Application SWOT to develop Business
Strategies of Nike
Nam Hoang TRAN,
Duong Thai DANG, Ly Kyp ZUL
a
Faculty of Economics, Vietnam Maritime
University.
Abstract  frame work for the stable development of the
Nike has earned a significant reputation in
young people in relation to its sports related its nearest rival, with 36 percent worldwide
products around the world. The company
offers broad products line to its customers
and competes in global markets. In order to
understand the business strategy for Nike it
is essential to perform SWOT analysis of the
company. This paper presents SWOT
analysis of Nike Inc. with its strengths,
weaknesses, opportunities and threats and
then devise strategies to help grow the
company.
Keywords: Nike, business strategy, SWOT analysis of the shoe manufacturer. When William
Introduction
Along with Adidas, and Reebok and Under
Amour, the Nike brand name and the swoosh
emblem are among the most well-known
around the globe. Specifically, with the rational
business strategy, which considered as a central
company. According to the most recent
industry survey, Nike is well ahead of Adidas,
revenue compared to 21.8 percent for the latter.
In addition, Nike’s core business strategy has
not changed since its rise in the 90 and the
history will demonstrates a development and
emergence of a company. It was started by
Philip Knight in his mother’s bathroom back in
1962 with the name Blue Ribbon Sports. From
then until 1971, the “start-up” company was a
fledgling player in the shoe industry. The year
after, however, would radically change the fate
Bowerman, then a running coach at the
University of Oregon, presented to Knight how
a piece of malleable rubber on a waffle iron
could actually enhance running performance,
Knight took this presentation to heart, and Nike
was born. How was it able to achieve this feat
given the fact that the company was established
later than previous industry leaders such as
Adidas and Reebok? To answer this questions,
this study has been undertaken to determine the
efficacy of Nike’s brand promotions and how it
complemented the business strategy to
successfully achieve for the organization a
remarkable competitive edge and captured for
it its sizable market share. Using the SWOT
analysis, this paper has identified and explained
that, besides their individual merits and
successes, the manner in which they have
worked closely together has enabled the Nike
brand to dominate the global consciousness,
not just in terms of its association with the
footwear or apparel industry but also in the
sporting field as well.
1

Literature review
Concept of Business strategy
In essence, a business strategy is
an organizational master plan. This plan
is what the management of a company
develops and implements to achieve
their strategic goals. Essentially, a
business plan is a long-term sketch of
the desired strategic destination for a
company. This long-term sketch will
contain an outline of the strategic, as
well as tactical decisions a company
must take to reach its overall objectives.
This business strategy will then act as a
central framework for management.
Once this framework is defined,
management must live and breathe it. It
helps the different departments within a
business work together, ensuring that all
departmental decisions support the
overall direction of the
organization. This helps to avoid
working in silos, or different teams
pulling in opposite directions. At this
point it is important to highlight the
difference between a business strategy,
and a mission statement. One example is
Amazon’s “to be Earth’s most customer-
centric company” this is not a strategy,
more the vision that the strategy will
deliver, and creates the framework
within which the strategy will be
developed. The concept of marketing
strategy is defined in different ways.
And marketing mix is the most
fundamental concept of marketing which
is a set of controllable marketing tools
that a corporation uses to create a
desired response in the targeted market.
III. Methodology
The SWOT analysis helps to identify the
internal and external factors affecting Nike's
business performance. Internal factors include
its strengths and weaknesses, while external
factors include opportunities and threats. This
article aims to provide an in-depth SWOT
analysis of Nike to provide sufficient
information about Nike's business environment
from which to design a business strategy.
Chapter 1: Nike Background and Business
Strategy
Application of SWOT analysis
I. Introduction of Nike
1.1 History of Nike
Nike is a multinational company based in the
USA which engages in designing, developing,
advertising, promotion, and sales of sportswear
including footwear, accessories,
garment,services, and equipment. (Childs and
Bin, 2018). Originally introduced by Oregon
athlete, PhilKnight, and Bill Bowerman in
January 1964. The initial trademark was“BRS
Blue Ribbon Sports”. At its inception, Nike
functioned as a wholesaler for Japanese
shoemaker “OnitsukaTiger ”. In 1964 Nike
distributed shoes worth USD 8,000. In 1966
“BRS” opened the firstmerchandising shop in
California. which paved the way for its
expansion in the west coast. In1971 BRS
terminated the trade affairs with Otunga and
BRS introduced its own product linefor
footwear (Swoosh). In 1974, this company was
registered in the US patent and trademarkoffice
as Nike. Today Nike is the industry front-
runner in the subject, and its products
areavailable globally and online. The Risk
Aversion behavior of the board of executive
Officersand leadership of the Nike at large has
indeed been a key factor for success in present
context.The same is derived through close
examination on decisions made by the present
executiveOfficers as of 2022.
1.2 Vision of Nike
2
“We see a world where everybody is an
athlete united in the joy of movement.
Drivenby our passion for sport and our instinct
for innovation, we aim to bring inspiration
toevery athlete in the world and to make sport a
daily habit.”
1.3 Mission of Nike
“Bring inspiration and innovation to every
athlete”
1.4 Objectives
Nike’s objectives are to provide an
environment in which develops people to
maximize their contribution to Nike. To
Identify focused consumer segment
opportunities Provide quality and innovative
services and products internally and externally.
1.5 Industry of Nike
The industry that Nike competes was growing
over that past generation and actually it is still
growing with its new challenges, if we look
back the profile of shoe industry it seems that it
has faced a dramatic evolution over the last
fifty years, however the industry faces
many challenges from those who produce
identical products.
II. Current Business Strategy of Nike
The success of any business is influenced by
planning, preparation, and execution. The
success of a business starts with defining the
business’s strategy at the corporate and
business level. The corporate level strategy is
the planning pyramid of a business which
defines the main purpose of the business. The
target destination influences all the strategies
and decisions of the business. Business level
strategies detail the actions taken to offer value
to customers and gain competitive advantage
through exploiting core competencies in
specific product or service markets. The
business level strategy is influenced by the
firm’s position relative to its competitors as
well as the five forces of competition. In any
business organization, consumers are the
foundation of its business level strategy. Nike
Inc. has been continuously focusing on
innovation to develop and grow its business.
The paper presents Nike’s business level
strategies and corporate level strategies that
will help the company to gain competitive
advantages in the long-term. The paper will
also examine Nike’s competitive environment
to determine the most significant competitors in
the industry.
2.1 Business-Level Strategies
At a business-level, Nike utilizes a combination
of two strategies to ensure the offered customer
unique products and gain a competitive
advantage in the market. Nike Inc. uses a
combination of product differentiation and cost
leadership to win a greater share in the market.
The company differentiates its products from
other competitors through product innovation,
high-quality products, and technology
development. Differentiation at Nike Inc.
enables the company to build its brand image in
the global market. In product differentiation,
for example, Nike integrates its cutting-edge
design for its shoes. Nike Inc. has utilized
innovation and technology to offer customers
high-value products (Mahdi et al., 2015). For
example, customers can design their products
in Nike’s website and get it within the shortest
time possible. The company has also utilized
research and development initiative to ensure
continuous innovation and product
development to maintain its competitive
advantage in the market.
Nike does not utilize overall cost leadership as
compared to some of its competitors and new
entrants in the industry. Their products are
higher end prices which customers are willing
to pay because of their unique quality and value
in the product. Nike ID and other personalized
procedures including college and sports
sponsorships help the company to enhance
customer’s perception of their products which
are specialized to meet customer needs and
wants (Mahdi et al., 2015). The combination of
differentiation and cost leadership has helped
boost Nike’s performance in the global market.
The company has utilized advanced technology
to reduce the cost of production hence offering
a low price to the customer. However, Nike
3
Inc. should utilize mostly on product
differentiation to achieve long-term success in
the industry. It will involve the introduction of
new products such as new sports shoes as well
as advancement in technology to continuously
cut the cost of production (Mahdi et al., 2015).
As a result, the company will be able to
maximize its profit margins and maintain its
competitive advantages in the industry.
2.2 Corporate-Level Strategies
The success of any business is influenced by
planning, preparation, and execution. The
success of Nike business starts with defining
the business’s strategy at the corporate. In
Nike Inc., the biggest share of income
comes from the company’s sales on shoes
and apparel. The company uses the same
technology, distribution channels and other
resources for other minor products.
Although Nike has been growing in the
industry, corporate level strategies should be
designed to ensure the company’s growth.
There are three main corporate-level
strategies that Nike has been using to ensure
growth. Firstly, Nike has focused on product
development through the introduction of
new products (Burgelman, 2017). By using
new advanced technology, Nike has been
able to remain competitive in the market.
Because of product development, Nike’s
products remain attractive to customers
despite their change in preference. Secondly,
market development and penetration have
also been crucial to corporate level
strategies. Nike has been continuously
opening stores and retailers in the United
States of America and other regions in the
word. More so, due to its strong brand
image, Nike finds it easy to penetrate and
explore new markets as well as targeting
new market segments (Burgelman, 2017).
Market development and penetration in
regions such as Africa and the Middle East
have contributed to an increase in Nike’s
profit.
Lastly, Nike has an essential strategy that it
should utilize on to ensure continuous
growth of the company. Supplier diversity is
an important aspect of business success.
Nike customers are on a worldwide scale
leading to high demand for Nike products.
As a result, Nike has been diversifying its
market scale and ensuring continuous supply
for sustained production (Mahdi et al.,
2015). With the ready and potential market
that Nike has attained, there is a need for
supplier diversity. As the market share
increases, the need for more resources and
raw materials increase. As a result, there is a
need for more suppliers to ensure the
company does not run out of resources.
Supplier diversity will influence sustained
long-term success for the company and
ensure high-quality products for customers.
Product development, market penetration,
and market development can be achieved for
a long-term without supplier diversity
(Burgelman, 2017). Supplier diversity is the
key contributor to Nike’s long-term success
2.3 Nike has done over last 5 years
financially
The revenue of Nike is presented in the table
2.1 as follow
50000
45000
39117
40000
36397
Revenue in million U.S. dollars
34350
35000
30000
25000
20000
15000
10000
5000
0
2017 2018 2019
Year
Revenue
4
Table 2.1: Nike’ s revenue world wide from
2017 to 2021
It can be seen from the graph that the
revenue of Nike tended to increase in the
period of 5 years from 2017 to 2021. In the
year 2021, the revenue hit the highest point.
In two years from 2017 to 2018, the revenue
witnessed a significant increase with 36397
million dollars. In the next following year,
Nike’s revenue continue to go on sharply
with 39117 million dollar.
2011 to 2025. Overall, there is a slight
increase in the percentage of global market
share, and this figure will be predicted to
reach peak in 2025. From 2011 to 2014, the
proportion of market share significantly
increased, accounted for 6%. In the next 3
years, this number remained stable around
27% and it just increased 3% up to 30% in
2021. However, the percentage of Nike’s
global market share will be predicted to
stronly grow up, and it can be reached the
highest point in 2025, around 36%

Suddenly, this revenue fell dramatically with III. SWOT Analysis

37403 millions dollars in the year 2020 and Nike SWOT analysis will reveal their
started going up and peak the highest point strengths and weaknesses that are hindering
in the next year. their growth. Simultaneously, identifying the
opportunities and threats present in the
Forcast of Nike's global market share in current market scenario will hint at their
athletic footwear from 2011 to 2025 is possible business strategies to tackle the
presented in the table 2.2 as follow situation.
040% Listed below is a detailed table illustrating
the four components of the SWOT analysis.
036%
035% 034%
Strengths033%
032%
Efficient use of 030%
assets to aid cash flow - Low
030% - Innovation -
028% Implement disruptiveinnovation - Lack
027% 027%
025% 025%
initiatives theirw
025% 024% - Global brand recognition due to $2.5Bannual - Lack
Global market share

022%
marketing campaign. - Majo
020%
020% - Strong diverse company culture overse
018%
017% - Supply Chain - Strong company ownedlogistics - Lack
dept for multiple distributionchannels
015% - Consistent revenue growth
- Industry leading net profit margins due
010% toefficient management of SG&A costs
- Minimal A/R days (46 days)
005% - Size of company-Advantage due to economyof
scale
- Value chain that incorporates customervalue in 7
000%
2011 2012 2013 2014 2015 2016 2017 phases
2018 2019 2020 2021 2022 2023 2024 2025
Year - Strong reputation for superior performance

Opportunities
Table 2.2: Forcast of Nike's global market - Increase in direct to consumer channels - Exch
share in athletic footwear from 2011 to 2025 canincrease gross margins curren
- Increase in Soccer interest - Unce
This table illustrates the prediction of Nike worldwidecreates more valuable market to expand - Tren
worldwide market share in sport shoes from in canhin
5
 - Further develop a strong position onminimizing
Nike, Inc. environmental impact
- Market toward baby boomer generation thatis
comprised of 15%of U.S. pop.
-Market men and women products towardwomen
(make up 85% of purchase decisions)
- Leverage the strengths in efficiency
andinnovation to out perform the competition
ineconomic challenging time
- Maximze social media channels to betterdevelop
customer relationships worldwide
- Capitalize on the 20% increase in
emergingmarkets worldwide
Utilize increase in mobile device uses tocreate
possible value at every moment
Nike is a huge brand in sportswear with
impressive revenues and a huge customer
base to support the brand. The brand,
however, faces intense competition from
other multinationals. The brand would need
to continuously innovate and market its
products. The brand needs more research to
keep up with the changing needs and
preferences of customers.
Chapter 2: Recommend for Nike
I. Recommend Strategy
This paper will recommend different
business strategy for Nike’s which is
business level strategies that will help the
company to gain competitive advantages in
the long-term. At a business-level, Nike
utilizes a combination of two strategies to
ensure the offered customer unique products
and gain a competitive advantage in the
market. Nike Inc. uses a combination of
product differentiation and cost leadership to
win a greater share in the market.
II. Implements
The company differentiates its products
from other competitors through product
innovation, high-quality products, and
technology development. Differentiation at
Nike Inc. enables the company to build its
brand image in the global market. In product
differentiation, for example, Nike integrates
its cutting-edge design for its shoes. Nike
Inc. has utilized innovation and technology
to offer customers high-value products
(Mahdi et al., 2015). For example,
customers can design their products in
Nike’s website and get it within the shortest
time possible. The company has also utilized
research and development initiative to
ensure continuous innovation and product
development to maintain its competitive
advantage in the market.
Nike does not utilize overall cost leadership
as compared to some of its competitors and
new entrants in the industry. Their products
are higher end prices which customers are
willing to pay because of their unique
quality and value in the product. Nike ID
and other personalized procedures including
college and sports sponsorships help the
company to enhance customer’s perception
of their products which are specialized to
meet customer needs and wants (Mahdi et
al., 2015). The combination of
differentiation and cost leadership has
helped boost Nike’s performance in the
global market. The company has utilized
advanced technology to reduce the cost of
production hence offering a low price to the
customer. However, Nike Inc. should utilize
mostly on product differentiation to achieve
long-term success in the industry. It will
involve the introduction of new products
such as new sports shoes as well as
advancement in technology to continuously
cut the cost of production (Mahdi et al.,
2015). As a result, the company will be able
to maximize its profit margins and maintain
its competitive advantages in the industry.
III. Reasons why Nike should continue
getting better
6
- Nike's focus on launching products with support and encouragement throughout our
new technology should help it gain more study.
customers.

- Nike is adopting various strategies to References

engage with customers and increase its
brand presence, which have allowed it to
gain share from Adidas.
- Nike's strong cash pile will enable it to
continue investing in the business and
deliver more innovations.
- Nike's earnings are expected to grow at a
superior pace in the next five years as
compared to the last five.
Conclusion
This paper identifies that Nike is a brand
with a very good position. It is highly valued
by its consumers and other critics and is the
leader in its industry. Nike is both scoring
high with its product on the comfortable and
fashionable scale. Although, Nike has a very
good brand positioning there are still some
challenges ahead. After using SWOT
analysis carefully to exam the various
aspects of the Nike brand and its business
strategy, we can conclude that the brand is
facing a bright future. If Nike can quickly
overcome its weaknesses, innovate and
catch up with today's popular trends, this
brand will grow even more, be more popular
and become the number one brand. Still this
SWOT analysis is just a very small step into
analysing the forces that are influening
Nike. Especially, to conduct a more useful
analysis, deeper market research is needed,
where consumers are answering questions.
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Acknowledgement Yourself. Available from

https://upgrade-learning.com/nike-
We would like to express my very great strategic-plan-analysis/ (Accessed
appreciation to Dr Minh Duc who guided us January 1, 2023).
to write this study with right format and
supplied us some useful advice to approach Nike, Inc. (2013). History and Heritage.
the topic in the right way. His willingness to Available from:
give his time so generously has been very http://nikeinc.com/pages/history-heritage
much appreciated. We would also like to (Accessed January 1, 2023).
extend our thanks to our friends for their

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