APPENDIX I: S WO T AN ALYSIS. STRENGTHS.
- Customer loyalty is extremely strong with our customers. - We are one of the most innovative brands in athletics. For example, the very popular FLYKNIT is both aesthetically unique and sustainable in its production. - Strong cash flow stems from modest dividend payouts and an aggressive buyback program. - Customizable “Make to Stock” customer order provides fast stock and enhanced user experience. - Globally recognized Swoosh logo. - We have the supply chain capabilities to produce high quality product and the lowest price, since our strength is in research and development (“Quick Facts”). - Sell worldwide in over 180 countries. - Nike is considered the world’s #1 shoemaker.
WEAKNESSES.
- Five of our largest manufacturing partners represent approximately 60% of Nike footwear manufacturing. These enormous manufacturers hold tremendous power in terms of quality and bargaining power (“Footwear Manufacturing”). - High volume of sales through traditional retailers may hinder a user experience that is not 100% Nike curated, as we are sold in thousands of third party retailers worldwide. - We spend high amounts of money on advertising costs, roughly 11% of sales which can be divided into other categories.
OPPORTUNITIES. -
Directly targeting marketing to Generation Z, versus Millenials and Generation X primarily. Reinstate catalogues or more direct to consumer commerce. Creating designer collaborations to appeal to a more fashion-forward crowd. Opportunity to extend brand categories into related items such as expanding jewelry.
THREATS.
- High competition from edgier and up-and-coming athletic competitors. - The issue of price sensitivity does affect consumers though, as they look towards online commerce for cheaper deals. - Our global business model leaves us vulnerable to volatility in currencies that fluctuate the difference in margins for our cost of goods and margins.
APPENDIX II: BUSINESS ISSUES AND OBJECTVES With every business there are challenges, and Nike is no exception. Nike is the number one sports brand in the world, outdoing Adidas, ESPN, and other popular brands (Market Realist). However, Nike has plans, as previously stated, to improve and grow their NIKETOWN locations internationally and in the U.S. As stated previously, equipment is Nike’s smallest area of interest, and could potentially be an area of growth. Nike has a great opportunity to expand their sales in Asia, more specifically Japan and Greater China. Currently, China made up about 8.5% of Nike’s revenues, and although China has the highest return on sales among other countries, Nike is working on repositioning itself in the Chinese market by creating product categories specific to China and their wants (Soni).
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