SWOT analysis of Nike/ ppt/ case study

SWOT analysis of Nike/ ppt/ case study 2022

Nike Inc. is an American MNC company engaged mainly in footwear, sports equipment, apparel, and services. The company was founded in 1964 and John Donahoe is the current CEO. Nike is one of the largest sellers of sportswear in the world. The western population owns at least one item made by Nike. The famous logo of Nike was designed for just $35 by a student at Portland State University. In 2000 and 2002 the company won an Emmy award. Nike’s largest store is on Oxford Street in London, covering 42,000 square feet of area.

Strengths-

1. Nike has created about $12B of combined free income from operations through 2015.

2. Nike has defined itself as the greatest football maker company in the world. (Nike news 2010)

3. The brand has earned a strong name in the market of running basketball and football categories.

4. Nike’s market cap has grown up to $232 billion in 2022.

5. The company has a huge customer base around the world, which is making this brand more loyal.

6. Nike is associated with several sports stars like Christiano Ronaldo, Didier Drogba, Neymar, and more.

7. The company is also associated with non-profit organizations which helps to create brand awareness.

 

Weakness-

1. The company largely depends on the North American market. In 2021, the company’s 39% of sales were generated from North America and the rest 61% from the entire world.

2. About 65% of Nike products are sold directly to retailers or wholesalers. Retailers are served as their core customers. The company does not fight against pricing structure.

3. According to yahoo finance the company has reported $9.45 billion of total debt in 2021.

4. In the last 20 years, Nike has been targeted for its poor labor conditions, including forced labor, child labor, low wages, and unsafe working conditions.

5. According to the New York Times in an interview with Nike employees to investigate the working culture of the company, they described that Nike’s working environment is toxic, and sexual misconduct also exists. This point significantly affects the company’s image.

 

Opportunities-

1. The company has produced many innovative products, but there is still to innovate more.

2. Billions of people in China, India, and Bazil are willing to follow a western lifestyle which means they would be more receptive to brands like Nike. This is an opportunity for Nike to expand the market more in these countries.

3. In the production and supply of the products, the company is dependent on independent manufacturers, the company can acquire its own manufacturing and supplying.

4. Nike has recently acquired a digital shoemaking company in the metaverse, which is a plus point for Nike and the brand can expend more in the metaverse.

5. Nike is cutting down middlemen and accelerating its consumer-direct strategy. The company is focussing on its online business and closing physical stores.

 

Image source: statista

 

Threats-

1. Presence of similar products in the market is the most common threat to any brand. The market for these products is expanding very fast which is difficult to Nike to control.

2. The market is accommodating new companies which is a threat to the existing companies. Though Nike is a most popular brand and this is a challenge for Nike to ensure in a highly competitive market. The company has spent $3.5 billion in 2020 on marketing and continuing demand generation.

3. Nike is the largest buyer of Kangaroo leather, the company has been accused of putting the Australian Kangaroo population in a risk. The Kangaroo’s skin is used to manufacture leather football shoes. Animal rights advocates have urged Nike to use vegan leather instead of Kangaroo skin, but so far the company has not responded to these allegations.

4. Nike’s competitors- Adidas, Under Armour, and Lululemon are spending more on marketing which is increasing pressure on Nike.