Comprehensive Report: Nike's Macro-Environment Analysis and Impact

This report provides a comprehensive analysis of the macro-environment's impact on Nike's business operations. It begins with an introduction highlighting the positive and negative influences of the macro environment, emphasizing governmental, technological, societal, and economical factors. The report then applies the PESTEL model to analyze the political, economic, social, technological, environmental, and legal factors affecting Nike, and also conducts an internal and external assessment to identify the company's strengths and weaknesses. Further, it examines the interrelationship between Nike's strengths and weaknesses with external macro factors, employing SWOT analysis to evaluate opportunities and threats. Finally, the report critically evaluates the impact of both macro and micro factors on Nike's objectives and decision-making processes, considering aspects like market competition, tax rates, and consumer behavior across different regions, and concludes with a summary of key findings and references.

Introduction
This assignment demonstrates the negative and positive impact of the macro-environment
on business operations. It explains the internal weaknesses and strengths of Nike company and
also explains its interrelationship with external macro factors with the help of business analysis
tools, i.e, PESTEL analysis and SWOT analysis. In the last, it evaluates critically the impacts
both micro and macro factors have on Nike decision making and objectives.
P4 Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples
New risks always appear in the macro environment and they became difficult to tackle
for any company. In Nike case, it is not always possible to reject market change as the company
has to implement those changes within their organisation (Shtal, et al. 2018, p.18). Macro
environment includes governmental, technological, societal, economical influences. In a macro
environment, technology has a different negative and positive impact on company operations.
Technological advancements could provide business opportunities to Nike Company if they
could avail it. To increase sales it provides point-of-sales by allowing any company to process
credit, debit card and cash system. But such technological advancements have a negative impact
too like online users could select only those companies that have genuine technological
proficiencies. If Nike would not apply effective advancement of technology then possibly they
could lose their competitive position (Shtal, et al. 2018, p.18).
Legal factor has positive as well as negative impact on any business. If the government
would help Nike company in providing different subsidiaries, loans, and governmental assistance

and help them to develop their company then it could help positively Nike company. However,
tax rates on Nike would negatively affect the company (Shtal, et al. 2018, p.18).
A robust economy could increase the company sales, customer’s disposal income, and
help the company to sell more services and products efficiently. However, the lethargic economy
might reduce disposable income. And then it will lead further to decrease sales level and
pressurize retailers to decrease their prices of company products (Shtal, et al. 2018, p.18).
M3 Apply appropriately the PESTLE model to support detailed analysis of the macro
environment within an organisation.
Political
In the majority of big markets, stable political conditions show opportunities for Nike
Company to develop its market in these regions. Moreover, market penetration overseas is better
facilitated by expanding free-trade policies. And for infrastructure improving government
support, specifically in developing states, give more opportunities for Nike to expand its business
in these markets (Brohi, et al. 2016, p.92).
Economical
Developed markets, for example, the US are stable relatively, thus proving Nike with an
opportunity to endure its slow, however stable development in these states. But Nike is also
threatened by the rapid establishment of developing markets that increased costs of labour in
production facilities and supply chain of the company (Brohi, et al. 2016, p.92).
Social

Nike in developing states has opportunities to hit users with rising individual wealth.
Nike has opportunities also to develop secure products and utilise marketing campaigns, which
focus on the protection of its apparel and equipment.
Technological
Among companies, the increasing research and development investment threatens Nike
Company, as these rival companies intend to develop technologically advanced apparel,
equipment, and sports shoes more. Also, Nike is threatening by fast technological obsolescence
by forcing the firm to increase the efforts of its product development (Brohi, et al. 2016, p.92).
Environmental
For Nike, opportunities are created by expanding environmental law to improve its
sustainability and environmental programs that are recognized currently as one of the finest in
the industry. Also, the company has the chance to use such programs to address the change of
climate that influence supply chains and in certain regions the suitability of Nike apparels and
sports shoes (Brohi, et al. 2016, p.92).
Legal
In developing states improving employment law is a threat due to the cause that leads to a
rise in costs of labour in regions where many of the production facilities of Nike are located. But
this also gives a chance for Nike to implement higher standards for employment and labour
(Brohi, et al. 2016, p.92).

P5 Conduct internal and external analysis of specific organisations in order to identify
strengths and weaknesses
External and internal assessment could help Nike to identify their weaknesses and
strength and they could overcome their weaknesses through developing effective strategies.
Strengths: Nike has geographical diversification. They have a big loyal customer base.
Moreover, the biggest strength of the company is that they have a good corporate culture, which
develops the loyalty of employees towards the company as well as customer loyalty for the
brand.
Weaknesses: Nike is suffering from their limited liquidity position. Moreover, their
biggest weakness is that they hugely invest in their specific products however because of less
investment on other products they had suffered (Ahmed, 2016, p.53).
P6 Explain how strengths and weaknesses interrelate with external macro factors.
Weaknesses and strength of Nike Company have a direct link with the company and it
could affect their business directly. However, macro-environmental factors influence the
operations, strategy, decision making, and performances of the business. Thus if any company
does not work well in their home state and they have several weaknesses then they might face
many difficulties to reach globally. Thus the company should make their “internationalization
strategy” by assessing its weaknesses and strength. If in the national market, Nike has strength
then company management could take the urgent decision regarding their company position.
However, if Nike has many weaknesses then its management must be alert to apply distinct
business strategy and they might face problems to perform well for this cause (Ahmed, 2016,
p.53).

M4 Apply appropriately SWOT/TOWS analysis and justify how they influence decision-
making.
SWOT analysis is involved in the identification of internal and external factors that are
favourable and unfavourable for Nike objective achievement. SWOT analysis could be used as a
business tool, which could help Nike to take benefits of one’s opportunities, talents, and abilities.
SWOT-analysis helps the company to make decisions thus they could develop new strategies and
objectives. Moreover, it could also help companies to minimize their weaknesses and maximize
their strength so they could take benefits from the market (PANDEY, 2017, p.27).
Strengths
Huge customer base- From around the globe, Nike has millions and billions of customers
who follow the trend of the company loyally and participate in events of the company. Because
of this large customer base market cap of Nike has grown to 224 billion dollars in 2021 February
(Standaert, 2021, p.124).
Strong Brand Awareness- in the world Nike is among the recognizable brands as alone its
name is very unique, memorable and easy to pronounce. Nike has approximately captured 31 per
cent of the athletic footwear global market (Standaert, 2021, p.124).
Weakness
Nike in the last twenty years has been targeted consistently regarding their bad labour
conditions. Moreover, these issues include horrible working situations that were considered
unsafe, low wages, child labour, and forced labour (Standaert, 2021, p.124).

Opportunities
Nike has enhanced the consumer-direct strategy that means closing physical stores
subsequently and changing its attention to digital business. 35 percent of Nike brand revenue in
2020 comes from “online sales”. The pandemic is demonstrating how Nike Company interacts
with customers (Standaert, 2021, p.124).
Threats
Since Nike globally operates, it is influenced by changing foreign exchange rates. In US
dollars Nike Company reports its financial rates. This influences its revenues because US dollars
are volatile against other currencies (Standaert, 2021, p.124).

D2 Critically evaluates the impacts that both macro and micro factors have upon business
objectives and decision-making.
It is clear from internal and external factors that Nike has a strong position in the market
and has loyal customers thus on this basis they could enter easily into any new market. They
have, during their expansion in different states, faced a broad range of competition by other
companies and different legislative and political factors of those states influence their operations
to great extent. Nike has a good revenue source because they have several operations however
they are suffering much during their expansion because of the tax rate of different states. In
different states tax rates is distinct, however, in some states, corporate tax influence Company
positively and provide them with good opportunities to do business (PANDEY, 2017, p.27). But
in some states, a big amount of money is charged by the government as tax so a company in that
state might suffer. Different states responded differently during the economic and inflation crisis,
some of the states have recovered them, however, some of the states did not even recover
themselves (Mahdi, et al.2015, p.167 ). Thus monthly disposal wage is distinct in distinct states.
In this scenario, Nike should invest in different states by assessing the disposal monthly income
of the users in that state. Nike has an opportunity in the new market and they could invest their
business in new markets however they should consider the society and culture before investing
because different states have a distinct culture and also different users like distinct types of
services and products.
It is significant for Nike to increase technological advancements in the company to attract
e-shoppers. Nike is a socially and ethically responsible company however to attract ethical users
they could increase their sensitiveness concerning the environment (Mahdi, et al.2015, p.167 ).

Conclusion
This report provides detailed knowledge of macro and micro environmental factors
wherein Nike Company operates. Also, it defines different business assessment tools like SWOT
and PESTEL analysis that should be conducted by the management of every organisation .

References
Ahmed, R.R., 2016. „Strategic Marketing Plan of Nike “. ResearchGate, Indus Institute of
Higher Education.
Brohi, H., Prithiani, J., Abbas, Z., Bhutto, A. and Chawla, S., 2016. Strategic Marketing Plan of
Nike.
Mahdi, H.A.A., Abbas, M., Mazar, T.I. and George, S., 2015. A Comparative Analysis of
Strategies and Business Models of Nike, Inc. and Adidas Group with special reference to
Competitive Advantage in the context of a Dynamic and Competitive
Environment. International Journal of Business Management and Economic
Research, 6(3), pp.167-177.
PANDEY, B.C., 2017. Nike Inc-Complete Analysis: SWOT, PESTLE and Marketing strategy.
BookRix.
Shtal, T., Buriak, M., Ukubassova, G., Amirbekuly, Y., Toiboldinova, Z. and Tlegen, T., 2018.
Methods of analysis of the external environment of business activities.
Standaert, W., 2021. Product digitalization at Nike: The future is now. Journal of Information
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