NIKE’s S.W.O.T analysis

About this template

SWOT analysis is a technique to understand internal and external factors that play a part in an organization’s decision-making. This Nike SWOT analysis template helps you dive deeper into Nike’s marketing and manufacturing strategies. So, download this template to explore the company’s strengths, opportunities, vulnerabilities, and market threats.

Strengths

• Global products:

Nike’s products are sold to millions of customers worldwide through retail and online stores.

• Competitive prices:

Mostly, Nike manufactures its products in countries like Thailand and Indonesia, with low labor costs. It automatically reduces its material and production costs.

• Strong brand value:

Nike is one of the strongest sports brands. Simply put, it enjoys a higher commercial value, which is typically based on consumer perception of their products.

• Innovative marketing:

Nike is known for its marketing innovation. Over the years, the brand has focused on successful celebrity endorsements and social media campaigns, helping it increase revenue significantly.

Weaknesses

• Poor workplace conditions:

As discussed earlier, Nike manufactures its products in countries with low labor costs. This led to the company getting involved in unethical labor practices like long working hours, lowest wages, and poor working conditions.

• Heavy debts:

Though Nike is still a strong sportswear company, its long-term debt remains a financial worry for investors. According to Business Model Analyst, Nike had about $8.9 billion in debt in 2022, which was four times higher than it was three years ago.

• Poor retailer connections:

Most of Nike’s revenue comes from retail outlets, leaving the company with some disadvantages like low profits and less control over branding. Moreover, these retailers also sell Nike’s counterfeit products, which harms the brand’s global image.

• Similar products production:

Nike is over-dependent on footwear, even long after its release. Here, the lack of diversification is a major weakness, as it makes consumers disinterested in the products.

Opportunities

• High demand in emerging markets:

Though Nike has retail stores globally, it still needs to explore emerging markets like India and China. These consumer markets are flourishing, giving Nike a great opportunity to expand.

• AI startups:

Recently, the company acquired an AI startup called predictive analytics platform Celect. It has helped the brand predict customer behavior to boost its online sales.

• Direct to consumer:

As third-party retailers are harming Nike’s brand name, the company is cutting ties with them and moving toward digital stores. As of now, Nike does not work with partners like Bob’s Stores, Zapoo’s, and Dillard’s.

Threats

• Counterfeit products:

Counterfeit products are a significant challenge for Nike’s reputation in the market. These low-priced products use cheap materials and have company labels, which influences the customer’s loyalty and sales.

• Economic uncertainty:

Global recessions negatively hit most companies. Nike also experienced a significant decline in sales during the Covid lockdown.

• Competition:

Though Nike is an established sportswear company, upcoming brands are a potential threat. Hence, it calls for Nike to bring innovation in their product designing sector.

• Animal abuse scandal:

Nike is accused of using Australian kangaroos to manufacture leather football shoes. Therefore, animal rights activists are calling on the brand to rethink its production strategies.