Nike Swot Analysis

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SWOT analysis: Nike

Introduction

Like most companies, Nike has corporate strengths and weaknesses. However, in the 50 years that Nike has been in business, it has weathered most challenges. From its maverick days as an upstart sports shoe brand being sold out of the back of the trunk of its owners’ cars at track meets, through the 80s and 90s when it lavished multi-million dollar endorsement deals on sports icons. Following is a SWOT (strength, weakness, opportunity and threat) analysis of this great American business enterprise.

Strengths:

Marketing expertise

Nike is a marketing trailblazer. Its commercials are so unique and iconic that every new advertising campaign is analysed by industry watchers and experts, and reviewed like it is a new novel or bestseller (Howell, 1991). It has produced gems such as “Just Do It”, the “most recognizable tagline in advertising history” (Katz, 1994), and “No games. Just sport” – a no nonsense rallying cry immortalized in the 2000 movie “What Women Want” starring Mel Gibson and Helen Hunt. Air Jordans – its Air Jordan line has been so successful that more than 10 years after Michael Jordan has retired from professional sports, the line continues to be Nike’s premier brand (Strasser, 1994).

Innovative product

Its very first hit, the “waffle soles” for running shoes made Nike its first millions. It was inspired by Phil Knight’s wife’s pancake waffle iron (Strasser, 1994). It combined maximum traction, simplicity of design and minimum weight. It has been copied by competitors but never duplicated.

Innovative service

Nike recognized early on the power of e-commerce. It established its Nike website to assist its worldwide fan base, allow them to ask questions, design their own shoes, and order shoes directly from the factory (Dworkin, 1999). There was practIcally no e-commerce in 1995, but in 1997 this segment earned businesses $26 billion. By 2002, it explode into a $330 billion industry and $1 trillion by 2005. Nike continued to reach its worldwide audience through its website although the US is home to 50% of the world’s market in sports shoes and apparel (High Tech Writers, 2000).

Personalization

Through Nike.com, its "Nike Id", allows buyers to design their own shoes, or have their number or name on it, just like Kobe Bryant, or Michael Jordan or LeBron James. It gives regula customers access to special treatment Nike’s multi-million dollar endorsers and gives fans the perception that they can really be like their sports heroes (PRnewswire, 2000).

Adds value to product

Nike in 2009 paid LeBron James $90 million to promote his basketball shoes. Michael Jordan reportedly still commands upwards of $20 million a year, and Kobe Bryant, the same amount (Wicked Local, 2008). While it costs Nike a large amount of cash, the positive brand association that celebrity endorsements can bring can be worth several times more than they cost (Katz, 1994).

Weakness

Damaged reputation

Nike has been rocked by accusations of supporting unfair labor practices in its overseas factories. It is also accused of turning a blind eye on labor abuse in countries that produce Nikes such as, Korea, Taiwan, Malaysia, Thailand, Vietnam, The Philippines, China and other countries (Ferrell, et al., 1998). Labor and human rights activitists have picketed several Niketown Stores to call attention to these alleged abuses. An activist group, Vietnam Labour Watch, has accused Nike of violating minimum wage laws and overtime laws in these countries. Nike has denied the accusations .

Opportunity

Customer assistance through the internet

Through its “Ask Nike” website, a partnership it runs with “Ask Jeeves”, its technical advisers answer questions fielded by Nike fans and customers. The website provides customers with a direct and almost-instantaneous connection with Nike.(Dworkin, 1999).

Discount

Nike sells both popular and discontinued models of shoes and...
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