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This is a report on the SWOT analysis of the company prepared for the CEO for guidance in strategic decision making.
Nike is regarded as a very a competitive organisation and as its CEO once said, “We, the management of Nike have a healthy dislike for our competitors” (Nike, 2013). This ensures that the company is always ahead of its competitors in all aspects. The company is also said to have a lean organisation structure as it does not employ very many employees. This is due to the fact that it does not manufacture products but outsources them.
The company is only involved in the innovation and design of new products and marketing of finished products. The fact that the brand has a worldwide presence and is recognisable everywhere serves to market the company’s products at very low costs thereby ensuring that such costs do not eat into the profit margins. The strong research and development department helps the company to stay ahead of its competitors in terms of offering new and advanced products (Marketing teacher, 2013).
The Company has not diversified its products to other areas and this may leave it in a difficult problem if the footwear market was to be affected. This would lead to a situation where the company’s revenues reduce as this is the sector that brings in the most of its revenue. The fact that the company does not have its own retailers results in a situation where the margins of its products are reduced as the retailers also want to make their profits (Nike, 2013).
The fact that the company continuously engages in new product development activities ensure that they offer the best products to the athletes and therefore maintain their market share. The company can also expand into products such as jewellery and sunglasses as it is evident that athletes tend to have a preference for such high class accessories. This would add a new revenue stream for the company (Peteraf, 1993).
The retail sector is very price sensitive and this means that in case another sportswear company offers the same product at a lower price, most customers will shift to purchasing the item leading to loss of revenue and market share for Nike (Ferrier, 2001).
Ferrier, W.J. (2001), Navigating the competitive landscape: The drivers and consequences of competitive aggressiveness, Academy of Management Journal, 44 (1): 858-877.
Marketing Teacher (2013), Research and Markets: Analysis of Nike Inc – 2012 SWOT Analysis Study. Web.
Nike (2013), About the company. Web.
Peteraf, M.A. (1993). The Cornerstones of Competitive Advantage: A Resource-Based View, Strategic Management Journal. 14 (3): 179-191.