Nike Inc. is one of the biggest sports footwear, apparels and equipment company in the world. In this SWOT analysis tutorial, we will discuss Nike Swot Analysis Strengths, Weaknesses, Opportunities and threats. Its main focus is to produce quality and innovative products. Nike Inc. is listed on NYSE. Its Headquarter is situated in Oregon, United States. Please also read Nike Pestle Analysis.
Nike Strengths in SWOT Analysis
Nike global presence is another key strength. The total number of worldwide Nike stores and factories are 1182. Its US-based stored and factories are 392. Non-US based store and factors are 790. Nike is trying to increase the Non-US stores, as a result, the International Converse stores reach to 45. In 2016 the total number of the worldwide stores were 1045 and in 2017 it number was 1142.
Nike remained the world most valuable brand of 2018 in sports, apparel equipment industry. According to statista.com the brand value of Nike is 28.03 billion USD.
Nike inventory is reported 5.3 billion financial reports as on May 31, 2018, which is increased by 4 percent from the last financial year. It shows strong demand for Nike brand globally.
Nike has a strong financial report over the years. In the FY2018 Nike strengths include its strong financials. It the FY2018 the Nike brand generated $36.36 billion revenue and showed 6% increase in the revenue.
According to Nike Annual Report, research, design and development is the important factor of their success. There is a full fledged research committee which is made of trainers, coaches, renowned athletes, orthopedists and equipment manager and many more. These experts give provide their input in the manufacturing process and compliance with safety regulations.
Nike Weaknesses in SWOT Analysis
Nike is over-dependent on US market for its revenue and sales. In 2018 42% of revenue is generated by the US market and the remaining revenue from the Non-US market.
The footwear industry is very price sensitive. Nike does have some of its retailers. But mostly the Nike is generating most of its revenue selling into retailers. Retailers pass the pressure onto Nike when they offer low prices due to competition footwear and apparel industry.
Nike Opportunities in SWOT Analysis
People are getting more health conscious and try to adopt a healthier lifestyle. It means that sport will become an integral part of everyone life. People are more fashionable when activities participate in sports. In the upcoming year, the global sports and lifestyle market is expected to grow. This is a good opportunity for Nike to expand its presence in the international market.
More focus on product development, innovation and digitalization is another opportunity for this footwear, apparel and equipment brand. Both digital marketing and commence have a positive impact of revenue generation. If Nike competitors like Adidas, Under Armour and Puma, are investing in e-commerce and digital marketing, it means that they do not only increase brand awareness but affecting the consumers’ mind and decision-making process.
Manufacturing revolution or “Man Rev” is another opportunity that can affect future earning in a positive manner. This manufacturing revolution will increase focus on innovative materials and advance 3D printing that will help to overhaul the product management and making procedures in the coming years. One of Nike’s competitors Under Armour has already launched a manufacturing innovation center named as (Lighthouse) in the year 2016 in Baltimore. Nike doesn’t have any specific details about its “Man Rev”. Let’s see what happens in the future.
Nike Threats in SWOT Analysis
The effective tax rate in FY 2018 was 55.3% which was 13.2% in the year 2017. This is a great threat Nike is facing and it also affects its net income by 54% which is a great offset for the revenue growth.
Sports apparels and equipment have a very competitive market. Every competitor is trying to adopt new ways to adopt advanced technologies like “Manufacturing revolution” and develop alternative brand. This can adversely affect Nike market share.
Legal issues is another area which needs a lot of compliance. For example, if any company “Nike” is unable to comply with industry regulations and strands can harm the company based on financials and reputation. Compliance can increase costs.
All global brands that are dealing in international trade facing foreign exchange currency fluctuations. Since Nike is a global brand, the currency fluctuation can affect its revenues, inventory and net income.