A Swot Analysis of Nike, Inc.

Internal:

Strengths

– The first strength of Nike as a company is that is outsources all aspects of its production to overseas facilities. This is a strength as the company saves money on the labor costs and the helps the company focus on design and research with the additional capital they save.

– The next strength is that Nike is a globally recognized brand that has strong customer loyalty. Along with this, Nike has a reputation for quality and endurance which makes it the brand of choice for athletes and fitness fanatics.

– Another strength of Nike is that it is an extremely competitive company with a catchy slogan that summarizes the ideology of the company. “Just Do It” is globally known and contributes as to why Nike is one of the few dominating companies in the market.

Weaknesses

– The first weakness of Nike as a company is it perceived by some people as too premium and expensive. This is a weakness as a lot of people are migrating to lower prices athletic wear which is primarily focused on quality.

– The next weakness is that Nike does its business through retailers who sell other competing brands. This kills the exclusivity of the brand as it is often competing against hundreds of other brands who beat Nike in some aspects including price or quality.

– As mentioned previously, Nike outsources all of its manufacturing to save money. A lot of companies who outsource overseas are faced with negative publicity due to the bad image of “Sweatshops”. This could turn people off shopping at Nike due to unfriendly conditions that are associated with sweatshops.

Opportunities

– One of the biggest opportunities for Nike is the emerging markets in regards to athletes and sports teams. A lot of people purchase their favorite teams regardless of the brand. If Nike strategically gets access to the biggest sports teams their sale would increase.

– If Nike continues to diversify into new markets other than footwear they can begin to dominate different markets such as sporting accessories.

– Nike has the advantage of compromising price to attract new customers. They already have a loyal customer following so they already have large profit margins. If they take the chance of lowering prices they could increase revenue from new customers.

Threats

– The main threat to Nike is competitors such as Adidas, Puma and Under-Armor. Companies in the same market as Nike are continuously growing, putting pressure on Nike as a company that needs to continue to grow.

– The price of competitors is a big threat to Nike. Consumers today are more price cautions and will often opt for the cheaper products.

– As Nike uses overseas outlets to manufacture there is a constant threat that they will be exposed for poor trade practices. If they are exposed it would damage the company’s image and consumers might want to purchase from other suppliers.

· Where do our internal strengths match with external opportunities? This represents the best fit between the company’s resources and the options available in the external environment.

Nike’s internal strengths matches their external opportunities in the sense that Nike is a globally recognized company that has strong customer loyalty. An external opportunity that Nike could take advantage is lowering their price to attract new customers. As of one Nike’s strengths is strong brand recognition, it makes Nike a desirable brand especially if the prices are lowered. There is a possibility that the increase of new customers could increase profit and get more life-long customers.

· Where do our internal weaknesses match up with external opportunities? What opportunities are we not able to capture?

The first weakness of Nike that matches up with external opportunities is that Nike is viewed as a premium brand that is too expensive for some consumers to purchase. The opportunity that this matches up to is the chance Nike has to lower its prices and attract new customers. The reason as to why it is difficult for Nike to capture this opportunity is because Nike carries a certain prestige that they don’t want tainted with cheap prices of their merchandise. If everyone can afford to wear Nike the prestige element wouldn’t have as much of an effect and it could possibly lose customers.

· Where do our internal strengths match up with external threats? What resources do we have that might turn a threat into an opportunity?

The internal strengths that match up with the external threats in Nike is the face that Nike outsources all of its production to overseas facilities to save money on the cost of production. The matches with the external threats as the conditions of these overseas facilities leave much to be desired. If a report of these conditions were to ever appear it could severely damage Nike’s reputation. The pressure of other companies such as Adidas and Puma could become an opportunity for Nike to continuously grow and slow down in a very competitive market.

· Where do our internal weaknesses match the external threats in the environment? These are the worst possible scenarios for an organization.

The internal weaknesses that match the external threats is the fact that Nike do most of its business through retailers. This is a threat as many consumers can compare prices of Nike to other competitors in a retail store. This could introduce consumers to cheaper prices of rival brands.

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