Nikes Threats Opportunities Weaknesses Strengths PDF

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Week 6 Assignment 2 Student Full Name Strayer University BUS499 Business Administration Capstone Dr. Keller Dr. Gardner Date

2 Week 6 Assignment 2 Nike has varying weaknesses and strengths that have been identified utilizing strategies and tactics. This paper will identify the tangible and intangible resources, core capabilities and competencies, as well as the segments of Nike’s environmental structure and influence. The forces of competition will be explained in detailed following how Nike addresses such forces. This paper will also provide some predictions relating to the forces of competition using the “Porters 5 Forces of Competition”, then proceeding with an identification of the external threats against Nike. A comprehension review of threats will lead to predictions of how Nike handles these challenges to identify the greatest opportunities that are presented. General Environment The general environment of Nike includes two main components that are vital for their success. Those vital environments are social/demographics and technological advancements. Given the social/demographic environments and the products sold being sports and athletics have always been male-dominated (Hitt, & Ireland & Hoskisson, 2015). Nike however, has strongly positioned their products towards men regarding the looks and segmentations as with women’s fitness. Thus, has greatly and significantly accelerated their growths while strengthening their positions towards the brands in which they choose to supply. Their brands and products lay emphasize all types, ages, and vendors regarding the athletic demographics and consumers. Based on extensive research, Nike has discovered that women aren’t into fitness as largely as men (Zhang, 2018). Given these statistics, women conduct more walking and running while exercising on cardio machines and taking dancing classes and yoga, whereas men are more into athletic sports. This provides Nike with the must of positioning their brand accordingly to meet expectations,

3 needs, and wants of consumers regarding both genders and positioning some products for the women’s line of fitness (Hitt, & Ireland & Hoskisson, 2015). Technological advancements have provided methods of innovation for Nike to provide fitness products that improve performance while enabling a greater specialization given the specific segments of the industry. Such products that have included technological advancements are acquired towards those who conduct fitness routines along with athletic sports. Given the wrist bands that tracts the individual's fitness goals and incorporates the given scenarios in which they can choose from enacts capabilities of enhancing their overall fitness training and productivity (Hitt, & Ireland & Hoskisson, 2015). Five Forces of Competition Two forces given the competition of Nike regards those of the competitive rivalry and the threat of new entrants. Such factors of competition have laid the foundations in which brings upon challenges for Nike. Nike must incorporate newly involved methods to surpass such competition while enhancing their profit margins and producing products that continuously meet the needs of their consumers regarding the likes and preferences (Angeles, 2014). If Nike prioritizes such strategies given the competition, their power can succeed those in which are less significant making way for investment and giving them a competitive advantage. Competition Rivalry The competition Rivalry for Nike is a strong force. The competition determines how Nike is maintaining their shares given the sports footwear market. Such elements of the force analysis provide an insight into how just competitive Nike is while giving influences towards the industry of environment and performance. Such external factors then create a basis for a stronger force regarding competitive rivalries for Nike (Hitt, & Ireland & Hoskisson, 2015). The factors include the low market growth rate, the high aggressiveness of other firms and companies, and the

4 moderate number of companies. Given the low market growth rate, this is because of the markets penetration and saturation. Such conditions provide strong forces for Nike and other rivalries to compete. Firms are becoming highly competitive in this type of market given the bigger market shares that are becoming readily available. However, there are only a few numbers of firms that give threat in competition towards Nike, thus, making this a moderate force through product innovation and development (Angeles, 2014). The threat of New Entrants New entrants can disrupt the processes and sales of Nike given their environment. Such elements have been analyzed as the extent of the influence given by the new entrant markers. Such influences are moving towards sports shoes and apparel while incorporating equipment tools for athletes (Hitt, & Ireland & Hoskisson, 2015). The external factors involved with the threat of new entrants regards the higher costs of brand development, higher economies of scale, and the moderate cost of conducting business. Such higher costs of brand developments are increasing in difficultness because of the success of larger companies competing against Nike. There is, however, a competitive edge that is placed against the new entrants in which takes into consideration the global production and distribution (Zhang, 2018). The moderate costs of business running incorporate the abilities of the new entrants disrupting the industry environment. Evaluation Nike has dealt with competition rivalry and new threats of entrants in the past. Such measures and methods that Nike took on dealt with new innovations and newly developed ways of how they conducted business (Hitt, & Ireland & Hoskisson, 2015). This was done through pricing strategies, reducing costs, and providing newly valued positioning towards their

5 consumers. Nike has managed to surpass the challenges and build effective barriers in which safeguarded the competitive edge in which they have built. Providing newly innovated products hasn’t only brought new consumers but also has incorporated a folding of old consumers. In return, they lowered the fixed cost per unit of products that were sold. Nike also developed new economies while building capacities and dynamics of restructuring their industry. The rivalry that has been upon Nike in competition has been among the existing players of the industry (Nikodimou, & Dimitrakopoulou, 2019). Such intense rivalry has been well driven and has decreased the pricing of products in which Nike sells while decreasing its profitability of accessories, apparel, and footwear. Such competition hasn’t taken much toll on Nike over a period due to the probability of the company. Future Improvements Nike can incorporate methods of dealing with these challenges through building a sustainable differentiation, building a scale so that they can compete on a higher level, and through collaborating with the competitors so that an increase in market shared go up, as opposed to just competing with them and the smaller markets involved (Nikodimou, & Dimitrakopoulou, 2019). Dealing with the challenges of new entrants, Nike can establish newly developed and innovated products while enhancing their capacities of spending money given newly research conducted on products and development. This will not only bring new customers to the company to purchase products, but it will also help establish relationships back with prior customers. External Threats and Opportunities Nike has many external threats two of which are competition and currency volatility. Competition being an external threat to Nike is due to their athletic footwear and appeal being

6 highly competitive across the nation, not only in the United States (Hitt, & Ireland & Hoskisson, 2015). There are other significant athletic and leisure footwear and apparel companies that provide sports equipment to their consumers and processes similar products. Some of those competitors are Puma, Adidas, and Under Armor. Given the rapid advances with technology and preferences of the consumers, such challenges constitute a significant risk for Nikes stability. The other threat of currency volatility is generated across the United States due to the exposure of currency fluctuations (Pharr & Lough, 2012). Nike’s generated sales are outside of the U.S. and with the recent strengthening of the United States dollar, this has hurt the reported results of their profits because of how foreign amounts are being translated in the dollar for purposes of reporting. Nike does have multiple hedges in place which enables Nike to lessen the impact of such unfavorable exchange rates, but these designs of hedging aren’t eliminating the full risk. Two important opportunities that Nike has been consistent with the emerging markets and innovative products being offered to consumers. Opportunities for emerging markets places Nike's presence against the markets where there is still room for potential growth (Nikodimou, & Dimitrakopoulou, 2019). The rapidly growing economies such as China, including other emerging markets in India and Brazil, offers the potential to enforce driven incorporation for future earnings and growth of sales. China alone has resulted in around 10% of sales and revenues for Nike. Nike also realigns its products to match what the Chinese consumers are wanted as far as tastes and preferences are aligned (Nikodimou, & Dimitrakopoulou, 2019). Innovative products are another opportunity for Nike. Given the faces of Nike on R&D in which was mentioned as being a strength of Nike, the company is generally placed on the forefront of the innovation concerning the products in which they offer. For instance, their products, ‘Fuel Band’, is a wearable technology in which monitors the physical activities

7 (Nikodimou, & Dimitrakopoulou, 2019). This product hasn’t been as successful for Nike as they had hoped, but they remain focused on greater advances of products given newly advanced technologies. Nike’s brand strength coupled with its focus on R&D will continuously allow Nike to remain at the forefront of new advanced technologies given footwear and products that are technology related. Threats and Opportunities Strategies External threats that impact this organization are exhibit advancement, considering uniting development, and changes in customer tendency, just to give a few precedents. These would affect this organization unimaginably, considering the way that there is a credibility that the market could create, considering that everyone uses advancement, nowadays, and markets have opportunities to create (Nikodimou, & Dimitrakopoulou, 2019). Moreover, merging advancement with another association could impact this undertaking, considering the way that most associations mix their business with associations that are correspondingly in a similar class as they may be, assuming more regrettable, which makes them far superior as a business. Thusly, that without anyone else's input could be a hazard to this organization. Essentially customer tendency is a hazard to this endeavor, since customers pick and pick where they should need to get their organizations, thusly, combining this association with another association would be a test (Nikodimou, & Dimitrakopoulou, 2019). Strengths and Weaknesses The strengths in which Nike has been undeniable. Nike has respectfully earned the title in which they have worked so hard to achieve as being a reputable sales company in the footwear and apparel industry. Such recognition has given Nike a brand name through utilizing a traditional sales force which has increased a reduction in costs regarding operations (Hitt, &

8 Ireland & Hoskisson, 2015). Thus, enabling Nike to ingeniously ally themselves with nearly 300 alliances and partnering with many international companies. However, the greatest strength of all regarding Nike is how they conduct their strong research and development of their products. The designs, research, and developments have put forth many efforts as being the key factor to Nike’s success. Advanced and technical innovations have made it possible to incorporate designs with manufacturing processes of their products including footwear, apparel, and athletic equipment for consumers across the globe (Nikodimou, & Dimitrakopoulou, 2019). Given such advancements has enabled Nike to produce products that have decreased injuries in the athletic fields while enhancing athletic performances of the users of the product. Given the core strength of Nikes products and reputation, unfortunately, Nike battles with a weakness of high pricing on the products in which they serve to their consumers. Higher prices are, unfortunately, due to the strong brand that Nike has developed. Given the reputation that Nike has built, Nike can command premium prices to be placed on their products (Hitt, & Ireland & Hoskisson, 2015). Such higher prices are beneficial to Nike due to the increase in margins and profitability, but a weakness for consumers. The prices for Nike’s footwear is higher than most of their competitors in the same industry, which entails their products come to be out of reach for many consumers globally, particularly with the emerging markets (Nikodimou, & Dimitrakopoulou, 2019). Thus, also being a risk towards declining in demand due to the economy falling into recession because consumers are having lower discretionary spending limits for items that are non-essential. Strategy

9 Nike has the chance to improve its work practices to address contentions here of the business. Proactive methodologies for this worry can prompt an improved brand picture. Another open door is for Nike to improve its item blend to pull in more clients, particularly noncompetitors (Hitt, & Ireland & Hoskisson, 2015). The organization likewise has the chance to improve its quality in creating markets to profit by these business sectors' high development potential. This piece of the SWOT Analysis demonstrates that Nike Inc. must change a portion of its approaches and systems to guarantee it proceeded with authority in the worldwide athletic footwear, clothing, and hardware advertise. The retail portion is astoundingly esteem delicate. In any case, most by far of its compensation is gotten from selling into retailers (Korzeniewicz, 2015). Retailers will, by and large, offer an on a very basic level equivalent to experience to the customer. So, edges will when all is said in done get squashed as retailers endeavor to pass a part of the low esteem competition weight onto Nike. Resources, Capabilities, and Core Competencies Nike has changing needs and traits that have been seen utilizing system and procedures. This paper will see the basic and unstable resources, focus cutoff points and aptitudes, similarly as the bits of Nike's natural structure and effect. The forces of the contest will be cleared up in down to business after how Nike looks out for such powers (Hitt, & Ireland & Hoskisson, 2015). This will in like manner give a couple of needs relating to the forces of contention using the "Porter’s 5 Forces of Competition", by then proceeding with an ID of the external dangers against Nike. An understanding review of perils will provoke needs for how Nike handles these challenges to see the best open doors that are showed up. Focus limits can't abstain from being limits that fill in as a wellspring of high ground for a firm over its foes (Hitt, & Ireland & Hoskisson, 2015). Focus limits move after some time through a legitimate procedure for

10 grasping how to position different resources and abilities to a connection's favored position. Nike's inside limits exist in their dumbfounding publicizing techniques and their inventive thing structure. These two segments give much regard and central focuses to Nike's buyers, are hard for questions to mirror, and can be used everything considered to by a wide edge most of their things and markets (Korzeniewicz, 2015).

11 References Angeles, R. (2014). Using the Technology-Organization-Environment Framework for Analyzing Nike's Considered Index Green Initiative, a Decision Support System-Driven System. J. Mgmt. & Sustainability, 4, 96. Angeles, R. (2014). Using the Technology-Organization-Environment Framework for Analyzing Nike's Considered Index Green Initiative, a Decision Support System-Driven System. J. Mgmt. & Sustainability, 4, 96. Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2013). Strategic management: Concepts and cases: Competitiveness and globalization (10th ed.). Mason, OH: South-Western Cengage Learning. Korzeniewicz, M. (2015). Commodity chains and marketing strategies: Nike and the global athletic footwear industry. Contributions in Economics and Economic History, 247-247. Larson, D. (2011). Global Brand Management--Nike's Global Brand. ISM Journal of International Business, 1(3). Nikodimou, V., & Dimitrakopoulou, P. (2019). The Power of Marketing in the Industry of Sports. Pharr, J. R., & Lough, N. L. (2012). Differentiation of social marketing and cause-related marketing in US professional sport. Sport Marketing Quarterly, 21, 91. Zhang, J. (2018, August). The strategy of Sports Brand Network Marketing on the Basis of Brand Image Promotion. In 2018 International Conference on Management, Economics, Education and Social Sciences (MEESS 2018). Atlantis Press....