A SWOT Analysis For Nike Company

An analysis outlines the strengths, weaknesses, opportunities and threats faced by the retailer that can be considered on a basis of recommendation for making short-term or long-term strategic decisions.

Strengths

Nike has a very dominant market position with a strong brand image - they are the leading suppliers of footwear in the retail market with high levels of sales and overall customer satisfaction. They focus on innovation and ethics which has proven to be a well defined marketing strategy.

They have a large and efficient supply chain - as discussed earlier, Nike is vertically integrated so they are able to control more than one stage of its supply chain. Majority of their products are manufactured and supplied by independent contractors outside the country which helps to cut costs and reduce risks.

Strong international presence - Nike operates 1142 stores worldwide, with a third of its stores in the US and the other two third outside the US. They are the number one sports brand in the world and their prominent logo called the swoosh is easy recognizable.

Weaknesses

High Prices - Due to Nikes strong brand image, the company is able to control prices putting premium prices the products they sell. This places the company upon many risks, on of which in the case of a recession the company could face a huge decrease in demand which could lead to a decrease in profits.

Overdependence on Independent Contractors - Despite listing this as a strength, the image of Nike over the years has been damaged because of the unfavourable labour conditions of the workers overseas. Workers are paid very little to do their jobs and provide for their families.

Opportunities

Backward Integration - Nike relies heavily upon independent contractors for the manufacturing and supply of products, instead they could build or buy some of their own factories so that they will have full control of their supply chain and enable rapid growth.

Product development - Nike has to potential and opportunity to increase the range of products sold, they could make more items that non-sports related for example; jewelry, accessories and other clothing products that could help further diversify its product portfolio.

Sponsorship

Nike can support or sponsor various market events worldwide Eg FIFA World Cup, Olympics etc.

Threats

Economic recession could in turn cause Nike to lose sales or market share.

Competition

There is high competition in their shoe market for various sports, the pressure of the competition could require Nike make significant investments in marketing. Their competitors are aware of Nikes high level of sales and are always looking for an angle to take away their market share.