SWOT analysis is the strategic process which incorporates the evaluation of the strengths, weaknesses, opportunities and threats of an organization or the project undertaken by it. Strength refers to the advantage the company has over the other competitors in the industry. Weaknesses are the disadvantage a company has relative to the competitors. Opportunities and threats are external to the business; it is the external chances of improving or facing a trouble in the future. The company chosen for analyzing on the basis of SWOT is Nike Inc. Nike Inc. is one of the world’s leading companies in sports industry. The company was established in the year 1968 in the state of Oregon, United States. It is one of the renowned players in sports footwear, apparel, and equipment and accessory products. Many different athletic brands have been introduced by Nike namely; , Nike Pro, Nike +, Air Jordan, Nike Air, Max Air, Zoom Air, Nike Golf etc. Nike’s SWOT analysis is as follows: Strengths:
Strong management: Nike has attained a brand image worldwide; it has strong managerial capabilities because of which the company has been able to place itself globally. Nike uses a transnational strategy that follows a flexible and decentralized structure of the organization, thus creating a mark in the global world. The company uses its management strategies in such a way that helps it to be innovative, focused, committed and technologically advanced. Therefore, a strong management capability is one of the strength of the company. First mover in E- commerce: Nike was the first company to enter into selling the product through E- commerce. The online products are sold with the help of NIKE ID. The website can be used by the customers to purchase the products and customization is also allowed to certain extent. The customer can purchase the product and can also ask the company to design the product according to his own specification. The first mover advantage is enjoyed by Nike and it helps it to out beat its competitors.
Brand recognition and image: Nike’ logo i.e. ‘swoosh’ and its tag line “Just do it” is recognized worldwide. The brand of Nike is one of leading brand and is recognizable easily by the customers. The logo represents the Greek goddess of Victory. Product range diversity: The Company provides a wide range of product line from footwear to apparel; it has been able tosuccessfully diversify. The customer is given a wide range of footwear range. The company has focused on the creation of the association of its products with the customers worldwide. The fashion is also taken into consideration and Nike has been diversified in the casual segment. Strong control over the supply chain: The Company pursues strong supply chain so as to have fast and ready availability of its products in the market. Strong customer loyalty and innovation: The Company’s main focus is on customer satisfaction and innovation. The company also associates different athletes with its brand so as to build a connection with its customers. It uses different technologies in order to innovate in its product range. Weakness:
Nike Sweatshops: Nike can be taken as an example for an unethical behavior, as it has been accused of using the sweatshop labor that is against the CSR (corporate social responsible behavior), i.e. using the children as their laborers. The company claims to provide top quality products mainly in the sport category but is acting totally irresponsibly towards the society. E- Commerce constraints: The E- commerce facilities are not fully developed all over the world, it is only possible in some parts of United States. Even the NIKE ID has a complicated interface, which makes it difficult for the consumer to interact. Thus, Nike should focus on designing its website in more interactive way. Opportunities:
Globalization: The operations of the company are spread in more than 170 countries, with the advent of globalization; new area can be taken into consideration specially which are untapped. Due to the globalization and easy accessibility of the products, the demand for online shopping has increased. Nike should utilize this opportunity so as to increase its customer base. Increased participation of females in athletics: The active participation of the females in sports can act like a market for Nike. The product range of Nike should focus on women as well in order to expand and capture new customer base. E- Commerce should be used as much as possible throughout the world as it reduces the cost associated with the selling. It should be expanded globally to commercial bases like China and Canada. Threats:
Negative image due to “sweatshops”: The overall working conditions of the factories of Nike are not at all standardized. The issue like human trafficking in a factory in Malaysia was also confronted, showing a negative image of the company. Increasing competition from the competitors: The merger of the companies like Reebok and Adidas has intensified the competition of Nike. Fluctuation in foreign currency and transactions – As Nike operates globally; the fluctuation in currency can affect the profitability and the price of the products of Nike.