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NIKE® Report executed by: Prasanna Malagi

Executive Summary

This study was undertaken with an intention to understand the Brand Nike
and it position in the market as compared to its competitors using the
following tools of analysis:

 Pest Analysis

 Swot analysis

 Porter’s 5 forces

Introduction

Nike operates within the sports footwear and apparel market. Originally
designing and producing running shoes, their portfolio has broadened to
include a wide range of sports and also leisure wear. All the products are
endorsed by top sporting personalities.

Mission Statement

In its mission statement Nike expresses that it requires doing business in a

responsible way, leading to sustainable financial growth. With the advances
in technology, HR practices, the well informed and trained work force,
there is very little left to differentiate organisations. Being seen to go
further than the minimum required on social issues can attract and retain
customers. This green cleansing attracts attention to the organisation; they
are viewed as caring and social responsible (Mullins, L. 2005).
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MODELS USED IN ANALYSIS

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

Political Environment

Striking dock workers is one of the factors which have a major

influence on the organisation.

Political conflict in the production countries affects the business in a

huge way which indirectly hamper the smooth business process

Terrorism in the home country also has a major impact on the business,
due to such instances the trade between the countries get affected
resulting in to huge losses.

Economic Environment

Slow down in the economy: The economic slowdown is a nightmare for

any business firm. Impact of Crisis is observed to have a bad impact on
the market which result in to less demand for such products and thus
affecting the business

Reduction in consumer confidence: Customers confidence is a must for

Nike as well as other brand in market. The customers with confidence
in the brand create a good word of mouth and thus helping the
company to create a name in the market

Barriers of entry to the certain places in India: Barriers in certain place

will not allow to the brand to reach large number of customer in that
market thus triggering as untapped market .
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Contract manufacturing
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Socio-cultural Environment

Brand conscious consumers: Customers are now well aware and are
brand conscious. Once a person is attached towards the brands like
Rebook or Adidas, it is difficult for the Nike Company to create a need
for their products among such customers.

Change in buying habits in younger people: It very difficult to analyse

the buying habits in younger people and their behavior is dynamic in
nature. The survey which are conducted to analyse the same are very
time consuming and costly, hence the company has to strategically
understand the buying behavior or the decision to precisely produce
and place the products which have demand.

Generation Y prefers other types of footwear

Increase in the female share of the market: There are been sudden
demand for female products in the market, hence new innovative
products need to be launched which attracts the female segment in
other to capture or increase such market share

Corporate social responsibility

Technological

Speed of change of product: Ever changing market and demand for new
fashionable/trendy products has put a great challenge for a brand like
Nike. In order to sustain in the market the company has to innovate
new products, bring about new ideas of providing the best quality as
well as the latest technological products which is new for the
customers.

Design Ability: The Company also has to bring new and fresh design at
every moment which has a major influence on the sale of the company
product. Fresh designs create a need among the customers and
indirectly tempt them to buy these products.

Speed of News reporting

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Swot Analysis

This analysis will summarise key issues from the business environment
and the strategic capacity of Nike. This can be used to judge future
strategic options.

Strengths Weaknesses

-Product Range -Single Brand

-Capacity for innovation
-Distribution expertise
-Single Brand
-Stars endorsement
-Contract manufacturing
-Large portfolio of products
-Too many stars endorsement
-Contract manufacturing
-Spread portfolio of products
-Reliant on retailers
-Reduction of target market

Opportunities Threats
-New Markets
-E commerce -Competition
-Research and development -Fashion Trends
-Increase product line -Contract manufacturing and
-Product diversification copying of product (intellectual
-Change target market property)
-New manufacturing countries -Consumer lifestyle changes
-Competition
-Bad press associated with Nike
Outlets cancelling orders 4
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Porter’s 5 Forces Model

Threat of
New
Entrants

Bargaining Rivalry among Bargaining

Power of Existing Power of
Suppliers Competitors Buyers

Threat of
Substitutes

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

Threat from New/Potential Entrants

Other sportswear manufacturers are expanding their portfolio

Cheap copies from the Far East are causing serious threat to the Brand.

Bargaining Power of Buyers

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

There has been an increase in women purchasing the shoes,

Generation Y has a different tastes and purchasing methods.

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Threat from the 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.

Bargaining Power of 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 political
unrest causes delays in manufacturing and shipping of the goods.

Rivalry among Existing Competitors

Reebok & Adidas are offering more choice of shoe, also introducing
endorsement by sports personalities and sponsoring sporting leagues

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

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