Nike SWOT & PESTLE Case Study Help
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Nike, the American brand, conducts the SWOT analysis to provide an assessment of the primary concerned aspects. The brand reviews the performance and strategy with respect to the internal and external factors. The SWOT analysis involves Strengths, Weaknesses, Opportunities, and Threats. These basically form the basis of strategic decisions in long-term and short-term.
- Strengths: Nike has solidified its status with respect to product innovation. With the unabated evolving and newfangled product ambit, the brand has become one the prominent brands in the footwear and apparel industry. It is also a powerful international brand promoted by famous personalities and sports professionals, creating vital brand equity in terms of image and recognition. The brand possesses global influence and presence. In addition, it has economical manufacturing with strong flow of cash. Moreover, Nike has emerged as a proficient leader through a great team of leaders who devise tremendous marketing tactics and inspire others to do the best possible work.
- Weaknesses: Nike shows a lot of dependence on footwear. The marketing trends suggest that the brand heavily relies on the sales of footwear. The need is to diversify the range of products that the brand offers. In addition, the brand spends highly in endorsements and advertising. Though it is a successful marketing strategy, still the yearly expenses become manifolds impacting the profit margins substantially. Also, the brand charges high prices for the products it offers. Furthermore, Nike has been quite conscious of its brand image. The brand image got a strong blow when the unfair practices of labor happened in different factories of the company. Termed as the sweatshop problem, this has impacted the brand image severely.
- Opportunities: Nike can boost the sales by a huge amount by exploring the markets of countries, such as India, China, South Africa, and Brazil that showed great economic growth during the slowdown of American and European economies. The brand needs to look into its product expansion. It requires diversifying the product range especially emphasizing accessories and partnerships with other brands to cement its position. The brand needs to lay emphasis on e-commerce trade that can help the brand get many prospective customers. Moreover, Nike needs to play a constructive role in environment protection. The brand has shown some strategies to initiate doing away with the usage of chemical components, recycling, and precautions to ensure health of workers in factories.
- Threats: Nike faces intense competition from Puma, Adidas, and other well-known brands. All such brands produce footwear, apparel, and additional equipment making the competition quite powerful. Plus international markets fluctuate impacting the standard currency majorly. Other factors like recession apparently takes a huge toll on the financial stability of the brand. The risky supply chain management and increasing cases of counterfeiting are also major threats.
PESTLE analysis is important for analyzing macro-environmental factors essential for strategic management. The concerned factors include the following:
- Political: Government policies impact global businesses majorly. Favorable policies help the brand to expand and grow globally. Mostly Nike factories are located in Asian countries, such as Indonesia, Vietnam, and Thailand. There has been some political unrest in these Asian countries. In addition, different countries have introduced new regulations to cease illicit activities within their region.
- Economics: These factors include increase in the production cost and labor issues, fluctuating profit margin, the threat of competition and recession, and subsidiaries and acquisitions.
- Social: These are the ones that have consumers becoming fashion and health conscious, consumers becoming more brand conscious, working circumstances in factories, and rise in female consumers.
- Technological: These involve marketing techniques and innovation primarily.
- Legal: Child labor and minimum income allegations, legal battles with competitors, and counterfeit products come under legal factors.
- Environmental: These are the ones that incorporate concerns of pollution in China, global warming, and environmental concern, and drop in greenhouse emission.
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