Nike Pestle Analysis

So without any due let us understand Pestle Analysis of Nike and have a close look at political,
economic, social, technological, legal and environmental factors that affect Nike performance.

Nike Political Factors

Due to US Sanctions on Iran, Nike the American footwear and apparel manufacturer and
marketers will unable to produce the equipment to Iranian football team. According to a
company statement, “Sanctions applicable to Nike have been in place for many years and are
enforceable by law”. By this corporation can have a negative brand image in the minds of Iranian
and other consumers.

The recent Nike campaign “Just Do It”. The Ad displayed Colin Kapernick; face with a tagline
“Believe in something, even if it means sacrificing everything”. This player Colin Kapernick has
some past issues of Injustice and racism. Nike should stay away from any political issues that
affect customer emotions and create controversies.

Fortunately, the U.S government policies helped Nike to advance it products. Policies like low-
interest rate and favorable international tax agreements provide strong foundations for Nike
growth.

Nike is facing frequent changes in manufacturing laws and tax rate around the world.

Nike Economic Factors

Economic recession is the biggest threat Nike might face in the near future. The US and Asian
economic recession can affect Nike since the company is manufacturing its products in Asia and
the US. During the recession time labor and material cost also face an increase.

Nike has a competitive market, generating more revenue means low labor cost. It has to
maintain the low labor cost, though increases in many countries and can affect the revenue
generation.

Over the years Nike has a balanced stock performance i.e. growth in EPS and revenue. But no
stock is risk-free even the Nike. An increase in competitors and currency movement can
negatively affect Nike performance.

Nike Social Factors

Nowadays, people are more and more health conscious. People don’t compromise on diet and
health-related issues. People are joining fitness clubs that have a positive impact on the
footwear industry. When people join a fitness club they will need shoes, appeals and other
fitness equipment and Nike is the number one choice in the fitness industry for long.

Nike has failed to address and improve the poor working conditions for labors, low wage rate
and factories conditions in different countries of Asia. This is known as the sweatshop. Due to
social media platforms consumers have more access globally and this part of the problem is not
good for Nike. It can badly affect Nike brand image and sales.

Nike Technological Factors

Using technological innovations give brands a competitive advantage. Technology can be

valuable when developing a product, inventory management system, accounting systems and
interacting with customers and development. Here are some technological factors affect Nike.

Nike’s leadership status is mostly relying on the implementation of information technology in

different field from designing, production, marketing to distribution.

In today’s competitive market social media connect companies with customer faster than ever.
Nike is embracing every social media platform in brand building strategies.

Nike Legal Factors

Legal factors affect large business globally and Nike is one of them. Though Nike is always trying
to comply with international laws it is not possible all time. Like in America and Western world
laws and regulations are friendly for business like footwear industry. Asian countries have
complicated laws to comply with.

Product quality laws are also different from country to country. In past years Nike faced many
lawsuits of labor abuse, low wage and bad working conditions. Legal issues always affect your
brand image and brand reputation.

Nike Environmental Issue

The importance of environmental issues is gradually increasing. Environmental issues affect

Nike as well.

Mostly Nike’s mass production factories are creating pollution and other environmental issues.
Chinese Environmental campaigners were blaming many largest clothes and apparels suppliers
including Nike and Adidas. These companies are creating a negative impact, not only polluting
the air but also poisoning Chines Rivers like Yangtze and Pearl Rivers.

Nike was able to respond positively and promised to ensure environmental friendly policies by
its suppliers.
I have tried to provide relevant information about Nike Pestle analysis and external environment
analysis. Despite the fact that Nike has maintained its brand image and strong financial position
it should comply all the laws and regulation. If you have any other factors related to Nike
external environment, please let us know.