SWOT Analysis of Nike | Nike Business Strategy | Nike Opportunities for Growth
SWOT Analysis of Nike
Nike is a leading global company that has been in the footwear and apparel industry for 50 years. Nike operates by focusing on the core of sports performance, re-inventing classic styles to suit the modern lifestyle, and creating new concepts for developing winning athletes.
The SWOT Analysis of Nike will help us understand where their strengths lie within their current industry and how they can improve or expand into other markets that will support them.
History About Nike
Nike Inc. is a global company that develops, designs, and markets footwear, apparel, equipment, and accessories for a wide range of sports and fitness activities. Nike was founded in 1964 by Phil Knight and Bill Bowerman and is headquartered in Beaverton, Oregon.
Nike has a great variety of products offered at a number of different prices that suit the needs of many people. In order to keep up with the latest trends, Nike has been implementing new innovations.
Nike’s purpose is to bring inspiration and innovation to every athlete in the world. It helps people in all walks of life to have a better lifestyle and a healthier body.
Nike and the entire athletic industry, in general, is a very sensitive and competitive market. Nike’s products are expensive, and their consumer base consists mainly of high-income earners who have higher purchasing power.
However, with the pricing of sports equipment and the prices of luxury goods, Nike has been able to sell the same amount of product at a higher price point with more profit margin than any other competitor.
Nike also has a history of being able to re-invent their product throughout time. They have introduced new colorways such as the Nike Magista Obra, a soccer cleat that came in three colors to match its three distinct silhouettes.
They have also done the same thing with shoes, first introducing the Nike Free, which featured its own unique ankle design, and then added materials that would make it lighter and more durable.
The Swot Analysis of Nike would suggest that there are strengths within their current market but that they can benefit from expanding into a different market to increase revenue and profitability.
SWOT Analysis of Nike
-Nike’s product has a variety of styles to fit different purposes
-The brand is strong in many markets around the world
-Nike sponsors many successful athletes, especially in the US, e.g., Michael Jordan, Tiger Woods
-Nike sponsors many teams, especially in the US, e.g., New York Yankees, Los Angeles Lakers, etc.
-Nike has been able to maintain their market share through innovation and technological advances
-The company has excellent customer service, e.g., on their website, they can process refunds quite fast
-The company is not well-positioned in the Asian market, e.g., China, India.
-The company has had some negative publicity in the past, e.g., Nike put out a running shoe for mass distribution, which made the athletes run slower, and thus the company was sued.
-The company has to constantly compete with Adidas, Reebok, and other sports apparel companies.
-There is a trend for people to buy sportswear from specialized shops rather than general retailers, which could pose a threat to Nike’s market share.
-Nike could expand their market in Asia, e.g., China, India
-Nike could also use its brand and sports sponsorship to expand its market in other sectors apart from sports and fitness.
-The company has an excellent brand name. Therefore, there is a need for the company to expand its market by upgrading its product lines, e.g., expanding into more fashionable styles.
-Nike is not well-positioned in the European market, e.g., Italy, Germany.
-Nike is not well-positioned in the US market, e.g., Nike is not able to slice Adidas’s market share at present, and it may be hard for Nike to do so in the future because Adidas has a strong brand name and good customer service.
-Nike will have to innovate their product lines faster than their competitors because they are losing market share, e.g., Nike’s share in 2020 dropped in teens running shoes (Nike Is Losing Its Grip on the Teen Market). Nike has to find a new product and innovate it quickly to produce a competitive advantage over its competitors.
-Nike is facing competition from companies such as Adidas, whose share is high, and Reebok who has been able to increase its market share in the recent past.
-Nike has had a poor performance in the past because they failed to innovate their product lines and did not have sufficient customer service.
Nike Business Strategy | Nike Opportunities for Growth
Nike is a strong brand that has many areas of opportunity for growth. They have a well-known brand name, which can be leveraged even further to expand their market while still being careful not to risk their current market.
The cost of creating a new product is always risky and expensive, but if Nike goes about it in the right way, they can reduce some of the risks associated with this. They need to make sure they are creating a product with some differentiation from their current product line but still offer the same value and quality as their current products do.
Another way Nike can improve is to create new segments for their consumers in the market. They are focused on providing high-quality sports equipment. Still, they have not been able to connect with different sports or segments within those sports that would provide them with an opportunity to expand and increase revenue.
Finally, Nike needs to continue to grow its market share, and they can do this by developing a wider range of products that appeal to more consumers and not just the high-income earners.