Swot Analysis Template Page 4

ADVERTISEMENT

SWOT Analysis Nike, Inc.
Strengths
Weaknesses
Nike is a very competitive organization. Phil Knight (Founder and
The organization does have a diversified range of sports products.
CEO) is often quoted as saying that 'Business is war without bullets.'
However, the income of the business is still heavily dependent upon
Nike has a healthy dislike of is competitors. At the Atlanta Olympics,
its share of the footwear market. This may leave it vulnerable if for
Reebok went to the expense of sponsoring the games. Nike did not.
any reason its market share erodes.
However Nike sponsored the top athletes and gained valuable
The retail sector is very price sensitive. Nike does have its own
coverage.
retailer in Nike Town. However, most of its income is derived from
Nike has no factories. It does not tie up cash in buildings and
selling into retailers. Retailers tend to offer a very similar experience
manufacturing workers. This makes a very lean organization. Nike is
to the consumer. Can you tell one sports retailer from another? So
strong at research and development, as is evidenced by its evolving
margins tend to get squeezed as retailers try to pass some of the low
and innovative product range. They then manufacture wherever they
price competition pressure onto Nike.
can produce high quality product at the lowest possible price. If prices
rise, and products can be made more cheaply elsewhere (to the same
or better specification), Nike will move production.
Nike is a global brand. It is the number one sports brand in the World.
Its famous 'Swoosh' is instantly recognizable, and Phil Knight even
has it tattooed on his ankle.
Opportunities
Threats
Product development offers Nike many opportunities. The brand is fiercely
Nike is exposed to the international nature of trade. It buys and sells in
defended by its owners whom truly believe that Nike is not a fashion brand.
different currencies and so costs and margins are not stable over long periods
However, like it or not, consumers that wear Nike product do not always buy
of time. Such an exposure could mean that Nike may be manufacturing and/or
it to participate in sport. Some would argue that in youth culture especially,
selling at a loss. This is an issue that faces all global brands.
Nike is a fashion brand. This creates its own opportunities, since product
The market for sports shoes and garments is very competitive. The model
could become unfashionable before it wears out i.e. consumers need to
developed by Phil Knight in his Stamford Business School days (high value
replace shoes.
branded product manufactured at a low cost) is now commonly used and to an
There is also the opportunity to develop products such as sport wear,
extent is no longer a basis for sustainable competitive advantage. Competitors
sunglasses and jewelry. Such high value items do tend to have associated with
are developing alternative brands to take away Nike's market share.
them, high profits.
As discussed above in weaknesses, the retail sector is becoming price
The business could also be developed internationally, building upon its strong
competitive. This ultimately means that consumers are shopping around for a
global brand recognition. There are many markets that have the disposable
better deal. So if one store charges a price for a pair of sports shoes, the
income to spend on high value sports goods. For example, emerging markets
consumer could go to the store along the street to compare prices for the
such as China and India have a new richer generation of consumers. There are
exactly the same item, and buy the cheaper of the two. Such consumer price
also global marketing events that can be utilized to support the brand such as
sensitivity is a potential external threat to Nike.
the World Cup and The Olympics.

ADVERTISEMENT

00 votes

Related Articles

Related forms

Related Categories

Parent category: Business
Go
Page of 7