Nike Inc SWOT Analysis
Strengths
Nike is the leading and most recognized name in sportswear.
The Nike swoosh sign and slogan “Just do it” are loved by the people.
Nike has strong distributions, it supply its products almost at every part of the world.
Manufacture variety of sports products including sports shoes, trousers, shirts, sports equipment and other accessories.
Strong financial position, net income of US $ 1.49 billion in year 2009.
It employed approx 30,000 people around the world.
Strong marketing efforts by endorsing athletes for TV commercials.
It belongs to fortune 500 companies.
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.
It uses lunarlite foam and flywire materials in order to make the manufactured shoes lighter and more controllable
Strong research and development in sports footwear.
Nike has made number of acquisitions including Cole Haan, Hurley International, Converse Inc. and Umbro.
Weaknesses
Revenues of Nike are highly dependent of footwear products.
It is considered as the expensive brand, it is difficult for the third world and Asian countries to afford Nike products.
Less diversification in products which increase their depends on few products.
Criticize by number of social group on paying low wages to workers, overtime and child labor
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.
Opportunities
Diversification in products range.
Reduce prices in Asian and third world countries to increase market share
Enter into the untapped markets.
Make efforts to reduce the pollution generated from the Nike manufacturing factors.
Utilization of shoe production waste.
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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