Proactive strategies for this concern can lead to an improved brand image. The report stated: Nike scored the following in the report's themed scores: 1. SWOT analysis. Bernroider, E. (2002). In addition, it has the benefit of higher gross margin by allowing Nike to create customized gear and other higher-priced items, as well as keep the full sale rather than letting a percentage go to a third-party retailer. The following threats are most notable in Nike’s case: Nike faces tough competition, considering other major players like Adidas. As mentioned by Han in 1991, fashion is a reason for Impulse Buying, “fashion orientated Impulse Buying” (Han … The company is utilizing new technology in order to reduce production costs and the time it takes to bring products through the supply chain. Potatoes pack a lot of starchy carbs — a large one contains about 65 grams. Â, Many companies are looking at manufacturing and supply chain and how investments in those areas could drive new growth in the years ahead. In 2006, Nike developed the ‘Nike+iPod’, an activity tracker that records the distance and pace of its user’s workout through a … The company must also collaborate with government units to address patent protection issues. For long-term bulls who believe all these initiatives and other big growth opportunities can move the stock back to where it was in late 2015 and higher, Nike continues to look like a great long-term play. However, the company must address concerns regarding competition, labor practices, imitation and patent protection. Most of the successful businesses worldwide have improved their growth rates only by adopting innovative supply chain management practices. Innovation in terms of the materials used, and also the speed with which new products can get from concept to market -- an initiative the company is calling Express Lane -- could help on both fronts. The company’s extensive global production and distribution network is a strength that enables the business to support global market dominance. This component of the SWOT Analysis deals with the external strategic factors that negatively impact business performance. Factors in SWOT Analysis Applied to Micro, Small-to-Medium, and Large Software Enterprises: an Austrian Study. Organizational Culture Characteristics: An Analysis, Nike Inc. Five Forces Analysis (Porter’s Model), Nike Inc. Generic Strategy & Intensive Growth Strategies, Nike Inc. PESTEL/PESTLE Analysis & Recommendations, Nike Inc. Operations Management: 10 Decisions, Productivity, Nike Inc. This component of the SWOT Analysis deals with the internal strategic factors that support business development and competitiveness. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. 1997: Efforts at promotion become occasions for public outrage. Even though Nike is one of the major players in the sports shoes, equipment and apparel market, some threats could limit or reduce the company’s performance. Traceability and Risk … But there's always room for improvement, so how else can Nike improve as a company? For GDPR compliance, we do not use personally identifiable information to serve ads in the EU and the EEA. "The Greater China marketplace continues to be fueled by higher sports participation, with 38,000 runners taking part in the Shanghai marathon, while nearly fo… Improve labor/employment practices 2. Nike learned this the hard way in the mid-1980s when it lost out on the lucrative aerobics market to Reebok. Simultaneously, it is also focusing on its pricing, retail, and marketing strategy to bring the best products for its customers. Nike Inc.’s leadership in the global sports shoes, equipment and apparel market shows the significance of its strengths in competing against other giants like Adidas. This report captured the areas where companies needed to take actions to eradicate forced labour from their supply chains. 1996: Nike establishes a department tasked with working to improve the lives of factory laborers. Its tweets are short, punchy and compelling, and nearly always included the hashtag #justdoit or other community-building hashtags like #nikewomen. Returns as of 12/21/2020. We look at the tactics that have netted Nike tens of millions of followers on Facebook, and made it … The company has many growth opportunities ahead of it, but these three look like some of the most interesting now. Competitors, such as Under Armour Inc., have recently opened major offices in Portland, which is a few miles from Nike’s headquarters. In February 2019 Ethical Consumer read KnowtheChain’s 2018 report which assessed 43 of the largest publicly traded clothing and shoe companies in the world. This weakness limits Nike’s global growth. Organizational Structure Characteristics (Analysis), Nike Inc.’s Mission Statement & Vision Statement (An Analysis), Nike Inc.’s Marketing Mix (4Ps/Product, Place, Promotion, Price) - An Analysis, Nike’s Promotional Mix (Marketing Communications Mix), Puma’s Organizational Culture & Its Characteristics (An Analysis), Puma’s Generic Strategy, Intensive Growth Strategies & Competitive Advantage, Puma’s Mission Statement and Vision Statement (An Analysis), Burger King SWOT Analysis & Recommendations, Whole Foods Market SWOT Analysis & Recommendations, U.S. Department of Commerce. See you at the top! However, the results of this SWOT Analysis point out some possible new strategic directions to further enhance Nike’s global performance and leadership. If somebody wants to find a review, they will. But what comes with being the … Nike also has released IP data for many of their products, particularly ecologically-related successes, in hopes that someone else can use that work to improve the world for everyone. Nike already gets more than half of its sales from outside the country, but it could still grow further internationally. SWOT analysis from a resource-based view. When you look back through history, Adidas was the only brand in sports that had a very strong connection to culture. The company sees enough opportunity in … At Nike, material innovations—such as recycled polyester, Flyknit, Flyleather, and Nike Air—are changing the world of sustainable performance and reducing the average product carbon footprint of our products. It is the world’s largest supplier of athletic shoes and apparel. Weaknesses could disrupt Nike’s growth trajectory in the sports shoes, apparel and equipment market. In the case of Nike Inc., the following weaknesses are the most significant: Labor controversies continue to plague Nike’s business, especially in considering production facilities in developing countries. Thus, it is recommended that Nike Inc. must reform its strategies in these areas. Market data powered by FactSet and Web Financial Group. But also, by removing this summary, Nike may be asserting its design credentials – “we don’t need your reviews”. Nike’s Generic Strategy Product development and differentiation: In this generic strategy, the company minimizes production costs to maximize profitability or reduce selling prices. “They can do it. Since then, it has worked hard to ensure that never happens again. To assess the level of sustainability, Nike created a Sourcing & Manufacturing Sustainability Index (SMSI). From the earnings call and elsewhere in the company's releases, we know that this is a focus on innovative materials, assembly procedures, and advancements with interesting technology such as 3D printing that the company believes will overhaul the ways its products are made in the years to come.Â, There are a few reasons this could be a huge opportunity for the company and its future earnings. This part of the SWOT Analysis shows that Nike Inc. has capabilities to retain its global market leadership. Jackson, S. E., Joshi, A., & Erhardt, N. L. (2003). Nike.com sales nearly doubled year over year in the most recent quarter.Â, Nike announced that in fiscal 2016, Nike.com went live in 20 additional countries, doubling from a year ago, which should help that international expansion as more of those localized online stores go live in 2017. Its stock fell 18% throughout the year, as Wall Street worried about its future growth prospects amid a changing consumer market and stiff competition from Under Armour (NYSE:UAA)(NYSE:UA) and a resurgent Adidas (OTC:ADDYY). Things have started to turn around for Nike in 2017, already one of the best-performing large-cap stocks of the year, and it could get much better from here. Another opportunity is for Nike to improve its product mix to attract more customers, especially non-athletes. This SWOT Analysis of Nike Inc. shows that the company has the strengths needed to support its global leadership in the sports footwear, equipment and apparel market. Nike is putting technology and its innovative flagship stores to work to build a big lead in retail instead of relying on department stores. Learn more about our average carbon footprint “To me, the most hopeful idea in sustainability is the belief that we get to decide how the story is going to end. Nike (NYSE:NKE) had a rough 2016. A survey is news. Nike's sales in China jumped 17% year over year in the quarter when adjusted for currency fluctuations, and the company believes that's just getting started. Established in 1964 as Blue Ribbon Sports, Nike Inc. is now one of the world’s biggest players in the athletic footwear market. Nike focuses on research and innovation to bring new designs and styles that increase the popularity of its products. Nike Supply Chain Management: Ethics, Sustainability and Efficiency. Nike Inc. has opportunities to enhance its performance in the athletic footwear market. Nike is the biggest sneaker maker in the U.S., putting it ahead of rivals Adidas and Under Armour. But when it comes to training, that’s not a bad thing: These are fast-digesting carbs, which means they’re readily available to use for energy during exercise, says Amadeo Salvador, a PhD candidate at the University of Illinois at Urbana-Champaign. Nike is facing that situation head-on, and as Edwards said during the call, "With the start of our new relationship with Chelsea Football Club next season, our brand is Europe is only getting stronger. Nike Inc. I can see why Nike would remove this – to remove distraction. Can you talk a little bit about your strategy there? The company’s effective marketing campaigns also contribute to this strength. Cumulative Growth of a $10,000 Investment in Stock Advisor, 3 Biggest Opportunities for Nike Inc. @themotleyfool #stocks $NKE $UAA $ADDYY $UA, Nike Inc (NKE) Q2 2021 Earnings Call Transcript, Nike Pops in After-Hours Trading on Surprise Q2 Growth, Stocks Finish Friday Lower, But Nike Gets an After-Hours Earnings Boost, Copyright, Trademark and Patent Information. Nike is an American multinational company producing equipment, footwear, clothes, and accessories. Nike can possibly enter new markets such as high-end fashion. In 2012, Nike introduced the Manufacturing Index (MI) to score factories on sustainability – including labour practices. Besides wearing top quality Nike gear they are shown working hard, sweating, or reflecting on events from the past. We use cookies for website functionality and to combat advertising fraud. The external strategic factors that facilitate business growth are covered in this component of the SWOT Analysis. Nike has recently been ranked by Fortune as the Top 24 of the Most Admired Companies and Top 1 in the apparel industry. This weakness negatively impacts the company’s brand image. The company expands its … These beliefs have guided Nike from its inception until today. Whether they will, or not, is something we’ll all watch.” Parker also needs to show progress to stop an exodus of employees. Moreover, the company suffers from limited presence in developing markets, partly because of issues with pricing, imitation and patent protection. This part of the SWOT Analysis indicates that Nike Inc. must reform some of its policies and strategies to ensure its continued leadership in the global athletic footwear, apparel and equipment market. Nike delivers innovative products, experiences and services to inspire athletes. Nike already gets more than half of its sales from outside the country, but it could still grow further internationally. Valentin, E. K. (2001). Nike hasn't given a lot of insight into the specifics of its Man Rev, but investors can probably expect to learn more in the earnings calls to come.Â. Nike chose to release their factory data, which led others to follow suit, now allowing competing companies to work together to improve conditions. Nike is Using Less Energy and Reducing Emissions Since 2008, the company’s contract footwear manufacturers have cut energy use per unit by around 50%. The importance of innovative supply chain management has been highlighted by scholars and researchers for the successful management of businesses in the 21 st century. This part of the SWOT Analysis shows that, for Nike to maintain its leadership in the global sports shoes market, product innovation and legal protection must be included in its major strategies. Leigh, D., & Pershing, A. J. 3. (2006). Also, rapid innovation processes are a core factor in Nike’s ability to create cutting edge designs for its athletic footwear, equipment and apparel. "The Greater China marketplace continues to be fueled by higher sports participation, with 38,000 runners taking part in the Shanghai marathon, while nearly four times that many consumers tried to sign up," said Nike Brand President Trevor Edwards in the most recent earnings call.Â, Western Europe, which is Nike's biggest international segment, has been another outstanding region lately. Commitment and Governance 85 out of 100 2. Nike excels on Facebook. Nike’s strengths are the primary drivers of the company’s growth and global leadership in the sports shoes, apparel and equipment market. Like so many things, it is not what is outside, but what is inside that counts." In the mid-2000s, Nike launched a program to boost supply-chain productivity and quality by introducing lean manufacturing principles to its apparel suppliers in the developing world. As a result, the target audience connects the brand with the effort and determination needed to succeed and therefore is motivated to improve their own “game”, whether everyday running or basketball. business can grow and become successful. So, how does one of the world’s most recognisable brands cut through the clutter on social? Part of the reason Nike had such a rough 2016 was that its gross margin continued to fall throughout the year because of higher-priced input goods and inventory challenges that led to reduced prices to get product cleared out. However, there are a few global organizations like Nike that believe without sustainability efforts no . Also, even though Nike Inc. has expanded its product mix through the years, the resulting product lines are still limited in capturing a larger share of the sports shoes, equipment and apparel market. This component of the SWOT Analysis addresses the internal strategic factors that prevent or reduce business performance. That means today it takes about half the energy and generates around half the emissions to make Nike shoes as it did eight years ago. Based on this part of the SWOT Analysis, Nike Inc. must improve its policies and strategies in the areas of labor and employment, product mix development, and penetration in developing markets. The company has many growth opportunities ahead of it, but these three look like some of the most interesting now. Nike Inc. has opportunities to enhance its performance in the athletic footwear market. 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