SWOT Analysis of Nike

The SWOT of Nike discusses the strengths, weaknesses, opportunities and threats of the leading footwear brand – Nike. Nike is one of the top three players in the world for sports shoes. You can also refer to this article on top Nike competitor’s.

Strengths in the SWOT analysis of Nike

• Nike is the world’s no. 1 shoemaker. It designs and sells shoes for a variety of sports including baseball, golf, cheerleading, volleyball, tennis and football.
• Nike uses a “Make to Stock” customer order which provides a fast service to customers from available stock.
• Nike operates Nike Town shoe and sportswear stores, Nike factory outlets and Nike Women shops. Nike sells its products throughout US and in more than 180 countries.
• Nike is strong at research and development, as is evidenced by its evolving and innovative product range. They then manufacture wherever they can produce high quality product at the lowest possible price.
• Nike is a global brand. It is the number one sports brand in the World. Its famous ‘Swoosh’ is instantly recognizable, and Phil Knight (Founder and CEO) even has it tattooed on his ankle.

Weaknesses in the SWOT analysis of Nike

• The income of the business is still heavily dependent upon its share of the footwear market. This may leave it vulnerable if for any reason its market share erodes.
• The retail sector is very price sensitive. However, most of its income is derived from selling into retailers. Retailers tend to offer a very similar experience to the consumer. So margins tend to get squeezed as retailers try to pass some of the low price competition pressure onto Nike.

Opportunities in the SWOT analysis of Nike

• Product development offers Nike many opportunities. The brand is fiercely defended by its owners whom truly believe that Nike is not a fashion brand however consumers that wear Nike product do not always buy it to participate in sport. In youth culture especially, Nike is a fashion brand. This creates its own opportunities
• There is also the opportunity to develop products such as sport wear, sunglasses and jewellery. Such high value items do tend to have associated with them, high profit
• The business could also be developed internationally, building upon its strong global brand recognition. There are also global marketing events that can be utilised to support the brand such as the World Cup (soccer) and The Olympics.

Threats in the SWOT analysis of Nike

• Nike is exposed to the international nature of trade. It buys and sells in different currencies and so costs and margins are not stable over long periods of time. Such an exposure could mean that Nike may be manufacturing and/or selling at a loss. This is an issue that faces all global brands.
• The market for sports shoes and garments is very competitive. Competitors are developing alternative brands to take away Nike’s market share.