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.