Goal setting will have benefits for Nike. It is a very important managerial role for this incorporation. One of the benefits of setting the objectives is that it will improve the profitability of Nike. According to the Chief Financial Officer, the incorporation is looking forward to achieving a high single digit growth in revenue. The growth in EPS is expected to be in the range of 15% to 17%. In addition, the incorporation aims at having a 25% return on investments. The incorporation has divided its goals in terms of quarters in a financial year. The goals in this case are maintaining the DPS at 25% to 35% of total expenditure. By setting these goals, Nike Incorporation will be in a position to attain the objectives. In the absence of goal setting the incorporation would not have estimated an attainment of such goals. This is because the goals would not have been there in the first place.
The second importance of goal setting to Nike Incorporation will be the increase in efficiency. Nike will be able to increase its efficiency since it will be brought about by the need to increase its profitability. For this incorporation to achieve a high performance there will be a need to improve the way it operates. At this point, this incorporation wishes to enhance its global retail business. This is intended to improve the customer experience of the different groups and also promote the idea category in all major markets. In this line, Nike will enhance its operations as far as the wholesale of goods and capabilities of sales are concerned. All these efforts will increase the efficiency of this incorporation. For this to be achieved, the management wishes to invest 5 to 6 billion dollars over the next five years. Overall, the increase in efficiency will imply that the incorporation will deliver increased revenues for a portion of funds that have been invested. Therefore, with the same resources Nike will produce more impressive results than it managed before.
The long term financial planning will assist Nike in increasing its market share. Nike will be in a position to diversify its sources of revenue by increasing its market share. This is because it plans to increase its presence across several geographical regions. The setting of financial goals will allow this incorporation to spread the Nike Brand in a number of regions. The specific areas that the incorporation has targeted include North America, Japan and Western Europe. This strategy is expected to increase revenues of Nike Inc. by between 3 and 3.5 billion dollars. From my reasoning, Nike will increase its market share in these regions.
This market share increase will increase its revenues and hence profits. The other element which will assist this company in attaining an increase in market share is spreading its investments in developing market geographies of the world. The incorporation plans to set its operations in China and some parts of Eastern and Central Europe. Other parts targeted by this incorporation include the Emerging Markets. For this particular segment, Nike Incorporation targets a double digit growth that is considerably low. This will result in an increase of revenues by up to 3.5 billion dollars in 2015.
With long term financial planning, Nike will improve its direct to consumer business. For this goal, Nike expects to improve its door step presence and direct linkage with its consumers. In order to achieve this, Nike will open 250 to 300 new Nike branded stores worldwide. The stores will be located at premium shopping locations, and this is expected to be conducted over the next five years. With these advancements, the company will accelerate growth in digital commerce. This growth line is expected to add 2.2 to 2.6 billion dollars by 2015. I feel that the goal to add these revenues will increase the convenience of customers since they will have an increased number of stores available. The retail outlets will increase the consumer business both to the benefit of Nike and the consumers themselves. Nike will increase its revenues while consumers will benefit from the convenience of shopping at places that are near to them. The strategic plan integrates with the vision for this incorporation’s success.
Blair, D. (2010, December 14). Long-term financial goals of Nike. Retrieved from http://www.articlesbase.com/sales-articles/long-term-financial-goals-of-nike-3848503.html: http://www.articlesbase.com
Olsen, E. (2008). Complete Guide to Developing Strategic Objectives. My Strategic Plan, 5.
RTT News. (2010, May 5). Nike Targets Revenues Of $27 Bln. By 2015 . Retrieved from http://www.rttnews.com/story.aspx?ID=1294436: http://www.rttnews.com