Telfer MBA Students visit Nike and the Vlerick Leuven Gent Management School

Monday, April 30, 2012

by Pier Martin, Telfer MBA Candidate

“Efficiency” is a key word used in businesses around the world today. Whether it’s production efficiency, labor efficiency or just overall cost efficiency, everyone is talking about it and in Europe, this is no different!

Today, the MBA group started the day with a presentation on “Strategic Performance Management” by Professor Dr. Kurt Verweire from the Vlerick Leuven Gent Management School.  The group learnt about the differentiation between companies around the world, specifically around developing a competitive strategy, which allows your business to maintain or create a competitive edge.  Dr. Verweire based his presentation and subsequent theories on the book “The Myth of Excellence – Why Great Companies Never Try to Be the Best at Everything” by Crawford and Mathews (2001) to help the group develop a value proposition framework and subsequently analyze a case on Dell Europe. It was a fantastic presentation, which opened many eyes to the importance of strategy to the organization and subsequent business units.

“If management does not know where they make a difference to their customers, how can they expect their customers to know?” Dr. Verweire

The above quote was the highlight of the morning session in my view. With strategy being implemented at the Corporate level, the Business Unit level and at the Functional level, it’s important that the underlying core strategy be understood by the Corporate level in order for the business in general to be successful. With the choice between being a firm which strives for “Operational Excellence”, “Product Leadership” or “Customer Intimacy”, the Corporate level must understand where it best provides value to it’s clientele to ensure success in the long run. This is often ignored in businesses in Canada and abroad!

In the afternoon, the MBA group was invited to visit the Nike European Logistics Centre in Laakdal, Belgium where Eric Vanelgenden, Manager for Customs and International Trade, greeted us.  This centre is the central distribution centre for the EMEA region (Europe, Middle East and Africa), specifically in both the footwear and apparel sectors. The session started with a very strong question and answer period where the focus of many questions from the MBA students was on the overall strategy of Nike, specifically in Europe. Topics discussed included the extensive use of external contacts between Nike and other worldwide companies such as Toyota to improve and streamline processes for improved efficiency. Questions along cultural barriers and differences, ethics, business risks hedging and the future of Nike as a global market leader were all asked amongst many others.

The central take-away from this presentation and the questions and answers session can be divided in two parts. Firstly, efficiency remains the key focus in a world with increasing wage costs and raw material costs. Nike even partners up with Adidas (a direct competitor) to identify ways to reduce these costs! Secondly, Mr. Vanelgenden stressed the importance of cultural differences and the increasing importance of learning and developing cultural awareness in business as the world continues to grow. With social media and internet communication increasing in this day and age, business with other nations within Europe and especially the rest of the world is becoming easier to undertake and thus this creates responsibility on all businesses and their respective managers to understand, respect and work cooperatively with other cultures to create a benefit for both parties.

After his presentation, we were taken on a guided tour of the incredibly large distribution centre (220,000 square meters with 2100 employees working on 3 separate shifts, 24 hours a day, 7 days per week!). This was an opportunity for all of us to understand and personally see the extensive process which Nike undertakes to receive goods from their producers, label, sort, and eventually repack for distribution to wholesalers, retail vendors and individuals alike, all within their single factory.  As we were guided by actual distribution employees, this gave us an insight into their daily working life and allowed us to ask questions related directly to the potential improvements within the process, the corporate culture of Nike and specifically, their direct opinions on many items we identified throughout the tour. An insight like this was invaluable for us to get in order to compare the corporate level strategy with the functional level processes.

After a long day, the group has retired to the hotel for a quiet night followed by a day of sightseeing tomorrow. A long but exciting day waits on Wednesday as we visit both Accenture and Deloitte.