SWOT-Analysis-of-Nike

SWOT Analysis of Nike: An Iconic Brand

The SWOT analysis of Nike would help us identify the brand’s position as one of the top three players in the world of sports shoes.

Over the years, the brand has grown exponentially by introducing athletic footwear, sports equipment, and footwear. In this guide, we’ll be examining the brand carefully via SWOT analysis.

Strengths in SWOT Analysis of Nike

Let us start by examining the strengths of Nike. Perhaps the biggest and most notable strength of Nike is its electric, almost contagious attitude towards business.  This is mostly a result of its adrenaline-packed “Just do it” slogan that has made Nike one of the most recognizable athletic-wear brands in the world.

Combined with its iconic “Swoosh” logo, Nike has risen as the number one “can do” company that people reach out to for cool, edgy products. Let’s have a look at some of the major strengths of the company:

Focus on Research and Development Activities

Nike outsources almost all aspects of its production to foreign facilities and does not have to concentrate on a manufacturing outlet of its own. Instead, the company exerts all its focus on other higher-value activities such as research and development which has tremendously saved high labor costs.

Multi-Channel Approach

Nike distributes its merchandise via retail stores using various physical and online channels. Nike owns several retail stores around the world and also distributes its products through independent licensees and distributors. This multi-channel approach has allowed Nike to increase their customer base.

Globally Recognized

Nike has the advantage of being a globally recognized brand that is immensely popular among youngsters and millennials. Over the years, the company has been able to position its brand as a synonymous of resilience and quality. This has made Nike a prime choice for athletes who wish to purchase athletic wear goods.

Weaknesses in SWOT analysis of Nike

Like any major brand in the world, Nike too must make improvements to overcome its weaknesses. Here are a few weaknesses that can be identified using SWOT analysis:

Exclusively Dependent on Footwear

Despite being one of the most well-known brands in the world, Nike is heavily dependent on its footwear business to generate revenue. In today’s ever-so-predictable world, a business should not be heavily dependent on only one segment. In order to succeed, Nike must diversify its brand and focus on apparel along with other necessities.

Negative Publicity

While outsourcing manufacturing aspects are considered as a strength, it has generated some negative publicity for Nike because of poor labor conditions that workers are made to work in overseas. In fact, people have mockingly used the term “Sweatshops” to describe the abhorrent conditions that people work in.

Opportunities in SWOT analysis of Nike

In today’s incredibly competitive market environment, Nike has some incredible opportunities that boost growth. Some of these opportunities include:

Tremendous Growth in Online Retail Channel

Because consumers have shifted towards online shopping, Nike has massive potential to grow from this trend. A similar trend is booming in various parts of the world including Europe and in the Middle East. With its online stores, Nike can further benefit from this trend to increase revenue.

Expand its Reach in India and China

One of the biggest opportunities of Nike is perhaps the emerging markets of India and China were several consumers are adamant about following Western trends and lifestyle. Since the company is deeply associated with segmentation and premium branding, it can work wonders if it starts marketing consumers from different demographics.

Build on its Strong Global Brand Recognition

Nike can expand its reach by taking on and building strong brand recognition.  This can be done by sponsoring global events such as The Olympics or The World Cup (especially soccer or football).

Threats in SWOT analysis of Nike

Despite its strong position in the market, there are a few threats that can be identified using the SWOT analysis of Nike which includes:

Ongoing Recession

Nike consumers are increasingly becoming price conscious because of the ongoing recession. To add to expenses, retailers are also demanding higher price margins. All this has made it tough for Nike to compete with other brands that are offering a lower price cut.

Growth in Counterfeit Products

Unfortunately, there’s been a drastic increase in counterfeit products around the world, especially in the US. It’s been reported that IPR seizures have increased by 25% within a year.

Intense Competition

Nike is a part of perhaps one of the most competitive businesses around the world. It’s competing with several big names such as Puma, Adidas, and Reebok. This obviously means that Nike continuously has to look for innovative ways to outshine its competitors.

Wrapping it up

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