Pest Analysis

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PEST analysis can be used to analyse the external influences. PEST stands for: · Political
· Economic
· Social
· Technological
The two macro elements undertaken by Nike are economic and social factors. The major threat for Nike would be a recession in economy, as the growth of Nike would be badly affected resulting in weak sales. Therefore as the economy slows down, the purchases by customers go down too. Also as Nike operates internationally too, there would be barriers of entry to the EU as there are different currencies in different countries e.g. a weak Euro could result in declining sales. The social element is that people are more conscious about their health. Consequently, there is an increase as more people are joining fitness clubs, making Nike to produce healthier sports shoes and apparel. The one micro element undertaken by Nike is its customers, as they have a direct influence in the organisation. Therefore in order for Nike to be successful, they need to meet the requirements of its customers and provide benefits for them because nowadays customers are becoming very price sensitive therefore they rather look for a bargain. Consequently, Nike has to try and meet the requirements of the customers in order to succeed because if Nike doesn’t meet these conditions then there is a possibility that the business will result in a failure. The issue for Nike regarding its customers is the participation in sports which the older generation are not very enthusiastic now as they were in the past, but this may an opportunity for Nike as they may be able to influence the next generation of customers, which are the children of the older generation. However, the older generation would still be loyal if Nike markets different shoes to meet their needs. The other problem that worries Nike is regarding the athletic shoes because its customers may be less loyal to the brand as they are more interested in cheaper athletic shoes and this brings Nike a lot of...
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