Posted: October 20th, 2022

Strategy Analysis of the Nike Company

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Nike has both commercial strengths and weeknesses.However, in the 50 years the Nike has been in production; it has shabby the majority face up to. For its unconventional person days as an nonentity sports shoe product being sell out of the back of the track of its owner” car at road meet during the eighty and ninety when it sumptuous multi – million dollars support deal on sports icon. Following is a SWOT analysis of this vast American industry project.

Contents

INTRODUCTION: 4

MISSION AND VISION: 4

OBJECTIVE OF THE STUDY: 4

SWOT ANALYSIS: 5

STRENGTH: 5

WEAKNESS: 6

OPPORTUNITIES: 7

THREATS: 7

PORTER’S 5 MODELS: 8

PESTEL: 9

CONCLUSION AND RECOMMENDATION: 11

Aaker, D. (2000) Brand leadership Free Press, New York 11

INTRODUCTION:

The company stable out just an airplane built-up in arranges to make happy path job at Stanford University. Mr. Phil knight a adapt student at Stanford University and a comprehensive space messenger firm that he would create small price organization shoes in Japan and then advertise them in USA. Knight solicits the help of a history teacher Bill Bower man to help him in his big business project and in 1964 they ongoing Blue Ribbon sports. Knight called his first shoe Tiger and began allocation at path meet. Blue Ribbon in 1971 earned its Swoosh and knight introduces the most important Nike brand line. In 1978 the Blue Ribbon becomes Nike and both years their earnings grow gradually. Owing to Nike attention in informal shoes in the 1980, they missed the leaning to aerobic shoe and cut down after allowing Reebok to manage the marketplace.

MISSION AND VISION:

In its mission announcement Nike state that it entail responsibility commerce in a guilty way, most significant to sustainable monetary increase. With the advance in knowledge, Human resource practices, the healthy knowledgeable and skilled employment power, here is extremely small deficient to distinguish organization’. Living being seen to go added than the lowest amount necessary on community issue can draw and keep patrons. This bottle sea green refinement attracts concentration to the association; they are view as thoughtful and public liable (Mullins, L. 2005).

A speech, on the construction put into practice of Nike during its make available succession accuse the association of creature concerned in scant operational circumstances, defiance of hard work civil rights, low salary and pestering of its labor force. Nike takes this information seriously. On the source of the study reply the corporation has make stronger the monitor of its supplier (Hummels, H and Timmer, D.2004)

OBJECTIVE OF THE STUDY:

The SWOT examination aim to propose the participate government of the Söderköping growth with an instrument to charge their past contribution in the Söderköping procedure as fit as to appraise the option for the modus operandi to bear on after the conclusion of the in progress development in February 2009.

The SWOT study is not course for at the Söderköping course itself, as adequate opportunity for Assessment of the procedure by Governments willpower be provide at an additional summit of the older height Assessment gathering.

SWOT ANALYSIS:

STRENGTH:

The company is the most important and nearly everyone documented name in sportswear. The Nike shoes sign and motto “Just do it” are appreciated by the people. Nike has physically powerful distributions, it supply its products nearly in every part of the world. Manufacture range of sports products including sports shoes, trousers, shirts, sports utensils and other accessories. Strong financial position, net income of US $ 1.49 billion in year 2009.It employed approx 30,000 people approximately the world. Strong Marketing efforts by support athletes for TV commercial. It belongs to wealth 500 companies. Nike has no factories; relatively it uses contract factories to get the work done which makes it reasonably a lean organization. It has contracts with above 700 shops globally in about 45 different countries. It uses linarite foam and flies wire resources in order to make the manufactured shoes lighter and handier. Strong research and development in sports footwear. Nike has made number of acquisitions including Cole Haan, Hurley International, Converse Inc.

Nike being a competitive organization has a healthy aversion towards its competitor’s i-eduring Atlanta Olympics, Reebok expensed on sponsoring the games; Nike however sponsored the top athletes and due to this step, it gained valuable coverage. Nike has no factories; rather it uses contract factories to get the work done which makes it quite a lean organization. it has contracts with above 700 shops globally in about 45 different countries. Nike is quite strong regarding its research and development; quite evident regarding its evolving and innovative product range. They manufacture high quality at the lowest possible price, if prices rise due to price hike then the production process is made cheaper by changing the place of production. It belongs to the Fortune 500 companies.

•It uses linarite foam and flies wire materials in order to make the manufactured shoes lighter and more controllable.

manufactured goods variety

facility for improvement

allocation knowledge

on its own make

star support

bond industrialized

Large portfolio of products Nike, Inc is listed in NYSE and positioned as a US headquartered worldwide sportswear trader and supplier that: Contracts with about 700 shops worldwide, runs offices in 45 countries, and manages factories in China, Indonesia, Taiwan, Thailand, India, Vietnam, Philippines, Pakistan, and Malaysia. Belongs to wealth 500 companies which 2007 total revenue exceeded 16 b. USD Employs more than 30.000 people worldwide; Owns strong marketing strategy under Nike brand that assumes the participation of world top-class athletes and sportsmen in Nike’s ‘Just do it’ advertising campaigns; Operates a chain of Nike town retail stores; Leads its international business operations through acquisitions and re-branding: Converse Inc, 2003; Starter athletic clothing, 2004; Umbro, 2008; Nike’s premium brand is used to manufacture and promote a wide variety of products for all types of sport-oriented and leisure activities; Manages the US premier training program SPARQ Training Program; Applies linarite froth and fly wire materials to reduce the weight of manufactured shoes (Aader, 2002)

WEAKNESS:

Still while the Revenues of the company are very much needy of footwear crop. It is not easy for the third planet and Asian countries to have enough money this products, it is measured as the expensive brand .A lesser quantity diversification in goods which add to their depends on a small number of crop. Disapprove of by numeral of community assembly on paying small salary to employees, after a while and young person employment the put on the market subdivision is charge perceptive; retailers typically have a propensity to offer a exceptionally parallel understanding to the customers with an additional very high expensive product, which in come back tend to search out compress as retailer effort to get ahead of a number of the near to the position price antagonism heaviness on top of Nike. The company was for moderately a number of times disinclined to make known whichever category of in order with reference to its partner company. Association has a diversify variety for sportswear, the proceeds of the production, however, it is immobile a great transaction reliant winning it’s donate to the footwear marketplace which vegetation it at a moderately subject mark for some motivation its marketplace contribute to erode. The put on the bazaar subdivision is price susceptible; retailer more often than not is inclined to recommend a very similar understanding to the customers with an additional very high ex pensive item for consumption, which in come back tend to acquire squeeze as retailer endeavor to get ahead of a quantity of of the near to the position penalty rivalry heaviness on top of Nike. Nike was for quite some time unwilling to disclose any type of information concerning its partner company. It is emotional with the infringement of finally and least amount wage rates in Vietnam, 1996, that was seen as having poor working conditions, and that it is in addition stimulating for exploiting contemptible personnel out of the country. The company is in adding together statement to encompass functional young person employment in Cambodia to manufacture soccer ball.It is located when a subject material of disparagement by anti-globalization group due to its wild and subjugated behavior so as to be moderately a catastrophe designed for its standing.

on its own product

as well lots of star support

deal industrialized

increase collection of crop

dependent on retailer

reduction of intention bazaar indisposed to make known in sequence with reference to its partner company, which cause ruthless disparagement from Stopwatch and other company; contract factory in Vietnam, China, Mexico, Indonesia; desecrated after at the alike moment in occasion as law smallest amount take-home pay excise and in Vietnam, ninety nigh teen seven provide underprivileged operational circumstances, and tend to take advantage of contemptible labor force out of the country, particularly in free of charge trade zones where; Some of Nike’s ads are associated with US female empowerment; the company be report to be suitable kid labor in Pakistan to manufacture soccer balls. Compulsory Labour applications in partner clothing factory in Malaysia, connecting mandatory Labour.

OPPORTUNITIES:

The brand is firmly defended by its owners who believe that Nike is not a fashion brand, however, a large number of consumers wear Nike product because they derive a fashion trend rather than to participate in a sport. It is mostly argued that in youth culture, Nike is a fashion brand which also creates opportunities for Nike since its products would become outdated before even the product wears out i.e. consumers will feel the need to replace the product with a newer Diversification in products range. Reduce prices in Asian and third world countries to increase market share Enter into the untapped markets. Make efforts to reduce the pollution generated from the Nike manufacturing factors. Utilization of shoe production waste. The brand is sternly defended by its owners who believe that Nike is not a fashion brand, however, a large number of consumers wear Nike product because they derive a fashion trend rather than to participate in a sport. It is mostly argued that in youth culture, Nike is a fashion brand which also creates opportunities for Nike since its products would become outmoded before even the product wears out i.e. consumers will believe the need to replace the product with a newer trend.There are many international regions that still need tapping and there is need for sportswear and with Nike’s strong global brand recognition, it can initiate in many markets that have the disposable income to spend on high value sports goods.

Nike gives a lot of effort on its corporate marketing mainly all over the promotion of corporate brand and sponsorship agreements.

THREATS:

Nike is exposed to the international nature of trade so it sells its product in different currencies which destabilizes the costs and margins for profits over long periods of time. This type of contact may make Nike to be manufacturing and or selling at a loss, even if that is not the case for a giant as itself. The market for sports shoes and sportswear is quite competitive; the competitors are frequently developing substitute brands and techniques to take away Nike’s market share. Consumers are frequently shopping about for a better deal that convey a good quality and if one store charges a higher price for the products, the consumer would try to seek a better deal of the same product in the premises that delivers the same value but cheaper of the two, this type of price sensitivity among the consumers is a potential threat to Nike. The textile industry disagreeably upsets the atmosphere, and therefore the organization is constantly struggling to keep its eco-friendly reputation. A recession may lead to job shortages in most of Nike’s worldwide branches. The organization has experienced many unfavorable publicity feedbacks due to its extensive advertising.

Competition

Fashion Trends

Contract manufacturing and copying of product (intellectual property)

Consumer lifestyle changes

Competition

Bad press associated with Nike

Outlets cancelling orders

Sarsi industry adversely affects the environment, and therefore the company is permanently striving to maintain its eco-friendly reputation; financial crisis may lead to job shortages in a number of Nike’s worldwide subsidiaries; The Company has experienced negative publicity feedbacks due to its extensive advertising in mass media Kasey. Nike; Minor Threat at; Beatles song; Chinese-themed at, Horror ad etc .

PORTER’S 5 MODELS:

This model is used to identify the sources of competition, and how to gain advantage over them.

Potential Entrants

extra sportswear manufacturer increasing their portfolio

Cheap copies from the Far East

Buyers

The buyers of sports footwear have changed in the past decade.

There has been and increase in women purchasing the shoes,

Generation Y has a different tastes and purchasing methods.

Substitutes

When required for professional use there is no substitute goods, but as a fashion item there are many other goods that could be purchased.

Suppliers

Using production facilities in the Far East has give Nike economies of scale. Although there are now problems arising from these factories, they are switching to making their own goods, labour and taking sides unrest causes delays in manufacturing and shipping of the goods,

Competitive Rivalry

Reebok, offering more choice of shoe, introducing endorsement by sports personalities, sponsoring sporting leagues

Adidas have recovered from the problems that beset them, and have a good product mix, covering a wide range of sports.

PESTEL:

This will consider environmental influences on the organization, both in the past and with future strategic plans.

Political

Striking dock workers

Political unrest in the production countries

Terrorism in the home country

Economic

Slow down in the economy

Reduction in consumer confidence

Barriers of entry to the EU

Contract manufacturing

Socio-cultural

Brand conscious consumers

Change in buying habits in younger people

Generation Y prefers other types of footwear

Increase in the female share of the market

Corporate social responsibility

Technological

Speed of change of product

Design Ability

Speed of News reporting

Environmental

Re use a shoe

Sustainability philosophy

Climate impact

Legal

Threaten action by underage workforce

Poor employment record

Corporate social responsibility

Contract manufacturing and copying of product (intellectual property)

Trade tax

Like every large IT undertaking, the team responsible for the implementation of Nike Supply Chain (NSC) began with a set of specific, stated goals:

Enhancing Nike’s ability to respond to changing conditions;

Reducing inventory and capital investment risk;

Improving service to meet customer/consumer needs;

Improving process, information and product quality; and

CONCLUSION AND RECOMMENDATION:

SWOT analysis should always be measured by all companies as it helps show companies all their weaknesses and threats. At the same time it also shows what the companies’ strengths and opportunities. Using this analysis companies can spotlight on their good part of the business and focus more on the bad part to make it good. Also a company can see what factors are external or internal which helps the business in a long run to be more capable

Aaker, D. (2000) Brand leadership Free Press, New York

Butterworth-Heinemann, Oxford

Doyle, P. (1998) Innovation in marketing

Butterworth-Heinemann, Oxford

Draw Baugh, K. (2001) Brands in the balance meeting the challenges to commercial identity Pearson Education, London

Groucutt, J. et al (2004) Marketing Essential Principals and New realities

Kogan & Page, Great Britain

Johnson J & Scholes K (1997)(4th Edition)Exploring Corporate Strategy Prentice Hall, Hemmel Hempstead.

Johnson, G & Scholes J (2004) (6th Edition) Exploring Corporate Strategy

Prentice Hall, Hemmel Hempstead.

Mullins, L. (2005) (7th Edition) Management and Organisational Behaviour

Journals:

Hummels,H and Timmer, D.(2004) Investors in Need of Social, Ethical, and Environmental Information Journal of Business Ethics Jun 2004Vol.52, Iss. 1

Kaler, J. (2003) Differentiating Stakeholder Theories

Journal of Business Ethics Aug 2003.Vol.46

Rowley, T (1998) A normative justification for stakeholder theory Business and Society. Mar 1998

Welch, J.(1997) Business ethics in theory and practice: Diagnostic notes.