SWOT and PESTLE Analysis of Nike

Introduction
• An American multinational corporation, Nike, Inc. is one of the most
leading brands which designs, develops and sells footwear, apparel,
accessories, equipment and other services worldwide.
• It concentrates and focuses primarily on producing sportswear and
athletics products (About.nike.com, 2016).
• But it also holds substantial popularity in the leisure and casual products.
• Founded as Blue Ribbon Sports in the year 1964, it was officially named as
Nike, Inc on 30th May, 1970.
• This company takes its name from the Greek goddess of victory named
Nike (About.nike.com, 2016).
• It has its operating segments throughout the world which in the year 2014
was recognized as the most valuable brand among all sports business.
• The brand, its Swoosh (also referred as Nike tick) logo and universal slogan
‘Just do it!’ are highly recognized throughout the world.
 Introduction
The brand, its Swoosh (also referred as Nike tick) logo and universal slogan
‘Just do it!’ are highly recognized throughout the world.
Industry Served Apparels, Accessories, Footwear
Headquarters Washington County, Oregon, USA
Area Served Worldwide
Annual Revenue US $30.601 billion (2015)
Key People Phil Knight, Chairman
Mark Parker, President and CEO

Products Athletic footwear, apparel, sport equipment

and other recreational products with separate
lining for men, women and kids

Number of Employees 62,600 (2015 data)

Website http://www.nike.com/
 SWOT ANALYSIS OF NIKE
• This study is conducted to assess Nike, Inc. reviewing the four major
aspects of concern.

• Nike, Inc. is listed on NYSE with offices located all over the world.

• It reviews the strategy and its performance against all the external and
internal factors.

• Commonly known as the SWOT analysis, it includes Strengths,

Weaknesses, Opportunities and Threats.

• They are known as the basis of its short-term and long-term strategic
direction.
 SWOT ANALYSIS OF NIKE
STRENGTHS

• Product Innovation - The below chart provides how Nike, Inc.

took various initiatives which reciprocate their strategy of
product innovation.
Year Product Milestones
1995 Shift from petroleum-derived solvents to water-based adhesives

2000 Nike endorsed Principles of the UN Global Impact and phased out
completely SF6 and PVC
2002 Introduced environmentally preferred rubber
2008 Nike, Inc. released Jordan XX3, Trash Talk shoes
2010 Introduced environmental-friendly and technologically advanced jerseys

2012 Introduced high-performance Nike fly knit racer

 SWOT ANALYSIS OF NIKE
STRENGTHS

• Product Innovation - The below chart provides how Nike, Inc.

took various initiatives which reciprocate their strategy of
product innovation.

Year Product Milestones

2014 Launched Nike Vapor Untouchable
2015 Made a revolution by introducing Nike FlyEase
Launched “Space Jam” Air Jordan 11 that marked the most successful shoe
2017
launch in Nike’s history
2018 Nike introduced its innovative Tech Pack collection
 SWOT ANALYSIS OF NIKE
STRENGTHS

• Strong Global Brand - The brand is promoted by the leading

celebrities and sports professionals which creates significant
brand equity in terms of recognition and image
(Businesstoday.in, 2016).

• Low Cost Manufacturing with Strong Cash Flow - Nike, Inc.

has always followed an effective marketing strategy which
helps it to reduce the cost of manufacturing.
 SWOT ANALYSIS OF NIKE
STRENGTHS
• Global Presence and Influence - In a recent data, the number of
retail stores of Nike located worldwide is more than 931 through which it
reaches its consumers located globally.
No. of Retail Stores of Nike
1000
900
800
700
600
500
No of Stores
400
300
200
100
0
2012 2013 2014 2015

Year Total number of retail stores

2017 1142
2018 1182
 SWOT ANALYSIS OF NIKE
STRENGTHS
• Proficient Leadership
WEAKNESSES
Year Revenue (in Million US Revenue (in Million US Revenue (in Million US
dollars) for dollars) for dollars) for
Footwear Apparel Equipment
2017 9684 4886 646
2018 9322 4938 595

• Excessive Dependence on Footwear

16000
14000
12000
10000
Equipment
8000
Apparel
6000
Footwear
4000
2000
0
2012 2013 2014 2015
 SWOT ANALYSIS OF NIKE
WEAKNESSES
• High Prices of its Products
• High Advertising Spending
Year Advertisement Spending in billion USD
2009 0.56
2010 0.89
2012 1
2013 1.15
2014 1.31
2015 1.4
2016 1.47
2017 1.46
The above chart explains how in USA itself the advertising spending has increased
in the last few years for Nike, Inc.
 SWOT ANALYSIS OF NIKE
WEAKNESSES

• Nike Sweatshop Problem

OPPORTUNITIES

• Explore Emerging Markets

• The Rise of e-Commerce Trade - The marketing strategists projects

that by 2020, e-commerce sales will be responsible for one-third of overall
growth (Internetretailer.com, 2016). They also project that the total sales
in the fiscal 2020 will reach $7 billion.
 SWOT ANALYSIS OF NIKE
WEAKNESSES

• The Rise of e-Commerce Trade

Growing e-Commerce Sales of Nike
$800

$700

$600

$500

$400
Sales
$300

$200

$100

$0
2011 2012 2013 2014
 SWOT ANALYSIS OF NIKE
WEAKNESSES

• Product Expansion
• Initiatives Towards Better Environment

THREATS
• Intense Competition - Nike, Inc. functions in such an industry that is
highly competitive. Nike, Inc. enjoys a better position in terms of market
share when compared with competitors. But it faces stiff completion from
Adidas, Puma and other reputed brands. All these brands produce the
similar athletic footwear, apparel and other equipment which makes the
competition much more intense (Statista.com, 2016).
 SWOT ANALYSIS OF NIKE
THREATS
• Intense Competition
20

15
Nike
10
Adidas

5 Puma

0
2010 2011 2012 2013 2014

Brand Revenue in US dollars (as recorded in 2017)

Nike 30.57
Adidas 21.22
Puma 4.14
 SWOT ANALYSIS OF NIKE
THREATS

• Fluctuating International Markets

• The Rising Counterfeit Cases

• Perilous Supply Chain Management

• Recession
 PESTLE ANALYSIS OF NIKE
• PESTLE analysis refers to all the macro-environmental factors that are
necessary for strategic management. It is an acronym which when
expanded includes six factors when the company is contemplating to
launch or upgrade a service or a product.
• The factors are:
- Political
- Economic
- Social
- Technological
- Legal
- Environmental
• The importance of all these factors is different for different companies or
industries but comprehensively they play a crucial role in deciding the
future action of every organization.
 PESTLE ANALYSIS OF NIKE
• PESTLE analysis refers to all the macro-environmental factors that are
necessary for strategic management. It is an acronym which when
expanded includes six factors when the company is contemplating to
launch or upgrade a service or a product.
• The factors are:
- Political
- Economic
- Social
- Technological
- Legal
- Environmental
• The importance of all these factors is different for different companies or
industries but comprehensively they play a crucial role in deciding the
future action of every organization.
 PESTLE ANALYSIS OF NIKE
Political Factors

• Favorable US Government Policies

• Political Unrest in Some Asian countries

Country Number of Factories (2014)

China 195
Indonesia 40
Vietnam 65
Thailand 35

• Changes in International Law

 PESTLE ANALYSIS OF NIKE
Economic Factors

• Rise in Production Cost and Labor Issues

• The Threat of Recession and Competition
• Fluctuating Profit Margin
• Acquisitions and Subsidiaries

Technological Factors

• Innovation
• Marketing Techniques
 PESTLE ANALYSIS OF NIKE
Environmental factors

• Global Warming and Environmental Concern

• Pollution Concern in China
• Decrease Greenhouse Emission
 PESTLE ANALYSIS OF NIKE
Social Factors

• Consumers Becoming More Brand Conscious

• Consumers Becoming Health and Fashion Conscious
• Increase in Female Consumers
• Working Conditions at Factories

Legal Factors

• Legal Battles with Adidas and Other Companies

• Child Labor and Minimum Wage Allegations
• Counterfeit Products
 Conclusion
• The organization needs to work on their weaknesses and
threats to strengthen their position.
• The footwear and apparel industry is very competitive, but
Nike, Inc. has successfully dealt with every challenge through
the years.
• Their impressive ability to alter their strategy and introducing
new products from time to time has helped its revenue to
grow every year.
• Lastly, Nike, Inc. will continue to rule the apparel and
footwear industry in the years to come.