Pest Analysis On Nike - December 2nd, 2010

Nike, Inc. (pronounced /naki/) (NYSE: NKE) is a major publicly traded sportswear and
equipment supplier based in the United States. The company is headquartered near Beaverton,
Oregon, which is part of the Portland metropolitan area. It is the world's leading supplier of
athletic shoes and apparel[4] and a major manufacturer of sports equipment with revenue in
excess of US$18.6 billion in its fiscal year 2008 (ending May 31, 2008). As of 2008, it employed
more than 30,000 people worldwide. Nike and Precision Castparts are the only Fortune 500
companies headquartered in the state of Oregon, according to The Oregonian.

The company was founded in January 1964 as Blue Ribbon Sports by Bill Bowerman and Philip
Knight,[1] and officially became Nike, Inc. in 1978. The company takes its name from Nike
(Greek pronounced [nk]), the Greek goddess of victory. Nike markets its products under
its own brand as well as Nike Golf, Nike Pro, Nike+, Air Jordan, Nike Skateboarding and
subsidiaries including Cole Haan, Hurley International, Umbro and Converse. Nike also owned
Bauer Hockey (later renamed Nike Bauer) between 1995 and 2008.[5] In addition to
manufacturing sportswear and equipment, the company operates retail stores under the Niketown
name. Nike sponsors many high profile athletes and sports teams around the world, with the
highly recognized trademarks of "Just do it" and the Swoosh logo.

Political Analysis

The government must create economic policies that will foster the growth of businesses. Nike,
fortunately, has been helped by the US policies which enable it to advance its products. The
support accorded to Nike by the US government, particularly in the general macroeconomic
stability, low interest rates, stable currency conditions and the international competitiveness of
the tax system, form the foundation critical to Nikes growth.
Economic Analysis

In economy, the biggest threat for Nike would be economic recession. During recession, Nikes
growth will be adversely affected. The US economy is experiencing a downturn right now.
Consumer purchases are slowing down. Currently, Nike's feeling the pinch of the economic
recession. The Asian economic crisis also affects Nike since its goods are manufactured in Asia.
The labor costs and material prices are going up.

Nike's growth is not just affected by the local economy but also in the international economy. A
weak Euro and an Asian recession could mean weak sales for Nike. The overall results in the
sales generated by Nike in athletic footwear, however, remained stable. The global market makes
up for the variances in sales particularly between peak and lean seasons.

Society Analysis

People are more health conscious nowadays. Diet and health are getting more prominence.
Consequently, more and more people are joining fitness clubs. There is an accompanying
demand for fitness products particularly exercise apparel, shoes and equipment. Nike is at the
forefront of this surge in demand as people are looking for sports shoes, apparel and equipment.
Nike, however, failed to foresee problems brought about by a sweatshop expose pertaining to
labor and factory conditions at production locations in Asia. This caused bad publicity and
declining sales as society and consumers demand more socially responsible companies.

Technology Analysis

Nike uses IT in its marketing information systems very effectively. Nike applies marketing
information systems to the economics of innovation, segmentation and differentiation for most of
its businesses. Nikes leadership status owes in large part to the use of extremely valuable
Information Technology, and applying it to every aspect of the product from development to
distribution.

Nike, being the world leader in the athletic footwear industry, is able to effectively harness its
environment to boost its marketing efforts. This strategy has translated into robust sales of Nike's
products