the FuelBand and FlyKnit cleats, attracts customers. As stated by Nike, “Innovation has never been more important than it is today. It’s not just about improving the products we make. It’s about how we invent better ones, work with other companies and organizations to develop markets that value and encourage 4
the creation of new sustainable processes and products, and improve lives by leveraging sustainability as the world’s greatest innovation opportunity.” (Nike CR Report, 2014). With all of these things taken into consideration, Nike’s revenue and stock performance have supported these goals set by the company. As seen in Appendix 2, their revenue over the past 5 years has increased every single year, starting from $20.9 billion in 2011 to $30.7 billion in 2015. Their stock prices over time have also shown a steady increase in share price, indicating the business’s success and growth. II. External Environment Being one of the leading footwear and apparel retailers in the world Nike has to be able to identify and deal with the external environment that might influence them as a whole. In our research we were able to find the effect that the external environment can have on such a big company. As we have been talking about there are a lot of things that can be classified as external environment, which include: demographic, socio-cultural, legal/political, economic, and technical. (Gotham,2013) The demographic environment that could affect Nike’s decision would be an aging population that would make for more retirees with more free time. Another thing to look at is also the change of and the popularity of sports, the more new sports that arise the more that they have to come up with new apparel and shoes. They would also have to be aware of what people can afford and also where they leave so they know what their target market it if it is ever changing. The next external is sociocultural that would have an effect on Nike. This could be a positive for Nike because of the shift to people being more self conscious about being healthy and being more active. This is increasing the number of gyms and people joining them or joining classes such as CrossFit, yoga/pilates, and biking which will result in an increase in sales of workout apparel/shoes. Nike has also been on the hot seat for using sweatshops in the past. Being in the spotlight for doing something unethical does not help your social image and it could hurt your sales in the long run. The public responded in outrage by boycotting the brand and demanded better conditions for workers, Nike now maintains they have cleaned up the practices but still draw heavy 5
criticism from human rights organizations and the public. Social pressure to change manufacturing locations/processes, could result in some significant challenges for Nike in the future. But they still however remain the world’s bestselling sports brand.
- Spring '14
- Marketing, Athletic shoe, Nike, Inc.