The pandemic’s impact is going to last even after a vaccine has arrived, and Nike will have to consider how the pandemic has changed consumer behavior around the world to manage its sales and profitability successfully. Nike, Inc. is listed on NYSE with offices located all over the world. Nike, despite being the world’s biggest sports shoes and apparel. Unequal Wealth Gap. Nike’s revenue in 2019 reached $39.1 billion compared to $36.4 billion in 2018. Apart from the growing competition in the industry, it also shows the company’s increased focus on marketing. Nike’s SWOT Analysis – Recommendations. The company has outsourced all its production but still maintains strong control over the quality of raw material used and that of the final products. Category Sports; Show more Show less. ... Tesla SWOT analysis 2020 - Duration: 11:09. Nike, Inc. is an American multinational corporation headquartered in Oregon, USA. The future of the company depends heavily on innovation. Players Profiles. It’s to easy to understand and explain to others.. Further, the product was introduced to common customers in late 1980 (Nike Air Jordan, 2018). Coupled with its iconic “Swoosh” logo and its equally catchy tagline, Nike’s strength is that it has emerged as a “Can Do” company. SWOT Analysis of Adidas. As Nike’s focus on customer experience has grown, the company is providing its customers with an omnichannel experience. Their dependence on digital technology has also grown. However, none of the producing factories accounted for more than 10% of footwear production in the year; the largest factory accounted for only 9% of the total. Revenue is the top line item on an income statement from which all costs and expenses are subtracted to arrive at net income. can i know the name? If the company successfully resolves the problems related to organizational culture, it could find its growth momentum increasing. The result was that Nike’s operating expenses grew and so did its profits. Since Nike is an early entrant in this area, it will reap the benefits of its investment in cloud technology and digitalization faster than its rivals. Most of Nike’s apparel production took place in China, Vietnam, and Thailand. One of its core strengths is product quality and also one of the leading factors that differentiates Nike from the other brands. Table of contents. Technological innovation is an area Nike must take very seriously. There are several types of legal threats and compliance in all areas including labor and product quality is essential for Nike to avoid hefty fines. Currently, Mark Parker is the CEO of Nike. The growing competition in the industry is an important reason Nike is spending more than ever on marketing and customer experience, driving operating expenses higher. There were 384 retail stores of Nike operational in the US as of 2019, including Nike factory stores, brand inline stores, Converse and Hurley stores. He is passionate about analyzing and writing about businesses. While Nike has grown its push towards direct to consumer sales, it has depended traditionally on retailers and wholesalers to achieve sales globally. Nike has decided to become a digital-first company. Nike is a very competitive organization. 334 factories in 36 countries produced Nike brand apparel in 2019. As a sports shoes and apparel brand, Nike enjoys the strongest popularity of all the brands in the industry. However, the company has also faced legal challenges related to the treatment of its employees. Taking place in Tokyo this July, the 2020 Olympics are predicted to be the hottest on record. Corporation, Adidas, ASICS, Lululemon, Anta, Under Armour, and New Balance are some of the major competitors of Nike. SWOT Analysis. Check Also. The pandemic has brought a major and long lasting impact in terms of consumer behavior and digital technology will become the primary driver of growth for Nike and its rivals. However, the role of technology in Nike’s ecosystem has grown exponentially in the latest years as the company has moved to offer an omnichannel shopping experience to its customers. The abbreviation represents strengths, Weaknesses, Opportunities and Threats. 2. This component of the SWOT Analysis deals with the internal strategic factors that support business development and competitiveness. The following strengths are the most notable in the case of Nike Inc.: 1. While Nike has already benefited in this area by moving its business to the clouds earlier than its rivals, the company can gain significant leverage by sustaining its focus on technological innovation in the coming years. Strong brand image 2. 1. At the Atlanta Olympics, Reebok went to the outlay of sponsoring the games. As of 2020, Nike is one of the leading brands in the lifestyle and retail sector. i want to know the publisher of this analysis, Date of Publish : Dec 17, 2018 Author : SG, Quick and to the point. Apart from that, Nike’s debt is well covered by its operating cash flow. Nike is headquartered in Beaverton, Oregon, USA. October 23, 2020 8 . Roughly every four years, Nike throws a World’s Fair for sport tech, showcasing the brand’s latest innovations in gear ahead of the summer Olympic Games. It also aims to examine the opportunities the company should explore and the threats it should keep an eye on. “Income before income taxes decreased 40% for fiscal 2020, primarily due to lower revenues and gross margin resulting from the impacts of COVID-19, as well as higher selling and administrative expense. Overall, the level of competition in the shoes and apparel industry has grown very fast during recent years, which has led to a higher focus on marketing and product quality and innovation. The company is enjoying strong financial performance over the last several years driven by its focus on product quality, innovation, sustainability and customer experience. Nike, Inc. is an American multinational corporation. Through the interviews, it was established that Nike did have a toxic working environment, where sexual misconduct was rampant. Roughly every four years, Nike throws a World’s Fair for sport tech, showcasing the brand’s latest innovations in gear ahead of the summer Olympic Games. There’s has been a great wealth distribution gap between the upper class and lower class. Learn more. The company specializes in athletic wear, providing footwear, apparel, athletic equipment, and accessories. Nike SWOT Analysis Presentation. Nike is the most valuable brand for sports in 2018. Nike’s leading strength is the brand equity the company has built over the years. This would help the company improve its employees’ performance and organizational productivity. While the counterfeits can be easily identified in most cases, they can still hurt Nike’s sales and revenue. Gupta understands how to create and implement business strategies. He graduated with a Hons. While the company faced several controversies in the past related to supply chain management, with time it has improved its supplier management practices a lot with a clear focus on ethics, quality, and labor management. People stopped shopping for the nonessential items as the pandemic spread through various markets and regions. It also aims to examine the opportunities the company should explore and the threats it should keep an eye on. In the year 2020, about 41% of Nike’s sales came from the U.S, while the rest of 59% came globally. Cloud technology has been driving swift changes across Nike and all functions including manufacturing, marketing, and sales, and relying on it to grow operational efficiency. Just like the retail industry technology has been driving sweeping changes in the sports shoe industry as well. All of them accounted for more than 10% of the company’s footwear production during the year. finding a solution against these environmental issues. ... Bata, Reebok, Nike, Adidas, etc. It designs and sells shoes for a variety of sports including baseball, golf, cheerleading, volleyball, tennis and football. The key theme in this article is that Nike is currently at a stage where it has to either diversify into other segments or risk placing all its eggs in one basket. Most of the Nike brand footwear production took place in Vietnam, China, and Indonesia. 4.3 Production, Revenue (2015-2020) 4.4 SWOT Analysis. Not just an excellent revenue growth rate, but the company has also maintained strong profitability. Today, we’ll study the swot analysis of Nike that how internal factors are impacting the company. The dependence of customers on digital sales channels has grown but the company might take some years till it has achieved an equal proportion of sales from both channels. Their number was reduced to 338 in FY 2020. Technology has remained a key driver of change in the sports shoe and apparel industry and even more so in the last five years. Nike SWOT analysis paper. Nike’s approach to marketing is considered highly authentic. Thank you ! Selling and administrative expenses remained higher as a percent of revenues, reflecting investments in data and analytics capabilities, digital commerce platforms and an initial investment in a new enterprise resource planning tool to accelerate Nike’s end-to-end digital transformation. SWOT ANALYSIS: Strengths. Using for my management program – Leadership & People Management. Nike’s growth in the recent years is a result of its consistent focus on product quality and growing investment in technology. There are various strengths, weaknesses, opportunities and threats of Adidas. The result was that it brought down Nike sales, and its revenue was severely hurt. While its leading rivals including Adidas are also heavily focusing on quality, Nike’s position and image are distinct from the others. I am guessing the presentation is for school? Nike has retained its leadership position in the shoe industry through a consistent focus on quality and in the light of changing customer preferences, it has modified its business strategy to maintain its lead. The product was first launched for legendary basketball player Michael Jordan in 1984. This article analyses the company using the SWOT Methodology. The brand has excellent marketing campaigns and, Recently, a former employee accused Nike of, Multiple female employees reported that they had complained to the HR but saw no action being taken from their part. The effective tax rate in FY 2018 was 55.3% which was 13.2% in the year 2017. This is a great threat Nike is facing and it also affects its net income by 54% which is a great offset for the revenue growth. Nike markets its products globally through a diverse spectrum of advertising and promotional programs and campaigns, including social media, mobile applications, and online advertising. Its market-leading position and global dominance are backed by the strong brand equity the company has built. Economic fluctuations in the global market can also hurt Nike’s sales and profitability. While the situation has improved in recent years, its HR related issues are not entirely over, and the company should gain higher employee satisfaction through inclusion and diversity programs. How Does Credit Karma Work and Make Money? The brand is dependent mainly on one market for the highest portion of its sales and revenues. Needless to say, the most important strengths are Nike’s powerful brand and low product cost. View Nike SWOT.pdf from ECONOMICS MISC at Bayview Secondary School. NIKE, incorporated on September 8, 1969, is engaged in the design, development, marketing and selling of athletic footwear, apparel, equipment, accessories and services. Thank You. Puma, V.F. Although the brand is still in debt, the next few years look promising. Before we begin in-depth on the SWOT analysis of Adidas, let us understand a bit of the background of the company Adidas. It was able to manage strong sales globally with the help of cloud technology and digital sales and distribution channels during the pandemic. Coronavirus severely hurt economic activity across several markets and various industries, including travel and fashion. in English literature from BRABU and an MBA from the Asia-Pacific Institute of Management, New Delhi. Nike is very vulnerable in … who wrote this article ? Nike suppliers follow a code of conduct that ensures they are managing their labor force and sourcing raw materials responsibly. The women were left devastated and felt unsafe while working at Nike. ... Tesla SWOT analysis 2020 - Duration: 11:09. These expenses grew to $3.75 billion in 2019 from $3.58 billion in 2018. While its net income also slipped, the company has still performed well during the crisis. Over the next several years, technology can also help Nike widen the gap between itself and its rivals. Nike air Jordan is one of the most famous and expensive basketball shoes and active clothing line. Nike’s sales from direct to consumer channels have increased in 2020. Nike SWOT Analysis Presentation. The company’s operating expenses, including the amount spent on technology and marketing and sales, have continued to increase year on year. Hi Divya, Most of the information is from Nike’s annual report and few points have embedded hyperlinks for references. The article was enlightening. The company generated 43% of its Nike brand revenues from the North American market alone in fiscal 2019, which fell to 41% in fiscal 2020. Nike did not. From releasing new product lines to building new brands, to outsourcing, and establishing a global presence alone is an extraordinary achievement. Due to the intense competitive pressure, Nike has also started investing more in customer experience and technology. while on the one had, it helps the company deliver superior customer experience, on the other it helps the company grow its profit margins. While Adidas has advanced fast in recent years and poses a formidable challenge before Nike, the industry leader has still maintained a strong edge over its rivals. In fiscal 2020, Nike’s gross margin reduced mainly due to the impact of Coronavirus falling to 43.4%. However, while the company is trying to get rid of the counterfeit problem by expanding its reach through direct to consumer channels, counterfeits still remain a difficulty for the brand. The company must focus on building an organizational culture that brings higher creativity and fosters innovation. Nike is the market leading brand of sports shoes and apparel. While Nike’s core market, the United States, is the main source of revenue for the brand, the impact of a recession or a pandemic on the US economy will also hurt Nike sales and profitability. I am glad you liked our analysis. Another area where investment can be highly profitable for Nike is its HRM strategy and organizational culture. Legal and regulatory pressures are also slowing the growth rate of Nike. Its faster and robust growth is also a result of the heavy focus on marketing. The CEO ensures that Nike will help to contribute. Several sporting teams are on the brink of collapse. Your favorite Nikes might be made from forced labor. Due to the outstanding quality and design of Nike shoes and apparel, Nike products are the favorite of the young customers worldwide. Its gross margin grew 90 basis points mainly due to higher full-price average selling price (ASP), on a wholesale equivalent basis, favorable changes in foreign currency exchange rates and growth in NIKE Direct. Chapter 5. As the pandemic’s impact has been the strongest on the US market, its impact on Nike’s revenue has been harsh since the US is Nike’s largest market. However, based on the increased focus of the company on DTC sales, it may not take Nike very long to be there. October 17, 2020 . However, the decline can be attributed largely to the fall in sales in the fourth quarter due to the pandemic. In the past too, Nike faced some serious allegations and legal scrutiny over its treatment of its supply chain labor force. Business Strategy Hub is your complete guide to business strategies. Like most big companies, Nike has a number of strengths. This article was very interesting. Nike SWOT analysis paper. Superior product quality has led to higher demand and improved sales and profitability. 032c returns to an old corporate strategy favorite – the SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis – to consider Nike’s position and message for 2020, and beyond. The company has experienced growth in its revenue from direct to customer sales channels. very grateful analysis. However, the competitive pressure has kept intensifying and to beat the competition, Nike grew its focus on technology, customer experience, product quality and marketing. Growth in operating expenses hurts revenue as well as gross profits. Some even left their jobs. This SWOT analysis looks at Nike, a global retailer that specialises in sportswear, including shoes, clothing and accessories. Chapter 4. However, Nike has focused on developing its own digital channel rather than depending on others like Amazon. Nike (NYSE: NKE) is the largest brand of sports shoes and apparel in the world with a global footprint. Its focus on product design and investment in R&D have also helped it establish itself as a brand obsessed with quality. Nike’s culture is not as outstanding as several other leading brands in various industries. The company generated around $24.3 billion from sales to wholesale customers in 2020 compared to $26.7 billion in 2019. The gross profit of the company grew to $17.5 billion in 2019 from $15.95 billion in 2018. – SG. Nike’s strengths are the primary drivers of the company’s growth and global leadership in the sports shoes, apparel and equipment market. There’re approximately 75400 people are working for the company by the end of 2020. Xu, V. (2020, March 17). The company is mainly using digital channels for marketing and mixing it with traditional channels and in-store marketing. It was found by, in the communities. Author: S.K Gupta First published: December 17, 2018 Last updated: Oct 06, 2020. A few years back, the company was hit with a lawsuit by female employees related to gender pay discrimination. In 2020, its revenue during the fourth quarter took a hit due to the pandemic, but the yearly revenue remained $37.4 Billion. Four leading contract manufacturers accounted for 61% of the company’s footwear production in 2019. The company was founded on the principle that it would make shoes for anyone who could walk or run and this has been the guiding philosophy behind Nike. This study is conducted to assess Nike, Inc. reviewing the four major aspects of concern. 1 shoemaker. Apart from improved customer experience, Nike’s investment in technology will also help it gain stronger sales in the international markets. Nike’s core market is the US, which accounts for its highest sales and revenue. The women were left devastated and felt unsafe while working at Nike. Among its leading competitors are Adidas, Under Armour, and others, including Fila and New Balance. Nike’s popularity rests on the design and quality of its products which are produced by independent suppliers and contractors. While the company took several significant steps to resolve the problem, it has not been able to establish a culture that fosters higher inclusion and creativity. Search for: Log In . Comments are turned off. The entire controversy has significantly affected the company’s image. Nike is a highly competitive brand just as it is highly customer centric. Regulations related to consumer data have also grown . However, due to the success, Nike has gotten the company now provides athleisure wear as well. It’s a great help. Nike’s DTC revenue increased to $12.9 billion in 2020 from $12.3 billion in 2019. Here’s a detailed breakdown of Nike SWOT analysis. The pandemic has had a strong negative impact on the sales and revenue of businesses like Nike leading. Its gross margin in 2019 grew to 44.7% from 43.8% in 2018. Phil Knight (Founder and CEO) is frequently quoted as saying that ‘Business is war without bullets.’ Nike has a healthy aversion of is competitors. It pulled out of Amazon’s e-commerce platform in 2019. Nike uses AWS to serve its customers globally. Nike’s primary goal is to supply athletes with exceptional products and wearable that aids them in better sports performance. Through this SWOT analysis of Nike, you will be able to understand the business model of the brand. Learn more about Amazon in this SWOT analysis: SWOT ANALYSIS OF AMAZON 2020 STRENGTHS: Strong brand equity: Amazon is the undisputed leader in the e-commerce sector. Its sales from direct to customer channels have also experienced faster growth in recent years. The interest payments on its debt are also well covered by EBIT. While legal threats are mostly an essential barrier, regulatory threats may sometimes create major pressures that can hurt expansion and growth plans of large businesses. Nike, Inc. is an American multinational corporation headquartered in Oregon, USA. Contradicting Strategies: Nike pledged to shift all its facilities to 100% renewable energy with net-zero carbon emissions under the “Move to Zero” scheme. The Puma SWOT analysis examines where it is in the market these days as well as how Puma has managed to stay relevant all these years. The US is the largest market for Nike and in 2019, it accounted for around 41% of the net revenue of the company. The SWOT and PESTEL analysis report of Nike Inc. presents the complex internal and external factors affecting Nike's brand, its operations, business model, market strategy and growth trajectory. Its net revenue grew from $36.4 billion in 2018 to $39.1 billion in 2019. Table of contents. It designs and sells shoes for a variety of sports including baseball, golf, cheerleading, volleyball, tennis and football. The company generated $16.1 billion in FY 2019 from the United States market and in 2020, $14.6 billion. Thanks Taku, I am glad you liked our analysis. Nike Threats in SWOT Analysis. At the Atlanta Olympics, Reebok went to the outlay of sponsoring the games. However, its competitors are also going to play catch-up. 112 factories located in 12 countries supplied Nike shoes in 2019. Another major threat before Nike is that of counterfeits. Deliveroo Business Model | How Does Deliveroo Make Money? From 2016 to 2020, Nike’s net revenue has grown by around $5 billion. He likes to blog and share his knowledge and research in business management, marketing, literature and other areas with his readers. In 2020, Nike’s revenue from direct to consumer sales improved as compared to the previous year. Apart from bringing products that fit into their customers’ lifestyles, Nike has also altered its sales and marketing strategy to suit its customers’ tastes. It enjoys one of the most impressive profit margins in the entire shoe industry. SWOT Analysis of Nike in 2020 | Nike SWOT Nike is an American multinational company that involves itself in the plan, expansion, creation, and marketing and sales at the global level of various products like footwear, apparel, equipment, accessories, and services. Apart from that, it is relying heavily on cloud technology to manage the digital experience it offers. Last Updated 10 Aug 2020. Words 1144 (4 pages) Views 381. Puma SWOT analysis 2020: Case Study in 4 Steps. Category Swot Analysis. The growth of Nike can also be attributed to its focus on quality and investment in technologies that have helped it consistently improve the quality of products and customer service. Comments are turned off. Remember me . Dorrene, Thanks for your positive feedback, I am glad you liked it. 365 Careers 68,713 views. Its focus on customer experience has only increased with time resulting in growth in brand equity and profitability for the brand. The global growth and popularity of the company is also driven by its focus on product quality. While organizational culture is a critical pillar of organizational success, this is an area where Nike has been unable to achieve significant progress. However, in fiscal 2020, while Covid-19 has hurt Nike’s business, the company has managed to control the overall impact to a large extent. Apart from its great quality products, Nike is known for its excellent marketing strategy and techniques that have helped the brand gain a distinct position and identity in the global market. Customers’ expectations and preferences have changed fast in recent years. The product was first launched for legendary basketball player Michael Jordan in 1984. However, this was more than offset by a decline of 820 basis points in the fourth quarter of fiscal 2020, primarily due to the impacts of COVID-19. Lack of Diversification: Nike’s over-dependence on sporting apparel or lack of diversification is a major weakness. The biggest strength of Nike is that it is an extremely competitive organization with its approach of “Just Do It” slogan for its brand epitomizing its attitude towards business. This creates the perception that Nike is not committed to addressing climate change and its pledge is just a marketing stunt. Nike is the world’s no. Another major benefit for the brand is that it will help Nike reduce its dependence on retailers and distributors. The company enjoys the strongest margins in the sports shoes industry. Hey, who is the author of this report and what year was it finalized. It was found by Bill Bowerman and Phil Knight in the year 1964. Global GOLF CLUBS Market Analysis by Regions. Thank you Gargi, I have been through business school not so long ago, so I can totally relate to you. SWOT analysis of Nike. Essay type Analysis . However, in fiscal 2020, while Covid-19 has hurt Nike’s business, the company has managed to control the overall impact to a large extent. Nike therefore needs to grow its focus on the other economies and particularly the emerging economies that are seeing faster growth. Samsung SWOT Analysis 2020 | SWOT Analysis of Samsung, Disney SWOT analysis 2019 | SWOT Analysis of Disney, Amazon SWOT 2020 | SWOT analysis of Amazon, Nestle SWOT Analysis 2019 | SWOT Analysis of Nestle. The SWOT analysis of Adidas shows the TOWS matrix of one of the strongest sports brand in the world. Nike was able to manage the impact of the pandemic to a large extent successfully due to its investment in technology over the last few years. Did you find this article interesting? Multiple female employees reported that they had complained to the HR but saw no action being taken from their part. Luxury Swimwear Market SWOT Analysis 2020 by Players – Nike Inc, Perry Ellis International Inc, Swimwear Anywhere Inc., Adidas AG, Dick’s Sporting Goods December 9, 2020 Exltech Luxury Swimwear Market Overview: According to sources, the previous CEO Mark Parker has once accepted that Nike was facing internal challenges related to organizational behavior. Its growth remained obstructed in many areas in the past and technology has helped it find new high growth segments. ... Adidas used to be the main apparel sponsor for the NBA, however, it lost the contract to Nike. Cloud technology is driving faster growth for Nike in various areas including marketing and customer service. This has led to superior customer experience and growth in sales from the direct to consumer channels apart from increased customer loyalty. 032c returns to an old corporate strategy favorite – the SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis – to consider Nike’s position and message for 2020, and beyond. Category Swot Analysis. It is listed on the NYSE and is headquartered in the United States. It has been able to successfully position itself as the brand for athletes. Read out this article, to get an understanding of where Adidas stands. The abbreviation represents strengths, Weaknesses, Opportunities and Threats. However, the company has taken a very innovative approach to market its brand. 365 Careers 68,713 views. These benefits were partially offset by higher production costs. Nike did not. Sexual Harassment: Former female employees also pointed out that sexual harassment and misconduct was very common in the company. October 19, 2020 9 . If the crisis discourages sporting events for longer, Nike’s losses can be catastrophic. However, the company is also reaping the benefits of being an early mover in the industry. It is a well-recognized brand in most corners of the world. Company successfully resolves the problems related to supply athletes with exceptional products and wearable that aids them in sports... Industry as well shoes in 2019 margins in the United nike swot analysis 2020 market and in.. % of its supply chain management strategy whose focus is on quality as well this is American! That of counterfeits the information is safe and will never be shared 26.7! And Indonesia well during the pandemic has discouraged physical interaction and gathering sporting! Knight in the United States Last updated: Oct 06, 2020 take Nike very long to be the on! View Nike SWOT.pdf from ECONOMICS MISC at Bayview Secondary School name, email, and its rivals to! 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