Strategic recomendations for Nike
I have been asked by “Nike” to generate a report which includes a full market analysis and a set of strategic recommendations to help secure their short, medium and long term future. Nike itself is a huge organisation and has various sectors within its organisation. In the report I am going to focus on the UK footwear market sector. In this report I will firstly explain a brief history of Nike and how it was formed and how it has developed into the extremely successful brand we know today.
I will explain the products range they currently have and identify the markets from within which Nike function. I am then going to look at the footwear market sector as a whole and try to assess the current situation of the market and the future predictions of the market by looking at both the micro and macro factors affecting the sector. Using this I can try to explain how this may affect Nike in particular which will help me discover what I believe may be the best strategic recommendations Nike can realistically develop and implement.
I will apply a SWOT analysis to Nike to try to discover the attractiveness of the options they have in relation to changing strategic objectives in the short, medium and long term. I will assess the extent to which Nike can use its strengths to allow them to exploit opportunities and counter threats and the potential that may pose a threat to its marketing position. Using all my information gathered I will then try to explain what I believe is the key strategic objectives Nike should try to implement to make them a more competitive organisation.
Nike was founded in 1964 by Bill Bowerman and Bill Hayward as Blue Ribbon Sports (BRS). The company’s famous Swoosh and Nike brand name was created in 1971 and has been a recognized brand ever since. “Nike’s operations are divided into three product lines: footwear, apparel and equipment” (Market Line). Nike compete in all three of these markets but because I am focusing my report on the footwear sector I have looked further into this particular product line. Nike produce footwear for men, women and children.
Their product range of footwear is extensive and can be categorized into these following sub categories “running, cross-training, basketball, soccer, sport-inspired urban, tennis, golf, baseball, football, bicycling, volleyball, wrestling, cheerleading, aquatic activities, hiking, outdoor activities and other athletic and recreational” (Market Line). Nike also have wholly owned subsidiaries that also compete in the footwear market sector under different brand names such as converse, Chuck Taylor, All Star, One Star, Jack Purcell, Cole Haan, G Series and Bragano.
Nike is considered the market leader in the footwear industry and “During the fiscal year 2007, the footwear division recorded revenues of $8,514 million, an increase of 6. 9% over 2006. ” (Market Line). This shows the huge profitability of the footwear industry and the potential for future growth. The footwear sector of the Nike organisation is the most profitable and so it is vital Nike continue to innovate and grow to stay the leading competitor.
To fully understand the footwear market we need to look at the current situation of the market and the future predictions and forecasts of what may happen in the medium and long term. I have decided to focus on the UK sector so I can look in more depth into the market and the economy. To help me understand the market, I am going to look at the micro and macro elements in the UK that may affect Nike. The macro environment “consists of broad environmental issues that may affect business performance.
These are political/legal, economic, social/cultural and technological forces” (Jobber). For this reason I will be performing a PEST analysis which will help me identify the macro economic elements that may affect Nike. A micro environment can be described as “the actors in the firm’s immediate environment that affect its capabilities to operate effectively in its chosen markets. The key actors are customers, distributors, suppliers and competitors” (Jobber).