Nike's Business Environment: Macro & Micro Factors Analysis

This report provides a comprehensive analysis of Nike's business environment, utilizing PESTLE and SWOT frameworks to evaluate the impact of macro and micro factors on the company's operations and decision-making processes. The PESTLE analysis identifies political, economic, social, technological, environmental, and legal factors influencing Nike, highlighting both positive and negative impacts. The SWOT analysis assesses Nike's internal strengths and weaknesses, as well as external opportunities and threats. The report emphasizes the interconnectedness of these factors and their influence on strategic decision-making, ultimately concluding that a thorough understanding of the business environment is crucial for maintaining competitiveness and achieving organizational objectives. Desklib provides a platform for students to access similar solved assignments and past papers for academic assistance.

The Business
Environment

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK...............................................................................................................................................3
Identify the positive and negative impacts the macro environment has upon business
operations supported by specific examples.................................................................................3
Apply Pestle model to support detailed analysis of the macro environment..............................5
Internal and external analysis of specific organization in order to identify strength and
weaknesses..................................................................................................................................5
Strengths and weaknesses are inter-related with external macro factors....................................6
SWOT analysis influences decision-making..............................................................................7
Critique the impacts of both micro and macro factors have upon the decision-making and
objectives.....................................................................................................................................7
CONCLUSION ...............................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business environment refers to those elements which effects the company's performance
for maintain positive relation with customers for long time. Those elements are stakeholders,
competitors, suppliers, current company trends, government rules and other activities and so on.
The company's which is chosen for evaluating the business environment are Nike. It is a
multinational sports company which is engaging in developing, designing and manufacturing
footwear and other sports products. The company was established in 1964 and is headquartered
in United States. This research is prepared on the basis of secondary data which includes
journals, newspapers, magazines and so on. It also refers to the work culture and atmosphere in
workplace between the employees. For analysing the business environment of different
companies effectively various strategies are described in this report which includes SWOT,
PESTEL and others.
TASK
Identify the positive and negative impacts the macro environment has upon business operations
supported by specific examples
PESTEL Analysis of Nike Company
It is a method which is used by organization for evaluating macro external factors (Al-
Mansour and Al-Ajmi, 2020). These factors effects the company's activities in both positive and
negative manner which are described below-
Political – In this factor organization faced various challenges politically which includes
political stability, taxation system, government rules and regulations and so on.
 Positive – Nike is one of the company who correctly followed the taxation system of the
government which leads to increase the company's growth.
 Negative – The policy product of the organization did not worked properly when
customer received the damaged product. It creates negative impression in the minds of
users towards organization.
Economical – It refers to those elements which effects the company economically which
includes company's growth, customers disposal income, unpredictable inflation etc.

 Positive – Nike is one of the company who managed their effectively according to the
analysis of current trends and buying power of consumers. It leads to enhance the
economic growth and productivity of company easily.
 Negative – In COVID 19 market of the Nike are highly decreased because at that time
for running the activities properly quality was reduced by company.
Social – It refers to those elements which is useful for enhance the desire, behaviour and attitude
of the consumers (Bousdekis, Apostolou and Mentzas, 2019). It includes health awareness,
population growth, buying habits and so on.
 Positive – Nike is one of the company who manufacture their product fashionably
according to needs and wants of consumers and current trends in country. It leads to
increase popularity of product.
 Negative – Due to the global service of company their supply chain management are not
worked effectively. It leads to decrease the popularity of the brand between new and
existing consumers.
Technological – It refers to those factor which effects the company in the form of technology
which includes communication systems, social media, use of AI technology and so on.
 Positive – With the help of technology the reliable and meaningful information are send
to the consumers easily. It enhance the purchasing power of customers for purchase the
right product easily.
 Negative – Due to competition competitors create threat for organization. Because with
the help of advanced technology competitors try to theft the confidential informations of
the customers.
Environmental – In this stage organization get effected by the natural elements which is come
from the nature (Sulkowski, 2018). It includes increasing scarcity of raw materials by suppliers,
pollution targets and so on.
 Positive – Nike used the recyclable and reusable materials in their product which is eco
friendly and not harmful for the human beings. It increases the durability of the product
for long time.
 Negative – Company is using the carbon footprint in their work place area which is
harmful for the employees. It leads to decrease the productivity of employees.

Legal – Legal refers to those elements which effects the organization legally which includes
advertising standards, safety and health standards and so on.
 Positive – For maintaining brand image in the market between the competitor and public
Nike must follow the legal norms of government. It supports the organization to run their
operational activities smoothly.
 Negative – Due to the government policies, rules and regulations Nike are not able to fix
their own prices in all countries.
Apply Pestle model to support detailed analysis of the macro environment.
It has been examined from the pestle analysis is that it includes several factors that affect
the business operations and activities. It is important for the managers to keep their keen eye on
those factors as it determines the strong and weak areas of businesses (Aker and Aghaei, 2019).
In case of Nike, the brand is dealing smartly with the external factors that develop numerous
business opportunities (Zhu and Liu, 2021). Factors such as political, legal, economic factors
considered as the weak areas where company need to take care otherwise it leads harmful
circumstances that leads business to fall. Social factors are important for the Nike as it
considered as the strength. The brand highly focuses on the customer and produce products that
attract a larger customer base. Technological factors required investment from the business
which simultaneously affects the revenue of the business.
Internal and external analysis of specific organization in order to identify strength and
weaknesses
SWOT Analysis of Nike -
It is a method which is used by company for evaluating competitive advantage in the
market. In this method basically four factors are considered by the Nike which are described
below -
Strength includes -
 Skilled workforce – Nike is one of the organization who used the smart and talented
employees for serving best best quality products and services to the customers.
 Strong core brand – The brand name of the Nike is very strong in market (Jaja, Gabriel
and Wobodo, 2019). Because Nike is one of the company who is focused on all customer
segment in market and with the help of this strategy their revenue are highly increased.
Weakness includes -

 Focusing on one product – The main product of Nike is only footwear which includes
shoes, sandles and sleepers (Saxunova and Szarkova, 2018). Due to focus in only one
product customer get decreased because in footwear choices are easily available in other
shops also.
 Dependence on US market - It means that they are mainly focused on US market for
sell their product. But it leads to decrease the productivity of company because in other
areas they are not properly focused.
Opportunities includes -
 Growing market – In today's time market are growing day by day in footwear products
(Snieska, Zykiene and Burksaitiene, 2019). Due to this reason companies used talented
and qualified employees for establishing various projects in different locations.
 Effective distribution system – Due to his well established brand name organization
increased their distribution channel globally through online mode. It leads to develop
good relation with consumers for long time.
Threat includes -
 Competitors – Due to competition in market company faced lots of threat by the
competitors. Because competitors also provide same product in market with various
specifications which leads to decrease the number of loyal customers.
 Taxation system – Nike is one of the company after gaining large profit also they did not
pay tax to government in time. Due to this behaviour of company government has the
power to take strict actions against them.
Strengths and weaknesses are inter-related with external macro factors.
Strengths and weaknesses of any company are inter-connected with macro environmental
factors of the business. It is important for the manager to keep their eye on the dynamic of such
factors as they affect internal activities of the business. In order to make a strong strategic
decision in the company, the management of the Nike Company needs to examine the inter-
relationship between micro and macro environmental factors (Gibbs, 2019). It is found that Nike
follows all rules and regulations imposed by the government which provides a strength to the
business. The company has allocated their business throughout the world which makes them
conscious and consider each and every external factors in order to grab new growth opportunities
for the business. It is important for the Nike to operate business in such country where political

stability is certain that do not affect the business in negative terms as uncertainties in such factors
might be threat for the business (Cherunilam, 2020). The chosen company is not smartly handle
the economic factors that in turn result the weaknesses of the business. The company have poor
labor conditions in many nations. Also, have some controversies related with the lawsuits and
sexual harassment. As the Nike has low-manufacturing costs, it allows them to sell products at
cheaper rate which identifies as the strengths of the business as it helps to increase the customer
base. In current times, there is a trend going on that everyone from youth to old ones everyone
wants to be fit and conscious about their health which indicates as the strong point of the
business. Somehow, competitors are the threats of the company and affects the business. These
competitors are Adidas, Puma, Reebok and many more. All such company always develop
strong strategies to attract customers towards their brand. Moreover, the rising costs of the
advanced technologies is a weakness and threat for the company, but adopting such technologies
help business to operate business effectively (Löffler and et.al., 2019). Lastly, the legal terms and
legislations of the country where they operate business is a weakness because if the brand is not
following the rules it might affect the reputation and brand image in the market.
SWOT analysis influences decision-making.
It is examined from the SWOT analysis of Nike is that decision-making of the business is
highly affected by internal and external factors of the business. It is quite vital to consider both
aspects for the business to make a strong decision (Metaxas, Chatzoglou and Koulouriotis,
2019). With a motive to make an impactful decision for the business, it is essential for the
managers to look on its strengths and weaknesses so that they can grab new opportunities for
growth and development while overcoming the threats of the business such as competitors in the
market.
Critique the impacts of both micro and macro factors have upon the decision-making and
objectives.
It is reviewed from the above discussion is that both frameworks of micro and macro
business environment have a significant impact on the business objectives to be accomplished
and decision-making that affects functions of the business (Nudurupati, Garengo and Bititci,
2021). With a purpose to make a strong and effective decision-making for the business of Nike,
the top management need to ascertain both the environment of business. Moreover, the factors
that gives a strong effect on the business needs to be determined as it helps the attainment of the

business goals (Shehata and Montash, 2019). Also, factors in macro environment developed
countless opportunities and threats that further create in strengths and weaknesses of the Nike.
Analysing such factors also help the business to identify solutions to address and overcome
issues related with business.

CONCLUSION
From the analysis of above information it is understood that effective business
environment helped organization to manage their operational activities smoothly. For increasing
the productivity and work efficiency of employees in workplace positive business environment
are highly important. In sports field companies are mostly focused on quality in their product.
Because quality products are responsible for maintaining loyalty of customers towards
organization for a long time. Nike is one of the company who used the best pricing strategy for
attract the customers globally in large number. This strategy also helped the organization for
increase their profit in long run.

REFERENCES
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