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How to Construct a Swot Analysis Paper: Nike Situation


Introduction:

SWOT analysis is quite a powerful tool which is used by organizations to strategist their business and planning process. It helps them to evaluate their current situation and find a strategy to make things better for their business in the future. SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats.

Strengths and weaknesses are internal factors of a company which they have a control over. That means it is in their hands to change and control. On the other hand, Opportunities and threats are external factors of a company and they are not in their control. An organization can take advantage of opportunities and protect its business from the threats but can not control or change them. Lets take a look at NIKE situation:

SWOT ANALYSIS OF NIKE:

Nike, formerly known as Blue Ribbon sports was first formed in 1964 by Bill Bower man and Phil Knight. The company is famous for its athletic equipment, sportswear and sports shoes. Its logo is represented by a swoosh sign.

1. Strengths:

  • Renowned and famous brand:

A Nike’s product can easily be identified by its logo. Consumers all over the world can recognize a swoosh sign as Nike’s logo. Nike’s popularity is world known because most of the world’s famous athletes have endorsed this brand making it one of the leading brands in the world.

  • Innovation:

There have been other companies that produce athletic products but after their rise they were seen declining after some time. In comparison, Nike has continued to grow and rise. One of the reasons of its continuous progress is that it is always incorporating innovative ideas in its products. New concepts have been continually created to renew their old products.

  • Strong production and distribution process:

Nike’s products are available all over the world. They have strong resources through which they produce high quality products at elevated compressed pricing maintaining their standards and quality.
Nike’s distributions of products are via wholesalers situated in the US, second are directly through their factory outlets and third are via E-commerce.

2. Weaknesses:

  • High cost:

Nike is generating higher revenue as compared to the last years, its expenditures are increasing too. This happened some time ago too due to which Nike applied the downsizing strategy.

  • No Research and Development:

Although it is quite visible that Nike keeps on bringing new products, however, its quite shocking to know that they have spent literally nothing on their research and development according to their income statement.

  • Treating the workers negatively:

Nike has been accused of treating its workers negatively and utilizing child labor which affected its business which is why it has been trying to clear its name by finding relevant solutions.

  • Lack of presence in overseas markets:

Nike generates 40% of its revenue from North America which means it depends on the US market. Hence, any political, social or economic change of America can directly affect their business therefore; they should make their presence strong internationally.

3. Opportunities:

  • Strategy to acquire:

Nike has acquired various companies resulting in making itself a strong brand. It should not stop availing any opportunity of acquiring more companies.

  • E-commerce:

In this digital world, Nike should make most of it by growing its physical stores all over the world.

4. Threats:

  • Competitive marketing:

Competition is a factor which is faced by every business. Since other companies such as Puma, h&m, Adidas have been introducing their sportswear therefore; Nike should brainstorm strategies on how to stay ahead of its competitors.

  • Increasing expenses:

If Nike’s expenditures keep on increasing, they can affect the price of their products which will make it difficult for them to compete.

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