Strategic Analysis of Nike Using PESTLE and Porter's Five Forces

This report provides a comprehensive analysis of Nike using the PESTLE and Porter's Five Forces models. The PESTLE analysis examines political, economic, social, technological, legal, and environmental factors affecting Nike's business, highlighting the impact of tax agreements, inflation, eco-friendly consumerism, technology, government regulations, and environmental responsibility. The Porter's Five Forces model assesses the threat of new entrants, substitutes, bargaining power of suppliers and customers, and competitive rivalry, revealing Nike's strengths in economies of scale and brand image, as well as challenges in customer bargaining power and market competition. The analysis uses several references to support its claims. Desklib provides access to similar solved assignments and study tools for students.

Nike

TABLE OF CONTENTS
MAIN BODY...................................................................................................................................3
Examining the PESTLE analysis...............................................................................................3
Presenting the porter five forces model......................................................................................4
REFERENCES................................................................................................................................6

MAIN BODY
Examining the PESTLE analysis.
Factors Impact
Political Favourable tax agreements and political
stability in the country has created positive
impact on growth of the business. Also, tariff
barriers might create negative impact on
smooth expansion of the business (Achinas and
et.al., 2019).
Economical Factors such as inflation, import and export
restrictions on the company might affect the
overall sales of the business as products would
be sold in limited market only.
Social In the current era where people are conscious
in consuming more of eco friendly products it
is essential that Nike use strategies to avoid
negative impact on business so that product
could be developed according to the needs and
wants of the people.(Nayak and Kayarkatte,
2020)
Technological With the use of advanced technology and
social media Nike can create positive impact
on the sales of business. Further, with
continuous interaction with customers the
brand value of firm is maintained.
Legal Certain government laws and regulations have
to be strictly followed so that various problems
in the future does not occur. Also, recently the
case of false discounts offered by the company

to customers has created negative impact on
the brand image.
Environmental It is very important that all manufactured
products does not harm the environment in any
form. Thus, companies that are not socially
responsible might generate very fewer
revenues and might not being able to develop
the customer loyalty. Thus, this factor might be
both positive and negative depending upon the
goals and objectives of the business.
Presenting the porter five forces model.
Porter five forces model is type of strategy framework that helps to analyse the factors
that impact the operation of the business so that certain decisions of the firm could be made
easily. It consists of various factors that are described as below:
Threat of new entrants: It is very low for the firm as it the firm enjoys economies of scale by
selling products that are innovative and different form the competitors. Also, through such
differentiation there are fewer opportunities for the small manufacturers to enter into the market.
Threat of substitutes: It is moderate for the Nike and thus consumers are not likely to consume
other products that does not have brand image in the market. Also, if any substitute in the market
than performance is moderate based on the price of substitute (Firoz Suleman, Rashidirad and
Firoz Suleman, 2019).
Bargaining power of suppliers: There is also moderate size of suppliers because of which large
number of suppliers want to be part of Nike company. Further, the demand of the suppliers is
very less than result of which quoted firm is able to sell large variety of goods at fewer prices.
Bargaining power of customers: This impact the business performance on large scale as Nike
individual buyers are very small. Also, these customers have the option to consume products that
are available in the market at low prices. Furthermore, the firm need to invest continuously in
research and development so that new products could be offered on regular basis (Greckhamer,
and Gur, 2021)

Competitive rivalry: There is low market growth rate in the sports industry because of some
strong competitors that are operating in UK market. Thus, there are chances that company cuts
down the prices' so that it is able to maintain competitive advantage in long run (Islami, Mustafa
and Latkovikj , 2020).

REFERENCES
Books and Journals.
Achinas, S. and et.al., 2019. A PESTLE analysis of biofuels energy industry in
Europe. Sustainability. 11(21). p.5981.
Firoz Suleman, M., Rashidirad, M. and Firoz Suleman, S., 2019. The applicability of Porter's
generic strategies in pure online firms: A case study approach. Strategic Change. 28(3).
pp.167-176.
Greckhamer, T. and Gur, F. A., 2021. Disentangling combinations and contingencies of generic
strategies: A set-theoretic configurational approach. Long Range Planning. 54(2).
p.101951.
Islami, X., Mustafa, N. and Latkovikj, M. T., 2020. Linking Porter’s generic strategies to firm
performance. Future Business Journal. 6(1). pp.1-15.
Nayak, P. and Kayarkatte, N., 2020. Sustainability Study of Green Buildings in India-Through
Pestle and Swoc Analysis. International journal of business management and allied
science.