value chain functions
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Nike is an Oregon-based company that focuses on the design, development, and worldwide marketing of high-quality footwear, apparel, equipment, and accessory products. Nike is the largest seller of athletic apparel in the world. The company sells its products to approximately 19,700 retail accounts in the United States and through a mix of independent distributors, licenses, and subsidiaries in approximately 110 countries around the world.
Virtually all of the company's products are manufactured by independent contractors. Most footwear products are produced outside the United States, while apparel products are produced both in the United States and abroad.
1- Identify one decision that Nike managers make in each of the six value chain functions.
2- For each decision in requirement 1, identify one piece of accounting information that would aid the manager's decision.
3- Write 5 questions that can be answered by accounting information. For example, "How many shoe styles should Nike produce for next year?" or "where are the sales trends declining?"
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Solution Summary
Identify one decision that Nike managers make in each of the six value chain functions.
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Identify one decision that Nike managers make in each of the six value chain functions.
For each decision in requirement 1, identify one piece of accounting information that would aid the manager's decision.
The six value chain functions are:
1) R&D
It is the process that is conducted to generate and experiment with ideas related to new products, services, or processes. R&D department can look at information regarding operating expenses to identify weaknesses and errors in terms of processes, operations,etc. and can improve those processes for increasing bottom line profits. Similarly, trends in sales revenue also guide the R&D department to continuously seek improvement in existing products as well as develop new products. For example, if sales in a particular product line of Nike is decreasing, R&D managers of Nike can look for factors that can improve the sales.
2) Design: It is the detailed planning and engineering of products, services, or processes.
Design is particularly interested in accounting information related to sales, operations, processes and systems and look for figures presented in the profit and loss statement to capture trends regarding productivity, efficiency, etc.If the sales are decreasing, they will bring the desired changes in products or services to enhance revenues. If the operating expenses are increasing, design evaluate alternatives to improve efficiency of operations. Some of the other aspects which design looks are in accounting figures are those related to procurement or purchasing costs,costs of raw materials,etc. For example, if input ...
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- BCom, SGTB Khalsa College, University of Delhi
- MBA, Rochester Institute of Technology
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