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Nike SWOT Analysis Is Really Interesting


The Nike SWOT Analysis can be hugely interesting.

After all, this iconic shoe brand is often identified as a marquee shoe company.

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Nike has had a huge number of sports sponsorships

Therefore, tracking the story of their progress can be quite intriguing.

It is one of the top three players in the show industry globally but is it properly balanced on top?

Are there some factors that need to be corrected or is there a threat that the company is still not geared to handle?

Here are details of what Nike’s SWOT brings forth to us.

Nike SWOT Analysis

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Strength That Nike SWOT Analysis Highlights

The Nike SWOT Analysis throws up some rather interesting and compelling line-up of strength for this show major.

Perhaps its greatest strength lies in its slogan and the approach that it has, ‘Just Do It’.

This is what often gives the brand a decided edge over its competitors.

Often anyone who walks or runs in this brand also begins to believe the same.

That is in many ways a key reason why the brand keeps moving forward.

So whether it is the logo or the tagline, both the users as well as the company’s business model is run on the basis of a can do approach that can be a game changer in many ways.

Another interesting strength element that springs up in the Nike SWOT Analysis is surely the manufacturing model it follows.

It has outsourced almost every single element of manufacturing to facilities across the world.

It has no manufacturing outlet of its own.

Therefore, it has better resources for looking at research.

It is also able to give more time to bettering its design initiatives.

Despite a huge investment in R&D, it is able to rein in costs.

The reason is that the outsourcing manufacturing ensures that they are able to avoid the high labor cost that it would have entailed.

Nike’s global presence is another big booster for the brand.

The world over, the youth especially, identify this brand with grit, strength, perseverance and excellence.

No wonder it is a brand that athletes globally choose it as the best tool for excelling professionally.

This in many ways has also helped Nike to stand out as a brand amidst widespread disarray in the shoe industry.

We can see significant amount of fragmentation with Nike.

However, it is this unique selling point and the overall appeal that has enabled the brand to excel and overcome competition.

But can outsourcing its manufacturing pose any future threat to the company?

Well, let’s analyze the weaknesses for a deeper insight.

Weakness in Nike Brand

Well, you would have already seen that Nike as a brand got a major denting.

This was because of the negative publicity it got with regard to its overseas manufacturing facility.

Terms like ‘Sweatshop’ describe the unfriendly working conditions in its overseas manufacturing units.

Therefore, the real impact of a long-term of this in worrying.

That is not all.

The Nike SWOT Analysis clearly highlights that this sports apparel and accessories major are still heavily dependent on the footwear industry for its income.

If you see on the balance sheet, the footwear market is where the lion’s share of its income is derived from.

As a result, the revenue from this sector remains crucial for its survival despite its diversification and global presence.

Given that the shoes industry is a lifestyle product, global recession and challenging economic times can never be a great news for this industry.

So for Nike to become more recession proof, it is important that it brings in a greater level of vertical diversification and divide the revenue share more uniformly.

The other key concern is the fact that Nike still does not have exclusive showrooms in most places.

So despite its global recognition as a brand, most times it has to deal with serious competition at the retailer level.

Perhaps an exclusive outlet to retail its product could help overcome the brand’s vulnerability to an extent.

Another worry is the fact that Nike is still not the choice of the price conscious shopper.

To most, it is a still a luxury brand and premium product bought or for making a statement.

While quality is not a concern, the pricing still appears stiff for those trying to look for value buys.

Opportunities Identified in Nike SWOT

The Nike SWOT Analysis goes on to highlight that despite its premium and luxury, the emerging markets like India and China are replete with growth opportunities for this footwear major.

They have also begun to actively diversify into several other segments of sports accessories and products.

This means that their over dependence on the footwear department might reduce in years to come.

This will help the company stand out in a situation where footwear revenues may begin to dwindle.

Additionally, Nike emphasis on great design and customer health.

This seems to have hit the right note with a majority of consumers.

This is an opportunity to leverage against competitors significantly.

Apart from this, we are also seeing Nike making significant progress towards getting more consumers who are looking for value based alternatives at a certain price.

The question at the current juncture is how effectively can Nike use this policy to handle any potential threat in future and take a significant head start compared to other competitors.

Threat Potential

The next step in the Nike SWOT analysis is no doubt looking at the potential threat that the company might face going forward.

Perhaps one of Nokia’s biggest strengths is also one of its greatest threats, its global presence.

While a wide spread market has meant better trade opportunities, it also entails larger vulnerability to international geo-political unrest that you might see in different parts of the world.

Any fluctuation in global monetary movement also could impact the overall margins seriously and bring about a meaningful loss in its profitability.

Further, Nike needs to do some serious work in repairing its international image about using exploitive work practices at its offshore manufacturing units.

While reducing costs could be any successful business’ prerogative, employing unfair business practices cannot be justified and the company needs to take serious steps to bring an end to those.

The Nike SWOT analysis, therefore, clearly highlights that the company has some great strength and growth opportunities; its threat potential is no less and could quite easily derail the overall profitability prospects.

When we delve deep into the basics of SWOT analysis, it is clearly manifested that Nike needs to put in some serious work in increasing the revenue share of its other verticals apart from footwear and also bring in better work practices.

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