SWOTs Influencing Nike’s Capacity to enhance its Brand Image

Various strengths, weaknesses, opportunities and threats (SWOTs) influence Nike’s capacity to enhance its brand image. Nike’s core strength arises from a strong brand that is globally recognized. The brand’s symbols such as the swoosh sign are globally recognized and associated with favorable outcomes (i.e. a tick or correct outcome) in many cultures (Interbrand 1). The entity has also communicated the brand consistently over many decades thus increasing its awareness. Additionally, the entity’s “just do it” slogan reinforces the swoosh sign in communicating the brand. Since the slogan is simple, customers can easily recall it thus recognize the entity’s brands wherever the slogan is used. Such aspects have enhanced the value of Nike’s brand with Interbrand valuing it at $13,706, a value that ranks the brand at position 25 globally. Such clear and consistent heritage depicted in the swoosh sign and the slogan have enabled Nike’s brand to succeed without increased expenditure on endorsements, and advertising (Interbrand 1). Further the strength of the Nike’s brand was evident with the minimal effect it had following the negative publicity of Tiger Woods, the entity’s core ambassador for the entity’s golf products at the time.

Other strengths that help to boost Nike’s capacity to enhance its brand image include its technological and technical competencies. Technological competencies are evident with the recent successes it has achieved in it digital marketing strategies (e.g. digital sport). Such successes have for instance led to Nike become the most engaged brand in the social site Twitter (Cendrowski 1), despite its previous lower rating compared to Adidas (Interbrand 1). Its technical competency is evident through its consistent quality that has been ensured by use of athletes to test its products (Datamonitor 6). Such aspects enhance customer experience thus boosting the entity’s brand image.

Despite such strengths, Nike suffers from weaknesses such as a battered corporate image in its production facilities (Boje and Khan 11-12). This could limit the extent to which Nike can use its brand image to enhance growth in markets such as North America and Europe. Another weakness is large unfunded pension liabilities (Edgar Online 78), which could limit the expenditure on market communications aimed at enhancing the brand image in future (Datamonitor 7).

Nike has multiple opportunities it can realize to boost its brand image. Such opportunities include sponsoring underprivileged teams and carrying out other corporate social responsibility that meet the needs of the communities in which it operates. Another opportunity would be to enhance engagement in the social media to use it as a means of communicating its brand. For instance, the entity could offer rewards to customers through its social network channels to increase customer engagement in such channels.

Various threats could reduce the capability of Nike to boost its brand image. Most of these relate to the competitive landscape and the entity’s macro environment. Threats of a competitive nature include aggressive competition from competing firms, which could lead to the entity losing some of its core customers. For instance, Adidas won the contract to become the official sportswear partner and clothing licensee of the 2012 London Olympic hence could leapfrog Adidas from the market-leadership position in the UK due to the relatively higher sales it is expected to make during the period (Hall 1). Suppliers in locations away from its core markets pose another competitive threat. Since Nike sources a substantial amount of its products from independent contractors in China and Taiwan (Edgar Online 4), aspects such as failure to meet capacity for demand and lowering the quality of products are probable threats. Such aspects reduce customer satisfaction (due to delays and low quality products) thus affecting the brand image adversely. Other competitive threats include buyers switching to other products (e.g. following adverse economic events) and entry of new participants thus reducing Nike’s share in the market.

Threats presented by the macro environment include legislative, sociocultural, political, economic and technological aspects. Economic downturns present a core threat to the entity since they reduce customers’ purchasing power thus reducing the sales of non-essential products. Such effect was noted for Nike during the 2008 financial crisis (Edgar Online 5). Threats of a sociocultural nature relate to communication of the brand. Due to differing cultures around the world, a standard communication strategy may not achieve desired results. Threat of technology arises with regard to rapid changes in technology that could lead to Nike’s technology becoming obsolete thus lose out to competitors who have modern technologies. Concerning legislation, changes in various laws (e.g. labor, patents, environment and incorporation) would affect Nike’s operations hence its ability to deliver value to the customer.

The entity could use its strengths to capture the opportunities while reducing the effect of such threats. For instance, the entity could minimize the competitive threats by using its strong brand and technological prowess to offer better services than competitor or acquire smaller entities that enhance its competitiveness in the market. The entity could also reduce the risk posed by some of the macro environmental factors via partnerships. For instance, it could enter into agreements with governments in areas in which it operates to get concession in exchange for aspects such as creating more jobs. It could overcome the weakness of a battered corporate image by implementing a well-guided public relations strategy. Go to part six here.

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