Nike Situation Analysis in Easy Words
Overview of the company Nike
Nike Inc. is an American company that is engaged in the activity of design, manufacturing, marketing and sales of apparel, footwear, accessories and services. The Headquarter of the company is near Beaverton, Oregon in the Portland Metropolitan area. It was founded by Phil Knight and Bill Bowerman in January, 1964 and officially incorporated in May, 1971. Nike is a major manufacturer of the sport equipment and is the largest supplier of shoes and apparels in the world. The products under the brand are – Nike golf, Nike pro, Nike blazers, Nike+, Air Jordan, Nike stake boarding and Nike dunk. It employs more than 44,000 persons in the world. In 2017, the brand value of the company was $ 29.6 billion in the sports business. In addition to the sportswear equipment, it operates retail stores under the name of Nike town. The mission of the company is to bring innovation and inspiration in the world of athlete (Nike, 2019).
Situation analysis is used to analyze the internal and external environment of the business to know about the organization’s customers, environment and capabilities. It involves the Macro and Micro environmental factors that affects the environment of the business. The purpose of this analysis is to indicate to a business about the product and organizational position and the whole survival of the business. However, situation analysis comprises the SWOT analysis i.e. Strengths, Weaknesses, Opportunities and Threats (Hudson, 2010).
The Industry of Athletic shoes segments more than Fifteen specific groups. Between the year of 2003 and 2006, American Time Use Survey had observed that 7.1 % people over the age of 15 engaged in the activity of running.
Nike has gained a major market share in the category of Athlete shoes. The top competitor of Nike is Adidas. Adidas brand has the marketing power to build the positive brand in the industry. However, Reebok brand owns a decent portion of the market and it is the main subsidiary of Adidas. Fig. shows the market share of Nike and their competitors –
Above fig. shows that Nike is the topmost brand that owns 35.21 % market share, whereas, the competitors of Nike such as Jordan owns 10.83 % market share, Adidas has 5.05 % market share, Skechers own 4.61 % market share, Reebok owns 2.58 % market, Asics own 3.89 % market share, Converse has 2.83 % market share and other competitors of the company have achieved 29.68 % market share (Brock, 1984).
There are a great number of male and female consumers who use Nike product. 50.7 % of the sales is made from males while 49.3 % sales made from females. Consumers with the age of 18-24 are more likely to use athletic products in a fairly consistent manner and keep more exercise than any other age groups. From this age group, 54 % people run or jog regularly as opposed to the older generations. Thus, it would be difficult to the company to change the perception of the older generation who consider the Nike products only as the running shoe brands (Ayungga, 2018).
SWOT analysis of Nike elaborates the strengths, weakness, opportunities and threats of the footwear products. SWOT is discussed as –
a) Nike is the top brand in the Athlete shoe as it designs, markets and sells the number of sport products including Volleyball, Football, Baseball, Tennis, Golf etc.
b) It is a strong, easily recognizable and number one sports brand in the world. “Swoosh” is the common logo and Philip Knight who is the founder and CEO of the company, has tattooed it on his ankle.
c) The company operates Nike women shops, Nike town shoe, Nike factory outlets and sportswear shoes. The products of this company are sold across the U.S. and the other countries.
d) It provides fast customer services to the people by using customer order named “Make a Stock”.
e) The brand of the Nike is very strong at Research & Development and proved by its innovative and evolving range of the products. Thus, the company can produce high quality products with the lowest prices by innovation and research & development.
a) As the company committed more research & development, the past three years’ study shows that Nike have spent Zero dollar on research & development.
b) The expenses are increasing year by year in the company. In 2017, Nike grew revenue by 5.6 % and the expenses increased by 9.66 %.
a) E- Commerce provides the opportunity to the company to increase its sales. Nike has its own website but it needs to be more visible through online media.
b) Nike has been working on the Product development. In youth culture, Nike is now considered as a fashion brand.
a) There are number of competitors existing in the sport market such as - Adidas, Reebok, Asics, Jordan etc.
b) The company is exposed to the International nature of trade. This exposure tells that Nike may be manufacturing and selling their products at a loss (GÜREL, 2017).
Nike. (2019). Retrieved from https://www.nike.com/
Ayungga, R. (2018). CUSTOMER BENCHMARKING ANALYSIS ON BRAND IMAGE FORMATION IN BRAND NIKE. Sinergi : Jurnal Ilmiah Ilmu Manajemen, 8(2). doi: 10.25139/sng.v8i2.1005
Brock, J. (1984). Competitor analysis: Some practical approaches. Industrial Marketing Management, 13(4), 225-231. doi: 10.1016/0019-8501(84)90017-8
GÜREL, E. (2017). SWOT ANALYSIS: A THEORETICAL REVIEW. Journal Of International Social Research, 10(51), 994-1006. doi: 10.17719/jisr.2017.1832
Hudson, R. (2010). Marketing situation analysis and strategic planning for NHS clinical services. Journal Of Management & Marketing In Healthcare, 3(3), 224-238. doi: 10.1179/175330310x12736577965801