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Nike Incorporated

Final Communication Plan

Daniel Abary, Adelia Acker, Rylee Berges

Trevor Henson, Tess Nakonechny, Greg Urquidez

BCOM 314-006, Spring 2018

Professor Marchesseault

01 March 2018
Final Communication Plan 1

Table of Contents

Executive Summary……………………………………………………………………………… 2

Introduction……………………………………………………………………………………..... 3

Who Are We……………………………………………………………………………... (page #)


Strong Brand Recognition………………………...
Industry Leader Status ……………………………..
Community Driven Campaigns ………………………………….

How We Got Here…………………………………………………………………...…… (page #)


Problem Identification………………………
Poor Working Conditions Abroad…………………………………...
Stakeholder Analysis………………………..
Employees ………………………………..
Customers………………………………...
Investors………………………………..

Where Do We Go From Here? ……………………………………………...………….... (page #)


Administer Satisfaction Surveys to Employees……………………………
Engage Customers Through Social Media………………..
Update Investors Via Email……………………………..

Next Steps……………………………..……………………………………………….…. (page #)


Projected Budget……………………………………………….
Return on Investment………………………………….
Timeline for Implementation……………...

Conclusion………………………………………………………………………………....(page #)

References…………………………………………………………………...……………….14-16

Appendix……………………………………………………………………………..…….(page #)
Final Communication Plan 2

Executive Summary
Nike has received fluctuating media attention, beginning with the sweatshop scandal in 1991 and
the subsequent rumors surrounding poor international working conditions. Nike has since
worked on changing factory standards and will continue to examine the internal and external
narratives to find deviations. This report will provide you with an overview of who we are as a
company, the problem surrounding the conflicting narrative of community, the stakeholders that
are impacted by this issue, recommendations, next steps, projected budget, and the return on
investment.

Who Are We and How We Got Here


In reviewing the company’s three main narratives of brand recognition, industry leader status,
and community, we discovered that there are negative views about our community narrative,
which is harmful to Nike’s brand. Employees, customers, and shareholders are unconvinced
about the claim that Nike is community driven, especially considering a 2014 building collapse
in Bangladesh and stories from a former Nike factory worker, Noi Supalai, in 2016. Ineffective
communication with our stakeholders has resulted in negative speculation regarding Nike’s
working conditions, which has devastated our brand reputation.

The logic behind this issue is that employees are unhappy and spreading negative word of mouth,
forcing customers to switch their loyalty towards ethical companies, resulting in frustrated
shareholders. Shareholders are requesting that Nike prioritize their communication efforts and
restore a positive brand image before it impacts the company’s stock prices. It is clear that Nike
must take immediate action and communicate with critical stakeholders.

Recommendations
In order to meet the needs of our stakeholders, we must address this issue immediately, starting
with improving labor practices abroad. To do this, we will utilize a resource called LaborLink,
which will aid Nike in communicating with employees. We will then transition our focus to
customers and create a social media campaign that will advertise our community driven efforts.
Once these changes have been made, we will update our Letter to Shareholders and
communicate with them via email. Since this is a time-sensitive issue, we have created a two-
month communication plan that will come to a close on May 8th.

Response
The suggested communication plan will cost $380,537.25, less than a single percent of Nike’s
net income reported in 2017. By closing this communication gap and engaging employees,
customers, and shareholders, Nike can expect to receive a return on investment of 3:1. Thank
you for taking the time to read our report, and if you have any questions or concerns, please
contact our intern team liaison, Mr. Urquidez, at gurquidez@email.arizona.edu.
Final Communication Plan 3

Introduction
The conflicting narrative regarding community was discovered after a thorough analysis of
Nike’s internal and external narratives. As of two years ago, a former Nike employee spoke
about the abusive working conditions in a Nike factory in Thailand. Only two years before then,
a factory building in Bangladesh collapsed after neglecting building standards. These are only
two examples of issues that have arose after the first reports of poor factory conditions surfaced
in 1991.

This conflict between Nike’s internal values of being community driven and the external views
of unethical employee treatment has made it clear that Nike is neglecting the key stakeholders of
employees, customers, and shareholders, and losing profits as a result. It is essential that these
narratives be corrected so that Nike can move past this negative reputation once and for all.

In hopes to regain the positive reputation that Nike had prior to the 1990’s, the remainder of this
report will provide you, the Director of Communications, with an overview of who we are as a
company, the problem surrounding the conflicting narrative of community, the stakeholders that
are impacted by this issue, recommendations, next steps, projected budget, and the return on
investment. Nike is committed to regaining our loyal consumer base, increasing profits along the
way.

Who Are We
Since our company’s launch in 1964, Nike has cultivated a dynamic and innovative culture that
encompasses the athletic wear industry. Our mission statement is “To bring inspiration and
innovation to every athlete in the world.” Co-founder Bill Bowerman highlighted Nike’s
welcoming and open culture by stating, “If you have a body, you are an athlete”. Nike attempts
to relay this perception by regulating their internal and external narratives of strong brand
recognition, industry leader status, and community driven campaigns.

Brand Recognition
The first key narrative that Nike maintains is our powerful brand image. Nike’s stellar marketing
strategy and campaigns have kept them in the spotlight of the media and the sports industry as
whole. According to SolveMedia, the words most associated with Nike are “Swoosh” and “Just
Do It”, showing the power of our marketing techniques. However, the surveyed groups also
associated the words “Sweatshop” and “Child Labor” with the company name. Regardless of
these negative associations, Nike has maintained their status as an industry leader.

Industry Leader Status


The second key narrative is Nike’s ability to lead the athletic wear industry. While Nike has been
a key player in the athletic-wear industry since its inception, we have recently surpassed our
Final Communication Plan 4

largest competitor, Adidas, with 68.2% more revenue in 2016, as reported by Mergent Online.
Nike continues to show growth and be a key player in the athletic-wear industry.

Community Driven Campaigns


The final and most important key narrative for Nike is our community based values. Nike does
its best to ensure that the public is aware of our positive impact on communities by advertising
our campaigns and partnerships on our website. The Community Impact tab on Nike’s website
outlines the Equality Campaign, more than sixty partnering organizations, and community
grants, to name a few. However, social activists have been participating in protests against Nike
regarding our use of sweatshops and child labor. This is the only narrative in which their internal
and external narratives conflict with one another and has thus created a large communication
issue.

How We Got Here


Problem Identification
After careful analysis of conflicting narratives, we discovered that there is a large gap between
Nike’s internal and external narratives regarding community, which is resulting in unhappy
employees, a loss of customers, and declining profits.

Through channels like the company’s website and advertising campaigns, Nike has emphasized
our positive impact on global communities. We have done this by harnessing the combined
power of over sixty organizations around the world that focus on getting kids active, providing
youth mentors, and offering community grants for education. However, Nike has received
backlash due to their management decisions internationally, which have contradicted this
community driven image. This is especially true when it comes to the working life of employees
abroad, even labeling Nike as proponents of sweatshops.

Poor Working Conditions Abroad Figure 1 - Noi Supalai speaking about Nike’s
abusive working conditions at the Penn
State conference in 2016. Source: The
Collegian.

Noi Supalai was a Nike factory worker in


Thailand who overcame a poor working
environment. Her story proves to be a
prime example of the negative external
narrative that Nike must work towards
alleviating.

During a Penn State Conference for the


United Students Against Sweatshops in
2016, Supalai stated that her working
situation was abusive, rigid, and oppressive; she claimed that there were two months in which
Nike refused to release paychecks to the workers. She went on to explain her efforts in
Final Communication Plan 5

improving the company’s standards regarding working conditions and Nike’s failure to
cooperate or attend press meetings. Noi stated, “I never expected such a big company like Nike
to lack such business ethics”.

Noi Supalai’s voice about her experience working in Nike factories in Thailand has made a large
impact on how the world views Nike’s company culture. Nike’s website claims that, “From the
start, community has been at the core of who we are and what we do,” yet Supalai’s story makes
three critical stakeholders, employees, customers, and shareholders, question Nike’s commitment
to these values. Before creating a communication plan to alleviate these concerns, we must fully
understand these stakeholders.

Stakeholder Analysis
Using the Four Step Model for Stakeholder Analysis, we have identified three of our key
stakeholders, understood their needs, prioritized them, and planned communication. All of these
stakeholders value ethics in corporations, and they feel as though Nike has fallen short of these
expectations. To illustrate the impact of neglecting stakeholders, the logic is as follows: treating
employees unethically will force customers to purchase from competitors due to a moral
obligation, which will cause investors to lose profit and retract their funds. Figure 2 summarizes
this information.

Figure 2 - Stakeholder Analysis

Employees
Supalai
represents
Nike’s

international employees and is an example of our most critical stakeholder. Those who work for
the company reflect the company’s image and when negative information is brought to light, the
company’s image suffers, failing to attract both customers and investors. According to Nike’s
interactive factory map, many of these employees are found in China, Vietnam, and Indonesia,
making up 73% of total factory workers and averaging an age of 32 years old. The Business
Journal and Wage Indicator report that the average wage for Nike’s factory workers in Vietnam
Final Communication Plan 6

is $73.94 per month, well below Vietnam’s minimum wage of $107-156. Employees represent
our most critical stakeholder because they are at the root of our narrative issue.

Customers
The second critical stakeholder is customers, who are important to Nike because they have a
great deal of buying power. According to IbisWorld, main consumers in the footwear industry
are women in their twenties and thirties who drive the athleisure trend, as well as active
millennials. These consumers differentiate themselves by their genuine involvement in activism
and social change, which unveils a significant problem for Nike since our primary consumers
will transfer their loyalty to ethically responsible brands.

Investors
The third most critical stakeholder is investors. Investors give Nike the opportunity to increase
profits, and they normally do so with companies that have values that align with their own.
Investopedia reports that Nike’s top three investors are founder Philip Knight, Nike’s president
Mark Parker, and the President of Nike Brand at Nike Trevor Edwards. An article from Wiley
Online Library states that in recent years, “Investors developed clear preferences for socially
responsible firms”. This means that it must be a priority to inform shareholders of any positive
changes we make to our working conditions. This will put many investors at ease when choosing
to support Nike.

Figure 3 - Stakeholder Breakdown

Nike’s poor international working environments has negatively impacted Nike’s relationships
with its stakeholders, and therefore we need to communicate with them immediately before we
Final Communication Plan 7

lose all connection. Our communication plan for international employees includes administering
surveys for direct communication to understand their needs and promote job satisfaction. Once
completed, we plan to communicate with customers through social media outlets to show them
the efforts we are putting forth to genuinely value communities. Lastly, we will update our
shareholder letter to address our initiatives and to prove to our investors that we prioritize
corporate social responsibility.

Where Do We Go From Here?


In order to communicate with key stakeholders about our community-driven values, our team has
put together suggestions for methods of contact for each stakeholder.

Administer Satisfaction Surveys to Employees


Our first suggestion is to administer surveys to better communicate with employees and
understand their workplace needs. To do this, Nike will assemble, prepare, and send out a team
to Nike’s three largest factories in China, Indonesia, and Vietnam to administer surveys about
employee job satisfaction within factories. Nike’s interactive factory map states that we have 567
factories spread across China, Indonesia, and Vietnam, employing over 1,000,000 workers
worldwide. Therefore, we will focus our efforts on these highly employed areas of production.

We plan to utilize a resource called LaborLink, an anonymous two-way mobile communication


channel between factory workers and supply chain leaders. Laborlink was launched in 2010 by
Good World Solutions to activate technology to create safe and respectful workplaces, making
factory workers an integral part of a successful supply chain. A Good World Solutions press
release argues that, “With more frequent and accessible communication, LaborLink is able to
surface unheard worker voices and translate their feedback into actionable analytics.”

LaborLink functions by having the factory worker follow easy-to-use instructions. They will call
a designated number on a mobile phone, which will redirect them to an automated voice message
system. The recorded voice will ask them simple questions like, “Do you feel your factory is a
safe environment?” and the employee will then be told to dial one for yes, or two for no. This
system is easy to use, not time consuming, and cost efficient.

Figure 4 shows the benefits of adopting LaborLink as our primary method of gaining insight into
the needs of our factory workers. LaborLink will provide Nike with reliable feedback in the form
of cost effective mobile technologies like Interactive Voice Response (IVR) and WeChat,
actionable data from survey topics including wages and hours, and better factories as a result of
direct worker feedback.
Final Communication Plan 8

Figure
4-

LaborLink Benefits

By utilizing this resource, we will be able to communicate with our employees that we care
about their well-being and are working to address their needs. Once we have communicated with
our employees, we will transition to our customers.

Engage Customers Through Social Media


Since the treatment of our abroad employees have been made public, it has impacted our
customer support of the Nike brand. In order to effectively communicate with the customers of
Nike, our company intends to channel this key stakeholder through the use of social media. The
overall message we will be sending is our improvements regarding diversity, inclusion, and
community. Our company’s social engagement on Instagram and Facebook, as seen in Figure 5,
indicates that social media is the most powerful platform to reach Nike customers.

Figure 5 - Social Media Engagement

Instagram
With Nike being one of the most followed brands on Instagram, we plan to utilize this platform
to communicate messages to our customers. Posting content that incorporates diversity within
sports and group exercise videos will characterize an overall positive and inclusive message to
our audience. The most ideal way to spread this particular message is through the use of
customized hashtags. Edelman community manager, Laura Currie, affirms that hashtags will aid
in building a community for Nike’s fan base by reaching the maximum impact on audiences. In
Final Communication Plan 9

fact, searching the #community hashtag alone returns over 8.2 million posts on Instagram.
NukeSuite’s marketing manager, Alice Walker, encourages Nike to have its followers to
participate in community-driven hashtags, such as #igsneakercommunity or #swooshcommunity,
that will promote positivity associated with the brand to distill our message. These hashtags have
the power to spread Nike’s desired message by providing our customers with an internal
perspective of the company’s community values.

Facebook
Through the use of multiple Facebook pages, Nike has the opportunity to cement their
community-driven message to their customers. Walker recommends to have our Facebook pages
cover all of the subdivisions of sports and further filter the page by country so our activities and
regions are localized into specific fan bases. Each page will have the ability to routinely post
diverse videos and photos of Nike products that pertain to each subdivision. Also, Alice Walker
suggests that by segregating Nike’s communities by category, rather than country, Nike will
bring more of an accessible, family feel to this particular social platform.

We propose to exploit Nike’s major social media platforms in order to engage and inform
customers of the company’s values. In fact, Adrianna Pride from Rival IQ, advises to incorporate
social media strategies to help construct the desired image of our company, which will then
create a two-way interaction between Nike’s brand and its consumers.

After we have address employee grievances and shown our customers that Nike is community
driven, we must prove to shareholders that we have made the necessary changes to our company
culture.

Update Investors Via Email


Due to the lack of our customer support, our investors are concerned about losing market share
with the Nike brand. Our suggested method of communication to directly contact this primary
stakeholder pertains to emailing our current investors. Nike will
update, modernize, and revise our letter to the shareholder and send
it out to key investors via email.

Our letter to the shareholder updates will contain elements ensuring


our investors that Nike will continue to be a dominant brand within
its industry. These updates include messages that pertain to the
company’s corporate social responsibility, which will align Nike’s
core values with its investors. Specifically, Clara Brenner suggests
to send important and consistent monthly updates to keep investors
engaged with the company. This will also allow investors to refer
back to updated versions of the company’s letter to the shareholder so communication errors are
avoided. In order to communicate these values with our key investors, we plan to use email as
our primary communication resource, since Business Insider states that 39% of people check
their email 1 to 3 times a day.
Final Communication Plan 10

Keeping Nike’s investors informed of the company’s corporate social responsibility will ensure
investors that we are committed to our employees and customers. Additionally, this will restore
confidence in shareholders when investing in Nike.

Next Steps
Our team will begin by assembling members from the Human Relations department, who will
work closely with a representative from LaborLink. They will be split into teams of three and
will travel to three of our largest factories in China, Indonesia, and Vietnam. Once there, they
will provide instructions to the factory workers on how to use the LaborLink survey system.

After receiving the survey responses, we will analyze them for opportunities to make a positive
change in the working life of our employees abroad. If there are changes to be made, Nike will
work to implement them in the most cost efficient manner.

Once we have satisfied the needs of our employees, we will turn our attention to our customers.
Nike’s primary method of consumer engagement is through social media, and therefore our
marketing department will be in charge of developing a new campaign that is primarily focused
on community values. Our marketing department will engage with consumers through consistent
Instagram and Facebook posts that promote our efforts to be more ethical and community driven.

Lastly, our communication plan will focus on relaying our changes to our primary investors. We
will do this by updating our Letter to Shareholders and sending it via email, outlining the
conflicting narrative of community, the changes that have been made to our factories, and how
this will benefit the company as a whole.

Timeline for Implementation


Since this conflicting narrative is costing the company profits, Nike must implement this
communication plan as soon as possible in order to minimize losses. Because of this time
sensitive issue, Nike plans to carry out this plan in a two month time frame. As seen in Figure 6,
there will be five segments separated by two week periods, starting on the 27th of February and
ending on May 8th.
Final Communication Plan 11

Figure 6 - Timeline

Projected Budget
Implementing this plan will require additional funding for establishing LaborLink, making
changes to the supply chain, and hiring advertisement specialists to roll out the new social media
campaign. Our team estimates that this communication plan will cost the company $380,537.25,
which is less than a single percent of Nike’ net income as of 2017. Figure 6, the full budget, is
shown below.
Final Communication Plan 12

Figure 7 - Full Project


Budget
The first area in our
communication plan that
will cost Nike funding is
the implementation of
LaborLink. Since 89% of
people in developing
countries have mobile
phones, Nike will be able
to avoid the cost of
technology associated with
establishing LaborLink
(Lam, 2016). Other survey
platforms utilize
smartphones and tablets to
capture data once a year,
with monitoring and
evaluation costs averaging
around $175 per worker.
However, since LaborLink
takes advantage of mobile
phone usage, they will
reach around 70% cost
savings, averaging around
$2 per worker (Franzese & Gendron, 2013). This means that if Nike invests $100,000 into
LaborLink, we will be able to receive 50,000 worker responses, giving us enough data to make
changes to our factory conditions.

A large investment will take the form of flights to Vietnam, China, and Indonesia. As seen in
Figure 7, three team members will be sent to each country, costing a total of $65,537.25. These
numbers were calculated using the Emirates Airline, a round trip for three people, business class.
Additionally, Nike has included an estimate for a week of hotels and transportation, costing a
total of $15,000.

The next investment will come in the form of making changes to factories to promote worker
satisfaction and safety. Six years after LaborLink’s launch, they had collected over 1.4 million
data points and discovered the following information:

Figure 8 - LaborLink Statistics


Final Communication Plan 13

These statistics provide


insight into what might
need to be changed
within the factories after
receiving survey
responses: revised
employee schedules,
proper payment, and
ethical superiors. These
are clear issues that need to be addressed in the near future, but for now, it is imperative that we
find a way to make the employees feel like they are being heard.

This will be done by modeling Gap Inc.’s communication plan for addressing factory worker
grievances. Gap has partnered with the Better Work Program to monitor facilities, with an
emphasis on protecting worker rights and well-being by helping companies and governments
uphold the ILO’s core labor standards and national labor laws.

Although the exact price is unknown, Better Work offers a Factory Service Package for an
“annual fee”. Nike will invest $150,000 for the time being, which will be enough to cover at least
the first stage of development in the Better Work Program.

Lastly, Nike will have to set aside funds for hiring advertisement specialists that will aid our
marketing department in developing an effective social media campaign. According to Forbes,
“Pricing for agencies that include business strategy range from $10,000 to $50,000 plus, but have
no ceiling”. Therefore, Nike will budget $50,000 for hiring an agency to help with our social
media marketing plan.

Return On Investment
Our team would not make these pricey suggestions without ensuring that there will be a long
term return on investment. Ensuring that Nike has bridged the gap between the conflicting
narrative regarding community will increase profits and reduce costs. The train of thought is as
follows; if employees are treated correctly, customers will commit to buying products from an
ethical company, and investors will get their money’s worth.

According to thorough research performed by Better Work, highly engaged employees are 38%
more likely to have above-average productivity, and suppliers that invest in workers receive a
three-to-one return on their investment. This will lead to increased profits, as demonstrated in
Vietnam; the average firm enrolled in Better Work increased its revenue to cost ratio by 25%
after four years of participation.

Overall, better working conditions lead to higher worker productivity and an increase in
profitability.
Final Communication Plan 14

Conclusion

Over the years, the reputation of Nike has fluctuated. Despite our negative reputation, Nike is a
community driven company. Building solid relationships with our key stakeholders is crucial to
the success of Nike. By addressing concerns and bringing in companies like LaborLink to our
foreign factories, we can begin to counteract this negative attention. By completing our budget,
we are able to review the costs of implementing LaborLink, which comes to $380,537.25, and
show that the costs are very minimal in regards to Nike’s net income. With addressing the
concerns of the employees of Nike, we will show our customers and investors that Nike is truly
doing whatever it can to make a better name for itself. Nike’s motto of “Just Do It” is evident in
what we are trying to implement and by moving forward with companies like LaborLink, Nike
can change how the world sees us as a community driven company.
Final Communication Plan 15

Appendix A: References

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Soni, P. (2014, December 2). An Overview Of NIKE's Supply Chain And Manufacturing
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What You Can Learn from Nike Branding Strategy. (2017, April 19). Retrieved February 22,
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NIKE Careers. (n.d.). Retrieved February 26, 2018, from


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https://www.mylaborlink.org/

Lam, B. (2016, February 01). Cellphones Are Letting Companies Learn What Their Factories
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http://www.gapincsustainability.com/people/improving-factory-working-
conditions/partnering-factories

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https://betterwork.org/blog/portfolio/progress-and-potential-a-focus-on-firm-
performance/

Factory Services. (n.d.). Retrieved February 24, 2018, from


https://betterwork.org/our-work/factory-services/
Final Communication Plan 16

Silva, P. (2017, July 13). How Much Does Branding Cost? Retrieved February 25, 2018, from
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Abrams, R., & Sattar, M. (2017, January 22). Protests in Bangladesh Shake a Global Workshop
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Tips on How to Build an Instagram Community. (n.d.). Retrieved February 26, 2018, from
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Rosoff, M. (2015, August 17). People either check email all the time, or barely at all. Retrieved
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their-email-2015-8

Bellis, R. (2017, February 10). The One Email Every Founder Should Know How To Write To
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Industry at a Glance. (n.d.). Retrieved February 25, 2018, from


http://clients1.ibisworld.com/reports/us/industry/ataglance.aspx?entid=1073

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