Nike: General Characteristics And Swot Analysis

Introduction

Previously known as Blue Ribbon Sports, NIKE is an American sportswear Co having headquarters in Bevatron, Oregon. It had been founded in 1964 by Bill Bowerman a track coach at Oregon’s University, and one of his students, Phil Knight. The primary outlet was opened in 1966. The corporate was renamed Nike in 1978 and went public two years later. Nike has dealers and outlets in more than 170 countries, and its logo that is a curved check took the globe by storm.

Body

Current CEO (since Jan 2020)

John Donahoe

Receiving an undergraduate degree from Dartmouth College and an MBA from Stanford Business School. John Donahoe is President and CEO of NIKE. Before that, Donahoe was one of Nike’s Board of Directors since 2014. He also serves as PayPal’s Chairman of the Board. He worked for Bain & Company for almost 2 decades, eventually becoming the CEO in 1999. H will continue to lead Nike Brand as well as NIKE, Inc.’s global business portfolio that encompasses several brands into a continuous success and growth. Also, he was previously the president and CEO for eBay and Service now.

Managerial Roles

Spokesperson and disseminator

John Donahoe has huge experience in e-commerce and software making him capable of leading NIKE into the digital era. His background in technology-aided him in leading and publicly sharing the corporate plans to design recycled footwear. Furthermore, he spent few weeks in China and Japan in order to gather information about consumers’ relationship with the brand on a global scale.

Leading style

John Donahoe is a democratic leader as he works closely with Nike Inc’s previous CEO, Mark Parker, and a Board of Directors in order to strategically plan NIKE’s roles and seize opportunities as they arise for the corporate.

Environmental Uncertainty Matrix

Nike has a stable degree of change and a complex environment, the nature of the corporate business that is designing athletic footwear guarantees a predictable environment with components that rarely change with time for example materials used in designing. Furthermore, due to a high number of corporates competing in athletic footwear with high-quality products, some of which are Adidas, puma, Reebok, and New Balance, to name a few. NIKE is rather positioned in a complex environment with its competitors coming up with new strategies and tactics to increase their revenues and market share.

Environmental Culture

‘equality isn’t a game but achieving it will be our greatest victory. Until we all win’

NIKE strongly aims to unite people through sports, aspire and inspire people to take actions in their own communities. It is committed to breaking barriers and boundaries for athletes worldwide. NIKE also commits to producing high-quality products with utter respect and importance to the environment and its employees. It aims to focus on sustainability through few projects such as producing gears made of recycled polyester and ground-up shoe parts. NIKE footwear’s key success and growth is due to the fact that they aim to build long-term relationships with their suppliers and form a strong and profound sense of unity. Over 90% of Nike footwear and made by factory groups that they have worked with for over 15 years. They have teams dedicated to sourcing and providing solutions to common issues such as excessive overtime and were rewarded for their efforts by the Fair Labor Association.

Social Responsibility

Covid-19 response

NIKE has funded World Health Organization and its partners with more than $25 million. They also initiated

Two to match between employees to raise more donations to support any organization throughout the world.

They have produced Personal Protective Equipment(PPE) with health professionals at Oregon Health & Science University (OHSU) in the form of full-face shields and powered, air-purifying respirator (PAPR) lenses to protect against the coronavirus (COVID-19).Some of which were donated across Oregon. They also donated 250,000 three-ply disposable face masks to New York State. Furthermore, NIKE is donating 30,000 pairs of Air Zoom Pulse that meet the need and safety of health workers that are currently battling the covid-19 pandemic. Indeed, NIKE follows an activist approach in its production. They are developing new materials that generate less waste, Using Flyknit technology that creates footwear uppers directly from yarn rather than cutting from fabric. The yarn is 100% recyclable polyester, they have avoided the use of more than 4 billion plastic bottles from landfills by using recycled polyester.

Growth strategy

NIKE uses a Horizontal Integration growth strategy in order to maintain its success and increase its revenues through buying competing brands with similar products. They have bought converse, starter, and some other brands. Buying converse proved to be fruitful for NIKE, even though they both produce footwear, converse aims to make retro-type, leisure shoes. Mass Merchandising was one most effective growth strategies employed by NIKE.

Swot analysis

External Analysis

Opportunities And Threats

NIKE is one of the leading sports product brands in the world, it is the 14th most valuable brand in the world, that has continued to buy out competing brands in order to increase their market share and diversify products. The growing market allows the corporate to grow its profits more and yet there are still some factors that threaten NIKE. The fierce competition with other successful corporates such as adidas and puma would also seize any opportunity to replace NIKE, raise their revenues and brand names.

Strength And Weaknesses

NIKE has a diverse brand portfolio, as aforementioned they have bought few competing brands, allowing it to cope with any changes in consumer’s needs, preferences, and tastes. However, NIKE mainly depends on the US market for over 40% of their revenue and such a huge dependence on a single market can prove to be detrimental if legal policies or taxes change.

Conclusion

In a nutshell, I firmly believe that NIKE investments and marketing strategies proved to be quite effective throughout the years. Their ability to analyze changes in customer preferences and taste since their foundation and until this very moment has helped them in providing the best quality footwear, compete with fierce corporates, maintain their leadership.