Nike Outfits with Swoosh Logo (Nike, 2024)
Bill Bowerman and Phil Knight established Nike on January 25, 1964 (Nike, 2024).
Mission: “To bring inspiration and innovation to every athlete in the world“ (Nike, 2024).
The swoosh logo with “Just Do It” phrase symbolizes Nike’s commitment to excellence, performance, and determination.
Agenda
2
NIKE PESTEL ANALYSIS
1. Political Factors
Pie Chart Showing Nike’s Workers by Race (Kell, 2016)
Agenda
Nike operates globally, making it susceptible to diverse political environments. (Kell, 2016) stated that majority of Nike’s workers were minorities
Subject to varying regulations and policies in different countries, impacting operations and supply chain.
Faces challenges related to international trade policies, tariffs, and geopolitical tensions.
NIKE PESTEL ANALYSIS
2. Economic Factors
Nike’s D2C Sales in Percentage (Richter, 2020)
Agenda
Nike is susceptible to economic swings since it works in a worldwide market.
Consumer spending patterns influence demand for sportswear.
Profitability is affected by geopolitical variables and currency exchange rates.
NIKE PESTEL ANALYSIS
3. Social Analysis
Nike Recycled Shoe (Nike, 2023)
Agenda
The tastes and fads of sportswear consumers are ever-evolving.
Emphasis on sustainability, fashion trends, and performance features.
Global operations require adapting to diverse social preferences and values.
NIKE PESTEL ANALYSIS
4. Technological Analysis
(Nike Introduces AeroReact Smart Fabric Technology, 2015)
Agenda
Nike has built its reputation on a never-ending stream of groundbreaking products and innovations.
Spending on innovative sports shoes and gear developed via research and development.
Embracing technological trends, like smart fabrics, to meet evolving consumer expectations.
NIKE PESTEL ANALYSIS
5. Environmental Analysis
Agenda
Proactive integration of sustainability initiatives into business practices.
Ambitious goals to reduce environmental impact and increase transparency.
Meeting consumer demands for environmentally responsible products.
NIKE PESTEL ANALYSIS
5. Legal Analysis
Agenda
Nike faces legal challenges related to intellectual property rights and counterfeiting.
Compliance with labor laws and ethical considerations in the supply chain.
Adapting to changing legal landscapes globally.
NIKE PORTER’S FIVE ANALYSIS
Activewear Companies by Revenue (Smith, 2022)
Agenda
Nike’s US Sales and Global Presence
Nike sold over 49 billion dollars in the US between January 2022 and January 2023 (Smith, 2022).
Adidas came in second, with over 2,200 retail locations (Smith, 2022).
Nike’s global presence is expected to continue expanding.
Threats of New Entrants
Agenda
Threats of New Entrants
Nike faces legal challenges related to intellectual property rights and counterfeiting.
Adapting to changing legal landscapes globally.
Compliance with labor laws and ethical considerations in the supply chain.
Bargaining Power of Suppliers
Agenda
Bargaining Power of Suppliers
Moderate to high threat with numerous sportswear brands as substitutes.
Nike counters through product innovation, brand differentiation, and strong marketing.
Competes with brands like Lululemon, Adidas, Under Armour.
Bargaining Power of Buyers
Agenda
Bargaining Power of Buyers
Nike counters this by differentiating its products, encouraging brand loyalty, and forming smart collaborations with retailers.
Price sensitivity is crucial; buyers seek competitive pricing and value.
Relatively high buyer power due to abundant sportswear options.
Threats of Substitutes
Agenda
Threat of Substitutes
Brand loyalty, smart retail alliances, and product uniqueness help Nike minimize.
Price sensitivity is crucial; buyers seek competitive pricing and value.
Relatively high buyer power due to abundant sportswear options.
Industry Rivalry
Agenda
Industry Rivalry
Intense rivalry due to numerous established competitors globally.
Nike navigates through continuous product innovation, global presence, and brand positioning.
Constant market changes, new product introductions, and aggressive marketing.
Conclusion
Importance of PESTEL and PORTER’S FIVE Analysis to Nike
Agenda
Strategic Positioning
Understand market dynamics and leverage strengths.
Innovation Focus
Prioritize R&D to stay ahead in the competitive landscape.
Emphasize brand loyalty and differentiation to mitigate buyer power.
Brand Management
Global Adaptability
Navigate global challenges through a diverse market approach.
Sustainability Integration
Align with environmental and social trends.
References
Kell, J. (2016, May 12). Majority of Nike’s U.S. Employees Are Minorities For the First Time. Fortune; Fortune. https://fortune.com/2016/05/12/nike-staff-diversity/.
Nike. (2023). Nike Sustainability. Move to Zero. Nike.com; Nike.com. https://www.nike.com/sustainability.
Nike. (2024). Nike. Just Do It. Nike.com. https://www.nike.com/.
Nike Introduces AeroReact Smart Fabric Technology. (2015, September 29). HYPEBEAST. https://hypebeast.com/2015/9/nike-aeroreact.
Richter, F. (2020, September 23). Infographic: Nike Cuts Out the Middleman. Statista Infographics. https://www.statista.com/chart/23008/direct-to-consumer-sales-as-a-percentage-of-total-nike-brand-revenue/.
Smith, P. (2022, September 10). Leading sportswear companies by sales worldwide 2018 | Statista. Statista; Statista. https://www.statista.com/statistics/900271/leading-sportswear-and-performance-wear-companies-by-sales-worldwide /.
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