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SWOT Analysis of Nike

Uploaded by dylanb98 on Oct 31, 2011

A discussion of the strengths, weaknesses, opportunities and threats of the athletic footwear and apparel manufacturer Nike. The company’s strategies involving innovation and diversity are mentioned as some of its strengths.

Introduction

Nike was founded in 1962 as Blue Ribbon Sports by former athlete Phil Knight, who still runs the company today as its Chief Executive Officer. Nike went public in 1980 and is currently the world’s top ranking athletic shoe company. It controls approximately 40% of the United States’ athletic shoe market, and also sells its products in 140 other countries.
Nike doesn’t just sell athletic shoes, however footwear does comprise some 60% of the company’s revenues. Nike also designs, manufactures, markets and sells dress shoes and casual shoes under the brand name Cole Haan, as well as a line of athletic clothing, accessories and equipment – including ice skates, skate blades, and hockey sticks. Nike also operates a chain of retail stores called Niketown, and is currently opening a group of stores catering only to women, called Nikegoddess.
Strengths
Nike’s business strategies involve aggressive advertising, diversification, and innovation, and these components have enabled the company to quickly rebound from a variety of adverse situations, some of which will be discussed later in this paper. Nike, indeed, has remained on top of the athletic footwear market since going public in 1980, and that is a long time to hold the number one position without so much as a falter.
Nike spends a lot of money on advertising; the 1992 “Just Do It” campaign featuring Michael Jordan cost $100 million. But it was effective; 10 years later, people still associate that catch-phrase with Nike, and remember the message behind the ads: be bold, believe in yourself, and wear Nikes!
As previously mentioned, Nike has diversified into a number of other product lines besides athletic footwear. These include accessories such as sunglasses and watches. Such expansion has significantly contributed to Nike’s ability to sustain earnings growth at a time when competitor sales have been slumping a bit (Nightly Business Report, PG).
The company has also diversified geographically, adding 10-20 new countries to its distribution network within the last few years. Approximately one of every five sales of Nike shoes occurs in a country other than the United States. The brand is especially popular in Europe and Asia, most particularly in Japan.
As...

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Uploaded by:   dylanb98

Date:   10/31/2011

Category:   Business

Length:   6 pages (1,282 words)

Views:   3332

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