Nike – SWOT Analysis Essay
Nike – SWOT Analysis
Nike is a very competitive. It has a huge and healthy dislike of its competitors. At Atlanta Olympics, its competitor Reebok went on expense of sponsoring the games but Nike didn’t take this step. It sponsored top athletes and gained much coverage. Nike does not have factories. It does not let its cash to tie up in buildings and manufacturing employees. This model makes it a very lean organization. They manufacture high quality product at a location which offers low prices. If price gets increased, it shifts to other production location. Nike has a very strong research and development area which can be seen in its innovative product range. Nike is a global brand. It is at top position in sport brand in the World. Its famous “Swoosh” logo is instantly recognizable by people. Nike is a very professional company.
It has offices in 45 different countries.
It offers products all over the world.
It is a fortune 500 company.
It has very strong marketing campaign that increases the familiarity of its brand.
It employs over 30,000 employees across the world.
It has got its retail chain – Niketown.
It has taken initiatives in many different branding opportunities and resulted in impressive outcomes.
It provides lightweight shoes by using lunarlite materials. (Nike SWOT Analysis) WEAKNESS
Though Nike has varied range of sports products but still its business’s income is depends heavily on the share of footwear market it has got. So, in case its market share decreases, it can leave the company becomes vulnerable to come down. Though Nike has got its own retailer: Niketown, its huge part of income comes from selling into retailers. And retail sector is very sensitive as well. Retailers also provide same set of experiences to customers. So, the profit margin will get affected if retailers try to sell off the products at lower prices. It has got charges against labor violations; experienced bad publicity with issues of sweatshops and practicing unethical patterns has degraded its image to some extent. Its history involves the violations of minimum wage rates in Vietnam. For cheaper prices, it has been charged for exploiting workforces which will be employed at lower price in overseas countries. It’s been accused of providing poor working conditions to the workers. It gets constant negative criticism from anti-globalization groups. Its production is carried out at a cheaper location, so majorly it happens outside U.S. But this practice is not considered good in U.S. (Swot Analysis Nike) (Nike SWOT Analysis)
1. The development of product range offers Nike many opportunities. Though Nike owners don’t consider its brand as a fashionable one but its customers consider it so. They don’t buy it for sports activities only. It has become a fashion trademark among customers especially the youth. This creates huge opportunities for Nike as the product could come under unfashionable tag before it wears out i.e. shoes gets replaced by the customers. 2. Opportunity also lies in developing sports wears, sunglasses and jewellery. These high end valued items will surely get associated with their mainline products. 3. It can develop its business internationally which can give strength to its global brand recognition. There are many emerging countries like China and India which offers disposable income to be spent on high value sports products. These countries have growing number of customers especially the working population. 4. There are many global sports events such as the World cup (Soccer) and the Olympics, which can be used as global marketing events. They can support the brand of the company. 5. Company can extend its reach in trendy and fashionable industry where not only Athletes but general population is also targeted. 6. There is a scope of new sponsorships. These new sponsors usually have successful ways to brandize an organization. 7. It can create new products by using waste from usual manufacture. 8. It can expand into jewellery and sunglasses items.
9. It can change its product development strategy with change in trends. 10. It can reduce controversy occurring around its business practices. (SWOT Analysis Nike, Inc.) THREATS
1. Nike has its business in several countries i.e. it is been exposed to international behavior of trade. It manufactures and sells in different currencies. Hence costs and profit margin will fluctuate over a longer period of time. This nature of trade can put Nike on loss side. 2. The market of sports shoes is very competitive. Hence the business model developed by the owners of Nike is no longer in use. It needs to come up with a sustainable model so as to remain in the race. 3. Market is flooded with competitors who are developing alternative brands to take Nike’s market share. 4. As we have observed that retail sector is very competitive. This means customers have got lot of options available at one’s end. So if one store charges a price for a product, consumer can go to other store if that store is selling the same quality price at lower rates. Hence price sensitivity is a huge threat to Nike. 5. A global business usually experiences hiccups because abroad business operations are exposed to risks of fluctuations in currencies, quotas, safeguard measures, restrictions in trades and terrorism. 6. Its exposed to risks associated with importing costs because of international barriers 7. It needs to maintain reputation as one of the eco-friendly organizations. 8. It is difficult for them to manage financial conditions in today’s economy. 9. Its association with Kobe Bryant.
10. It’s been accused for unfair labor practices. (Nike SWOT Analysis)
Nike SWOT Analysis. (n.d.). Retrieved from www.teamonedesign.com: www.teamonedesign.com/aio/mk/Nike_SWOT_Analysis.doc Swot Analysis Nike. (n.d.). Retrieved from http://www.quality-assurance-solutions.com: http://www.quality-assurance-solutions.com/swot-analysis-nike.html SWOT Analysis Nike, Inc. (n.d.). Retrieved from http://www.marketingteacher.com: http://www.marketingteacher.com/swot/nike-swot.html#