Analysis of Nike’s Strategy

Entities seek to remain competitive by delineating a strategy that uses their strengths to meet the opportunities and mitigate threats presented by the external environment. This paper aims to identify Nike’s strategy and assess how its strategic management approach fits the markets in which it operates. To meet this purpose, the paper first analyzes Nike’s external environment evaluating the industry profile, competitiveness in the market and the political, economic, socio-cultural, technological, environmental and legal (PESTEL) factors affecting the entity. Secondly, the paper evaluates the sources of competitive advantage for the entity including a value chain analysis. Thirdly, the paper will assess how Nike’s strategy fits its market by highlighting its strengths, weaknesses, opportunities and threats (SWOTs). Prior to these sections, a brief overview of the company follows in the subsequent paragraph.

Company Overview

Nike, Inc. designs, develops, and sells a wide range of products including apparel, footwear, and accessory products. It was incorporated in 1968 and has its headquarters in Beaverton, Oregon, the location of its advent (Edgar Online 1). Although its original product range was restricted to athletic footwear, its current portfolio extends to a variety of sports and leisure wear (Edgar Online 1). The entity sells its products through company-owned retail stores, direct-to-customer sales over the internet, and independent distributors and licensees (Edgar Online 1). It operates in more than 170 countries, possesses wholly-owned subsidiaries such as Cole Haan, Converse Inc. and Umbro International Limited and uses top-sporting endorsers as a core strategy to market its products (Edgar Online 1).

Its operations are ordered into six geographical regions – North America, Central & Eastern Europe, Western Europe, Japan, Greater China, and Emerging markets (Edgar Online 2). The entity’s revenues have grown consistently over the last five years from $16,326 million to $20,862 million, but net income fell in 2009 before recovering to surpass the levels existing before the economic crisis (Edgar Online 22). Overall, the entity has achieved a good performance being the global leader in the market for various sports’ and fitness activities’ footwear, apparel, equipment and accessories.

Go to part two here.

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