An Analysis of Nike

Nike, Inc. Foundation

Nike, Inc. is an American multinational corporation. Main field of Nike’s industry is worldwide selling for footwear, apparel, equipment, accessories and product services. Historically, Nike, Inc. is founded by Bill Bowerman and Phil Knight in 1964. First, Nike, Inc. started their business as ‘Blue Ribbon Sports’. But in 1978, they rearranged their organization and became the ‘Nike, Inc.’ that today we are known for Nike.

Products

If you go to the department store or outlet etc., especially for the sportswear and golf session, easily you could find the Nike’s products. Also, Nike is spread all around the world from downtown of the Seoul to Canada, and all of other countries. Nike is the multinational corporation. Their main product is footwear. Nike has various type of the footwear.

Among many kinds of footwear, we can classify their footwear as 4 types. (I researched only 2 popular models)

First is ‘Free Run’. It is superior among the Nike footwear in the field of ‘lightweightness’, but cushioning is less than Air Max, so maybe it would be not appropriate for training comparing with the former footwear model. Next is Air Max is well-known type of footwear. It model is the most common shoes for the people.

Their main product is footwear. But not only for that, they produce many kinds of sports equipment, too. Nike logo shows the football as well. That means Nike, Inc. is the producer.

With the era of ‘Smartphone’, Nike also developed the product connecting the smartphone and sports accessories. ‘Nike Sports Watch’ is one of them. It is for expert of runners in order to enhance the running ability. Using the GPS, measures the distance, course checking, running alarm, and also measures the personal record (how many reduce calories). It is connected to the smartphone, so the user can visualize own records.

Marketing

First, Nike uses the sports events. They promote their product marketing by special sports competition. For example, in 2010 World cup in South Africa, Nike took the official sponsor. So, Nike mainly promoted their brand image by using the unique occasion.

Second, they are using sponsorship. They support the professional league teams and national teams. Sports field that Nike support is vary from American football and Soccer clubs (English Premium League especially). They support American university football league as well.

Third is advertisement. Nike make their advertisement casting the famous athlete such as Jisung Park (Manchester United Soccer Player in Korea), Yeona Kim(famous woman figure skater in Korea), Cristiano Ronaldo, Michael Jordan, etc. Specially for the brand, ‘Jordan’ is the successful brand making by casting the celebrity. So their advertisement is familiar to everyone.

Last is manufacturing. Nike doesn’t have any factory. They just design the all things. So they have contracted with many outsourced factories in the whole world. This is a very unique management style.

SWOT analysis

Strength

First, Nike has strong brand power. They’re the number one sports brand in the whole world. The favorable brand image has been kept afloat because the strong association with the Nikes logo which is quite distinctive and the slogan “Just Do It”. Also, their products are high quality.

Second, Nike has flexible supply chains. They have no factories in the world. They contract with local factories to produce. Also, they then manufacture wherever they can produce high quality product at the lowest possible price. Ultimately, Nike products can be made more cheaply elsewhere.

Last, Nike has high quality products. According to New-York Times, Nike is strong at research and development, as is evidenced by its evolving and innovative product range. They continuously improve their products. Nike achieves high customer royalty.

Weakness

First of all, Nike depends just footwear. They make, design, and try many products (golf, shirts, hat etc.). However, the income of the business is still heavily dependent upon a footwear market. In my opinion, if Nike footwear has an internal downturn, then the company could collapse.

Second, their price goes up as time goes by. I understand that prices have risen, but these days they have gone up too fast, so there seems to be a problem. If Nike makes a low-priced line, it will help increase income.

Opportunity

The brand is fiercely defended by its owners whom truly believe that Nike is not a fashion brand. However, like it or not, consumers that wear Nike product do not always buy it to participate in sport. Some would argue that in rising culture especially,

Nike is a fashion brand. This creates its own opportunities, since product could become unfashionable before it wears out i.e. consumers need to replace shoes. There is also the opportunity to develop products such as sport wear, sunglasses, jewel and electronic equipment. Such high value items do tend to have associated with them, high profits.

Threat

In the post-corona era, the worldwide economic is continuing downturn. I think they need to change the policy of high prices. That’s the only way, they can withstand competition with competitors. (Reebok, Adidas, etc.)

Conclusion

Nike is one of the most successful sportswear companies. And their marketing case is also very successful. Nike has well-developed sportswear making technology. For example, they make a microchip in the shoes. If people wear a shoe, they can know the information about where they are and how far they have walked. So they can see these things and compete. Nike covers high add-value procedure such as R&D and marketing, which makes Nike get high profits. Recently, Nike goes forward to give more consumer value using events to give consumers special brand experience. Furthermore, Nike gives consumers active and affirmative brand image.

In my opinion, Nike has its own outstanding brand image and loyal consumers. So the future for Nike remains bright and it has additional growth potential a lot.