Growth in operating expenses hurts revenue as well as gross profits. However, in fiscal 2020, while Covid-19 has hurt Nike’s business, the company has managed to control the overall impact to a large extent. While the company faced several controversies in the past related to supply chain management, with time it has improved its supplier management practices a lot with a clear focus on ethics, quality, and labor management. Thank you ! Category Swot Analysis. It designs and sells shoes for a variety of sports including baseball, golf, cheerleading, volleyball, tennis and football. Customers’ expectations and preferences have changed fast in recent years. While the company’s revenue in 2020 has declined due to the Covid-19 pandemic, the US being the most affected region globally, its impact has also been strong on Nike’s fourth-quarter revenue in 2020. The abbreviation represents strengths, Weaknesses, Opportunities and Threats. The global growth and popularity of the company is also driven by its focus on product quality. Now, Nike is a digital-first company that is using digital technology to serve and engage its customers worldwide. It enjoys one of the most impressive profit margins in the entire shoe industry. A few years back, the company was hit with a lawsuit by female employees related to gender pay discrimination. There’s has been a great wealth distribution gap between the upper class and lower class. The company has outsourced all its production but still maintains strong control over the quality of raw material used and that of the final products. The company must focus on building an organizational culture that brings higher creativity and fosters innovation. However, based on the increased focus of the company on DTC sales, it may not take Nike very long to be there. Nike is known globally as a maker of premium shoes and apparel. The Washington Post. All of them accounted for more than 10% of the company’s footwear production during the year. Counterfeit products of lower quality and priced lower than original products can affect Nike’s brand image. Roughly every four years, Nike throws a World’s Fair for sport tech, showcasing the brand’s latest innovations in gear ahead of the summer Olympic Games. Nike SWOT analysis paper. Apart from that, it is relying heavily on cloud technology to manage the digital experience it offers. The effective tax rate in FY 2018 was 55.3% which was 13.2% in the year 2017. Corporation, Adidas, ASICS, Lululemon, Anta, Under Armour, and New Balance are some of the major competitors of Nike. Through the interviews, it was established that Nike did have a toxic working environment, where sexual misconduct was rampant. ... Tesla SWOT analysis 2020 - Duration: 11:09. The company generates most of its revenue from the United States. There were 384 retail stores of Nike operational in the US as of 2019, including Nike factory stores, brand inline stores, Converse and Hurley stores. Abhijeet has been blogging on educational topics and business research since 2016. Table of contents. The company is enjoying strong financial performance over the last several years driven by its focus on product quality, innovation, sustainability and customer experience. Nike’s growth in the recent years is a result of its consistent focus on product quality and growing investment in technology. Nike, Inc. is an American multinational corporation headquartered in Oregon, USA. Luxury Swimwear Market SWOT Analysis 2020 by Players – Nike Inc, Perry Ellis International Inc, Swimwear Anywhere Inc., Adidas AG, Dick’s Sporting Goods December 9, 2020 Exltech Luxury Swimwear Market Overview: The top five apparel manufacturers together accounted for 49% of the company’s apparel production in 2019. Weakness of NIKE in SWOT Analysis. How Does Credit Karma Work and Make Money? In 2020, Nike’s revenue from direct to consumer sales improved as compared to the previous year. The women were left devastated and felt unsafe while working at Nike. From 2016 to 2020, Nike’s net revenue has grown by around $5 billion. 365 Careers 68,713 views. Nike is trying to reduce its dependence on external sales channels in an effort to grow its revenue and profitability. Opportunities for Thailand. Now, its focus is on digitalization and offering its customers a superior customer experience. Log In. https://bstrategyhub.com/swot-analysis-of-nike-nike-swot-analysis Traditionally, it depended more on external distributors and retailers for sales to customers. The SWOT analysis of Nike discusses the strengths, weaknesses, opportunities and threats of the leading footwear brand - Nike. Still, DTC sales account for just around one-third of its net revenues in 2020. The effective tax rate in FY 2018 was 55.3% which was 13.2% in the year 2017. The product was first launched for legendary basketball player Michael Jordan in 1984. This would help the company improve its employees’ performance and organizational productivity. 3.3 Porter’s & Five Forces Analysis and SWOT Analysis. View Nike SWOT.pdf from ECONOMICS MISC at Bayview Secondary School. Economic fluctuations in the global market can also hurt Nike’s sales and profitability. Opportunities are some of the prospects that the government of a country must take some advantage of, some of those prospects are as follows. The following strengths are the most notable in the case of Nike Inc.: 1. Their dependence on digital technology has also grown. Here’s a detailed breakdown of Nike SWOT analysis. This component of the SWOT Analysis deals with the internal strategic factors that support business development and competitiveness. Nike was able to manage the impact of the pandemic to a large extent successfully due to its investment in technology over the last few years. Nike, Inc. is an American multinational corporation. Nike is a very competitive organization. Remember me . Economic fluctuations caused by other factors can also hurt Nike’s sales and revenue globally. Cloud technology is driving faster growth for Nike in various areas including marketing and customer service. In countries like India, Brazil, and Mexico, a large group of middle class buyers has emerged in recent years. The dependence of customers on digital sales channels has grown but the company might take some years till it has achieved an equal proportion of sales from both channels. Your information is safe and will never be shared. Often it is also cited as one of the most critical barriers to Nike’s faster growth. Nike is the most valuable brand for sports in 2018. For fiscal 2020, NIKE, Inc. gross margin decreased 130 basis points as higher full-price average selling price (ASP), on a wholesale equivalent basis, was more than offset by higher product costs due to incremental tariffs in the U.S., as well as factory cancellation charges, higher inventory obsolescence reserves and the negative rate impacts of supply chain costs on a lower volume of wholesale shipments in the fourth quarter of fiscal 2020.”. These expenses grew to $3.75 billion in 2019 from $3.58 billion in 2018. If the company successfully resolves the problems related to organizational culture, it could find its growth momentum increasing. Press Release Zinc Battery Market SWOT Analysis by Key Players : Panasonic, PowerGenix, Primus Power Published: Dec. 16, 2020 at 12:28 p.m. As of 2020, Nike is one of the leading brands in the lifestyle and retail sector. Category Sports; Show more Show less. The key theme in this article is that Nike is currently at a stage where it has to either diversify into other segments or risk placing all its eggs in one basket. Phil Knight (Founder and CEO) is frequently quoted as saying that ‘Business is war without bullets.’ Nike has a healthy aversion of is competitors. Its gross margin in 2019 grew to 44.7% from 43.8% in 2018. Nike air Jordan is one of the most famous and expensive basketball shoes and active clothing line. Gupta understands how to create and implement business strategies. While the strategy is great and welcomed, it contradicts Nike’s strategy that favors innovation over sustainability. SWOT Analysis. Further, the product was introduced to common customers in late 1980 (Nike Air Jordan, 2018). As Nike’s focus on customer experience has grown, the company is providing its customers with an omnichannel experience. Other sports shoes and apparel brands are also investing heavily in marketing, product design, quality, and innovation. The SWOT analysis of Adidas differentiates the brand’s strengths, weaknesses, opportunities, and threats that would be useful for the company to grow. While the company took several significant steps to resolve the problem, it has not been able to establish a culture that fosters higher inclusion and creativity. Nike’s popularity rests on the design and quality of its products which are produced by independent suppliers and contractors. The US market accounted for 39% of its total revenues in 2020 compared to 41% in 2019. S.K. Nike markets its products globally through a diverse spectrum of advertising and promotional programs and campaigns, including social media, mobile applications, and online advertising. I am guessing the presentation is for school? SWOT Analysis is a proven management framework which enables a brand like Nike to benchmark its business & performance as compared to the competitors and industry. Nike air Jordan is one of the most famous and expensive basketball shoes and active clothing line. The women were left devastated and felt unsafe while working at Nike. Adidas is known most prominently for its range of Shoes, but the brand is also a manufacturer for clothing and accessories. According to sources, the previous CEO Mark Parker has once accepted that Nike was facing internal challenges related to organizational behavior. Regulations related to consumer data have also grown . Nike’s primary goal is to supply athletes with exceptional products and wearable that aids them in better sports performance. NIKE annual/quarterly revenue history and growth rate from 2006 to 2020. Last Updated 10 Aug 2020. Apart from its website and app, it has also brought other fitness apps that engage Nike fans and customers. Last Updated 10 Aug 2020. 4.3 Production, Revenue (2015-2020) 4.4 SWOT Analysis. All rights reserved | contact@bstrategyhub.com | Logo designed by Looka. Save my name, email, and website in this browser for the next time I comment. Over the next several years, technology can also help Nike widen the gap between itself and its rivals. Here’s why. While its leading rivals including Adidas are also heavily focusing on quality, Nike’s position and image are distinct from the others. Nike is a brand of premium sports shoes and apparel that has been enjoying strong sales and profitability over the past several years. View Nike SWOT.pdf from ECONOMICS MISC at Bayview Secondary School. Its focus on product design and investment in R&D have also helped it establish itself as a brand obsessed with quality. 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. Sexual Harassment: Former female employees also pointed out that sexual harassment and misconduct was very common in the company. Nike’s revenue in 2019 reached $39.1 billion compared to $36.4 billion in 2018. It was able to manage strong sales globally with the help of cloud technology and digital sales and distribution channels during the pandemic. Some even left their jobs. The company has been growing consistently over the past several years. Before we begin in-depth on the SWOT analysis of Adidas, let us understand a bit of the background of the company Adidas. Nike, Inc. is listed on NYSE with offices located all over the world. Through this SWOT analysis of Nike, you will be able to understand the business model of the brand. Check Also. The pandemic has brought a major and long lasting impact in terms of consumer behavior and digital technology will become the primary driver of growth for Nike and its rivals. Also Read: SWOT Analysis Weaknesses Explained with Examples. Nike suppliers follow a code of conduct that ensures they are managing their labor force and sourcing raw materials responsibly. However, in fiscal 2020, while Covid-19 has hurt Nike’s business, the company has managed to control the overall impact to a large extent. As the pandemic’s impact has been the strongest on the US market, its impact on Nike’s revenue has been harsh since the US is Nike’s largest market. Together, the three countries accounted for 27%, 22%, and 10% of Nike’s apparel production during the year. Today, we’ll study the swot analysis of Nike that how internal factors are impacting the company. This study is conducted to assess Nike, Inc. reviewing the four major aspects of concern. However, the company is also reaping the benefits of being an early mover in the industry. Cloud technology has been driving swift changes across Nike and all functions including manufacturing, marketing, and sales, and relying on it to grow operational efficiency. While the counterfeits can be easily identified in most cases, they can still hurt Nike’s sales and revenue. 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. Its approach differs sharply from rival brands. According to the statistical analysis by macrotrends.com, the annual revenue of Nike has declined by approximately 6.26% in 2020 compared to the previous years. Technological innovation can also help Nike find faster growth and expand its market share. Samsung SWOT Analysis 2020 | SWOT Analysis of Samsung, Disney SWOT analysis 2019 | SWOT Analysis of Disney, Amazon SWOT 2020 | SWOT analysis of Amazon, Nestle SWOT Analysis 2019 | SWOT Analysis of Nestle. Nike is the world’s no. Nike has retained its leadership position in the shoe industry through a  consistent focus on quality and in the light of changing customer preferences, it has modified its business strategy to maintain its lead. Nike’s 2019 Income before income taxes increased 11%, as revenue growth and gross margin expansion were partially offset by higher selling and administrative expenses. It is known as one of the best marketers in the entire industry. Words 1144 (4 pages) Views 381. It also aims to examine the opportunities the company should explore and the threats it should keep an eye on. A lot of this push has come from the pandemic. We respect your privacy. SWOT analysis of Nike. The product was first launched for legendary basketball player Michael Jordan in 1984. Nike’s approach to marketing is considered highly authentic. Several sporting teams are on the brink of collapse. 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. The pandemic has had a strong negative impact on the sales and revenue of businesses like Nike leading. Apart from that, Nike’s debt is … Since Nike is an early entrant in this area, it will reap the benefits of its investment in cloud technology and digitalization faster than its rivals. However, this was more than offset by a decline of 820 basis points in the fourth quarter of fiscal 2020, primarily due to the impacts of COVID-19. October 23, 2020 9 . ... Bata, Reebok, Nike, Adidas, etc. Throughout its history, the company has introduced several market leading technologies that have helped it dominate the sports shoes market. The entire. The company specializes in athletic wear, providing footwear, apparel, athletic equipment, and accessories. The company has experienced growth in its revenue from direct to customer sales channels. Nike’s DTC revenue increased to $12.9 billion in 2020 from $12.3 billion in 2019. However, the role of technology in Nike’s ecosystem has grown exponentially in the latest years as the company has moved to offer an omnichannel shopping experience to its customers. He graduated with a Hons. Its faster and robust growth is also a result of the heavy focus on marketing. Quality is a leading factor that differentiates Nike from the other brands. 1 shoemaker. The brand is dependent mainly on one market for the highest portion of its sales and revenues. 1 shoemaker. Roughly every four years, Nike throws a World’s Fair for sport tech, showcasing the brand’s latest innovations in gear ahead of the summer Olympic Games. Nike’s culture is not as outstanding as several other leading brands in various industries. While the situation has improved in recent years, its HR related issues are not entirely over, and the company should gain higher employee satisfaction through inclusion and diversity programs. The New York Times conducted interviews with 50 former and present Nike employees to investigate the company culture. Words 1144 (4 pages) Views 381. Revenue is the top line item on an income statement from which all costs and expenses are subtracted to arrive at net income. Nike has brought several game changing shoe technologies for its  customers and fans like NIKE Air, Lunar, Zoom, Free, Flywire, Dri-Fit, Flyknit, Flyweave, ZoomX, React, Adaptive and NIKE+ technologies which prove Nike’s dedication to the design of innovative products. Nike is the market leading brand of sports shoes and apparel. Phil Knight (Founder and CEO) is frequently quoted as saying that ‘Business is war without bullets.’ Nike has a healthy aversion of is competitors. However, the decline can be attributed largely to the fall in sales in the fourth quarter due to the pandemic. Apart from its core brand, Nike also owns Converse and Hurley. Another major benefit for the brand is that it will help Nike reduce its dependence on retailers and distributors. In the year 2020, about 41% of Nike’s sales came from the U.S, while the rest of 59% came globally. There’re approximately 75400 people are working for the company by the end of 2020. Selling and administrative expenses remained higher as a percent of revenues, reflecting investments in data and analytics capabilities, digital commerce platforms and an initial investment in a new enterprise resource planning tool to accelerate Nike’s end-to-end digital transformation. Using for my management program – Leadership & People Management. Extensive global production and di… Tell us what you think? Some even left their jobs. Most of the Nike brand footwear production took place in Vietnam, China, and Indonesia. Read more about Nike in this swot analysis analyzing its key strengths and  weaknesses in 2020. Hi Divya, Most of the information is from Nike’s annual report and few points have embedded hyperlinks for references. Table of contents. However, Nike has focused on developing its own digital channel rather than depending on others like Amazon. It pulled out of Amazon’s e-commerce platform in 2019. The growth of Nike can also be attributed to its focus on quality and investment in technologies that have helped it consistently improve the quality of products and customer service. At the Atlanta Olympics, Reebok went to the outlay of sponsoring the games. Contradicting Strategies: Nike pledged to shift all its facilities to 100% renewable energy with net-zero carbon emissions under the “Move to Zero” scheme. At the Atlanta Olympics, Reebok went to the outlay of sponsoring the games. Deloitte: Mission Statement | Vision Statement| Values | Culture, Starbucks Mission Statement, Values, Principles, & Sustainability Goals, Uber: Mission Statement | Cultural Norms | Principles | Philosophy (2020), Amazon: Mission | Leadership Principles | Philosophy (2020), Nordstrom: Mission | Vision | Core Values (2020), Your favorite Nikes might be made from forced labor. Its focus on customer experience has only increased with time resulting in growth in brand equity and profitability for the brand. It was found by, in the communities. Among its leading competitors are Adidas, Under Armour, and others, including Fila and New Balance. However, while the company is trying to get rid of the counterfeit problem by expanding its reach through direct to consumer channels, counterfeits still remain a difficulty for the brand. Comments are turned off. Nike (NYSE: NKE) is the largest brand of sports shoes and apparel in the world with a global footprint. Together, the three countries accounted for 49%, 23%, and 21% of Nike brand footwear, respectively. contact: support@notesmatic.com, admin@notesmatic.com, Easy Ways Businesses Can Incorporate Sustainability, What You Need To Know About Marketing for Your New Business. Its net revenue grew from $36.4 billion in 2018 to $39.1 billion in 2019. Nike, Inc. is an American multinational corporation headquartered in Oregon, USA. Author: S.K Gupta First published: December 17, 2018 Last updated: Oct 06, 2020. Nike Threats in SWOT Analysis. The company generated around $24.3 billion from sales to wholesale customers in 2020 compared to $26.7 billion in 2019. Its growth remained obstructed in many areas in the past and technology has helped it find new high growth segments. Apart from its great quality products, Nike is known for its excellent marketing strategy and techniques that have helped the brand gain a distinct position and identity in the global market. Puma SWOT analysis 2020: Case Study in 4 Steps. Here’s why. These benefits were partially offset by higher production costs. Taking place in Tokyo this July, the 2020 Olympics are predicted to be the hottest on record. Nike is a very competitive organization. Its market-leading position and global dominance are backed by the strong brand equity the company has built. October 23, 2020 8 . While Nike has already benefited in this area by moving its business to the clouds earlier than its rivals, the company can gain significant leverage by sustaining its focus on technological innovation in the coming years. 4.1 Company Profiles. Comments are turned off. ... Adidas used to be the main apparel sponsor for the NBA, however, it lost the contract to Nike. However, the company must address concerns regarding competition, labor practices, imitation and patent protection. Apart from improved customer experience, Nike’s investment in technology will also help it gain stronger sales in the international markets. While Nike has grown its push towards direct to consumer sales, it has depended traditionally on retailers and wholesalers to achieve sales globally. Apart from bringing products that fit into their customers’ lifestyles, Nike has also altered its sales and marketing strategy to suit its customers’ tastes. Join our newsletter today to get updates on the latest posts! The gross profit of the company grew to $17.5 billion in 2019 from $15.95 billion in 2018. Nike SWOT Introduction A SWOT Analysis is probably the simplest ways for administrators and corporate authorities to envision every one of the variables that could assume a job in the achievement or defeat of their organization. Nike has leveraged the power of marketing quite well. This creates the perception that Nike is not committed to addressing climate change and its pledge is just a marketing stunt. SWOT ANALYSIS: Strengths. Revenue can be defined as the amount of money a company receives from its customers in exchange for the sales of goods or services. With a growing focus on optimizing and delivering a superior customer experience, Nike is now more interested in serving its consumers directly than through retailers and wholesalers or other e-commerce channels. who wrote this article ? Nike is very vulnerable in … Coronavirus severely hurt economic activity across several markets and various industries, including travel and fashion. The interest payments on its debt are also well covered by EBIT. This SWOT analysis looks at Nike, a global retailer that specialises in sportswear, including shoes, clothing and accessories. It is listed on the NYSE and is headquartered in the United States. This detailed SWOT analysis of Nike aims to examine the strengths and the weaknesses of Nike. NIKE, incorporated on September 8, 1969, is engaged in the design, development, marketing and selling of athletic footwear, apparel, equipment, accessories and services. The stock price of Nike is $72.63 on NYSE in 2018. . SWOT Analysis of Adidas. I am glad you liked our analysis. The brand has excellent marketing campaigns and, Recently, a former employee accused Nike of, Multiple female employees reported that they had complained to the HR but saw no action being taken from their part. While Nike’s core market, the United States, is the main source of revenue for the brand, the impact of a recession or a pandemic on the US economy will also hurt Nike sales and profitability. Unequal Wealth Gap. 032c returns to an old corporate strategy favorite – the SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis – to consider Nike’s position and message for 2020, and beyond. 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