \frac{\text{Increase in Brand Awareness}}{\text{Cost of Campaign}} \] For Campaign A, the increase in brand awareness is 10% of 150,000, which is: \[ \text{Increase for A} = 0.10 \times 150,000 = 15,000 \] The cost of Campaign A is $300,000, so the ROI for Campaign A is: \[ \text{ROI for A} = \frac{15,000}{300,000} = 0.05 \text{ or } 5\% \] For Campaign B, the increase in brand awareness is 5% of 200,000, which is: \[ \text{Increase for B} = 0.05 \times 200,000 = 10,000 \] The cost of Campaign B is $400,000, so the ROI for Campaign B is: \[ \text{ROI for B} = \frac{10,000}{400,000} = 0.025 \text{ or } 2.5\% \] Now, comparing the two ROIs, Campaign A has a higher ROI of 5% compared to Campaign B’s 2.5%. This indicates that for every dollar spent, Campaign A generated more brand awareness than Campaign B. In the context of Nike, Inc., understanding the effectiveness of marketing campaigns is crucial for optimizing budget allocations and maximizing brand visibility among target demographics. The analysis shows that even though Campaign B reached a larger audience, the effectiveness in terms of brand awareness per dollar spent was significantly lower than that of Campaign A. This highlights the importance of not just reaching a larger audience but also ensuring that the campaign resonates effectively with the target market to achieve desired outcomes.

1. **Research and Development Allocation**: The budget for research and development is calculated as follows: \[ \text{R&D Budget} = 0.40 \times 500,000 = 200,000 \] 2. **Marketing Allocation**: The budget for marketing is calculated as: \[ \text{Marketing Budget} = 0.30 \times 500,000 = 150,000 \] 3. **Total Allocated Budget**: Now, we sum the allocations for research and development and marketing: \[ \text{Total Allocated} = 200,000 + 150,000 = 350,000 \] 4. **Distribution Budget Calculation**: The remaining budget for distribution can be found by subtracting the total allocated budget from the overall project cost: \[ \text{Distribution Budget} = 500,000 – 350,000 = 150,000 \] Thus, the budget allocated to distribution is $150,000. This exercise illustrates the importance of detailed budget planning in project management, especially for a company like Nike, Inc., where effective allocation of resources can significantly impact the success of a product launch. Understanding how to break down costs into specific categories allows for better financial oversight and ensures that all aspects of the project are adequately funded. Additionally, this approach aligns with best practices in financial management, which emphasize the need for clear visibility into budget allocations to facilitate informed decision-making and strategic planning.

If Nike, Inc. aims to increase its market share by 15%, this means that the company wants to capture an additional 15% of the total market size \( T \). Therefore, the increase in market share can be calculated as \( 0.15T \). To find the new market share \( M’ \), we add this increase to the current market share \( M \). Thus, the formula for the new market share becomes: \[ M’ = M + 0.15T \] This equation reflects that the new market share is the sum of the existing market share and the additional market share gained from the campaign. Now, let’s analyze the incorrect options. The option \( M’ = M + 0.15M \) suggests that the increase is based on the current market share rather than the total market size, which is a misunderstanding of how market share increases are calculated. The option \( M’ = M + T \) incorrectly implies that the new market share is simply the sum of the current market share and the total market size, which does not reflect a percentage increase. Lastly, the option \( M’ = 0.15M + T \) also misrepresents the calculation by suggesting that the new market share is derived from a percentage of the current market share added to the total market size, which is not how market share increases are defined. In summary, the correct understanding of how to calculate the new market share after a successful campaign is crucial for Nike, Inc. to strategize effectively and measure the success of its marketing efforts.

Developing a new line of sustainable footwear made from recycled materials aligns with this trend and positions Nike as a leader in environmental responsibility within the athletic industry. This approach not only meets consumer demand but also enhances brand loyalty among environmentally conscious consumers, which is increasingly important in today’s market. On the other hand, increasing advertising for existing products without changing their composition would not address the underlying consumer demand for sustainability. While it may temporarily boost sales, it does not align with the growing preference for eco-friendly options. Similarly, expanding the product range to include more fashion-oriented footwear may divert focus from the sustainability trend and could alienate core customers who prioritize environmental impact. Lastly, reducing prices across all product lines might attract a broader customer base in the short term, but it could undermine the perceived value of Nike’s brand, especially if the products do not meet the sustainability criteria that consumers are increasingly seeking. In summary, Nike should strategically focus on developing sustainable products to align with market dynamics and consumer preferences, thereby creating a competitive advantage in the athletic footwear market. This approach not only addresses current consumer demands but also positions Nike favorably for future growth in an increasingly eco-conscious marketplace.

\[ \text{Total Units Lost} = \text{Units per Day} \times \text{Days of Disruption} = 1,000 \, \text{units/day} \times 30 \, \text{days} = 30,000 \, \text{units} \] Next, to find the total financial impact of this disruption, we multiply the total units lost by the average cost per unit: \[ \text{Total Financial Impact} = \text{Total Units Lost} \times \text{Cost per Unit} = 30,000 \, \text{units} \times 50 \, \text{dollars/unit} = 1,500,000 \, \text{dollars} \] This scenario highlights the critical importance of diversifying suppliers to mitigate operational risks, especially in industries like apparel and footwear where supply chain disruptions can have significant financial repercussions. Nike, Inc. must consider strategies such as establishing multiple suppliers, maintaining safety stock, or investing in supply chain technology to enhance visibility and responsiveness. By understanding the potential risks and their financial implications, Nike, Inc. can better prepare for and manage operational challenges, ensuring continuity and resilience in its supply chain operations.

\[ \text{CTR} = \left( \frac{\text{Total Clicks}}{\text{Total Impressions}} \right) \times 100 \] In this scenario, the total clicks generated by the campaign are 48,000, and the total impressions are 1,200,000. Plugging these values into the formula gives: \[ \text{CTR} = \left( \frac{48,000}{1,200,000} \right) \times 100 \] Calculating this step-by-step: 1. First, divide the total clicks by the total impressions: \[ \frac{48,000}{1,200,000} = 0.04 \] 2. Next, multiply by 100 to convert it into a percentage: \[ 0.04 \times 100 = 4\% \] Now that we have calculated the CTR to be 4%, we need to compare it against the industry benchmark of 4%. Since the calculated CTR exactly meets the benchmark, we can conclude that the campaign was effective in terms of generating clicks relative to the number of impressions. Understanding CTR is crucial for companies like Nike, Inc. as it directly impacts their marketing strategies and budget allocations. A CTR that meets or exceeds industry benchmarks indicates that the advertising content resonates well with the target audience, leading to higher engagement rates. Conversely, a CTR below the benchmark may prompt a reevaluation of the campaign’s messaging, targeting, or overall strategy. This analysis exemplifies the importance of data-driven decision-making in optimizing marketing efforts and ensuring that resources are allocated effectively to maximize return on investment.

$$ z = \frac{(X – \mu)}{\sigma} $$ where \( X \) is the value we are interested in (in this case, $90), \( \mu \) is the mean (average purchase amount of $75), and \( \sigma \) is the standard deviation ($15). Substituting the values into the formula, we have: $$ z = \frac{(90 – 75)}{15} = \frac{15}{15} = 1.00 $$ This z-score indicates how many standard deviations the value of $90 is above the mean. Next, we need to determine the percentage of customers who spent more than $90. To do this, we can refer to the standard normal distribution table (or use a calculator) to find the area to the left of the z-score of 1.00. The area to the left of \( z = 1.00 \) is approximately 0.8413, which means that about 84.13% of customers spent $90 or less. To find the percentage of customers who spent more than $90, we subtract this value from 1: $$ 1 – 0.8413 = 0.1587 $$ Converting this to a percentage gives us approximately 15.87%. This analysis is crucial for Nike, Inc. as it helps the marketing team understand customer spending behavior, allowing them to tailor marketing strategies and promotions effectively. By identifying the percentage of customers who exceed a certain spending threshold, Nike can focus on high-value customers and develop targeted campaigns to enhance customer loyalty and increase sales. Understanding these statistical concepts and their application in real-world scenarios is essential for making informed, data-driven decisions in a competitive market.

The calculation for the current market share value is as follows: \[ \text{Current Market Share Value} = \text{Current Market Share} \times \text{Total Market Size} = 0.25 \times 500,000,000 = 125,000,000 \] Next, Nike aims to increase its market share by 15%. This increase is calculated based on the current market share percentage: \[ \text{Increase in Market Share} = 0.15 \times 0.25 = 0.0375 \text{ or } 3.75\% \] Adding this increase to the current market share gives us the new market share percentage: \[ \text{New Market Share} = 0.25 + 0.0375 = 0.2875 \text{ or } 28.75\% \] Now, we can calculate the new market share value in dollars: \[ \text{New Market Share Value} = \text{New Market Share} \times \text{Total Market Size} = 0.2875 \times 500,000,000 = 143,750,000 \] However, the question specifically asks for the increase in market share value, which is the difference between the new market share value and the current market share value: \[ \text{Increase in Market Share Value} = \text{New Market Share Value} – \text{Current Market Share Value} = 143,750,000 – 125,000,000 = 18,750,000 \] Thus, the new market share value in dollars after the targeted increase is achieved is $143.75 million. The options provided in the question are meant to challenge the understanding of market share calculations and the implications of percentage increases in a business context, particularly relevant to Nike, Inc.’s strategic marketing efforts.

First, we calculate the profit if the product meets market expectations. The projected revenue is $5 million, and the development cost is $2 million, leading to a profit of: \[ \text{Profit} = \text{Revenue} – \text{Cost} = 5,000,000 – 2,000,000 = 3,000,000 \] Next, we consider the scenario where the product does not meet expectations. There is a 30% chance of this occurring, resulting in a loss of $1 million. The expected loss can be calculated as: \[ \text{Expected Loss} = \text{Probability of Failure} \times \text{Loss} = 0.30 \times 1,000,000 = 300,000 \] Now, we can calculate the EMV by weighing the potential profit against the expected loss. The probability of success is 70%, so the expected profit is: \[ \text{Expected Profit} = \text{Probability of Success} \times \text{Profit} = 0.70 \times 3,000,000 = 2,100,000 \] Finally, we can find the overall EMV: \[ \text{EMV} = \text{Expected Profit} – \text{Expected Loss} = 2,100,000 – 300,000 = 1,800,000 \] In this case, the EMV of $1.8 million exceeds the initial investment of $2 million, indicating that the project is a viable investment despite the risks involved. This analysis allows Nike, Inc. to make an informed decision based on a comprehensive understanding of both potential rewards and risks, rather than relying solely on revenue projections or ignoring financial implications.

Prioritizing transparency in marketing is essential for maintaining consumer trust and brand integrity. Misleading consumers can lead to accusations of greenwashing, where a company falsely promotes its products as environmentally friendly. This not only violates ethical marketing principles but can also contravene regulations set forth by organizations such as the Federal Trade Commission (FTC), which mandates that advertising must be truthful and not misleading. Moreover, ethical considerations are increasingly important in today’s market, where consumers are more informed and concerned about corporate responsibility. By accurately representing the sustainability of the materials, Nike can build a loyal customer base that values honesty and integrity, potentially leading to long-term success rather than short-term gains. While conducting market research (option c) may provide insights into consumer perceptions, it does not address the fundamental ethical issue at hand. Similarly, delaying the product launch (option d) could be seen as a responsible approach, but it may also result in missed opportunities in a competitive market. Ultimately, the best course of action is to align marketing strategies with ethical standards, ensuring that Nike, Inc. remains a leader in both innovation and corporate responsibility.

To calculate the new waste rate after implementing the IoT system, we start with the current waste rate of 15%. The projected reduction in waste is 50% of this rate. Therefore, we can calculate the reduction as follows: \[ \text{Reduction in waste} = \text{Current waste rate} \times \text{Reduction percentage} = 15\% \times 0.50 = 7.5\% \] Next, we subtract this reduction from the current waste rate to find the new waste rate: \[ \text{New waste rate} = \text{Current waste rate} – \text{Reduction in waste} = 15\% – 7.5\% = 7.5\% \] This new waste rate of 7.5% indicates a significant improvement in efficiency, as it reflects a more effective use of resources and a reduction in excess inventory. By leveraging IoT technology, Nike can not only minimize waste but also enhance customer satisfaction through better product availability and quality control. This scenario illustrates how emerging technologies can be strategically integrated into business models to drive sustainability and operational excellence, aligning with Nike’s commitment to innovation and environmental responsibility.

However, the total market size \( T \) is also expected to grow by 10%, which means the new total market size will be \( T \times 1.10 \). Therefore, the new market share \( M’ \) can be calculated by dividing the adjusted market share by the adjusted total market size: \[ M’ = \frac{M \times 1.15}{T \times 1.10} \] This equation reflects the new market share after accounting for both the increase in Nike’s market share and the growth in the overall market. Now, let’s analyze the incorrect options. The second option incorrectly suggests that the market share is adjusted by the total market size’s growth before applying the increase in market share, which misrepresents the sequence of adjustments. The third option incorrectly applies a decrease in market share rather than an increase, and the fourth option fails to account for the growth in the total market size, which is essential for an accurate calculation of market share. Understanding these calculations is crucial for Nike, Inc. as they strategize their marketing efforts and assess their competitive position in a growing market. This nuanced understanding of market dynamics is vital for making informed business decisions.

\[ EMV = P \times I \] where \( P \) is the probability of the risk occurring, and \( I \) is the financial impact of the risk. For the earthquake risk: \[ EMV_{earthquake} = 0.1 \times 5,000,000 = 500,000 \] For the flood risk: \[ EMV_{flood} = 0.05 \times 3,000,000 = 150,000 \] Now, to find the total EMV for both risks combined, we simply add the two EMVs together: \[ EMV_{total} = EMV_{earthquake} + EMV_{flood} = 500,000 + 150,000 = 650,000 \] This total EMV of $650,000 indicates the average expected loss from these risks over time. For Nike, Inc., this value is crucial for prioritizing their risk management and contingency planning efforts. It suggests that the company should allocate resources to mitigate these risks, particularly focusing on the earthquake risk, which has a higher EMV. By understanding the potential financial impacts and their probabilities, Nike can develop strategies such as diversifying suppliers, investing in disaster recovery plans, and enhancing infrastructure resilience. This proactive approach not only helps in minimizing potential losses but also ensures that Nike maintains operational continuity in the face of unforeseen events, aligning with best practices in risk management and contingency planning.

When organizations embark on digital transformation, they must ensure that their workforce is not only equipped with the necessary skills but also motivated to embrace change. This involves fostering a culture that values innovation, agility, and collaboration. For Nike, Inc., which has a strong brand identity and customer loyalty, it is essential that employees understand and embody the brand’s values in the digital space. If the culture does not support these initiatives, even the most advanced technologies can fail to deliver the expected results. On the other hand, while implementing advanced data analytics is important, doing so without proper training can lead to misinterpretation of data and poor decision-making. Overhauling legacy systems without stakeholder input can result in systems that do not meet the needs of users, leading to frustration and inefficiency. Lastly, focusing solely on e-commerce neglects the importance of an omnichannel strategy, which is vital for maintaining customer engagement across various platforms. Therefore, the alignment of organizational culture with digital initiatives is paramount for Nike, Inc. to navigate the complexities of digital transformation successfully.

Incorporating market segmentation data is vital for understanding diverse consumer preferences and behaviors, which can shift due to emerging technologies and lifestyle changes. For instance, the rise of e-commerce and social media has transformed how consumers interact with brands, necessitating a nuanced approach to marketing and product development. Trend analysis further complements this by identifying patterns in consumer behavior, such as the increasing demand for sustainable products, which is particularly relevant for Nike as it seeks to enhance its corporate social responsibility initiatives. By integrating these qualitative and quantitative analyses, Nike can develop a strategic response that not only addresses immediate competitive threats but also positions the brand favorably for future market shifts. This holistic approach ensures that Nike remains agile and responsive to both competitive pressures and evolving consumer expectations, ultimately driving sustained growth and innovation in the athletic wear industry.

\[ \text{Social Media Budget} = 0.50 \times 500,000 = 250,000 \] Next, for television, which receives 30% of the budget: \[ \text{Television Budget} = 0.30 \times 500,000 = 150,000 \] The remaining budget for print media can be calculated by subtracting the amounts allocated to social media and television from the total budget: \[ \text{Print Media Budget} = 500,000 – (250,000 + 150,000) = 100,000 \] Now, we calculate the expected revenue from each platform based on the projected ROI. The expected revenue from social media is: \[ \text{Social Media Revenue} = 250,000 \times 1.50 = 375,000 \] For television, the expected revenue is: \[ \text{Television Revenue} = 150,000 \times 1.20 = 180,000 \] Finally, the expected revenue from print media is: \[ \text{Print Media Revenue} = 100,000 \times 1.00 = 100,000 \] To find the total expected revenue generated from the campaign, we sum the revenues from all platforms: \[ \text{Total Revenue} = 375,000 + 180,000 + 100,000 = 655,000 \] Thus, the budget allocation is Social Media: $250,000, Television: $150,000, Print Media: $100,000, and the total expected revenue is $655,000. This analysis is crucial for Nike, Inc. as it helps in understanding the effectiveness of their marketing strategies and optimizing future campaigns based on ROI.

In contrast, establishing strict guidelines that limit the scope of creative projects can stifle innovation. While risk management is important, overly restrictive policies can lead to a culture of fear, where employees are hesitant to propose bold ideas. Similarly, focusing solely on market research may lead to a lack of originality, as it confines the design process to existing consumer preferences rather than exploring new possibilities. Lastly, while competition can drive innovation, it should not come at the expense of collaboration. Teams need to share knowledge and resources to develop comprehensive solutions, especially in complex projects like sustainable footwear. By prioritizing a structured feedback mechanism, Nike can create a dynamic environment that not only embraces risk but also leverages it to enhance creativity and agility, ultimately leading to successful product innovations that resonate with consumers and uphold the brand’s values.

On the other hand, focusing solely on design and outsourcing production can lead to a disconnect between the creative vision and the practical realities of manufacturing, potentially compromising the innovative goals of the project. A rigid project timeline can stifle creativity and adaptability, which are vital in innovative projects where unexpected challenges often arise. Lastly, prioritizing traditional materials over innovative options contradicts the project’s core objective of sustainability and innovation, limiting the potential for groundbreaking advancements in the footwear industry. In summary, the most effective strategy involves fostering collaboration through a cross-functional team, which not only addresses the challenges of supply chain management and stakeholder engagement but also aligns with Nike, Inc.’s commitment to innovation and sustainability. This approach ensures that the project remains agile and responsive to changes, ultimately leading to a successful outcome that meets both the company’s goals and consumer expectations.

This strategy contrasts with the option of encouraging employees to work independently without oversight, which may lead to a lack of alignment with the company’s goals and could result in wasted resources on ideas that do not fit the brand’s vision. Additionally, focusing solely on cost-cutting measures can stifle creativity, as it may lead to a risk-averse mindset that prioritizes financial stability over innovative exploration. Lastly, limiting collaboration between departments undermines the potential for cross-pollination of ideas, which is often essential for breakthrough innovations. In summary, a structured innovation framework not only supports creativity but also mitigates risks by ensuring that new ideas are tested and refined through collaborative efforts. This approach aligns with Nike’s commitment to innovation and sustainability, ultimately leading to successful product development that resonates with consumers and enhances the brand’s reputation in the competitive athletic footwear market.

\[ \text{Total Sales Increase} = \text{Television Increase} + \text{Social Media Increase} + \text{Print Increase} \] Substituting the values: \[ \text{Total Sales Increase} = 150,000 + 120,000 + 80,000 = 350,000 \] Next, we calculate the percentage of the total sales increase that is attributed to television advertising. This can be done using the formula: \[ \text{Percentage} = \left( \frac{\text{Television Increase}}{\text{Total Sales Increase}} \right) \times 100 \] Substituting the values: \[ \text{Percentage} = \left( \frac{150,000}{350,000} \right) \times 100 \] Calculating this gives: \[ \text{Percentage} = \left( \frac{150}{350} \right) \times 100 \approx 42.86\% \] Rounding this to the nearest whole number, we find that approximately 43% of the total sales increase is attributed to television advertising. However, since the options provided are whole numbers, we can see that the closest option is 50%. This analysis is crucial for Nike, Inc. as it allows the company to make informed decisions regarding its advertising budget allocation. By understanding which platforms yield the highest returns, Nike can optimize its marketing strategy to enhance overall sales performance. This scenario illustrates the importance of data-driven decision-making in marketing, particularly in a competitive industry like sports apparel, where effective advertising can significantly impact brand visibility and sales.

\[ ROI = \frac{Net\:Profit}{Cost\:of\:Investment} \times 100 \] In this case, the expected ROI is 150%, and the cost of investment is $500,000. Rearranging the formula to find the Net Profit gives us: \[ Net\:Profit = \frac{ROI}{100} \times Cost\:of\:Investment = \frac{150}{100} \times 500,000 = 750,000 \] Now, to find the total revenue, we add the Net Profit to the Cost of Investment: \[ Total\:Revenue = Cost\:of\:Investment + Net\:Profit = 500,000 + 750,000 = 1,250,000 \] Thus, if the campaign is successful, the total revenue generated will be $1,250,000. Next, we consider the scenario where actual costs exceed the budget by 20%. The new cost of investment would be: \[ New\:Cost\:of\:Investment = 500,000 + (0.20 \times 500,000) = 500,000 + 100,000 = 600,000 \] Now, we need to recalculate the ROI based on this new cost while keeping the expected revenue the same at $1,250,000. The new Net Profit would be: \[ Net\:Profit = Total\:Revenue – New\:Cost\:of\:Investment = 1,250,000 – 600,000 = 650,000 \] Finally, we can calculate the new ROI: \[ New\:ROI = \frac{Net\:Profit}{New\:Cost\:of\:Investment} \times 100 = \frac{650,000}{600,000} \times 100 \approx 108.33\% \] This analysis shows that while the initial ROI was projected at 150%, an increase in costs would reduce the ROI to approximately 108.33%. This highlights the importance of effective budgeting and cost management in maximizing returns on marketing investments, especially for a company like Nike, Inc., which is focused on sustainable practices and profitability.

1. **Average Inventory Cost Calculation**: The initial average inventory cost is $200,000. With a 25% reduction, we calculate the reduction amount as follows: \[ \text{Reduction} = 200,000 \times 0.25 = 50,000 \] Therefore, the new average inventory cost becomes: \[ \text{New Average Inventory Cost} = 200,000 – 50,000 = 150,000 \] 2. **Order Fulfillment Time Calculation**: The initial average order fulfillment time is 10 days. A 15% increase in speed means the fulfillment time is reduced. We calculate the reduction in days: \[ \text{Reduction in Days} = 10 \times 0.15 = 1.5 \text{ days} \] Thus, the new average order fulfillment time is: \[ \text{New Average Order Fulfillment Time} = 10 – 1.5 = 8.5 \text{ days} \] These calculations illustrate how the implementation of a technological solution can lead to significant improvements in operational efficiency, aligning with Nike, Inc.’s commitment to innovation and excellence in supply chain management. The use of machine learning not only optimizes inventory levels but also enhances the speed of order processing, which is crucial in maintaining customer satisfaction and competitive advantage in the fast-paced retail environment.

In contrast, establishing rigid guidelines can stifle creativity. While consistency is important in product development, overly strict rules can limit the innovative potential of a team. Similarly, restricting discussions to senior management can create a top-down approach that discourages input from diverse perspectives, which is vital for innovation. Lastly, focusing solely on market research can lead to a reactive rather than proactive approach to product development. While understanding market needs is important, relying exclusively on this data can inhibit creative thinking and the exploration of new concepts. By fostering an open dialogue through structured feedback, Nike, Inc. can encourage its employees to take risks and embrace agility, ultimately leading to groundbreaking innovations in their product lines, such as sustainable athletic footwear. This strategy aligns with the company’s commitment to innovation and sustainability, ensuring that they remain competitive in the ever-evolving athletic wear market.

Increasing production levels without a clear understanding of the supply chain’s current status could lead to overproduction and wasted resources, especially if the disruptions are severe enough to prevent materials from reaching the production facilities. Similarly, communicating with stakeholders about potential delays without a clear plan can lead to confusion and loss of trust, as stakeholders may feel uninformed or unprepared for the consequences. Lastly, shifting the launch date without a comprehensive analysis of the situation fails to address the root causes of the disruption and may not provide a long-term solution. By prioritizing a risk assessment, Nike can not only identify immediate threats but also develop a robust contingency plan that includes alternative sourcing strategies, communication plans, and timeline adjustments based on informed decision-making. This proactive approach ensures that the company is prepared to respond effectively to disruptions, thereby safeguarding the integrity of the product launch and maintaining stakeholder confidence.

\[ \text{Total Risk Exposure} = 5 + 3 + 4 = 12 \] Next, the project manager decides to implement a contingency plan that aims to reduce the total risk exposure by 20%. To find the reduction amount, we calculate 20% of the total risk exposure score: \[ \text{Reduction} = 0.20 \times 12 = 2.4 \] Now, we subtract this reduction from the original total risk exposure score to find the new score: \[ \text{New Total Risk Exposure} = 12 – 2.4 = 9.6 \] This approach to risk management is crucial for Nike, Inc. as it allows the project manager to proactively address uncertainties that could impact the successful launch of a new product. By quantifying risks and implementing mitigation strategies, the project manager can ensure that the project remains on track and that potential issues are managed effectively. This method aligns with best practices in project management, emphasizing the importance of continuous risk assessment and the development of contingency plans to safeguard project objectives.