Categories
SWOT Analysis

Nike SWOT Analysis

Today we will chart out Nike SWOT Analysis Strength, Weakness, Opportunity and Threats. Nike Inc. is the most popular brand in the US market for the sports footwear, apparel, equipment and accessories. It was founded by Blue Ribbon Sport in the year 1964 by Bill Bowerman and Phil Knight. Nike is ranked number 89 in the fortune 500 having worth 28 Billion in the year 2019. Nike is operating in 45 countries with more than 700 retail outlets outside the United States.

Strengths of NIKE in SWOT Analysis

Nike designs and manufacture a long range of products starting from sport shoes, jerseys, shorts, cleats for almost all the sports be it baseball, football, tennis, golf, basketball, ice-hockey etc. So far it is the world’s largest supplier of athletic shoes and apparels.  Nike brand alone is valued at approx 30 Billion in 2017.   

They have a huge customer base of in united states. In 2018 the Nike has sold almost 42% of there products in the United states and rest 58% are sold all around the world. Nike  has a great competitive advantage over its competitors.

Nike is ranked in the top three amongst the climate friendly companies in the world in 2007. In 2019 nike has started making shoes from the threads made up of the waste plastic from the ocean. Which is need of the hour to eliminate plastics to go into the ocean.

Nike Research and development is very robust and they have proved themselves in the past by developing the innovative product range and by reducing the cost of manufacturing per unit, By outsourcing the manufacturing units to Vietnam, China and in the south asia.

Nike is the most valuable brand for sports in 2018. Its revenue in 2018 is $36 Billion with net income of $1,973M and having a workforce of nearly 73,000. The stock price of Nike is $72.63 on NYSE in 2018.

Weakness of NIKE in SWOT Analysis

Nike is very vulnerable in terms of market diversification. Look at the numbers in 2018 42% of the revenue is coming from the US market only rest is from apart from US. Situation lead to an over dependence on the US market.

All of the manufacturing plants of nike are outside the US. The labor unfriendly situation can destroy the brand image of nike. To maintain this they have to overlook the conditions of their manufacturing units.

As most of the goods of nike are exporting from one country to another, so to survive in the retail business competitive pricing is the main factor to looked after.

Opportunity of NIKE in SWOT Analysis

Developing new and innovative products is the best opportunity to focus. To develop new products for the customer and engage them with the brand is the best bet they can play with.

There is an opportunity to create high end products such as sunglasses, jewellery and high end sportswear. High value items gives high profit margins and returns as well.

Sports is an integral part of the lifestyle. Consumer is more fashionable than in the past, he buys a sportswear but it is not necessary he uses them in sports. So developing the product such as stylish sportswear is the biggest opportunity for nike.

There is a whole new opportunity to sell online. They can sell it directly to the customers, they can do it directly by making an e-commerce store or they can do it by partnering with amazon, ebay and walmart in the US and global market.

They can take the lead in the high volume markets like India and China, where they can sell their products at lower prices and work on the low profit margins with high sales.

Nike has a whole new opportunity to make the 100% recyclable products because there is an increased demand of the eco-friendly products in the market. Nike can take a lead into this and grab this opportunity wisely.

Threats of NIKE in SWOT Analysis

There is an intense competition in the market by having the players like puma and adidas. Nike has to maintain competitive pricing in the market and maintain its position as a market leader.

There is a huge pump in the sales of counterfeit products due to an increase in the number of consumers shopping online, so nike has to deal with it effectively to aware the customer about the original products.

Nike has its manufacturing units outside the US, it has to deal with the different currencies and watch closely on the costs and margins of the products. It can lead them into the loss due to the fluctuation of currencies in international trade.

Categories
Strategy

Shotgun Approach in Marketing

If we look at the marketing techniques to target users, we can classify them into two basic techniques. First one is “Shotgun Approach” and the second one is “Rifle Approach”. Both are used by companies to get the attention of customers and make their business stand out from other competitors. While making a brand, it is very essential for an organization to effectively get attention and awareness of their customers & target them in a way that they(organization) get maximum benefits out of it.

What does Shotgun Approach means in marketing?

Shotgun approach, is a principle where advertiser aims to cover a large population of users as possible and hope that organization will get maximum amount of sales.The main focus in this approach is on the product rather than on the audience that we are targeting. The product features that we display in the advertisement will be generic and appealing to the generic audience.

Shotgun approach is a mass marketing approach it will target a large audience wherever possible. I would take two Examples each for online & offline. In online, advertisers used to buy the ads over youtube trending videos & high traffic websites and for offline marketing advertisers used to buy spaces on the crowded areas billboards.

Features of Shotgun Approach:

  1. There is more focus on reaching out to the maximum audience rather than ROI 
  2. As Target Audience is broad, there is an improvement in the brand visibility on multi-channels.
  3. The product features and advertisements will be generic.
  4. Huge Marketing Budget is needed

Examples of Shotgun Approach:

  1. Netflix
  2. Paypal
  3. Coca Cola
  4. Colgate
  5. Walmart
  6. IKEA
  7. UBER Eats
  8. Patreon

What does Rifle Approach means in marketing?

In context of rifle approach, organizations will segment its audience in the specific groups and make efficient use of marketing resources in order to achieve a specific objective. It is also known as one to one approach. In this organization believe that there is a different wants and needs for each user, they need to be treated like individuals. So that is why according to rifle approach organization will cater to the needs of the customer at an individual level.  

Features of Rifle Approach:

  1. The rifle approach generates more loyal customers.
  2. Sufficient data is needed of the targeted audience.
  3. Very helpful for the organizations which has very less resources.
  4. Organizations can make use of their resources appropriately.
  5. It involves direct marketing strategies.
Categories
SWOT Analysis

SWOT Analysis of McDonald’s

Today we will discuss about the McDonald’s swot analysis, we will take a look at strengths, weaknesses, opportunities, and threats of the world’s largest fast food chain brand. 

About Mcdonald’s

Mcdonald’s is serving the best burgers to americans’ since 1940’s. Founded by Richard and Maurice McDonald’s in a city located riverside-San Bernardino, California. They kicked off by selling hamburgers at the stand. When Ray Kroc see their systematic way of making the burgers in the year 1955. He joined them as the franchise seller and after some years he purchased the restaurant from the McDonald brothers. 

In the year 2014 it had 36,528 restaurants in 119 countries with almost 4,20,000 personnel employed, serving locally-relevant food and drinks at an affordable price. The food menu includes a variety of burgers(Veg and Non-veg), starters(Chicken mc-nuggets, French Fries, sandwiches etc.), ice cream and shakes. Mcdonald’s have qualified independent vendors which supplies the raw material to the franchise. Vendors have to stick to the policies to qualify for the hygiene and taste. 

Mcdonald’s works on the franchise model, In 2014, 81% of the McDonald’s outlets were owned and operated under the franchise model. It generates cash at multiple levels first for at each and every product sold the McDonald’s get a royalty share, they charge a franchise fee from the owner in turns they give them equipment and decor items interior and exterior. The place is owned or rented by McDonald’s itself. Owner is just an employer of the restaurant he generally looks after the staffing. The prices of the items is decided at the company level.

Strengths of McDonald’s 

The company’s strength is focussed approach to capture a market and wide range of product development. That is totally the main factor that is contributing to the company’s success and make them a leader in this market segment. McDonald’s Strengths in the SWOT Analysis are as follows:

  • It has a global brand presence in more than 120 Countries. That makes it the most recognizable brand in the industry after subway.
  • It has a wide range of products, starting from burgers, smoothies, shakes, ice cream and snacks items vary from place to place.
  • The variety of food weather you’re eating it in america or in europe the taste for both of them will be the same.
  • It provides the food items according to the region, like in india the consumption of non-veg items are relatively low. So they have designed the different menu for vegans, it includes Mcveggie.
  • One of the largest fast food chains in the world.
  • Income of Mcdonald’s is diversified in 120 countries. That doesn’t make them to rely on one place for the earnings.

Weakness of McDonald’s

The McDonald’s weakness is due to the internal strategic factors and the competition in the market. They can be handled, if the company tries to tackle these in a strategic manner. McDonald’s Strengths in the SWOT Analysis are as follows:

  • There is negative publicity about the products that mcdonalds sell are fast food and contains a high amount of fat, carbs, salt and sugar. Due to which there is the trend of obesity in children.
  • The US market for the burger outlet is almost saturated. So McDonalds have to look for taking its product internationally to other countries, which involves cultural and economic challenges.
  • The dividend growth rate has been slowing down there is potential for that the investors will opt out from the McDonald’s.

Opportunities of McDonald’s  

There are an ample number of opportunities in the market which McDonalds can implement to get a sustainable development in the future. McDonald’s opportunities in the SWOT Analysis are as follows:

  • There is an opportunity for the international expansion for Mcdonald’s.
  • Can start the premium products at some of its franchise to check whether there is a change in the customer demand.
  • Can start developing the supply chain for the related products in the market so that they can generate revenue from other segments as well.
  • Can start selling the products which are giving health proposition to the customers.
  • There is a lot of potential by designing the customer centric campaign to add value proposition to the brand.
  • Focus on the opportunities to expand in the underdeveloped nations
  • Use corporate social responsibility and reducing the impact on the environment and use it as a competitive advantage to attract the customers.
  • Company can expand more in the caffeinated beverages industry and can be a direct competitor of starbucks in the caffeinated beverages segment.
  • Propose a joint venture with the supermarkets to sell the franchise in there marketplace.

Threats of McDonald’s 

  • Government policy on banning ingredients such as MSG(Monosodium Glutamate).
  • The competition in the market is very high, the market is more saturated and intensity of competition is high
  • In the new product segments the company have to compete with the market leaders such as Starbucks and Subway.
  • The customer nowadays are health conscious they are more lean towards the products which are healthy.
  • Most of revenue of McDonald’s is dependent on the U.S. market so in the recession there might be trickle down effect on the revenue.
Categories
Strategy

Concentrated Marketing

In this process of marketing strategy the company make efforts to design a product for a specific set of consumers. Concentrated marketing works effectively for companies with limited resources. It enables them to define a small group of target audience and make the most effective and competitive product, which will cater the need of that small group of segment. It will target a smaller group of people because they have a similar wants.

Features of Concentrated marketing:

  1. This strategy helps small businesses to focus on a smaller group of segment and catering the needs of that segment by making specialized products for them only.

  2. Mostly the strategy is implemented in small firms

    The marketing strategy will be on a target group of customers and not any traditional marketing strategy such as mass advertising and mass distribution will not be used to market the product.

    The optimal use of resources would be there, as the activities which we are doing are concentrated on one target segment.

  3. Due to the narrow targeting there are very less chances to lose a customer. In turn they can build a loyal customer base by developing a product that the customer needs.

  4. The company need to be the market expert to get into the niche market:

    As company will target the narrow audience so they have to be specialized in the core of the product.

    As the customer will want the more extra features to be added in the product so the company has to be good at adding benefits to the product.
      
  5. There is no difficulty to find these kind of segments because these are ignored by most of the larger firm and you can take a competitive advantage of it and can make a targeted brand to satisfy the needs of the customers.
  6. There is very less opportunity to scale the business and acquire larger customer bas. It would be difficult to increase the size of the business.
  7. Per unit profit can be maximized by providing the additional benefits to the customers. 

Example of concentrated marketing:

A company might market a product to target a specific age group of kids audience, or a set of fitness lovers who are living in a metropolitan city, or a specific girl teenagers. These all are the examples of the smaller targeted groups who can be targeted in the future for selling a product. 

Categories
Startup

Start Up, Startup or start-up? Which of the spelling is correct and why?

Which is correct: startup, start up or start-up?

Startup is a word that is corrected to Start-up in most of the writing script. It originated from the word “Start up” in 1550 which is originally a verb later it is as a (startup) noun in the Vernacular. It is much more like a Teenager or teen and e-mail or email. Three of them are right and can be used interchangeably and  evolves with time.

Startup/Start-up is a business entity which is in at the introduction/Ideation phase. As it is a business that is in the ideation phase they have to have the capability to nurture the idea, manage the resources and organise them in a way that it will give maximum output. 

Here is a list how professional handle it:

Startup

New York Times
Financial Time
Inc.com*
Economic Times

V/S

Start-up

Financial Time
Merriam-Webster
New York Times
Oxford English Dictionary
Random House Dictionary


*https://www.inc.com/startup