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SWOT Analysis of Nike and its Historical Success

by Shamsul

Wise SWOT Analysis of Nike and its Historical Success

 
Nike is a famous American multinational corporation that manufactures fitness equipment, apparel, footwear, services, and accessories. Today, Nike is one of the biggest suppliers of athletic apparel and shoes in the world. It also manufactures high-quality sports equipment and fitness gear. Athletes, fitness freaks, and health-conscious people love to buy its products. This SWOT analysis of Nike will highlight its internal as well as external business environment that involves strengths, weaknesses, opportunities, and strengths. Let’s get started.
 
 
Background of Nike:
 
Company Name: Nike, Inc.
 
Founder: Bill Bowerman, Phil Knight
 
Company’s Former Name: Blue Ribbon Sports, Inc. (1964-1971)
 
CEO: John Donahoe
 
Founded: 1964
 
Area Served: Worldwide
 
No. of Employees: 73,300 (2021)
   
 
Annual Revenue: US$44,538 million (2021)
 
Net Income: US$5,727 million (2021)
 
 
 
 
The main purpose to conduct the SWOT Analysis of Nike is to define the successes story of Nike. It is one of the most popular sportswear brands in the world which sells top-quality sports apparel, shoes, and accessories. There are several sports stars associated with this brand such as Cristiano Ronaldo, Rafael Nadal, James LeBron, and Neymar. It has a strong worldwide presence and offers online services too. The company’s logo is the most renowned symbol in the world.
 
 
Time to Time Development of Nike:
 
1964: Phil Knight and Bill Bowerman founded Blue Ribbon Sports, Inc.
 
1971: The Company cancels affiliations with Onitsuka Tiger.
 
1971: The name of the company changed to Nike.
   
 
1984: Micheal Jordan Signs a deal with Nike and they launched Air Jordan Series.
 
1990: The Company opens its first outlet in Portland.
 
2002: Nike acquired Hurley, a surf-apparel company.
 
2004: Nike acquired Converse.
 
2012: The Company becomes the first supplier for NFL apparel.
 
2015: The Company becomes the supplier of the NBA.
 
 
SWOT Analysis of Nike:
 
With this SWOT analysis, Nike can easily identify its strengths, current market scenarios, latest situations, and threats present in the market. This article will help them how to tackle these problems and exploit opportunities.
 
 
Strengths of Nike – SWOT Analysis of Nike
 
For any company, it is important to identify its strengths. In the case of Nike, it is really crucial as it can help the company to stay on top and gain a stable position in the market. Here are some prominent strengths of Nike:
   
 
  • When it comes to brand perception, Nike is one of the leaders. It has high brand awareness as it is associated with several organizations, sports events, and athletes.
  • As a global sports apparel brand, the company has such a strong consumer base. They manufacture low-cost sports products and due to this reason they have affordable product portfolio. It is a big strength of Nike as they can attract customers easily.
  • The company has strong hold on its online and retail business. The company is making huge profit from both sources such as outlets and online.
  • The advertising strategy of Nike is really robust and they know how to run ad campaigns. Due to this reason, they are associated with celebrated athletes, sponsors, sports events, and more. These people praise the company due to their high quality products.
 
 
Read More: MARKETING STRATEGY OF NIKE – AN ULTIMATE BRANDING TECHNIQUE
 
 
Weaknesses of Nike – SWOT Analysis of Nike
 
Just like any international brand, Nike has its own weaknesses in different segments. But, they can eliminate these weaknesses by working on their strengths. They can enhance their services and products to remove negative things. Here are some major weaknesses of Nike:
 
  • As Nike is a global company, but it is heavily dependent on North American markets. Most of its revenue comes from these markets. They need to expand their reach to other regions of the world such as Asia, Africa, and Europe.
  • The major weakness of Nike is that its retailers get higher margin cuts.
  • The company is facing many lawsuits, controversies, and scandals. They are facing sexual harassment issues, poor labor conditions, and other problems. These things continuously affecting the repo of the company internationally and they can face loss in terms of sales and profits due to these reasons. This kind of thing can lead to negative criticism which is unbearable for the company at this stage.
  • Outsourced manufacturing is one of the biggest weaknesses of Nike. They need to improve the strength and quality of their workers just to increase brand awareness. Due to the poor outsourcing, the quality of Nike products is not same in every country.
 
 
Opportunities for Nike – SWOT Analysis of Nike
 
In sportswear, Nike is a top-notch brand that is hard to beat. They have a lot of growth opportunities that can take the company to the next heights. Moreover, the sportswear market is really dense and competitive, so Nike should take some important decisions to take the competitive edge. Here are some growth chances for Nike:
 
  • Nike is associated with several non-profit organizations. These organizations can help the company to build products from recycled materials. For this purpose, the company should fortify its R&D department. They can produce sustainable products to support nature and brand as well. In this way, the company can take the attention of environmentalists.
  • By developing a dedicated workforce, Nike can tackle poor labor management and sexual harassment issues. They should create a legal team to defend the brand at any level. They can’t afford scandals, lawsuits, and controversies at this level.
  • By creating AR/VR-related items, the company can give a solid boom to its online business.
  • The company doesn’t have strong sunglasses section and sports glasses. By introducing this segment, they can increase their product portfolio.
  • They should expand their business to other parts of the world. But, they must maintain the quality of products.
 
 
Read More:  PESTLE ANALYSIS OF NIKE | NIKE PESTLE
 
 
Threats for Nike – SWOT Analysis of Nike
 
Sportswear is a highly competitive market and there are several threats associated with it. By identifying the threats, Nike can take a competitive edge and expand their business. Here are some threats for Nike that they should address as soon as possible:
   
 
  • The pandemic has created several negative impacts on the companies especially Nike. Nike is dealing with the aftershocks of Covid-19 in terms of low revenue and sale. This thing can disrupt the growth of the company.
  • There are so many counterfeit products in the sportswear market that continuously affecting the profitability, brand image, and growth of Nike. It is hard to identify and control these counterfeit products or brands. It is one of the major threats for the company.
  • The sportswear market is highly competitive due to the presence of several giants. They are delivering better quality products at cheaper rates. In this way, they are attracting more consumers and threating the consumer base of Nike.
  • The company’s image is under constant danger due to the sexual harassment accusations. On the other hand, poor labor management, outsourcing manufacturing, and poor product quality are some of the major threats.
 
 
Conclusion:
 
This SWOT analysis of Nike specifies the major issues of Nike. The company should address these issues to take the competitive edge. But, Nike is really doing fine in this competitive environment in terms of annual revenue and awareness. Here are some of our honest recommendations:
 
  • The company should pay attention on the quality of products. Due to the outsourcing, they don’t have same product quality in different countries. They must ensure that the products they are selling are top-notch.
  • Nike must tackle accusations and negative criticism wisely. These things can destroy the name of the brand, so they must investigate any kind of matter thoroughly and take appropriate action to resolve issues.
  • Many fake brands are selling same products in the market. Nike’s product portfolio is really limited. They should increase their product portfolio by adding new fashion lines. They must manufacture and develop unique sports products to give competition to counterfeit brands.
 
 
 
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  PESTLE Analysis of Nike  
 
 
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PESTLE Analysis of Nike | Nike PESTLE
 
 by Shamsul   
 
 
 
 
 
 
 
PESTLE Analysis of Nike | Nike PESTLE
 
 
 
Nike, Inc. is an American-based international corporation. They provide functional and stylish sportswear. It was founded in 1964 and aims to deliver innovation and inspiration to every athlete. There is no doubt that it is the largest sportswear and accessory company in the world. Nike has established a strong position in the competitive market. Today, we will discuss the PESTLE Analysis of Nike, the potential future, and position of Nike through a business analysis tool PESTLE. It gives a strong picture of different factors like political, economic, social, technological, legal, and environmental. Keep scrolling to find out these factors right now.
 
 
 
 PESTLE Analysis of Nike | Nike PESTLE
 
Political Factors:
 
These factors provide real support and assistance to a company. Political factors can make or break the reputation of any company. In this process, the most important factor is that how you produce your goods. Moreover, it also depends on your sales and sales strategy. To be very honest, it looks a little insignificant but these factors predict your survivability. Some important political factors of Nike have given:
   
 
     
  • As we know that, Nike is a US-based company which is really good for the growth of the company. The American economy is stable which gives a big opportunity to companies like Nike to grow more. It features international tax agreements and low-interest rates.
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  • For companies that produce and sell goods, influenced due to the changes in manufacturing laws and tax regulations.
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  • Sometimes political instability makes the customs process a little difficult and reduces the supply of imports and export. As Nike is a transnational corporation, so these factors can impact the growth and development of the company.
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PESTLE Analysis of Nike | Nike PESTLE
 
Economic Factors:
 
In the activewear market, Nike is a respected name. Due to this reason, the company is less susceptible to several economic factors. Here are some economic factors of Nike given:
 
     
  • A sudden market crash can create a bad impact on the company and other big companies. Economic recession can change the purchasing power of customers and they prefer more cheap products. In this situation, it is really challenging for a global company to survive. So, in these situations, Nike should focus on a decent level of quality which helps to reduce the manufacturing costs so that they can cater to the customers.
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  • For a longer period of time, Nike was dependent on the different Eastern countries due to the low cost of labor. But, this process is ended which results in the higher prices of Nike’s products.
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  • Nike has a wonderful opportunity to target new emerging markets in order to sell their products. This thing does not only increase its popularity but also creates various opportunities to increase its market share. They just need to improve their resources and marketing strategy in order to attract new clients.
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PESTLE Analysis of Nike | Nike PESTLE
 
Social Factors:
 
It is necessary for big companies to maintain their social status which creates a good impact on the mind of users. An excellent social reputation makes you a number one brand in the world. Here are some social factors are given:
 
     
  • As the number of health-conscious people are on increase day by day and people adopting better lifestyles, so there is a maximum chance that these people will definitely buy sports apparel and products to make their lifestyle better. It creates a big opportunity for Nike.
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  • Recently, Nike faces huge backlash due to its doubtful production systems. They face severe criticism over social media for its production processes.
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PESTLE Analysis of Nike | Nike PESTLE
 
Technological Factors:
 
With the latest technology, a company can grow constructively and find multiple ways to expand its business. Nike can introduce innovation in different sectors such as manufacturing processes and customer service to make things better and smooth. Below, some of the technological factors are given that can affect Nike:
 
     
  • It is really easy to market new products on social media. Now, you can share the news with your audience in just a matter of seconds with the assistance of social media. Nike has excellently exploited social media for promoting their brand name and products. But don’t forget that it is a double-edged sword, so use this platform correctly and properly.
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  • Nike also has an opportunity to utilize valuable data based on metrics, thanks to technological innovations that allow the company to maximize profits and reduce the risks.
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PESTLE Analysis of Nike | Nike PESTLE
 
Legal Factors:
 
Some people coupled the legal factors with political factors in PEST analysis, but both are different in PESTLE analysis. There are very few legal factors that affect Nike, but we have mentioned some of the important legal factors below:
 
     
  • Like several big companies, Nike also dodges considerable amounts of tax in recent years. This kind of thing can create a big problem for the company.
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  • Moreover, Nike also faces legal consequences due to its dubious marketing practices. The major issue in this problem is false discounts. These things can badly impact the company’s image and reputation in the eyes of the audience.
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PESTLE Analysis of Nike | Nike PESTLE
 
Environmental Factors:
 
Due to the increasing number of health-conscious and eco-friendly people, green practices are essential for any company. There are some environmental factors that can affect Nike’s manufacturing processes:
 
     
  • There are several factories of Nike that directly harming the environment. They release a significant amount of air pollution and also polluting rivers with chemicals used in the manufacturing process.
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  • But, Nike has promised to reduce its environmental waste by changing its current manufacturing practices. This thing gives peace of mind to eco-friendly people. They can catch the attention of new customers by making nature-friendly products and reducing their environmental waste.
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PESTLE Analysis of Nike | Nike PESTLE
 
Conclusion:
 
Well, this is a complete PESTLE analysis of Nike. There is no doubt that Nike is a strong player in the sportswear industry and very popular among people due to its high-quality products. In terms of profits and market reach, the company is doing really well. They just need to pay attention to its unethical manufacturing processes and pricing strategy. So, we can say that there are bundles of opportunities for Nike to get a competitive edge over its competitors in the form of revenue and growth.
 
 
 
Need Help or Advice in Content Management:
 
Do you want more advice? Do you have good practices to share? Express yourself in the comments.
   
 
Do you want any help to write content and drive more traffic and boost conversions; get in touch through Contact our team?
 
 
 
Read More:
 
PESTLE ANALYSIS and Its Impacts in Marketing
 
How to Create a Brand That Would Last For a Very Long Time
 
Difference Between PESTEL or PESTLE Analysis
 
 
 
 
 
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