Nike has brought several game changing shoe technologies for its customers and fans like NIKE Air, Lunar, Zoom, Free, Flywire, Dri-Fit, Flyknit, Flyweave, ZoomX, React, Adaptive and NIKE+ technologies which prove Nike’s dedication to the design of innovative products. However, the company has taken a very innovative approach to market its brand. The company generated 43% of its Nike brand revenues from the North American market alone in fiscal 2019, which fell to 41% in fiscal 2020. However, in fiscal 2020, while Covid-19 has hurt Nike’s business, the company has managed to control the overall impact to a large extent. However, based on the increased focus of the company on DTC sales, it may not take Nike very long to be there. The SWOT and PESTEL analysis report of Nike Inc. presents the complex internal and external factors affecting Nike's brand, its operations, business model, market strategy and growth trajectory. The company generated around $24.3 billion from sales to wholesale customers in 2020 compared to $26.7 billion in 2019. The growing competition in the industry is an important reason Nike is spending more than ever on marketing and customer experience, driving operating expenses higher. There are various strengths, weaknesses, opportunities and threats of Adidas. Words 1144 (4 pages) Views 381. It is why the company needs to invest in managing its female staff better and managing diversity in its workforce well. Nike is headquartered in Beaverton, Oregon, USA. ... Bata, Reebok, Nike, Adidas, etc. Nike, Inc. is an American multinational corporation. As Nike’s focus on customer experience has grown, the company is providing its customers with an omnichannel experience. It pulled out of Amazon’s e-commerce platform in 2019. All rights reserved | firstname.lastname@example.org | Logo designed by Looka. Although the brand is still in debt, the next few years look promising. Copyright © 2020 Business Strategy Hub. The company’s operating expenses, including the amount spent on technology and marketing and sales, have continued to increase year on year. At the Atlanta Olympics, Reebok went to the outlay of sponsoring the games. There were 384 retail stores of Nike operational in the US as of 2019, including Nike factory stores, brand inline stores, Converse and Hurley stores. The company has outsourced all its production but still maintains strong control over the quality of raw material used and that of the final products. Throughout its history, the company has introduced several market leading technologies that have helped it dominate the sports shoes market. However, the role of technology in Nike’s ecosystem has grown exponentially in the latest years as the company has moved to offer an omnichannel shopping experience to its customers. Did you find this article interesting? Remember me . The following strengths are the most notable in the case of Nike Inc.: 1. Several sporting teams are on the brink of collapse. Nike is a brand of premium sports shoes and apparel that has been enjoying strong sales and profitability over the past several years. Chapter 4. Nike’s core market is the US, which accounts for its highest sales and revenue. Using for my management program – Leadership & People Management. Comments are turned off. While Nike’s core market, the United States, is the main source of revenue for the brand, the impact of a recession or a pandemic on the US economy will also hurt Nike sales and profitability. Nike’s strengths are the primary drivers of the company’s growth and global leadership in the sports shoes, apparel and equipment market. Nike is the world’s no. Thank you Gargi, I have been through business school not so long ago, so I can totally relate to you. Coronavirus has brought new challenges before Nike and the company has experienced a decline in its sales and profitability. The SWOT analysis of Adidas shows the TOWS matrix of one of the strongest sports brand in the world. Thanks it will help me my upcoming presentation. Sexual Harassment: Former female employees also pointed out that sexual harassment and misconduct was very common in the company. Post author By [email protected] Post date July 9, 2020 “ Trending Sport Sandal Market 2020: COVID-19 Outbreak Impact Analysis. 2. The company has been growing consistently over the past several years. At the Atlanta Olympics, Reebok went to the outlay of sponsoring the games. Abhijeet has been blogging on educational topics and business research since 2016. 032c returns to an old corporate strategy favorite – the SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis – to consider Nike’s position and message for 2020, and beyond. Category Sports; Show more Show less. Their number was reduced to 338 in FY 2020. Like most big companies, Nike has a number of strengths. Nike has been a customer centric brand since its beginning and despite the rise in competition from other brands, it is the most trusted shoe brand. Good read. finding a solution against these environmental issues. Four leading contract manufacturers accounted for 61% of the company’s footwear production in 2019. Apart from its website and app, it has also brought other fitness apps that engage Nike fans and customers. Customers’ expectations and preferences have changed fast in recent years. The effective tax rate in FY 2018 was 55.3% which was 13.2% in the year 2017. The net profit of the company has decreased by approximately 37.5% in 2020. The pandemic has brought a major and long lasting impact in terms of consumer behavior and digital technology will become the primary driver of growth for Nike and its rivals. As of 2020, Nike is one of the leading brands in the lifestyle and retail sector. Overall, the level of competition in the shoes and apparel industry has grown very fast during recent years, which has led to a higher focus on marketing and product quality and innovation. Together, the three countries accounted for 27%, 22%, and 10% of Nike’s apparel production during the year. Nike’s leading strength is the brand equity the company has built over the years. As a sports shoes and apparel brand, Nike enjoys the strongest popularity of all the brands in the industry. It’s to easy to understand and explain to others.. As the pandemic’s impact has been the strongest on the US market, its impact on Nike’s revenue has been harsh since the US is Nike’s largest market. Among its leading competitors are Adidas, Under Armour, and others, including Fila and New Balance. While the company took several significant steps to resolve the problem, it has not been able to establish a culture that fosters higher inclusion and creativity. Nike SWOT analysis paper. Nike’s revenue in 2019 reached $39.1 billion compared to $36.4 billion in 2018. V arious exa mples, for the impressive work of Nike on R&D. Nike did not. I am glad you liked our analysis. Save my name, email, and website in this browser for the next time I comment. It also aims to examine the opportunities the company should explore and the threats it should keep an eye on. Through the interviews, it was established that Nike did have a toxic working environment, where sexual misconduct was rampant. while on the one had, it helps the company deliver superior customer experience, on the other it helps the company grow its profit margins. While Nike has grown its push towards direct to consumer sales, it has depended traditionally on retailers and wholesalers to achieve sales globally. Not just an excellent revenue growth rate, but the company has also maintained strong profitability. This article was very interesting. Here’s why. Nike dropped Amazon in 2019, mainly because of the problem of counterfeits on the platform. The company generated $16.1 billion in FY 2019 from the United States market and in 2020, $14.6 billion. Opportunities are some of the prospects that the government of a country must take some advantage of, some of those prospects are as follows. Learn more. Superior product quality has led to higher demand and improved sales and profitability. The pandemic’s impact is going to last even after a vaccine has arrived, and Nike will have to consider how the pandemic has changed consumer behavior around the world to manage its sales and profitability successfully. Thank you ! Nike, Inc. is an American multinational corporation. The biggest strength of Nike is that it is an extremely competitive organization with its approach of “Just Do It” slogan for its brand epitomizing its attitude towards business. The fiscal 2020 proved to be successful for Nike. The SWOT analysis of Adidas differentiates the brand’s strengths, weaknesses, opportunities, and threats that would be useful for the company to grow. In the year 2020, about 41% of Nike’s sales came from the U.S, while the rest of 59% came globally. Before we begin in-depth on the SWOT analysis of Adidas, let us understand a bit of the background of the company Adidas. The company’s supplier management practices have also played an important role in helping it manage product quality better than its rivals. Rapid innovation processes 3. Also Read: SWOT Analysis Weaknesses Explained with Examples. very grateful analysis. 4.1 Company Profiles. While the situation has improved in recent years, its HR related issues are not entirely over, and the company should gain higher employee satisfaction through inclusion and diversity programs. Its faster and robust growth is also a result of the heavy focus on marketing. While organizational culture is a critical pillar of organizational success, this is an area where Nike has been unable to achieve significant progress. Apart from that, Nike should also place a higher focus on employee satisfaction. In 2020, Nike’s revenue from direct to consumer sales improved as compared to the previous year. Technology has remained a key driver of change in the sports shoe and apparel industry and even more so in the last five years. This SWOT analysis looks at Nike, a global retailer that specialises in sportswear, including shoes, clothing and accessories. ... Tesla SWOT analysis 2020 - Duration: 11:09. How Does Credit Karma Work and Make Money? Its market-leading position and global dominance are backed by the strong brand equity the company has built. Another major threat before Nike is that of counterfeits. Thanks Taku, I am glad you liked our analysis. The interest payments on its debt are also well covered by EBIT. It is listed on the NYSE and is headquartered in the United States. The Washington Post. Lot of clarity in the format – the SWOT is explained. The product was first launched for legendary basketball player Michael Jordan in 1984. 032c returns to an old corporate strategy favorite – the SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis – to consider Nike’s position and message for 2020, and beyond. Its focus on product design and investment in R&D have also helped it establish itself as a brand obsessed with quality. One of its core strengths is product quality and also one of the leading factors that differentiates Nike from the other brands. Nike’s sales from direct to consumer channels have increased in 2020. in English literature from BRABU and an MBA from the Asia-Pacific Institute of Management, New Delhi. The entire. Learn more. Its gross margin in 2019 grew to 44.7% from 43.8% in 2018. However, while the company is trying to get rid of the counterfeit problem by expanding its reach through direct to consumer channels, counterfeits still remain a difficulty for the brand. The US market accounted for 39% of its total revenues in 2020 compared to 41% in 2019. These expenses grew to $3.75 billion in 2019 from $3.58 billion in 2018. Nike is the world’s no. From releasing new product lines to building new brands, to outsourcing, and establishing a global presence alone is an extraordinary achievement. Visit us and find ultimate business news and strategy resources. Last Updated 10 Aug 2020. Technological innovation can also help Nike find faster growth and expand its market share. Check Also. With a growing focus on optimizing and delivering a superior customer experience, Nike is now more interested in serving its consumers directly than through retailers and wholesalers or other e-commerce channels. Thank you. Nike therefore needs to grow its focus on the other economies and particularly the emerging economies that are seeing faster growth. Thank You. From 2016 to 2020, Nike’s net revenue has grown by around $5 billion. Thanks. While Nike has already benefited in this area by moving its business to the clouds earlier than its rivals, the company can gain significant leverage by sustaining its focus on technological innovation in the coming years. Nike has retained its leadership position in the shoe industry through a consistent focus on quality and in the light of changing customer preferences, it has modified its business strategy to maintain its lead. However, the company’s investment in its own digital sales and distribution channels has paid off during the coronavirus crisis. Puma, V.F. Nike has grown exponentially in the last decade. Apart from its core brand, Nike also owns Converse and Hurley. There’re approximately 75400 people are working for the company by the end of 2020. can i know the name? Nike’s primary goal is to supply athletes with exceptional products and wearable that aids them in better sports performance. Further, the product was introduced to common customers in late 1980 (Nike Air Jordan, 2018). Here’s a detailed breakdown of Nike SWOT analysis. Cloud technology is driving faster growth for Nike in various areas including marketing and customer service. The CEO ensures that Nike will help to contribute. [Source: 2016 Annual Results Nike Inc] SWOT & PESTLE ANALYSIS OF NIKE . However, none of the producing factories accounted for more than 10% of footwear production in the year; the largest factory accounted for only 9% of the total. Nike suppliers follow a code of conduct that ensures they are managing their labor force and sourcing raw materials responsibly. The pandemic has discouraged physical interaction and gathering with sporting events canceled or postponed. 4.3 Production, Revenue (2015-2020) 4.4 SWOT Analysis. Apart from that, it is relying heavily on cloud technology to manage the digital experience it offers. SWOT analysis of Nike. By growing its direct to consumer sales channels’ penetration, the company will be able to offer better customer experience and win higher customer loyalty. While legal threats are mostly an essential barrier, regulatory threats may sometimes create major pressures that can hurt expansion and growth plans of large businesses. Nike’s approach to marketing is considered highly authentic. The result was that Nike’s operating expenses grew and so did its profits. Growth in operating expenses hurts revenue as well as gross profits. Through this SWOT analysis of Nike, you will be able to understand the business model of the brand. Nike’s growth in the recent years is a result of its consistent focus on product quality and growing investment in technology. In fiscal 2020, Nike’s gross margin reduced mainly due to the impact of Coronavirus falling to 43.4%. While the counterfeits can be easily identified in most cases, they can still hurt Nike’s sales and revenue. It also offers a large sum on marketing each year that it calls demand creation expenses. Nike air Jordan is one of the most famous and expensive basketball shoes and active clothing line. It was able to manage strong sales globally with the help of cloud technology and digital sales and distribution channels during the pandemic. Economic fluctuations caused by other factors can also hurt Nike’s sales and revenue globally. The growth of Nike can also be attributed to its focus on quality and investment in technologies that have helped it consistently improve the quality of products and customer service. For the first nine months of fiscal 2020, gross margin expanded 30 basis points compared to the first nine months of fiscal 2019. Nike is very vulnerable in … ET Further, the product was introduced to common customers in late 1980 (Nike Air Jordan, 2018). Nike uses AWS to serve its customers globally. While the company faced several controversies in the past related to supply chain management, with time it has improved its supplier management practices a lot with a clear focus on ethics, quality, and labor management. Search for: Log In . Due to the intense competitive pressure, Nike has also started investing more in customer experience and technology. In the year 2020, about 41% of Nike’s sales came from the U.S, while the rest of 59% came globally. Nike has decided to become a digital-first company. Apart from its great quality products, Nike is known for its excellent marketing strategy and techniques that have helped the brand gain a distinct position and identity in the global market. Nike, Inc. is an American multinational corporation headquartered in Oregon, USA. NIKE annual/quarterly revenue history and growth rate from 2006 to 2020. Over the next several years, technology can also help Nike widen the gap between itself and its rivals. Another area where investment can be highly profitable for Nike is its HRM strategy and organizational culture. People stopped shopping for the nonessential items as the pandemic spread through various markets and regions. Press Release Zinc Battery Market SWOT Analysis by Key Players : Panasonic, PowerGenix, Primus Power Published: Dec. 16, 2020 at 12:28 p.m. https://bstrategyhub.com/swot-analysis-of-nike-nike-swot-analysis Category Swot Analysis. The company has achieved strong brand awareness and customer engagement through its unique marketing strategy. Table of contents. Nike is a very competitive organization. Other sports shoes and apparel brands are also investing heavily in marketing, product design, quality, and innovation. It designs and sells shoes for a variety of sports including baseball, golf, cheerleading, volleyball, tennis and football. If the company successfully resolves the problems related to organizational culture, it could find its growth momentum increasing. Has brought New challenges before Nike is trying to reduce its dependence on retailers and.... Other fitness apps that engage Nike fans and customers ) Segmentation, analysis. 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