Simplified Strategic Analysis of Nike

Nike is a well-known sportswear brand in the world. In management courses, students must take different organisations and strategically analyse them. The majority of the students choose Nike as their organisation since there are extensive research reports and information available on this firm online. But many of the research reports have typical data and it can get difficult for you to sort the best data for your assignment. So, in this blog, we help you simplify the strategic analysis of Nike so that you can use it in your next assignment and can also understand it well.

Strategic analysis is defined as carrying out research on a firm and its environment, which can include an external and internal environment for developing different strategies. The strategic analysis can include determining and evaluating data about the strategy of the firm.

The strategic analysis of a firm can be done using different tools. In this blog, we will carry out a SWOT and PESTLE analysis of Nike in simple words.

Internal analysis- SWOT analysis of Nike

SWOT is a strategic tool and an acronym for strengths, weaknesses, opportunities, and threats. It is used for carrying out internal analysis of the organisation.

Strengths A key strength of Nike is its brand image. The company has an extremely strong brand image because of its high-quality products. It has emerged to be a popular company in the world in the sportswear industry. Another key strength of Nike is that it has outsourced its production to facilities abroad. Therefore, the company does not have any manufacturing unit. Because of this, the firm can focus on marketing, research, and development, designing, etc. The market share of Nike in the footwear industry is extremely high.

Weaknesses The business of Nike is dependent majorly on its footwear products. However, because of the recession, it is a weakness for business as the management needs to focus on other core areas as well. Nike has been criticised in past because of exploitation of labour in Asian countries and been given the allegation that the company runs sweatshops. This implies that the factories of the company have poor working conditions for the staff.

Opportunities Nike can focus majorly on markets like China and India where the population is high, and the clientele is also big. The company should diversify its products and should not stick to footwear only. This will open plenty of options and markets for the company.

Threats The company owns manufacturing units overseas due to which market fluctuations can influence the business of the firm. The crisis, Covid-19, has impacted the international business of the company. Nike’s negative criticism about sweatshops can hamper its image in the international market. it is crucial that the company take strategic steps to cope with the negative points against the company.

The SWOT analysis of the company shows that Nike has several strengths due to which it is quite successful in the international market. But the company needs to take strategies to manage its weaknesses and threats.

External analysis – PESTLE analysis of Nike

• Political: Nike’s business is influenced by the stability of the political system in a country.
• Economical: Nike’s business is influenced by economic factors like inflation, recession, tax laws, etc.
• Social: Nike’s key aim is to cater to the needs of the people by offering them premium products.
• Technological: Nike should adopt advanced technology in the market where it operates. This ensures that the company is successful.
• Legal: Nike must adhere to the legislation of the country where it operates. This includes WHS laws, employment laws, etc.
• Environmental: the business of Nike is influenced by environmental factors. The company ensures that it takes green steps to avoid harming the environment.

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