The glory that  Nike has earned over time is a result of its focus on its customers and mainly athletes. NIKE Brand sales to wholesale customers grew by 5 percent while Direct To Consumer revenues grew to $9.1 billion, up 18 percent. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. In this regard, it also reduced the number of suppliers to have only those onboard who are committed to quality and sustainability. The footwear and apparel  industry is growing fast and is seeing very high level of competition. Registered Data Controller No: Z1821391. Submitted to: A.J. Substitutes do present a limited threat to Nike’s position. Island Press. Its responsibilities include selecting and contacting the right suppliers for quality goods and services. One of the critical ingredients of Nike business model success is its ability to create demand for its products. However, despite its international growth the brand depends heavily on US market for revenue and income. Nike’s Jordan brand focuses exclusively on basketball and designs, distributes and licenses athletic and casual footwear, apparel and accessories. Increased competitive pressure – The competitive pressure in the sports shoe and apparel industry has kept rising. Politically, Nike has some interesting issues to contend with. Strengths. It can also try backward integration since it is heavily dependent on independent manufacturers down its supply chain. You can view samples of our professional work here. Only suppliers who can guarantee more than the minimum quality requirements get to remain in its supply chain. Also read Nike SWOT Analysis, STP & Competitors. Disclaimer: This work has been submitted by a university student. While the governments have made stringent laws for environmental protection, businesses themselves are actively investing in CSR and environmental responsibility for better reputation and faster growth. If you need assistance with writing your essay, our professional essay writing service is here to help! Nike uses best in class technologies to reuse the waste its factories generate. Its industry leading performance is backed by excellent product quality and great customer focus as well as a fantastic marketing strategy. Rapid growth through careful acquisitions has enabled Nike to achieve considerable market penetration across developed countries. Afterwards Nike had made itself as a leading brand in U.S. athletic market and covered half of its market share. The company has retained its focus upon two important things – product innovation and product quality. The largest number of Nike suppliers are located in Asia. Supply chains and the efficiency of these chains has been critical to Nike’s ability to serve customers’ needs. Its products always dominate the top selling shoe models in US and abroad. There are legal barriers too which discourage new brands from exerting the market. The importance of economic factors can be understood from the fact that low economic activity results in lower sales and revenue for international brands. Being recognised as a world expert of design and sports apparel has been the central basic strategy for Nike and has proved to be very successful both in design and retail, expanding its scope both in terms of geographic location and type of product (Brown & Eisenhardt, 1998)[2]. Strategy & Leadership, 34 (4). Market penetration is high in certain countries and Nike needs to look to expand into new markets, although this is proving difficult in Europe due to entry barriers. This growth was driven by a 30 percent rise in digital commerce sales, growth in number of stores and 7 percent growth in comparable store sales. The Asian markets particularly have seen faster growth. It has six important distribution facilities in Memphis Tennessee, two of which are owned by Nike and rest are leased properties. It share of non US revenue has shot past 50% in 2017. A very large part of Nike’s supply chain is located in Asia and this is because apart froth availability of raw materials, labor is cheap there. Competitive rivalry among the existing brands: The level of competitive rivalry between the existing brands is high. Therefore, only the most responsible suppliers get to be a part of its supply chain. Brown, S.L. However, new entrants required the huge amount for the capital; therefore, Nike has the maximum market share in the footwear industry (Reuters, 2016). Its main strategic suppliers for footwear are 127 footwear factories located in 15 countries. The international brands face several kinds of pressures while operating in a highly competitive market. 15th Jun 2018 Looking at the political, economic, social, technological, legal and environmental factors surrounding Nike will allow the choice of business strategy to be seen much more clearly. Human Resource Management International Digest, 13 (3). Whilst professional equipment and sports shoes are not readily substituted, fashion items are and this area of Nike’s market is, therefore, potentially threatened by substitutes. Nike has continued to increase its investment in R&D as well as marketing of the brand. However, the political environment is not stable globally in all the countries. Nike is the world’s largest sports shoe and apparel brand of which has focused on product innovation and marketing for growth. Competing on the Edge: Strategy as Structured Chaos. From there, the products are distributed to the individual and wholesale customers apart from Nike’s own retail stores. Strategy & Leadership, 36 (4). While Nike designs products mainly for athletic use, their popularity as leisure wear has continued to grow worldwide. Its weaknesses are, however, linked to its strengths. Marketing capabilities: The marketing capabilities of Nike are quite advanced and it is known for its excellent marketing which is absolutely outstanding. Globally too, the athletic footwear industry is growing at a very fast rate. Its excellent marketing has ranked it among the best marketers of the world. Using value-chain analysis to discover customers’ strategic needs. Phil Knight (Founder and CEO) is often quoted as saying that 'Business is war without bullets.' Nike is the world’s largest sports shoe and apparel brand of which has focused on product innovation and marketing for growth. In a bid to regain its edge, Nike, in 1987, launched a new product called Air Max. By 1980s, it made association of games with its products offerings to its target market. Currently, Nike is supplied by 127 footwear factories in 15 nations and 363 apparel factories in 363 nations. They accounted for more than 90% of its footwear production during 2017. Nike is the leading brand in sports shoes and apparel industry. Island Press, [4] Collis, D.J. Nike’s local sales for the current quarter in China, for instance, are forecast to be roughly flat year on year, rather than declining. Do you have a 2:1 degree or higher? It reflected the string global revenue growth. – Innovation: Its focus on innovation has enabled it to continuously bring new and greta products to the market and keep its customers engaged and satisfied. PEST Analysis: Nike: SWOT Analysis Of Nike. 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