reviewing its strategy and how it is performing against external and internal factors, these strengths,
weaknesses, opportunities and threats can be considered as the basis for recommendations on how the
company might change its short-term and long-term strategic direction.
Prepared by: El Mahrouk Rose
Page 13
Strategic Management
Nike
Strengths
1.
Strong Brand Awareness
– Nike is one of the most recognizable brands in the world as its
name alone is memorable, easy to pronounce, and very unique. Its swoosh symbol is easily
recognized by everyone. Nike has
captured approx.
31%
of the global athletic footwear market.
2.
Huge Customer base
– Nike has millions of customer from around the world who loyally
follow Nike’s trends, participate in Nike events, and even provide customer feedback. Due to its huge
customer base, Nike’s market cap has grown to
$115.19 billion
as of 2018.
3.
Aimed For Sustainability
– Nike’s CEO Mark Parker has addressed that they will continue
to acknowledge the
environmental issues
in the communities. The CEO ensures that Nike will help to
contribute
in
finding a solution against these environmental issues.
4.
Iconic Relationships
– Nike’s long-term partnership with Michael Jordan has proved to be
beneficial in terms of sales for the company. Their collaboration resulted in “
Air Jordan 1 Shoes
”.
Additionally, Nike teamed up with the famous basketball player to help design the “Air Jordan 1
Shoes”.
5.
Side Brands
– Nike’s ability to maintain and enhance its side brands has enabled it to enjoy
unparalleled success for decades.
6.
Low Manufacturing Cost
– Most of Nike’s footwear is manufactured in foreign countries.
In the year 2018, Vietnam produced 47%, China produced 26%, and Indonesia produced 21% of total
Nike’s footwear. Other operations are in Argentina, Brazil, India, Italy, and Mexico.
7.
In-house Professionals
– Nike has a team of professionals that design its shoes and other
athletic accessories. Nike believes that their business has flourished due to the thorough research that
is conducted for each product.
8.
Superior Marketing Capabilities
– Nike has excellent marketing campaigns. The brand
heavily relies on digital marketing. In the year 2016 and 2017, Nike spent $3.2 and $3.3 billion
respectively. The brand has successfully utilized social media and marketing campaigns to
target
more customers
.
Prepared by: El Mahrouk Rose
Page 14
Strategic Management
Nike
Weaknesses
1.
Poor Labor Conditions in Foreign Countries –
In the last 20 years, Nike has been
consistently targeted regarding their poor labor conditions. These issues include child labor, low
wages, and horrific working conditions that were deemed “unsafe”.
2.
Retailers Have a Stronger Hold –
Nike’s retail sector makes Nike weak due to its
sensitivity against pricing. About 60-70 % of Nike’s stocks are sold directly to retailers. With retailers
serving as their core customers, Nike does not put up a fight against
their
pricing
structures
whatsoever.
