Nike Pestle

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Pestle Analysis - SWOT Analysis Assignment -

PESTLE & SWOT Case Study
A Brief Profile of Nike, Inc.
An American multinational corporation, Nike, Inc. is one of the most leading brands
which designs, develops and sells footwear, apparel, accessories, equipment and
other services worldwide. It concentrates and focuses primarily on producing
sportswear and athletics products (About.nike.com, 2016). But it also holds
substantial popularity in the leisure and casual products.
Founded as Blue Ribbon Sports in the year 1964, it was officially named as Nike, Inc
on 30th May, 1970. This company takes its name from the Greek goddess of victory
named Nike (About.nike.com, 2016). It has its operating segments throughout the
world which in the year 2014 was recognized as the most valuable brand among all
sports business.
The brand, its Swoosh (also referred as Nike tick) logo and universal slogan ‘Just do
it!’ are highly recognized throughout the world.
Industry Served Apparels, Accessories, Footwear
Headquarters Washington Country, Oregon, USA
Area Served Worldwide
Annual Revenue US $32.4 billion (2016)
Phil Knight, Chairman

Key People
Mark Parker, President and CEO
Athletic footwear, apparel, sport equipment and other

Products recreational products with separate lining for men, women and
kids
Number of
70,700 (2016 data)
Employees
[Source: 2016 Annual Results Nike Inc]
SWOT & PESTLE ANALYSIS OF NIKE
SWOT Analysis
This study is conducted to assess Nike, Inc. reviewing the four major aspects of
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concern. Nike, Inc. is listed on NYSE with offices located all over the world. It reviews
the strategy and its performance against all the external and internal factors.
Commonly known as the SWOT analysis, it includes Strengths, Weaknesses,
Opportunities and Threats. They are known as the basis of its short-term and long-
term strategic direction.
STRENGTHS
•Product Innovation
In the competitive world, innovation is a crucial determinant of sustainability. Nike,

Inc. has always been successful and is regarded as one of the pioneers to introduce
various enthralling products. With the constantly evolving and innovative product
range, it has solidified its position as one of the leading brands in the apparel and
footwear industry.
Since the 1990s, due to the complicated supply chain management, Nike, Inc. started
focusing on creating such products which would be better for the athletes, business
and also the planet (News.nike.com, 2016). The below chart provides how Nike, Inc.
took various initiatives which reciprocate their strategy of product innovation.
Year Product Milestones
1995 Shift from petroleum-derived solvents to water-based adhesives
Nike endorsed Principles of the UN Global Impact and phased out completely
2000
SF6 and PVC
2002 Introduced environmentally preferred rubber
2008 Nike, Inc. released Jordan XX3, Trash Talk shoes
2010 Introduced environmental-friendly and technologically advanced jerseys
2012 Introduced high-performance Nike fly knit racer
[Source: http://news.nike.com/]
•Strong Global Brand
Nike, Inc. is regarded as one of the strongest global brands which have its prominent
presence all over the world. The brand is promoted by the leading celebrities and
sports professionals which creates significant brand equity in terms of recognition
and image (Businesstoday.in, 2016). It is also the brand ambassador of various
sporting events and teams (at domestic and national level). Some of the legendary
sportsperson (or teams) who promoted or still promote Nike, Inc. are Michael
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Jordon, Cristiano Ronaldo, Rory Mcllory and Rafael Nadal. These influential
endorsements along with the captivating slogan ‘Just do it’ is recognizable and inspire
all its potential consumers.
•Low Cost Manufacturing with Strong Cash Flow
Nike, Inc. has always followed an effective marketing strategy which helps it to reduce
the cost of manufacturing. Most of their factories and production units are located in
Asian countries which are emerging economies as well as involve low production cost.
Their plants are located in China, Vietnam, South Korea and Thailand. Apart from
these units, it also has manufacturing firms located in South American countries and
in USA (Seattlepi.com, 2016).
Shareholders of Nike, Inc. always earn a healthy dividend which keeps their
reputation high. It also enjoys high valuation in NYSE and trust among all investors.
Nike, Inc. also maintains a steady cash flow which is used for aggressive marketing
strategy and to allocate sufficient amount for Research and Development budget. The
capital expenditures of Nike, Inc. increased rapidly in the last five years, from $432
million in the year 2011 to $963 million in the year 2015 (Marketwatch.com, 2016).
•Global Presence and Influence
In a recent data, the number of retail stores of Nike located worldwide is more than
931 through which it reaches its consumers located globally.
It is currently the most valuable brand among all sports businesses. According to the
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Annual Report (2016), its annual revenue in this financial year was US $32.4 billion
with operating income at US $5.163. Their products are immensely popular among
the teenagers and youth. It has enjoyed rising revenue globally since the last ten years
with 27.8 billion US dollars in the year 2014 from 13.7 billion US dollars in 2005.
•Proficient Leadership
The success of any company depends on their leadership and executives who manage
the company in good and bad times. As it explains Nike, Inc. has one of the brightest
team of leaders who not only devise the meticulous marketing strategies but they also
inspire others to do the best work (About.nike.com, 2016). Globally, Nike, Inc. has
more than 62,000 employees who are behind the success of this brand. At the Board
of Director level, it comprises of:
Philip H Knight, Chairman
Mark Parker, President and CEO
Trevor Edwards, President of Nike Brand
Andy Campion, CFO
Jeanne P Jackson, President of product and merchandising
Hilary Krane, CAO
Lastly, it won’t be inappropriate to mention one comment by Philip Knight, the

founder of Nike, ‘Business is war without bullets!’ Nike, Inc. works on this principle.
WEAKNESSES
•Excessive Dependence on Footwear
Nike, Inc. has a diversified range of products which includes apparels, equipment and
footwear. But the marketing trends exhibit that the sustainability of Nike, Inc. is
dependent on the sales of its footwear (Statista.com, 2016). If in any circumstances,
the footwear segment experience an erosion then the whole organization would be
affected adversely. In North America itself, more than half of the revenue gets
generated from the footwear every year.
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The above figure clearly explains how important for Nike, Inc. it is to diversify its
products and provide more importance to other fields apart from its footwear.
•High Prices of its Products
As Nike, Inc. enjoys huge reputation throughout the world, almost all the products
are premium ranged. Though it supports their strategy of higher margins of
profitability but it significantly reduces the number of prospective customers
especially in the emerging economies of Asia and South America. The high prices of
their products also encourage the competitors of Nike, Inc. to keep their charges low
giving them an opportunity to increase their market share. As the company is
expected to continue with their price hiking strategy (Marketrealist.com, 2016), it will
probably result in the loss of key market share in Japan and Brazil. But it will
continue to reign in other global segments.
•High Advertising Spending
Nike, Inc. spends highly to advertising and brand endorsements. Though regarded as
a successful marketing strategy, the annual cost rise manifolds and create a
substantial impact on the profit margins. According to the Nike, Inc.’s Annual Report
(2013), the total advertising and promotion spending accounted for about 11% of the
total sales or around $2.7 billion. As the competition increases with every fiscal, the
allocation for advertising costs also increases exponentially. The company itself
argues its stance by claiming it as a ‘demand creation’ process but the percentage
increase does not reflect in the productivity advances as expected.
Year Advertisement Spending in billion USD
2009 0.56
2010 0.89
2012 1
2013 1.15
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2014 1.31
2015 2.70
2016 3.3
[Source: Statista.com]
The above chart explains how in USA itself the advertising spending has increased in
the last few years for Nike, Inc.
•Nike Sweatshop Problem
Nike, Inc. has always been very protective about its brand image. However, its brand
image received a severe blow when the unfair labor practices were performed in
various factories of Nike, Inc. especially in the Asian countries. Referred to as a
sweatshop issue, it tarnished the company’s image and hurt sales. Poor working
conditions, low wage rates and using children as laborers were the main complaints
against the company (Theguardian.com, 2005). Issues started from the 1990s when
Nike, Inc. started to shift their companies to Vietnam and Thailand from South Korea
and China to tackle the rising demands by the laborers. Various allegations from
Vietnam, Indonesia and Thailand had compelled them to devise a new commitment
to maintain the standards at the factories. Named as SHAPE (Safety, Health,
Attitude, People and Environment), it defines the code of conduct to be followed in
every company. Since the year 2005, the company continues to perform according to
the commitment. Overall the situation changed and Nike, Inc. has been successful in
retrieving its image considerably (BusinessInsider.com, 2013). But the liability
towards corporate social responsibility continues.
OPPORTUNITIES
•Explore Emerging Markets
In the 21st century, countries like China, India, Brazil, and South Africa exhibited
high economic growth when European and American economies slowed down.
Consumers in these countries had high disposable income with increasing interest in
western brands (Forbes.com, 2016). These countries can turn into significant markets
for Nike, Inc. Exploring these markets can boost up the sales of Nike, Inc. by
manifolds and hence increase the profit margins. Though Nike, Inc. has already
stepped into these countries, still the potentialities have not been exploited
completely. The main strategy that Nike, Inc. undertook to popularize their products
in these countries is to endorse the popular sports.
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•The Rise of e-Commerce Trade
Till the last decade, Nike, Inc. had to reach the customers through their own retailer
stores or their franchises. But the rise in the e-commerce sector now allows every
customer to book their selected product from their smartphone and get it delivered at
their home anytime. The marketing strategists projects that by 2020, e-commerce
sales will be responsible for one-third of overall growth (Internetretailer.com, 2016).
They also project that the total sales in the fiscal 2020 will reach $7 billion.
Apart from the rising sales, people who are not engaged with any sports associate the
brand of Nike with fashion and style. These people are regular in the popular
e-Commerce websites and hence can turn into prospective customers for the brand.
•Product Expansion
Nike, Inc. is one of the few brands which spend millions of dollars in research and
development. As they reign in footwear, apparel and sports and health equipment, it
gives them considerable opportunity to increase their range of products. It needs to
diversify the product range with special emphasis on accessories and also
partnerships with other branded companies to strengthen its position
(Nikevision.com, 2016). As the preferences of the customers tend to change every
year, product expansion would help to maintain their hold on market share.
The innovative research and development branch of Nike, Inc. has always brought
enthralling products. Some products like Nike Flyknit, recycled polyester, Colordry,
Nike Grind shows their skill and diligence towards introducing new products
(News.nike.com, 2016).
•Initiatives Towards Better Environment
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Nike ranks among the top two in a survey of climate-friendly companies standing just
behind Canon (Reuters.com, 2016). As with every year, climate change and global
warming are becoming more serious, it becomes crucial to play a constructive role to
protect the environment. However, only a few companies play their role of corporate
social responsibility. In this bleak scenario, Nike, Inc. shows promise as it devises
particular strategies to initiate recycling, phasing out usage of chemical components,
proper precautions to safeguard health of laborers working in factories earned them
reputation and praise globally (About.nike.com, 2016). However, these initiatives are
not sufficient as the scope remains unlimited.
THREATS
•Intense Competition
Nike, Inc. functions in such an industry that is highly competitive. Nike, Inc. enjoys a
better position in terms of market share when compared with competitors. But it
faces stiff completion from Adidas, Puma and other reputed brands. All these brands
produce the similar athletic footwear, apparel and other equipment which makes the
competition much more intense (Statista.com, 2016). While the industry is highly
competitive, the customers always have the option to substitute a product with a
similar one of other company if they are not satisfied with the quality or service.
The above chart depicts the fierce rivalry between the first three brands of the
industry. In the footwear section, Nike is the leader of the industry but it receives
consistent challenge from Adidas and Puma. Recently, Nike, Inc. has experienced a
fall in footwear sales in the USA which is a serious threat to the company.
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•Fluctuating International Markets
Since the last decade, the international market is fluctuating creating a major impact
on the standard currency. Most of the products manufactured by Nike, Inc. are
developed in the factories located outside the USA. Accordingly, they conduct
transactions in various currencies. It increases their vulnerability towards
fluctuations in foreign currency exchange rates. It also increases the cost, affects the
operations and disrupt business with independent manufacturers of Nike, Inc (Nike,
Inc. Annual Report, 2009). This is an issue faced by all global brands and exposure to
these fluctuations for a longer period of time can be detrimental for the company.
Along with the oscillating currencies, the product cost inflation and labor inflation
also affects Nike, Inc. and hampers its productivity.
•The Rising Counterfeit Cases
The World Custom Organization (WCO)’s second Illicit Trade Report 2013 stated that
Nike, Inc. is the most counterfeited brand worldwide while Apple. Inc became a
distant second. The research states that this illicit business of fake products is very
popular in the Asian markets which directly disturb the annual revenue of Nike, Inc.
In the Chinese markets, the performance of Nike, Inc. is quite dismal when compared
to other emerging economies. The total revenue collection by Nike, Inc. at 2013 in
China slipped by 3% and the experts explicitly points out the challenge it faces from
the huge counterfeit market. As the market of apparel and footwear is extremely
volatile and substitutive, these rising fake Nike products pose enormous threat to the
sustenance of the company. These fake products not only affect the revenue but it also
maligns the reputation and brand image that Nike, Inc. holds globally
(Worldtrademarkreview.com, 2016). Accordingly, these unethical business practices
will force potential customers to migrate to other brands. Hence, it is important for
Nike, Inc. to take social responsibility for serious and maintain its brand image.
•Perilous Supply Chain Management
For a global company like Nike, Inc., it is very crucial to reach the customers and
make the delivery of the products with precision. Nike, Inc. owns no factories for
manufacturing footwear and apparel though it makes up to 90% of its revenues. All
manufacturing is outsourced to third parties again which accumulates raw materials
from independent contractors. It helps in improving profit margins and reduces
inventories but it also adds risk into the whole supply chain management system.
This perplexed supply chain failed in February 2001 and Nike, Inc. incurred a loss of
over 100 million US dollars. The stock price of the company also fell by 20% at that
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time (Scdigest.com, 2016). Since then, they tried to improve their network of supply
chain which comprises of workers, communities, suppliers, buyers and obviously
consumers by identifying the key issues which lead to the failure. It is a collaborative
action which requires better management and constant monitoring to create and
effective and efficient management system (Nikebiz.com, 2016).
•Recession
Nike, Inc. is known for its massive advertising spending, endorsements and
sponsorships. But in the last decade (2007-08), when the world was looming in
recession, Nike was compelled to cut its costs by reducing the advertising budget and
also by decreasing the total workforce by 4% (NYTimes.com, 2009). The recession
not only affected the company internally but the economic conditions of the
customers also worsened as they went to buy footwear and apparel from the brands
with low prices. Hence, being a premium product company, Nike, Inc. was affected
from multiple sources. The global economic conditions and the financial stability of
the potential consumers are necessary for the growth of this company.
If the above figure is minutely noticed, then it can be seen how the annual revenue of
Nike, Inc. suffered in two years successively (2009 and 2010) which was also the
recession years. The growth rate was negative as it earned less globally especially
witnessing drastic fall in sales in North America and European markets. Hence, every
global recession pose a serious threat for this company Nike, Inc.
PESTLE Analysis
PESTLE analysis refers to all the macro-environmental factors that are necessary for
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strategic management. It is an acronym which when expanded includes six factors

when the company is contemplating to launch or upgrade a service or a product.
The factors are:
Political
Economic
Social
Technological
Legal
Environmental
The importance of all these factors is different for different companies or industries
but comprehensively they play a crucial role in deciding the future action of every
organization.
PESTLE Analysis for Nike, Inc.
Political Factors
•Favorable US Government Policies
The government policies always have a profound impact on the businesses especially
which are engaged globally. The US government has always initiated growth-oriented
policies which have helped the company to grow and expand internationally. The
trade regulations, stable government and international competitive tax arrangements
by the Federal Reserve fosters its growth (Whitehead, 2012). As Nike, Inc. is known
for its environmental-friendly business strategies, it receives considerable tax benefits
in this regard.
•Political Unrest in Some Asian countries
Most of the factories of Nike, Inc. are located in the emerging Asian countries like
Thailand, Vietnam and Indonesia. The political unrest in Thailand in the last few
years was a major concern for the management of Nike, Inc. where more than 35
factories are located. The situation was equally gloomy in Vietnam, Indonesia and
parts of China in stages as any form of protest, political instability or social unrest can
disturb the supply chain of Nike, Inc.
Country Number of Factories (2014)
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China 195
Indonesia 40
Vietnam 65
Thailand 35
[Source: Wall Street Journal, 2014]
•Changes in International Law
The international law in the last one decade has become more stringent with the
rising threat of terrorism. Various countries have imposed new rules and regulations
to counter the growing threat of illegal activities within their territory. The increase in
tariffs in some countries while the strict rules of immigration and visa are one of the
important concerns for every global firm and Nike, Inc. is not an exception. United
States, where the headquarters of Nike, Inc. is located is always under constant threat
of terrorist attacks which pose a potential threat for the normal functioning of Nike,
Inc.
Some of the countries also impose various tariffs to protect their indigenous brands
for which Nike, Inc. is a serious threat. This trade protection hinders the growth of
Nike, Inc. in those respective nations.
Economic Factors
•Rise in Production Cost and Labor Issues
One of the main reasons for Nike, Inc. to set up their base in Asian countries is the
low labor cost. But with the economic boom and rise in living standards, the
production cost in these countries has raised manifolds (Scmp.com, 2014). The labor
issues are quite common in the factories of Nike, Inc. recently. In April 2014, Nike,
Inc. experienced the biggest strike as most of the factories in China stopped
production citing low wages. It had a significant effect on the production as well as
the revenue of the company.
•The Threat of Recession and Competition
Nike, Inc. needs to devise a plan how it can tackle another global economic recession.
Being a market leader, Nike, Inc. can be affected significantly as it experienced in the
last decade (2008-09). Last time, it was noticed that during the recession that
consumers replace Nike with some other brand which offers the same products at a
lower price. So, the threat of recession always has a paired effect on Nike, Inc.
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•Fluctuating Profit Margin
Nike performs all its business on the global spectrum. Hence, the stability of currency
exchange and international interest rates in crucial to consistent growth of its profit
margins (Nytimes.com, 2009). However, the higher inflation rate at the domestic
level (USA) with the fluctuating currency rates with respect to the Dollar always has
detrimental effects on the annual profit margin. According to Forbes, gross profit
margin for Nike’s apparel division declined by 2.4% in 2011 and the primary reason
being the volatile economic condition around the world (though the input costs also
rose during this period).
•Acquisitions and Subsidiaries
Nike, Inc. has acquired various companies which function within its domain of
footwear and apparel industry. It started in the year 1988 when it acquired Cole Haan
(New York times). Since then, it has purchased many companies to strengthen their
base in the world. It has also started various subsidiaries like Converse Inc and
Hurley International to increase their customer base. However, some of these
acquisitions put a major pressure on their finances without any significant
accomplishments.
Social Factors
•Consumers Becoming More Brand Conscious
Globally most of the consumers have became brand conscious. They associate Nike,
Inc. with quality and stature. This increase in brand awareness has helped the
business of Nike, Inc. to grow. They were the first company that introduced
innovation in the footwear and apparel industry. The amalgamation of style with
technology led the foundation of success for Nike, Inc. which continues till today
(Scribd.com, 2016). Apart from the products, the Swoosh logo and their slogan ‘Just
do it!’ is highly popular and recognized around the world.
•Consumers Becoming Health and Fashion Conscious
Every year the number of people visiting the nearest gym to maintain their health,
body and physique is increasing exponentially. Indirectly, this rise helped Nike, Inc.
to boost up the sales as they turn to buy footwear and apparel for themselves to look
athletic. Some of the consumers also associate Nike, Inc. with fashion and leisure
(About.nike.com, 2016). They too are getting interested to buy Nike, Inc. products.
This awareness among the people would help Nike, Inc. in the long run.
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•Increase in Female Consumers
Nike, Inc. has devised the key strategy to grow their business in the next few years by
targeting the increasing number of female customers. As a part of the strategy, it has
appointed Amy Montage as the head of its business in the year 2013 (Forbes, 2014).
The business in the women line grew by nearly 12% to $5 billion in the year 2013. The
company envisages that the revenue from this segment will reach $7 billion by the
year 2017. The enormous potentiality of this segment has encouraged the company to
introduce various products exclusive for women. Nike, Inc. projects that soon 25% of
its total revenue would be generated by the female consumers itself.
•Working Conditions at Factories
Nike, Inc. is often accused of its hazardous working conditions in its factories
especially in the Asian countries. It has been alleged that it is using sweatshops to
produce footwear and apparel since the 1970s. Initial denials from the authorities and
Nike, Inc. itself made the situation even more complicated which affected its image
globally. During the 1990s, Nike, Inc. installed the code of conduct for their factories
with defined regulations for safety, security, optimum wages and overtime limits
(Businessinsider.com, 2015). Since then, the working environment improved in the
factories. Consumers always want their company to be socially responsible.
Technological Factors
•Innovation
Nike, Inc. is often referred as the Apple Inc. of apparel and footwear. It is regarded as
the pioneer to introduce various products which enthralled the whole world. It has
always adapted the latest technology to ameliorate their products. This technological
innovation not only helped them to set ahead from their competitors but also refined
and augmented the production process (About.nike.com, 2016). It is also one of the
global brands which took a revolutionary step to curb the usage of chemicals and
other raw materials which are detrimental for the environment. The latest popular
product introduced by Nike, Inc. is Flyknit Racer which received acknowledgment
globally (News.nike.com, 2016).
•Marketing Techniques
With the global rise in sales and impact, Nike, Inc. has also altered their marketing
strategies to reach their customers and prospective consumers. The increase in
advertising concentrating on the digital medium more than the traditional channels is
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one such step. Nike, Inc. uses online media and apps to reach the customers and
popularize their different products. In the last few years, the market of online
shopping has expanded which has given Nike, Inc. the opportunity to increase their
base worldwide. Now, Nike, Inc. does not have to depend on their stores and
franchises outlets to sell their popular footwear and apparel.
For the year 2015, Nike, Inc. reported a 55% increase in sales through web compared
to last year. The figures touched $1.19 billion crossing the billion mark for the first
time through the internet sales. It was $767 million in the fiscal year 2014
(Internetretailer.com, 2015).
Legal Factors
•Legal Battles with Adidas and Other Companies
The feud between Nike, Inc. and Adidas is not new. In the year 2014, Nike, Inc. filed a
$10 million lawsuit on Adidas accusing the later for taking proprietary secrets,
marketing plans and product designs when they recruited few former employees of
Nike, Inc (Qz.com, 2015). Though Nike, Inc. enjoys undisputed dominance in North
America, still these legal cases against the rival companies are an important factor
which determines the future strategies. It is also engaged in various other legal battles
which include the rights over the iconic ‘Jump man’ logo and footwear designs.
•Child Labor and Minimum Wage Allegations
Nike, Inc. had been accused of using child labor in its various factories located in
Cambodia and Pakistan. They were used to prepare soccer balls. Although Nike, Inc.
took extensive measures to stop this practice, it was rebuked globally and it also faced
legal cases worldwide. Accordingly, in Indonesia, the laborers claimed to receive
lower wages than the standards. Nike was sued in California for this illegal practice.
However, the matter ended amicably, it was a considerable bolt to its reputation
(Jennings, 2012). Though Nike, Inc. now follows a definite regulation still violations
are not rare.
•Counterfeit Products
Nike, Inc. is one of the most counterfeited brands globally. It affects its annual
revenue drastically. It is also regarded as the violation of intellectual rights and
patented products when they are sold by fake brands claiming to be Nike, Inc. There
are also some contract manufacturers which produce these products and sell them
into the markets which directly affects the sales in that country (Philnike.blogspot.in,
2013). In a step to tackle the menace of counterfeit products, Nike, Inc. can monitor
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and ensure that their products are not sold widespread as these fake products can
ruin the reputation of the company.
Environmental factors
•Global Warming and Environmental Concern
With the rising concern about global warming, it has become extremely important for
the global companies to reduce waste which are harmful for the environment. In
various countries the new environmental laws also restrict their production if they do
not follow the specific laws. Through the usage of innovative manufacturing methods
like Nike Flyknit technology, it strives to reduce the manufacturing waste in the
supply chain and also reduce carbon emission and elimination of waste
(About.nike.com, 2016). Nike, Inc. plays its role; however, still a lot needs to be done.
•Pollution Concern in China
Most of the factories of Nike, Inc. are located in the China. In the last few years, the
Chinese government took extensive steps to check the pollution level in the country
which has increased the production cost for the company drastically. The limited
usage of fossil fuel and its regulations adds to their concern.
•Decrease Greenhouse Emission
Nike, Inc. is working to reduce their contribution towards greenhouse gas emissions
throughout the value chain. It has formulated definite strategies to introduce new
technology which will not only release less carbon dioxide and carbon monoxide but
it will also decrease the need of basic raw materials (Reuters.com, 2016).
Conclusion
After assessing all these concerned factors, both internal and external, it will be safe
to say that Nike, Inc. will continue to enjoy their dominant position in the industry.
But the organization needs to work on their weaknesses and threats to strengthen
their position. The footwear and apparel industry is very competitive, but Nike, Inc.
has successfully dealt with every challenge through the years. Their impressive ability
to alter their strategy and introducing new products from time to time has helped its
revenue to grow every year. Lastly, Nike, Inc. will continue to rule the apparel and
footwear industry in the years to come.
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Pestle Analysis - SWOT Analysis Assignment - PESTLE & SWOT Case... https://myassignmenthelp.com/case-study/nike-swot-pest-analysis-case-s...

Pestle Analysis - SWOT Analysis Assignment -

A Brief Profile of Nike, Inc.

Industry Served Apparels, Accessories, Footwear

Headquarters Washington Country, Oregon, USA

Area Served Worldwide

Annual Revenue US $32.4 billion (2016)

Phil Knight, Chairman

Athletic footwear, apparel, sport equipment and other

[Source: 2016 Annual Results Nike Inc]

SWOT & PESTLE ANALYSIS OF NIKE

In the competitive world, innovation is a crucial determinant of sustainability. Nike,

Year Product Milestones

1995 Shift from petroleum-derived solvents to water-based adhesives

2002 Introduced environmentally preferred rubber

2008 Nike, Inc. released Jordan XX3, Trash Talk shoes

2010 Introduced environmental-friendly and technologically advanced jerseys

2012 Introduced high-performance Nike fly knit racer

•Strong Global Brand

•Low Cost Manufacturing with Strong Cash Flow

•Global Presence and Influence

Philip H Knight, Chairman

Mark Parker, President and CEO

Trevor Edwards, President of Nike Brand

Andy Campion, CFO

Jeanne P Jackson, President of product and merchandising

Hilary Krane, CAO

Lastly, it won’t be inappropriate to mention one comment by Philip Knight, the

•Excessive Dependence on Footwear

•High Prices of its Products

•High Advertising Spending

Year Advertisement Spending in billion USD

•Nike Sweatshop Problem

•Explore Emerging Markets

•The Rise of e-Commerce Trade

•Initiatives Towards Better Environment

•Fluctuating International Markets

•The Rising Counterfeit Cases

•Perilous Supply Chain Management

strategic management. It is an acronym which when expanded includes six factors

The factors are:

PESTLE Analysis for Nike, Inc.

•Favorable US Government Policies

•Political Unrest in Some Asian countries

Country Number of Factories (2014)

[Source: Wall Street Journal, 2014]

•Changes in International Law

•Rise in Production Cost and Labor Issues

•The Threat of Recession and Competition

•Fluctuating Profit Margin

•Acquisitions and Subsidiaries

•Consumers Becoming More Brand Conscious

•Consumers Becoming Health and Fashion Conscious

•Increase in Female Consumers

•Working Conditions at Factories

•Legal Battles with Adidas and Other Companies

•Child Labor and Minimum Wage Allegations

•Global Warming and Environmental Concern

•Pollution Concern in China

•Decrease Greenhouse Emission

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SWOT Analysis of Nike | Business Teacher. (2016). Businessteacher.org.uk.