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Nike, Inc. Pestle and Swot Analysis

Essay by   •  January 2, 2019  •  Case Study  •  1,974 Words (8 Pages)  •  19 Views

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ANALYSIS INTERNATIONAL BUSINESS ENVIRONMENT

Contents

INTRODUCTION ABOUT NIKE        2

1. A review of environment analysis techniques        3

1.1 Macro environment analysis        3

1.2. Micro environment analysis        5

2. Micro and Macro environment analysis of Nike        6

2.1. Porter’s Five Forces Model        6

2.2. PESTLE model        9

3. The international business environment impacts on Nike        10

4. The benefits, opportunities and challenges of globalization on Nike        11

CONCLUSION        13

References        14



INTRODUCTION ABOUT NIKE

Nike, Inc. is an American multinational corporation that supplies clothes and sport equipment including bags, socks, sport ball and especially footwear. They are produced both a domestic and through the foreign manufacturer. Headquarter is located in Beaverton. The company was founded on January 25, 1964 as Blue Ribbon Sports, by Bill Bowerman and Phil Knight. Products of Nike are known as Nike Golf, Nike Pro, Nike+, Air Jordan… The highly recognized slogan “Just do it” and “Smooth” logo.

Nike is one of the largest manufacturers of athletic apparel and sporting equipment in the world, therefore it has numerous, distinct missions and aims. Nike does not have a vision statement, but it does have a mission statement: “Our Mission: To bring inspiration and innovation to every athlete* in the world. *If you have a body, you are an athlete.” According to Nike, the asterisked clarification came from cofounder Bill Bowerman.

Nike, Inc. has a many strength points that makes them develop in a competitive market. Above all, they have a strong global brand that is attached to famous athletes such as Mario Gotze, Michael Jordan, Carl Lewis… (Nike, 2016)


1. A review of environment analysis techniques

1.1 Macro environment analysis

Nowadays numerous factors have impacts on external factors, which are dependent on business environment. Therefore we cannot control those factors. However, if we identify, understand and analysis what these factors represent and how they are interdependent. The company can plan an effective strategy to be successful. PESTLE analysis is a useful tool to understand the market is going up or down and on which located, search and direct the enterprise. PESTLE analysis classifies these factors affecting the organization under six headings, namely: Political, Economic, Social, Technological, Legal, Environmental factor.

PESTLE model involves the collection and portrayal of information about external factors which have, or may have, an impact on business. (Rothaermel, 2012)

Political

  • Government type
  • Stability of government
  • Entry mode regulations
  • Social policies
  • Trade regulation

Economic

  • Disposable income of buyer
  • Credit accessibility
  • Unemployment rates
  • Interest rates
  • Inflation

Social

  • Population demographics
  • Distribution of Wealth
  • Changes in lifestyles and trends
  • Educational levels

Technological

  • New discoveries and innovations
  • Rate of technological advances and innovations
  • Rate of technological obsolescence
  • New technological platforms

Legal

  • Employment regulations
  • Competitive regulations
  • Health and safety regulations
  • Product regulations
  • Antitrust laws
  • Patent infringements

Environmental

  • Waste disposal laws
  • Energy consumption regulation
  • Popular attitude towards the environment

        

PESTLE analysis is an easy to use tool which aids businesses perform strategic planning, preparing for a new marketing drive, new product development and organizational change. Often PESTLE analysis is followed up with SWOT analysis to identify the organizations strengths and weaknesses. PESTLE has proved tremendously beneficial. However, it is highly recommended the pitfalls be taken into account as well.

Advantages

Disadvantages

  • Simple framework
  • Helps understand the overall business environment (big picture)
  • Helps to better position the organization for future trends
  • Spot new business possibilities and gain an edge over competition
  • To be effective, PESTLE analysis must be undertaken on a regular basic
  • Provides better results when people with different perspectives are involved
  • Time consuming and costly to get access to quality information

Source: [Rookieba, 2016]

1.2. Micro environment analysis

In contrast to macro-environment, micro-environment can be affected by the policy and business strategy of the enterprise. Therefore business often use the Porter’s 5 force to analyze the new environment and new markets whether to should join in and expand their share. This analysis method is also used to search for a certain region that should be improved to reach more profit. According to Michael Porter’s five forces of competition is following: Bargaining power of buyers, bargaining power of suppliers, threat of substitutes, industry rivalry, threat of new entrants.

[pic 1]

Five Force Analysis (Porter)

2. Micro and Macro environment analysis of Nike

2.1. Porter’s Five Forces Model

  • Bargaining power of buyers

Today, customers require a high standard of quality, want to know more information and have more choice to purchase. Customers have a strong power and are more intellectual. That means market is become more competitive and slowdown in the sales industry worldwide.

  • Bargaining power of suppliers

Nike has a lot of supplier in Asian areas such as China, Viet Nam, Indonesia where have a cheaply labors and resources. Nike will set up the relationship if the suppliers guarantee to reach standards of quality, products, prices and delivery time. They also make a contract sign with manufacturers from over 40 countries, majority products of Nike produces in China (35%), Viet Nam (29%), Indonesia (21%) and Thailand (13%). Power suppliers are low to negotiate.

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