Nike Swot Analysis

. Case Profile

Nike started out just as plan developed in order to satisfy course work at Stanford University. Mr. Phil Knight a graduate student at Stanford University and a long-distance runner decided that he would make low cost running shoes in Japan and then sell them in the US. Knight solicited the assistance of a past coach Bill Bowerman to assist him in his business venture and in 1964 they started Blue Ribbon Sports. Knight called his first shoe Tiger and began distribution at track meets. Blue Ribbon in 1971 earned it's "swoosh" and Knight introduced the first Nike brand line. In 1978 the Blue Ribbon became Nike and each year their profits grew steadily. Due to Nikes concentration in casual shoes in the 1980's, they missed the trend to aerobic shoes and fell behind allowing Reebok to control the market. Due to poor management in the years following and proceeding Reebok's take over things fell apart. Phil Knight repositioned and reestablished Nike following the bumpy years in the 80's. In 1988 Nike purchased Cole Haan for $64 million which allowed them to increase casual footwear sales by 16%, they also purchased the accessories company in 1990. Nike even expanded by opening their own retail store "Nike Town" in 1990. Nike distributes to 123 retail stores in the US and also in 52 retail stores in countries such as, the UK, Japan, France, Italy, Spain, Germany, and Canada.

II. Situational Analysis

A. General External Environment

o Political/Legal Changes

Due to the industry's strong global presence, there are many legal restraints that must be taken into consideration. There are positive aspects such as those provided by NAFTA and GATT such as, reduced import/export duties when operating in Mexico and Canada, and access to international markets and tariff cutbacks as provided by GATT. However with the new formation of the European Union and the introduction of the Euro, has increased European influence on import controls, but it has also created one European market. In 1995 the EU (European Union) enforced on imported athletic footwear from China and Indonesia anti-dumping duties. The U.S.'s diplomatic relations with countries such as China and Vietnam is critical for shoe manufacturers who want to produce in those countries. In addition to these changes, there are also laws that vary from country to country which may provide opportunities or impose restrictions.

o Sociocultural

The most influential cultural change would be how to approach the changing youth markets who are mostly interested in boots, and sandals. Even though the consumers in the footwear industry have become more brand conscious; that does not mean that they are buying more athletic shoes. The industry was experiencing a decrease in health and fitness awareness and practices, but I believe the onset of the twenty first century has brought it back to wear it use to be in the early 90's.

o Demographic

The industry is realizing the influx of women's sport players and leisure fitness participants, and is preparing to accommodate such an increase in female consumers. Also as women increase their consumption the younger generation is decreasing; due to the popularity of boots and sandals. Additionally because of the increase and profitability of technological industries some countries are deciding not to manufacture shoes in hopes of making more money in other industries.

o Economic

The footwear industry as well as all other industries around the world are preparing for a loss in revenue due to a sluggish economies and the onset of war. Because of these factors companies around the world are preparing themselves for a decline in sales and stock prices. Due to the organization of the European Union and the disbursement of the Euro some economic discomfort in participating countries may be felt. In addition to those listed above other economic changes may be felt through the increase of inflation and unemployment in Asia and the Pacific Rim, Latin America, and Russia, consequently having a negative effect on shoe sales. Furthermore the fluctuation of foreign currency and interest rates, as well as a sluggish US economy may also have negative effects on the industry.

o Technological

As the nature of science and technology change new advances are being made, but because of the industries competitive nature each company makes their own advances, and then copyrights them. The industry has come very far by studying the fashion, leisure, fitness and sport consumers.

o Global

Sluggish international economies especially in countries where manufacturing occurs may decrease in international profits. In addition with the initiation of war on a global level, as well as terrorist alerts, people are generally spending less in an effort to prepare for whatever comes to pass.

B. SWOT Analysis

Strengths:

o Brand name recognition, because Nike has been around so long, the brand is recognized and respected both internationally and domestically.

o Brand loyalty, Nike has consistently produced quality products that appeal to its consumers both internationally and domestically.

o Nike carries a wide arrangement of products with a large amount of options for personal preference.

o Strong international presence, in the event that U.S. sales continue to slack off or the economy continues to worsen, they have their international investments that consistently turns a profit. They are the number one footwear manufacturer in nine international countries; with distribution centers both internationally and domestically. The ad agency that they contract out to has opened three offices in three different countries in order to reach their target audience on a local level.

o Nike is constantly trying to increase their international presence.

o Good financial standing,