SWOT Analysis of NIKE

NIKE, INC. JUST DO IT !
Deals in athletic shoes, apparel, sports equipment and Accessories
Listed on New York Stock Exchange(NYSE).
Founded: 1972
Headquarters: Beaverton, Oregon United States
CEO and President: Mark Parker
Co-Founder: Bill Boverman
Industry: Sports wear and sports equipment
Corporate Records: [Finance] For FY 2006
Net Income: $1.392 Billion
Total Revenue: $15 Billion
Total Employees: 26,700
Market Share: 47% in footwear industry
Market Capitalization: $13.4Billion

STRENGTHS

1. Management is destined and focused on creating performance opportunities fro those who could benefit.
2. There has been a 380% increase in market capitalization of Nike.
3. Wide range of products including tract and field, football, basketball, golf, etc.
4. Products are promoted by celebrity athletes like Tiger Woods, Roger Federer, Rafael Nadal and many others.
5. More than 500 locations in the US, Middle East, and Asia Pacific Region.
6. Manufactures 30% lighter shoes than their competitors making them preferred by consumers.
7. Nike Grind Program is the company’s recycling program meant for eliminating wastes during production.
8. High performance fabrics and FIT(Fitness Information Technology) technologies are used to manage temperature and moisture which is helpful for athletes to compete in any condition.

OPPORTUNITIES

1. Dynamic consumer behavior regarding fashion brands means that Nike would be an ongoing concern.
2. To develop products such as jewelries, sunglasses, etc.
3. Developing countries like India and some of the Asian countries are also keeping their fingers crossed because increasing disposable income enhances chances of corporate growth.
4. Market share and market capitalization of adidas and reebok is less than that of Nike’s which is 47%,13.4Billion
   Adidas 6%,$8.4Billion
   Reebok 16 %,$ 4Billion

WEAKNESSES

1. Offers mostly high priced products or the price range is quite high, normally the retail starts at $100.
2. Online purchase is not preferred because the rates are even higher.
3. Higher percentage of market share depends upon the foot wear so eroding of the market share could bring down the company’s name.
4. Huge shipping and insurance cost creates hindrance in imports.

THREATS

1. Numerous competition from every sports fashion brands.
2. Reebok and Puma are giving high geared competition in sports industry.
3. Reebok is the second largest shoe and sports clothing supplier .
4. Not able to stop illegal manufacturing of shoes by some other companies with the same brand nameLong term debt has increased from $380.4M in 2006 to $420.9M in 2007 .

SWOT ANALYSIS

SWOT Analysis: Lesson
Strengths, Weaknesses, Opportunites and Threats (SWOT).


SWOT analysis is a tool for auditing an organization and its environment. It is the first stage of planning and helps marketers to focus on key issues. SWOT stands for strengths, weaknesses, opportunities, and threats. Strengths and weaknesses are internal factors. Opportunities and threats are external factors.

In SWOT, strengths and weaknesses are internal factors. For example:A strength could be:
1 Your specialist marketing expertise.
2 A new, innovative product or service.
3 Location of your business.
4 Quality processes and procedures.
5 Any other aspect of your business that adds value to your product or service.

A weakness could be:
1 Lack of marketing expertise.
2 Undifferentiated products or services (i.e. in relation to your competitors).
3 Location of your business.
4 Poor quality goods or services.
5 Damaged reputation.

In SWOT, opportunities and threats are external factors. For example: An opportunity could be:
1 A developing market such as the Internet.
2 Mergers, joint ventures or strategic alliances.
3 Moving into new market segments that offer improved profits.
4 A new international market.
5 A market vacated by an ineffective competitor.

A threat could be:
1 A new competitor in your home market.
2 Price wars with competitors.
3 A competitor has a new, innovative product or service.
4 Competitors have superior access to channels of distribution.
5 Taxation is introduced on your product or service.

A word of caution, SWOT analysis can be very subjective. Do not rely on SWOT too much. Two people rarely come-up with the same final version of SWOT. TOWS analysis is extremely similar. It simply looks at the negative factors first in order to turn them into positive factors. So use SWOT as guide and not a prescription.

Simple rules for successful SWOT analysis.
1 Be realistic about the strengths and weaknesses of your organization when conducting SWOT analysis.
2 SWOT analysis should distinguish between where your organization is today, and where it could be in the future.
3 SWOT should always be specific. Avoid grey areas.
4 Always apply SWOT in relation to your competition i.e. better than or worse than your competition.
5 Keep your SWOT short and simple. Avoid complexity and over analysis
6 SWOT is subjective.

Once key issues have been identified with your SWOT analysis, they feed into marketing objectives. SWOT can be used in conjunction with other tools for audit and analysis, such as PEST analysis and Porter's Five-Forces analysis. So SWOT is a very popular tool with marketing students because it is quick and easy to learn. During the SWOT exercise, list factors in the relevant boxes. It's that simple. Below are some FREE examples of SWOT analysis - click to go straight to them

Do you need a more advanced SWOT Analysis?

Some of the problems that you may encounter with SWOT are as a result of one of its key benefits i.e. its flexibility. Since SWOT analysis can be used in a variety of scenarios, it has to be flexible. However this can lead to a number of anomalies. Problems with basic SWOT analysis can be addressed using a more critical POWER SWOT.