Responding to the Changing Business

Running Head: NIKE 0
Responding to the Changing
Business Environment

NIKE 1
Contents
Task-1.........................................................................................................................................2
1.1 Factors impacting business..........................................................................................2
PESTEL..............................................................................................................................2
SWOT................................................................................................................................3
1.2 Business performance..................................................................................................3
1.3 Recommendations.......................................................................................................4
Task-2.........................................................................................................................................4
2.1 Role played by management in changing business environment................................4
2.2 Organisational changes................................................................................................5
2.3 Potential impact...........................................................................................................5
Task-3.........................................................................................................................................6
3.1 Changes in relationship...............................................................................................6
3.2 Change management...................................................................................................6
3.3 Opportunities...............................................................................................................7
References..................................................................................................................................8

NIKE 2
Task-1
1.1 Factors impacting business
In terms of business, macro environment affects the working and operations of companies
that can be analysed by using strategic tool such as PESTEL consists of external factors
which are political, economic, social, technological, environmental and legal. While, micro
environment impacts the business directly consists of performance and operations where
using SWOT as a strategic tool can help in analysing its strengths, weaknesses, opportunities
and threats for better functioning and success in future.
PESTEL
Political
 Favourable government policies
of the US
 Political unrest in some countries
of Asia
 Changes in International Law
Economic
 Rise in labour issues and
production cost
 Recession and competition threat
 Fluctuation in profit margin
 Subsidiaries and acquisitions
Social
 Consumers being more brand
conscious
 Consumers being fashion and
health conscious
 Conditions of working at
factories
 Increase in female consumers
Technological
 Innovation
 Marketing techniques
Environmental
 Environmental concern and
global warming
 Pollution concern in China
 Decrease greenhouse emission
Legal
 Battles with Adidas and other
companies legally
 Minimum wage allegations and
child labour
 Paradise papers
 Counterfeit products (Zhang, et
al., 2012).

NIKE 3
Source: (Shtal, et al., 2018).
SWOT
Strengths
 Product Innovation
 Strong Global Brand
 Strong cash flow with low cost
manufacturing
 Global influence and presence
 Proficient leadership
Weaknesses
 High dependence on footwear
 High products prices
 Spending highly on advertising
 Problem of Nike Sweatshop
(Nisen, 2013).
Opportunities
 Explore emerging markets
 Increase in e-commerce business
 Expansion of product
 Initiatives towards better
environment
Threats
 Intense competition
 Fluctuations in international
markets
 Rise of counterfeit cases
 Recession
 Hazardous supply chain
management (Distelhorst, et al.,
2017).
Source: (Gurel & Tat, 2017).
This shows that Nike is dependent on external conditions which impact the strategic decision-
making process of the company. The addressing of these external factors helps the company
to make sure about the business dominance within the industry among high competition
(Mihola, et al., 2015). It is essential for Nike to maintain the position of the company in the
market along with its strategic formulation that will help in shaping its macro-environment or
remote conditions.
1.2 Business performance
Nike’s business performance can be affected by developed markets economic stability, the
Chinese economic slowdown, and developing markets rapid growth. The company’s
performance is based on the state of economies where Nike is selling its products and