Nike Swot Analysis

Nike: Sweatshops and Business Ethics

History

What started with a handshake between two running geeks in Oregon in January 1964 are now the world's most competitive sports and Fitness Company. Bill Bowerman the legendary University of Oregon track &field coach and Phil Knights a University of Oregon runner under Bowerman coach, found the Nike Company, named by the Greek winged goddess of victory. First the company was named Blue Ribbon Sports. The Nike athletic machine began as a small distributing outfit located in the trunk of Phil Knight's car. From these rather unpromising beginnings, Knight's idea grew to become the shoe and athletic company that would come to define many aspects of popular culture. Bill Bowerman's search for lighter, more durable racing shoes for his Oregon runners, and Knight's search for a way to make a living without having to give up his love of athletics. Bowerman's desire for better quality running shoes clearly influenced Knight in his search for a marketing strategy. Between them, the seed of the most influential sporting company grew. While getting his MBA at Stanford in the early '60s, Knight's the semester-long project was to devise a small business, including a marketing plan. Synthesizing Bowerman's attention to quality running shoes and the burgeoning opinion that high-quality/low cost products could be produced in Japan and shipped to the U.S. for distribution, Knight found his market position.

By 1964, the company had sold $8,000 worth. Bowerman and Knight worked together, but ended up hiring a full-time salesman, Jeff Johnson. After cresting $1 million in sales and riding the wave of the success, Knight devised the Nike name and trademark Swoosh in 1971. By the late '70s, Blue Ribbon Sports officially became Nike and went from $10 million to 15 billion in sales in 2006.

Growth of the company's over time

Due to the industry's strong global presence, in the political and legal changes 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.

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. 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.

Identification of the company's internal strengths and weakness

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.

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.

Slow 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.

The Nike mission is "to bring innovation and inspiration to every athlete in the world. If you have a body, you are an athlete." As long as there are athletes, there will be Nike.

Nature of the external environment surrounding the company

The athletic footwear industry has experienced strong growth in the last twenty years. Men and women ranging from the casual athlete to the elite competitor are always looking for the latest and greatest shoe. "The US athletic shoe market is a $15 billion-per-year industry that sells more than 350 million pairs of sports shoes annually." This industry is not driven solely by performance but also by fashion and innovation. Consumers look at color, design and the overall style in addition to performance and comfort. This type of demand creates a market driven industry where the products have short-life cycles. The following analysis illustrates Porter's Five Forces applied to the athletic footwear industry.

The competition in the industry is currently rivalry among existing firms like: Reebok, Adidas, Asics, New Balance, and Puma among others. They are differentiating using marketing, advertising, fashion and technology to get the market, including the new potential competitors. It is not so easy to enter in this footwear industry due to few entrance barriers to