To maintain its position in the athletic shoes market, Nike Inc., must address the opportunities and threats based on the external factors that shape the conditions of its remote or macro-environment. Nike, fully known as “Nike, Inc.”, is a US-based transnational corporation which provides trendy, functional sportswear across the globe. Am i do my homework, dissertation help online who am i Reading, why i am the person i am today essay, hr … Nike has captured approx. 1. As one of the major firms in the global sports shoes, apparel and equipment market, Nike Inc. must address these external factors to ensure business dominance in the industry, especially when considering the presence of aggressive competitors like Adidas. Image “Janoski” by Leo Hidalgo is licensed under CC BY 2.0, [1] http://help-en-us.nike.com/app/answers/detail/a_id/113/~/nike-mission-statement, [2] https://en.wikipedia.org/wiki/Nike_sweatshops, [3] http://www.marketwatch.com/story/heres-how-apple-nike-and-others-avoided-620-billion-in-taxes-2015-10-06, [4] http://koin.com/2016/04/19/nike-faces-5-million-class-action-lawsuit/, [5] http://phys.org/news/2011-07-nike-adidas-suppliers-polluting-china.html. For GDPR compliance, we do not use personally identifiable information to serve ads in the EU and the EEA. E – Economic 3. P – Political 2. Politically, Nike has some interesting issues to contend with. The following political external factors determine some of Nike’s strategies: Stable political conditions in most major markets present opportunities for Nike to grow its business in these areas. PESTEL or PESTLE analysis, also known as PEST analysis, is a tool for business analysis of political, economic, social, and technological factors. In this section, we will share with you first of the five pestle analysis … Not only do they release plenty of aerial pollution like most factories, but Nike’s production centers occasionally go as far as directly polluting rivers [5]. This article may not be reproduced, distributed, or mirrored without written permission from Panmore Institute and its author/s. For example an Industry may be highly profitable with a strong growth trajectory but it won't be any good for NIKE, Inc. if … Organizational Structure Characteristics (Analysis), U.S. Department of Commerce. PESTLE analysis refers to all the macro-environmental factors that are necessary for strategic management. The biggest strength of Nike is that it is an extremely competitive organization with its approach of “Just Do It” slogan for its brand epitomizing its attitude towards business. V arious exa mples, for the impressive work of Nike on R&D. However, the rapid growth of developing markets also threatens Nike by increasing labor costs in the company’s supply chain and production facilities. From interacting with customers to designing products, technology provides value to organizations just like Nike. In Nike’s case, the following sociocultural external factors are most significant: In developing countries, Nike has opportunities to tap consumers with increasing individual wealth. PESTEL or PESTLE analysis, also known as PEST analysis, is a tool for business analysis of political, economic, social, and technological factors. You need to focus on the external elements that influence the brand's activities. S – Social 4. These include low-interest rates and well arranged international tax agreements. Thomas Bush is an English-born writer, entrepreneur, and fitness enthusiast. A good social status means a lot for modern corporations, so. These days, he spends his time flipping domain names, writing articles and pursuing other interesting business ventures. With its ‘deep pocket’ of finances, Nike has the resources to chase after small emerging markets in which they could sell products. In recent years, there hasn’t been too much of a crackdown on this, but it’s still valuable to consider. The online technology has enabled customers to make contact-less payments via mobile phones. (Pestle Analysis Of Nike Macro Environmental Factors Business Essay, 2013). PESTLE standing for Political, Economic, Social, Technological, Legal and Environmental. As a company that produces and sells physical goods, Nike is, however, always subject to changes in tax and manufacturing laws. Another recommendation is for the company to invest more in research and development (R&D) to tap potential demand for sports shoes, apparel and equipment integrated with advanced computing technologies. Blog. In fact, the issue of Nike sweatshops is so prominent that it has warranted an entire Wikipedia article on the topic [2]. Public Relations has never been more relevant than today. Despite being one of the largest sport apparel and accessory companies in existence, Nike has to keep a high guard in its extremely competitive market. This action can help address the potential decline of Nike’s performance in the Chinese market. Ecological issues influence Nike’s remote or macro-environment. In this article, we’ll be discussing Nike’s standings and potential future through the lens of a. This company takes its name from the Greek goddess of victory named Nike (About.nike.com, 2016). There aren’t many legal variables which affect Nike, but we haven’t forgotten about the elephant in the room: Environmental issues are of ever-growing importance. Pest Analysis On Nike - December 2nd, 2010 Nike, Inc. (pronounced / na ki /) (NYSE: NKE) is a major publicly traded sportswear and equipment supplier based in the United States. This component of the PESTEL/PESTLE Analysis model deals with the impact of ecological concerns on business performance. Various political conflicts can always make customs related processes difficult, or prevent imports and exports. Nike also gets the opportunity to use valuable information based metrics thanks to technological advances, allowing for them to optimize targeting and production, and maximize revenue. Analysing various aspects of the brand with SWOT analysis gives the case study on Nike brand major insights about Nike organisational structure. The economic external factors in this component of the PESTEL/PESTLE Analysis show that Nike Inc. must emphasize global expansion strategies while devising new ways to capture growth in developing countries. PESTLEanalysis.com is an educational website collecting all the information and resources related not only to PESTLE but also SWOT, STEEPLE and other analysis that will come useful to business owners, entrepreneur, and students alike. This has to do with politics of the day prevailing in country. Copyright by Panmore Institute - All rights reserved. Nike is doing well with using social media to build their brand, but it can be a double-edged sword if used incorrectly. 2. It is generally assumed that if political temperatures are down; businesses tend to flourish and the vice versa is also correct. This component of the PESTEL/PESTLE Analysis model deals with the effects of social conditions on the firm’s remote or macro-environment. Having freelanced for years, Thomas has appeared on various online publications numerous times, but recently set up his own website 'TalkSupplement' about the world of sports nutrition. Nike’s brand value as reported by Forbes in 2017 is $15.9Billion. The global clothing apparel market is oligopolistic with for players Nike, adidas, H&M and Zara having a combined market share of 7.0%. it’s definitely worth considering these factors, PESTLE Analysis: Business Environmental Analysis, Nintendo PESTLE Analysis 2021: Inside the Video Gaming …, Toyota SWOT Analysis 2021: Quick Reference Guide, Tips On How To Manage Your Finances and …, Coronavirus Data Analysis: How the Outbreak may Impact …. Nike is an American company that is engaged in the design, manufacture and marketing of apparel, footwear, equipment, services and accessories. Also, the company has opportunities to develop safer products and use marketing campaigns that highlight the safety of its sports shoes, equipment and apparel. PESTLE Analysis is one of the very important tools that is used for analyzing macro-environmental factors that has an impact on the Company. Strong Brand Awareness – Nike is one of the most recognizable brands in the world as its name alone is memorable, easy to pronounce, and very unique. PESTLEanalysis.com is an educational website collecting all the information and resources related not only to PESTLE but also SWOT, STEEPLE and other analysis that will come useful to business owners, entrepreneur, and students alike. The PESTEL analysis is a tool devised by Harvard professor Francis Aguilar to conduct a thorough external analysis of the business environment of any industry for which data is available. On the other hand, Nike receives much criticism for its dubious production processes. Gillespie, A. Rapid technological obsolescence also threatens Nike by putting pressure on the company to increase its product development efforts. Industry Analysis. In addition, Nike has the opportunity to improve its brand image by highlighting customer satisfaction in marketing its sports shoes, apparel and equipment. Here are some of the Technological factors affecting it: Legal factors are sometimes grouped together with Political factors in ‘PEST’ analyses, but in a PESTLE analysis — which is what we’re doing — the two are separated. UCF Research Guides. In. Nike’s business changes according to technologies available for business processes and athletic footwear, apparel, and equipment. Nike Inc. Five Forces Analysis (Porter’s Model), Nike Inc.’s Marketing Mix (4Ps/Product, Place, Promotion, Price) – An Analysis, Nike Inc. SWOT Analysis & Recommendations, Home Depot PESTEL/PESTLE Analysis & Recommendations, Wendy’s PESTEL/PESTLE Analysis & Recommendations, Toyota PESTEL/PESTLE Analysis & Recommendations, Harley-Davidson PESTEL/PESTLE Analysis & Recommendations, Starbucks Coffee PESTEL/PESTLE Analysis & Recommendations, Ford Motor Company PESTEL/PESTLE Analysis, Nike Inc. Generic Strategy & Intensive Growth Strategies, Nike Inc. Favourable Policies of US governmentThe policies generated by the government have huge impact on the business proceedings especially … E – Environmental 6. For Nike, some of these are: Nike sells a well-respected medium range product, so they are less vulnerable to economic factors than others, but nevertheless here are some of the Economic variables: Public Relations has never been more relevant than today. WHO AM I NIKE SWOT PEST ANALYSIS CASE STUDY Joey Goff. PESTLE Analysis. Social media allows things to blow up or whittle away faster than ever. PESTEL or PESTLE analysis, also known as PEST analysis, is a tool for business analysis of political, economic, social, and technological factors. In this article, we’ll be discussing Nike’s standings and potential future through the lens of a PESTLE analysis, which looks at the Political, Economic, Social, Technological, Legal, and Environmental factors that affect an organization. In the case of Nike and its sports shoes, apparel and equipment, the following ecological external factors are notable: Expanding environmental law creates opportunities for Nike to improve its environmental and sustainability programs, which are currently recognized as among the best in the industry. The following economic external factors are significant in determining Nike’s performance: Developed markets like the United States are relatively stable, thereby proving Nike Inc. with the opportunity to continue its slow but stable growth in these countries. Nike has also benefited from cooperation with government initiatives in terms of transparency in the global value chain; one example of this lies in membership of the Clinton administration’s 1997 Apparel Industry Partnership (Wagner, 20… Legal factors are sometimes grouped together with Political factors … This is an important step for eventually devising a strategy that can effectively manoeuvre the competition to maximize a firm's chances of sustainability and profitability. Pestle Analysis Examples: Uber. L is for Legal. These forces can have a direct impact on their sales and profits. Roper, K. (2012, November). Many …, There are many companies the world over, that conduct PESTLE …. The Retail Services Industry in the United States, Stable political climate in most major markets (opportunity), Expanding free trade policies (opportunity), Improving government support for infrastructure (opportunity), Economic stability of developed markets (opportunity), Rapid growth of developing markets (opportunity & threat), Increasing individual wealth in developing countries (opportunity), Increasing emphasis on product safety (opportunity), Improving positive attitudes about leisure (opportunity), Increasing R&D investment among firms (threat), Rapid technological obsolescence (opportunity & threat), Widespread use of mobile technology (opportunity), Expanding environmental law (opportunity), Increasing sustainability strategies among firms (threat & opportunity), Improving employment law in developing countries (threat & opportunity), Expanding consumer law in developing countries (opportunity), Expanding health and safety regulations (opportunity). L – LegalLets look at each of these macro-environmental factors in turn.All the external environmental factors (PESTEL factors) PESTLE Analysis of Nike The focus should be on the macro environmental factors of Nike, as it is an international organization, so consists of political, economics, society, and technology. They may have a strong brand and healthy finances, but they need to pay careful attention to the morality of their practices and watch out for other growing, cheaper outlets. Political factors are especially important to the backend of a company — the part we don’t normally see. The company is headquartered near Beaverton, Oregon, which is part of the Portland metropolitan area. In the case of Nike Inc., the PESTEL/PESTLE Analysis enumerates such external factors that influence the company’s strategic decision-making processes. Based on this component of the PESTEL/PESTLE Analysis, Nike Inc. has major opportunities to improve its brand image and corporate reputation. Nike is a US-based company that sells sports apparel for men, women, and children and is a major competitor in the industry, In this paper, we’ll be discussing Nike’s standings by using a PESTLE analysis, which looks at the political, economic, social, technological, legal, and environmental factors that affect an organization (A Pestle analysis, 2017). Nonetheless, this external factor provides opportunities for Nike to integrate advanced technologies in its products. This component of the PESTEL/PESTLE Analysis indicates Nike’s opportunities to improve the environmental impact of its business. It is recommended that Nike must pursue a more aggressive approach to international expansion based on free trade policies, with focus on high-growth developing countries. Murphey, M., & Gause, R. (1974). These people will undoubtedly buy plenty of sports apparel, something which would make Nike very happy. In relation, the company has opportunities to integrate mobile technologies in its products to capture consumers who frequently use mobile technologies, such as mobile apps and online tools. The level … Based on the external factors in this component of the PESTEL/PESTLE Analysis, Nike Inc. has considerable opportunities for product development and business growth. In addition, the slowdown of the Chinese economy threatens Nike’s performance, which is now significantly dependent on the Chinese market for sports shoes, apparel and equipment. Worldwide increases in ‘health consciousness’ means that more and more individuals are moving towards better lifestyles. Political AnalysisIt is the responsibility of government to create such economic policies, which will have a great effect on the growth of business. Also, Nike occasionally meets legal repercussions for its shady marketing practices, which include false discounts [4]. The PESTLE/ PESTEL/ STEEPL Analysis for in-depth analysis of all external factors specifically, political, economic, social, technological, legal and environmental, highlighting their consequence on Nike's business model, marketing and growth strategy 7. It shouldn’t surprise you to hear that, like most massive corporations, Nike also dodges substantial amounts of tax [3]. Nike Pestle Analysis So without any due let us understand Pestle Analysis of Nike and have a close look at political, economic, social, technological, legal and environmental factors that affect Nike performance. The PESTEL/PESTLE Analysis model identifies the external factors that present opportunities and threats in the remote or macro-environment. However, Nike also shows promise of a change in their current practices, with a strong resolve to become more ‘eco’. Nike PESTEL Analysis. What is visual communication and why it matters; Nov. 20, 2020. Nonetheless, this external factor provides the opportunity for Nike to further improve its sustainability standing. The PESTLE Analysis highlights the different extrinsic scenarios which impact the business of the brand. Needless to say, the most important strengths are Nike’s powerful brand and low product cost. Based on the political external factors in this component of the PESTEL/PESTLE Analysis, Nike Inc. experiences opportunities to improve its market presence and global expansion in the sports footwear, apparel and equipment market. Its swoosh symbol is easily recognized by everyone. The following technological external factors affect Nike Inc.: The increasing R&D investment among firms threatens Nike, as these competing firms aim to develop more technologically advanced sports shoes, equipment and apparel. Nov. 21, 2020. The company also has opportunities to rapidly grow by increasing its operations in high-growth developing countries. Organizational Culture Characteristics: An Analysis, Burger King PESTEL/PESTLE Analysis & Recommendations, Whole Foods Market PESTEL/PESTLE Analysis & Recommendations, Tesla, Inc. PESTEL/PESTLE Analysis & Recommendations, Microsoft Corporation’s PESTEL/PESTLE Analysis & Recommendations, Unilever’s PESTEL/PESTLE Analysis & Recommendations, Nike Inc. Operations Management: 10 Decisions, Productivity, Verizon PESTEL/PESTLE Analysis & Recommendations, Nike Inc. Nike uses advanced IT to market its products and targets the needs of its customers. Nike’s business performance depends on the state of economies where it sells its athletic footwear, equipment and apparel. This component of the PESTEL/PESTLE Analysis model identifies the economic concerns that affect the remote or macro-environment of the business. The external factors in this PESTEL/PESTLE Analysis also highlight the importance of improving Nike’s sustainability and employment practices. Nike Inc. must address a variety of opportunities shown in this PESTEL/PESTLE Analysis. Nike is the main brand of the company and it has the proven experience of adding billions of dollars to the brand’s account. Legal terms influence businesses like Nike. Nike being number one sportswear in the USA, its profits, turnovers, marketing sponsor ships and advertising surmount all other sports wea… (2007). Please consider supporting us by disabling your ad blocker. PESTEL Analysis of Nike: The international brands face several kinds of pressures while operating in a highly competitive market. To us, this may seem insignificant, but Political factors decide the survivability of an organization. In this particular case, it can be said that it is neutral and thus not expected to cause much rubble in the new companies operations. These actions address regulatory and sociocultural concerns and, consequently, improve Nike’s brand image and corporate image. The company was founded on the principle that it would make shoes for anyone who could walk or run and this has been the guiding philosophy behind Nike. Most of today’s political changes only affect how a company can produce their goods or how much profit they make, for example. Having been founded in 1964, Nike serves to “bring inspiration and innovation to every athlete in the world.” [1]. T he PESTLE analysis evaluates the Political, Economic, Social, Technological, Legal and Environmental aspects influencing Nike externally. Nike can also adopt new product development strategies to address needs for products for leisure activities. Nike’s revenues are to some extent dependent on the low cost of labour in Far Eastern countries. All of these forces may not be related to business directly but can have a deep influence on it. 31% of the global athletic footwear market. It is an acronym which when expanded includes six factors when the company is contemplating to launch or upgrade a service or a product. A PESTEL/PESTLE Analysis of Nike Inc. identifies key issues that the company must include in its strategic formulation. PESTLE Analysis of Nike Looking at the political, economic, social, technological, legal and environmental factors surrounding Nike will allow the choice of business strategy to be seen much more clearly. PESTLEanalysis.com is an educational website collecting all the information and resources related not only to PESTLE but also SWOT, STEEPLE and other analysis that will come useful to business owners, entrepreneur, and students alike. In Nike’s case, the following legal external factors are important in the sports shoes, apparel and equipment business: Improving employment law in developing countries is a threat because it leads to an increase in labor costs in areas where many of Nike’s production facilities are located. However, future political challenges cannot be ruled out. Founded as Blue Ribbon Sports in the year 1964, it was officially named as Nike, Inc on 30th May, 1970. PESTEL analysis of the macro-environment. 1. Consumers may choose to switch to lower-end, cheaper products if this were to occur, or even just as a decent level of quality becomes easier to produce. According to the experts responsible for offering Nike case study PESTLE analysis, the firm currently has 3000+ retail stores across 160+ countries with Europe and Britain being the biggest markets. Moreover, improving government support for infrastructure, especially in developing countries, gives Nike more opportunities to expand its operations in these markets. Nike’s Strengths – Internal Strategic Factors. Here’s the swot analysis of Nike as follows; Strengths of Nike Sub Brands. 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