SWOT Analysis Nike, Inc.

Strengths.
 Nike is a very competitive organization.is often quoted as saying that
'Business is war without bullets.'
 Nike has a healthy dislike of is competitors.
 Nike has no factories. It does not tie up cash in buildings and manufacturing
workers.
 Nike is strong at research and development, as is evidenced by its evolving
and innovative product range.
 They manufacture wherever they can produce high quality product at the
lowest possible.
 Nike is a global brand. It is the number one sports brand in the World.

 It belongs to the Fortune 500 companies.

 Nike employs about more than 30.000 people worldwide.
 It has a strong sense of marketing campaign by sponsoring top athletes.
 Nike promotes its products by sponsorship agreements with
celebrity athletes, professional teams and college athletic teams

Weaknesses.
 The organization does have a diversified range of sports products.
 The retail sector is very price sensitive.
 Nike does have its own retailer in Nike Town. However, most of its income
is derived from selling into retailers.
 Retailers tend to offer a very similar experience to the consumer. So margins
tend to get squeezed as retailers try to pass some of the low price
competition pressure onto Nike.
  It was charged with the violation of overtime and minimum wage rates in
Vietnam, 1996, that was seen as having poor working conditions, and that it
was also charged for exploiting cheap workforce overseas.
 It was positioned as a subject of criticism by anti-globalization groups due to
its unruly and exploited manner that was quite a disaster for its reputation.
 Nike was for quite some time unwilling to disclose any type of information
concerning its partnering companies.

Opportunities.
 The brand is fiercely defended by its owners whom truly believe that Nike is
not a fashion brand.
 Consumers that wear Nike product do not always buy it to participate in
sport. Some would argue that in youth culture especially, Nike is a fashion
brand. This creates its own opportunities, since product could become
unfashionable before it wears out i.e. consumers need to replace shoes.
 There is also the opportunity to develop products such as sport wear,
sunglasses and jewellery.
 The business could also be developed internationally, building upon its
strong global brand recognition.
 There are many markets that have the disposable income to spend on high
value sports goods. For example, emerging markets such as China and India
have a new richer generation of consumers.
 Nike gives a lot of effort on its corporate marketing mainly through the
promotion of corporate brand and sponsorship agreements.

Threats.
 Nike is exposed to the international nature of trade. It buys and sells in
different currencies and so costs and margins are not stable over long
periods of time.
 The market for sports shoes and garments is very competitive. The model
developed by Phil is now commonly used and to an extent is no longer a
basis for sustainable competitive advantage.
  Competitors are developing alternative brands to take away Nike's market
share.
 The retail sector is becoming price competitive. This ultimately means that
consumers are shopping around for a better deal, but cheaper price and its
duplicate. Such consumer price sensitivity is a potential external threat to
Nike.

 The textile industry unpleasantly upsets the atmosphere, and therefore the
organization is constantly struggling to retain its eco-friendly reputation.
 The organization has experienced many adverse publicity feedbacks due to
its widespread advertising.
 A recession may lead to job shortages in most of Nike’s worldwide
branches.

EFE MATRIX
Key External Factors Weigh Ratin Weighte
t g d score
OPPORTUNITIES
The brand is fiercely defended by its owners whom 0.10 4 0.40
truly believe that Nike is not a fashion brand.
Consumers that wear Nike product do not always 0.15 3 0.45
buy it to participate in sport. make’s it semi-
fashionable under youth category
There is also the opportunity to develop products 0.15 4 0.60
such as sport wear, sunglasses and jewellery.

The business could also be developed internationally, 0.09 4 0.36

building upon its strong global brand recognition
There are many markets that have the disposable 0.25 5 1
income to spend on high value sports goods like china
etc
0.12 5 0.60
Nike gives a lot of effort on its corporate marketing
mainly through the promotion of corporate brand
and sponsorship agreements.

THREATS
Nike is exposed to the international nature of trade. It 0.05 2 0.10
buys and sells in different currencies and so costs and
margins are not stable over long periods of time.

The market for sports shoes and garments is very 0.10 2 0.20
competitive. The model developed by owner is now
commonly used and to an extent is no longer a basis
for sustainable competitive advantage.

Competitors are developing alternative brands to 0.02 3 0.06

take away Nike's market share.

The retail sector is becoming price competitive. 0.01 1 0.01

The textile industry unpleasantly upsets the 0.06 2 0.12
atmosphere, and therefore the organization is
constantly struggling to retain its eco-friendly
reputation.

The organization has experienced many adverse 0.04 2 0.08

publicity feedbacks due to its widespread advertising.

A recession may lead to job shortages in most of 0.03 2 0.06

Nike’s worldwide branches.

Total 1.17 4.04

 Nike Adidas Reebok

Critical Success Weight Rating Weighted Rating Weighted Rating Weighted

Factors Score score score

Advertisement 0.15 4 0.6 3 0.45 1 0.15

Management 0.25 5 1.25 4 1 3 0.75

Financial position 0.15 3 0.45 2 0.30 1 0.15

Customer loyalty 0.05 4 0.20 3 0.15 3 0.15

Innovation 0.10 3 0.3 4 0.40 2 0.20

Product service 0.10 2 0.2 3 0.30 3 0.30

Market share 0.20 5 1 1 0.10 1 0.20

Total 1 4 2.8 2.0

COMPETITIVE PROFILE MATRIX (CPM):

(IFE Matrix)

Key Internal Factors Weight Rating WS

Strengths
Very competitive (war without a bullet) 0.15 5 0.75

Healthy Dislike of competitors 0.05 4 0.20

Nike has no factories 0.05 3 0.15

Nike is strong in research and development 0.10 4 0.40

The number one sports brand in the World.
0.05 5 0.25

It has a strong sense of marketing campaign by 0.10 5 0.50

sponsoring top athletes

Nike promotes its products by 0.05 5 0.25

sponsorship agreements
High quality product at the lowest possible.
0.05 4 0.20

Weaknesses
Diversified range of sports products
0.05 2 0.10
The retail sector is very price sensitive.
0.05 1 0.05

Unruly and exploited manner 0.10 1 0.10

Poor work condition ,overseas labor 0.05 1 0.05

Disclosing the information regarding partners 0.15 1 0.15

Total 1 3.15
UNIVERSITY OF CENTRAL PUNJAB
 ASSIGNMENT # 2 &3

SUBJECT: BUSINESS POLICY

SUBMITTED TO:
PROF. AITZAZ
SUBMITTED BY:
UMER FAROOQ L1F07BBAM0077

JAWAD ASIF L1F07BBAM

Section: ‘D’