Pestle Analysis NIKE 2019 - Nike Case Study | The Rise of Nike | MyAssignmenthelp

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14 Oct 201906:25

Summary

TLDRIn this insightful video, marketing expert Mark Salinger from assignmenthelp.com dives into a detailed PESTLE analysis of Nike, the world's largest athletic footwear and sports gear supplier. He covers political influences like government support and challenges like U.S. sanctions on Iran, economic factors affecting Nike's growth, social trends emphasizing fitness, technological advancements in IT infrastructure, environmental efforts to reduce carbon footprint, and legal issues including tax evasion and marketing practices. The analysis aims to provide a comprehensive understanding of external factors impacting Nike's market presence and global expansion.

Takeaways

🏆 Nike's brand value in 2019 was $32.4 billion USD, with a net income of $4.03 billion USD, making it the world's largest supplier of athletic footwear and sports gear.
📚 Originally founded as Blue Ribbon Sports, Nike was established by Phil Knight and Bill Bowerman on January 25th, 1964.
🔍 Political stability and government support are key to Nike's growth, with favorable tax agreements and infrastructure support, but political issues like U.S. sanctions on Iran have posed challenges.
💡 Nike's marketing strategies, including the 'Just Do It' campaign, have faced backlash, particularly when associated with controversial figures like Khalid Kaepernick.
💼 High political lobbying expenditures, such as the $750,000 spent in 2016, indicate Nike's efforts to navigate political challenges and maintain market presence.
📈 Economic factors like the growth of developing markets and stable developed countries have positively impacted Nike's business performance.
🌐 Nike's success in managing growth and revenue from 2005 to 2018, despite minor fluctuations, highlights its resilience in the face of economic challenges.
👥 Social factors such as increased awareness of fitness and sports, along with rising individual wealth in developing countries, influence the demand for Nike's products.
🛠️ Technological advancements have allowed Nike to automate operations, reduce labor costs, and integrate mobile technologies to enhance consumer engagement.
🌿 Nike's commitment to environmental sustainability, as evidenced by its ISO 14001 certification, includes using organic cotton and focusing on carbon footprint and waste management.
📖 Legal challenges, including gender discrimination lawsuits and tax evasion allegations, have been obstacles for Nike, affecting its brand image and operations.

Q & A

What is the brand value of Nike in 2019?
-The brand value of Nike in 2019 was 32.4 billion US dollars.
What is the net income of Nike worldwide?
-Nike's net income worldwide is 4.03 billion US dollars.
What was Nike formerly known as before the brand name change?
-Nike was formerly known as Blue Ribbon Sports.
Who established Nike and when was it established?
-Nike was established by Phil Knight and Bill Bowerman on January 25th, 1964.
What types of products does Nike offer?
-Nike offers athletic footwear, apparel, athletic support equipment, and accessories.
How does the political environment affect Nike's business processes?
-The political environment affects Nike's business by influencing factors such as government policies, international tax agreements, and infrastructure support, which can create opportunities or impediments for growth.
What economic factors have positively contributed to Nike's growth?
-Economic factors such as the rapid growth of developing markets, stable economies in developed countries, low labor costs in Far Eastern countries, and outsourcing policies have positively contributed to Nike's growth.
How does the social factor of increasing individual wealth in developing countries impact Nike?
-The increase in individual wealth in developing countries allows Nike to cater to consumers with higher purchasing power, offering safer products and marketing campaigns that emphasize product safety and quality.
What technological advancements has Nike harnessed for its operations?
-Nike has harnessed advanced IT infrastructure, online technology for contactless payments, automation in operations, and integration of mobile technologies to reach out to consumers and enhance its digital presence.
How does Nike address environmental factors in its product development?
-Nike addresses environmental factors by following the ISO 14001 standard for product development, monitoring its carbon footprint, managing waste, using organic cotton, and ensuring the recyclability of its shoes.
What legal challenges has Nike faced in terms of gender discrimination and work conditions?
-Nike has faced legal challenges over gender discrimination and hostile work conditions, as well as charges for tax evasion and scrutiny over its marketing practices.
How can assignment help.com assist with case studies involving companies like Nike?
-Assignment help.com provides in-depth and accurate analysis of case studies, helping students understand complex business strategies and achieve success in their marketing classes.

Outlines

00:00

📈 Nike's PESTLE Analysis Overview

Mark Salinger, a marketing expert from myassignmenthelp.com, introduces a PESTLE analysis of Nike, the world's largest supplier of athletic footwear and sports gear. The company, valued at 32.4 billion USD in 2019 with a net income of 4.03 billion USD, was established in 1964 as Blue Ribbon Sports by Phil Knight and Bill Bowerman. Nike's product range includes footwear, apparel, support equipment, and accessories. The analysis will delve into the political, economic, social, technological, legal, and environmental factors affecting Nike's business strategies and global expansion.

05:02

🏛 Political and Legal Factors Impacting Nike

The political environment significantly influences Nike's business processes, with factors such as government policies, international tax agreements, and infrastructure support playing crucial roles. However, challenges like U.S. sanctions on Iran and controversies surrounding the 'Just Do It' campaign with Khalid Kaepernick have posed obstacles. Nike's political lobbying expenses, which amounted to $750,000 in 2016, indicate efforts to navigate political adversities. Legal issues, including gender discrimination lawsuits, tax evasion charges, and marketing scrutiny, have also affected the brand's image and operations.

💰 Economic and Social Dynamics of Nike's Market

Nike's business performance is closely tied to the economic conditions of the markets where it operates, particularly the U.S., which has seen growth and revenue stability despite fluctuations. Economic factors like the rapid development of emerging markets, low labor costs in Far Eastern countries, and outsourcing strategies have contributed positively. Social factors such as increased fitness awareness, individual wealth growth in developing countries, and emphasis on product safety and quality have also shaped Nike's market attractiveness. However, concerns over labor conditions and wage rates in manufacturing countries could potentially harm the brand's image and sales.

🛠️ Technological Advancements and Environmental Stewardship

Nike leverages advanced IT infrastructure and technologies to streamline operations and enhance supply chain efficiency. The adoption of online technologies for contactless payments and the integration of mobile technologies in products have broadened consumer reach. Social media and digital platforms have been effectively utilized for marketing. Environmentally, Nike has adopted ISO 14001 for product development, focusing on carbon footprint reduction and waste management. The use of organic cotton and recyclable materials in shoes positions Nike as an environmentally friendly brand, although the company faces legal challenges and needs to address its environmental impact comprehensively.

Mindmap

Keywords

💡PESTLE Analysis

PESTLE Analysis is a strategic tool for analyzing the external factors that affect an organization, covering Political, Economic, Social, Technological, Legal, and Environmental aspects. In the video, it is used to examine the macro-environmental factors influencing Nike's business strategies and operations, providing a comprehensive understanding of the company's external business environment.

💡Brand Value

Brand Value refers to the worth of a brand name, often measured by its financial worth and the power of its identity. In the context of the video, Nike's brand value in 2019 is mentioned as 32.4 billion US dollars, highlighting the company's strong market presence and consumer recognition.

💡Net Income

Net Income is the profit a company makes after deducting all its expenses from its total revenue. The video states Nike's net income worldwide as 4.03 billion US dollars, indicating the company's financial health and profitability.

💡Athletic Footwear and Sports Gear

Athletic Footwear and Sports Gear encompass the products that Nike specializes in, including shoes, apparel, and support equipment for sports activities. As the world's largest supplier in this category, Nike's product range is central to the video's discussion of the company's market position and consumer appeal.

💡Political Lobbying

Political Lobbying is the act of attempting to influence decisions within government by outside groups. The video mentions Nike's political lobbying expenditure, which is a strategy to navigate political adversities and secure favorable conditions for business operations, costing the company 750,000 in 2016 alone.

💡Economic Factors

Economic Factors are variables that influence economic activities such as growth rates, interest rates, and labor costs. The video discusses how Nike's business performance is affected by the economic conditions of the markets it operates in, particularly the growth of developing markets and the stability of developed ones.

💡Social Factors

Social Factors include demographic changes, lifestyles, and public opinion that can affect consumer behavior and market trends. The video highlights the impact of social factors such as the growing emphasis on fitness and product safety in developing countries, which influence the demand for Nike's products.

💡Technological Advancements

Technological Advancements refer to the development of new technologies and the improvement of existing ones. The video discusses how Nike leverages advanced IT infrastructure and online technology to enhance its operations, reduce labor costs, and improve consumer engagement through digital platforms.

💡Environmental Responsibility

Environmental Responsibility is a company's commitment to minimizing its impact on the environment. Nike's adherence to ISO 14001 and efforts to reduce its carbon footprint, as mentioned in the video, demonstrate the company's dedication to sustainable practices and eco-friendly materials.

💡Legal Issues

Legal Issues encompass any challenges or disputes that a company may face in a legal context. The video mentions Nike's encounters with litigation over gender discrimination and tax evasion allegations, which are critical aspects of the company's legal and ethical standing.

💡Marketing Strategies

Marketing Strategies are the methods used by a company to promote its products and increase sales. The video references Nike's 'Just Do It' campaign and its reception among different segments of the population, illustrating the importance of effective marketing in shaping brand perception and driving sales.

Highlights

Nike's global brand value in 2019 was $32.4 billion USD.

Nike's net income worldwide was $4.03 billion USD.

Originally named Blue Ribbon Sports, founded by Phil Knight and Bill Bowerman on January 25th, 1964.

Nike is the world's largest supplier of athletic footwear and sports gear.

Nike's products include athletic footwear, apparel, support equipment, and accessories.

Political factors influence Nike's business processes and strategies.

Low interest rates and favorable international tax agreements positively impact Nike.

U.S. sanctions on Iran impeded Nike's growth plans in that region.

Nike's 'Just Do It' campaign faced controversy with Khalid Kaepernick's involvement.

Nike's political lobbying expenditure was $750,000 in 2016, increasing since then.

Economic factors such as growth in developing markets and stable developed countries affect Nike's performance.

Low labor costs in Far Eastern countries contribute to Nike's revenue growth.

Social factors like increased emphasis on fitness and product safety influence Nike's market.

Nike faces challenges with labor conditions and wage rates in factory settings.

Technological advancements in IT infrastructure and online technology benefit Nike's operations.

Nike has integrated mobile technologies and digital platforms for consumer engagement.

Nike's environmental efforts include ISO 14001 certification and use of organic cotton.

Nike has faced legal issues including gender discrimination and tax evasion allegations.

Marketing analysis of Nike and other Fortune 500 companies is available for academic assistance.

Call provided number for expert assistance in marketing case studies.