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Nike SWOT Analysis

Strengths

•Nike is a globally recognized for being the number one sportswear brand in the World.

•Nike being a competitive organization has a healthy aversion towards its competitors i-eduring Atlanta Olympics, Reebok expensed on sponsoring the games; Nike however sponsored the top athletes and due to this step, it gained valuable coverage.

•Nike has no factories; rather it uses contract factories to get the work done which makes it quite a lean organization. It has contracts with above 700 shops globally in about 45 different countries.

•Nike is quite strong regarding its research and development;quite evident regarding its evolving and innovative product range.

•They manufacture high quality at the lowest possible price,if prices rise due to price hike then the production process is made cheaper by changing the place of production.

•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.

•It uses lunarlite foam and flywire materials in order to make the manufactured shoes lighter and more controllable.

Weaknesses

•Even though the organization has a diversified range for sportswear, the income of the business, however, is still heavily dependent upon its share of the footwear market which leaves it at a quite vulnerable spot if for any reason its market share erodes.

•The retail sector is price sensitive;retailers usually tend to offer a very similar experience to the consumers with another cheaper product, which in return tends to get squeezed as retailers try to pass some of the low price competition pressure onto Nike.

•Nike was for quite some time unwilling to disclose any type of information concerning its partnering companies.

•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.

•Nike was also reported to have applied child labor in Pakistan and Cambodia to produce soccer balls.

•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.

Opportunities

•The brand is sternly defended by its owners who believe that Nike is not a fashion brand, however, a large number of consumers wear Nike product because they derive a fashion trend rather than to participate in a sport. It is mostly argued that in youth culture, Nike is a fashion brand which also creates opportunities for Nike since its products would become outdated before even the product wears out i.e. consumers will feel the need to replace the product with a newer trend.

•There are many international regions that still need tapping and there is need for sportswear and with Nike’s strong global brand recognition, it can initiate in many markets that have the disposable income to spend on high value sports goods.

•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 so it sells its product in different currencies which destabilizes the costs and margins for profits over long periods of time. This type of exposure may make Nike to be manufacturing and/or selling at a loss, although that is not the case for a giant as itself.

•The market for sports shoes and sportswear is quite competitive; the competitors are constantly developing alternative brands and techniques to take away Nike’s market share.

•Consumers are constantly shopping around for a better deal that conveys a good quality and if one store charges a higher price for the products, the consumer would try to seek a better deal of the same product in the premises that delivers the same value but cheaper of the two,this type of price sensitivity among the consumers is a potential threat to Nike.

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

•A recession may lead to job shortages in most of Nike’s worldwide branches.

•The organization has experienced many adverse publicity feedbacks due to its widespread advertising.

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4 Responses to "Nike SWOT Analysis"

  1. jojo says:

    hi I got same content in some other websites, which one is genuine, confused. Though, materials are very much useful to me.

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