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Nike's Five Forces Analysis

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Nike is a sports brand providing niche products such as sportswear and apparels to consumers. It ranges to different types of sports from football to basketball. Nike is one of the leading firms, which is worth $15,000,000. Recently, Nike has provided a new design to the consumers. It consolidated modern technology with shoes, which is more appealing to the consumers. Adding on, Nike has been supplying the best products to every athlete around the globe. The company has utmost dedication to create every chance to show themselves after three years. Nike realizes that the use of advance technology produced the best products and hence, Nike decided to invest on manpower and material resources for the research and development of new products …show more content…

Most changes only affect how a company can produce their goods and how much profit they would make. Although these factors seem insignificant to us, these factors contribute the probability of a company surviving. One of the reasons why Nike is so successful is due to the policy it has. Nike embraces low-interest rates and well regulated international tax agreements. As a company that manufacture and sells physical goods, the tax and manufacturing laws are subject to change. Political conflicts can always make customs related processes …show more content…

The model is usually used, worldwide, to analyze the industry structure of a company as well as its corporate strategy. The forces are frequently used to measure competition intensity, attractiveness and profitability of an industry or market. One of the main intensity between the competitors is the rise of the number of competitors. Competition regulates how Nike maintains its share of the sports footwear in the market. Linking back to the porter five forces, it displays how competition impacts the environment of the industry and the performance of individual firms. Low market growth rate and high aggressiveness of firms also affects the industry. Based on the porter five forces, the strong competition in the industry requires Nike to pay attention on market development and product to ensure advantage and also to grow the share in the global

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is a major publicly traded company famously known for their footwear, clothing, sportswear, and equipment line of products. Phil Knight and Bill Bowerman co-founded the company in Beaverton, Oregon in 1964. At this time, the company was known as Blue Ribbon Sports until 1978 when it officially became Nike, Inc (About Nike, 2011). They are the major competitor for Under Armour as they are the current world's leading supplier of apparel and athletic shoes, as well as a major manufacturer of sporting equipment. Nike sponsors many high-profile athletes as well as sports teams around the world.

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They want people to , when looking for sporting gears, see the brand of nike and instantly know that is quality and reliable products on the shelf. They used ethos ,pathos, and logos to boost their campaign in establish well known sporting product on worldwide platform. This is the way how nike has become so successful in its category. Nike is setting standards that other companies are following in sporting

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Company Description Nike believes diversity and inclusion drives innovation that lead to a competitive advantage. Nike has a broad base of suppliers that actively and significantly support their business requirements. Nike’s Global Procurement team manages the procurement process, including selecting and contracting with the right suppliers for the right goods and services. They have also begun to reduce Nike 's footprint and lessen their impact.

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This model is considered as the most potent and useful tool and is widely used by organisations. This model deals with external factors that influence the nature of completion and internal factors how firms compete effectively to be more profitable. Porter’s 5 forces is used. Industry Rivalry : Porter (1980) reiterated that intensity of rivalry is dependent on number and size of direct competitors as numerous and/or equally balanced competitors may lead to intense competition. The rivalry for market share becomes intense when product differentiation and switching costs are

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Porter’s 5 forces model analysis to understand Nike’s industry Fig 2. Porter’s five forces model 1. Threat of substitute - Low Substitutes in the footwear category can include any other types of shoes that consumers can choose to serve similar purposes. Substitutes here therefore include the likes of sandals, which can act as substitutes, even though they may not fulfill exact same purpose. It is difficult to think of other substitutes that can fulfill the same purpose as athletic shoes from the footwear industry since this an industry that has something very specific to offer to a targeted market.

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The low cost of producing products in these countries continues to boost the bottom line. 2. Price stability The price of the Nike’s product is high, but the quality is high and the market price stability. Although Nike have more than 44,000 employees worldwide and thousands of retail in the world but the price is stability.

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Starting with the Waffle Trainer to the Shox columns developed in 2001, certain technologies can only be found in Nike shoes. Since it early stages, Nike research facilities had evolved to the present 13,000 square feet building designated to the constant improvements of technologies. 4-Procurement: Nike is seeking to product innovation and sustainable growth and that requires new ways in order to continue in business. Nike is working with all its partners all over the world and the establishment of

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The legendary position that Nike enjoys today has been achieved through attractive and innovative design, high quality production and effective marketing strategies. There are very many marketing strategies that the company has put in place to make sure that its products appeal to different segments of the market.

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Probable factors that could affect Nike’s business judgements are a range of demographic, social, economic and political. A few have already started to transpire, though others are purely likelihoods. External factors affecting this mix is one of the most common, technology. Before Nike releases its brand new product line to the market, it’s always prepared to authorize that whether or not there has been any sort of major advances from the other competitors that would tracker its launch. Thus they must time this carefully, as other competition may demand to shadow its release with their marketing

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Competitors: PUMA, K-Swiss Inc., LaCrosse Footwear, Inc., Dick 's Sporting Goods, Inc., New Balance Athletic Shoe and Adidas – (Adidas have currently branched out into customization of footwear products. To sustain its competitive advantage over competitors, Nike has to take this to consideration). However, a large number of competitors in an industry usually indicates lots of demand for the products or services provided and this will help Nike to succeed in the long run. Suppliers: Nike outsources almost all of its footwear production to independent third party suppliers. As Nike has a minor control over quality of the products.

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Nike has sustained positive revenue in a worldwide market focusing on a healthy and active lifestyle. For the past 3 years Nike has gained a gross profit ratio of 8.73% in fiscal of 2013, 10.28% in fiscal of 2012, and 8.28% in 2011 . Thus showing the financial power Nike has, well the firm holds a net income of 2.5 billion in the fiscal year of 2013. Nike’s largest product category is footwear, representing over 55% of the companies revenue. Nike uses their financial resources ability to obtain large advertising plots, whether it is a commercial on television, advertisements on the Internet, or product promotion in athletic facilities.

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The increasing level of competition decrease the profitability. Moreover, this tool provides a foundation to formulate strategy and recognize the competitive landscape in the same industry of the company ("Industry Analysis | Porter’s Five Forces | Competition,"

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