1.0 Introduction Nike is among the world’s largest sports equipment and apparel brands. Its manufacturer, Nike Inc. , is a listed company, based in Beaverton, Oregon. It is the market leader in the sports apparel and athletic shoe industry and definitely a high performer. It has an overall labor force of over 30,000 across the world. Nike Inc. was established by Philip Knight and Bill Bowermanon in January 1964 and originally named Blue Ribbon Sports, later changing to Nike Inc. in 1978. In addition to manufacturing, it runs retail stores named Niketown.
It sponsors many of the world’s top athletes and teams and has a famous trademark swoosh logo. The company has about 18,000 retail accounts within the United States alone and through collaboration with independent distributors, subsidiaries and licensees, operates in about two hundred countries (Firestein, 2006). Like any other international firm, Nike is faced with business challenges, especially the global economic downturn. Nevertheless, it has managed to uphold a steady growth since 2004 (Ramaswamy, 2009). This paper provides an analysis of Nike Inc. , indicating the environmental forces acting on it and how it has managed to cope, emerging as the world’s leader in its market. 2.0 Environmental Analysis2.1 Political AnalysisThere is the need for the government to come up with economic policies which will promote business growth.
Nike has so far been assisted by American government policies that facilitate the advancement of its products. The support is especially granted in the form of macroeconomic stability, minimized currency adjustments, minimal interest rates and an international model of a tax system (Locke, 2008). These are important components of Nike’s success. 2.2 Economic AnalysisSo far, the greatest economic threat to Nike is the current economic recession.
The American economy is at the moment facing a major downturn. There is shrinkage in consumer purchases. The economic crisis in Asia also impacts on Nike as its products are made in Asia. Labor costs together with costs of raw materials are also rising. The weakening of the Euro and recession in Asia lowers Nike’s sales. However, the aggregate sales results for athletic footwear have remained stable. The international market in this case compensates the variances observed in sales especially between the lean and peak times (Ramaswamy, 2009).
2.3 Social AnalysisThere is a raised level of health consciousness in today’s world. Issues such as exercise and diet are greatly emphasized. Consequently, more people are choose to join fitness clubs. This has raised the demand for fitness-related products especially exercise wear, equipment and shoes. Nike is a major beneficiary of the health awareness. It in the past however did not predict the problems that would arise from information about human rights abuses in Asian sweatshops, which contributed to a slowing down of demand (Morgan, Rye & Mirvis, 2009). 2.4 Technological AnalysisThe company adopts the use of Information Technology (IT) in its marketing procedures, for instance segmentation, innovation and differentiation.
Its leadership is partly due to the application of IT at every stage of product development and distribution. Nike has been able to harness all the components of its environment to promote its marketing and as a result record considerable success (Taylor, 2002).