7002LBSMGT: Strategic Management Analysis of Nike's Development

This report provides a comprehensive strategic analysis of Nike, a prominent player in the fashion industry. It assesses Nike's current strategies and market position using frameworks like PESTEL and SWOT, examining political, economic, social, technological, environmental, and legal factors influencing the company. The analysis delves into Nike's strengths, weaknesses, opportunities, and threats, along with its strategic direction, mission, vision, and strategic choices, including the adoption of a differentiation strategy. Furthermore, the report evaluates the level of progress related to strategy development and implementation, utilizing Ansoff's matrix to explore market penetration, market development, product development, and diversification strategies. The sustainability of Nike's strategy is also analyzed, incorporating Porter's generic strategies, such as cost leadership, differentiation, and focus strategy, to understand how Nike maintains its competitive advantage.

7002LBSMGT STRATEGIC MANAGEMENT COURSEWORK 2

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................3
1. Assess present strategies development as well as position................................................3
2. Evaluate the level of progress related to development as well as implementation of strategy.
................................................................................................................................................7
3. Analyse the sustainability of given strategy.......................................................................8
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12
Books and Journals...............................................................................................................12

INTRODUCTION
Strategic management plan is considered as an approved plan that assists in communicating
various kind of elements such as priorities goal energy as well as many more that helps in
achieving goal in pre-decided period of time. In this report there is a discussion regarding fashion
industry it is necessary to bring the idea regarding fashion industry for accepting the trend in an
appropriate manner. Due to change in the need of the customer it is significant for company to
cope up with the changing needs and wants of the customer in an appropriate manner. It is
necessary for fashion industry to provide qualitative goods to its customer for operating their
activties of organisation around globe. There is a discussion regarding the macro and micro
environment which imposes direct impact on organization. It develops understanding in relation
to Porter five forces model and Porter generic strategy. They also describe the STP plan for
sustainability of company which is also discussed in this report (Moutinho and Vargas-Sanchez,
2018).
1. Assess present strategies development as well as position.
Nike is considered as a one of the well-known company of UK that is famous for fashion
industry. There is a wide range of product that is provided by the fashion industry in order to
cope up with the changing trend in an effective manner. The PESTEL analysis which is adopted
by fashion industry that is mentioned beneath:
Political factor plays an important role within organisation and also there are a lot of
changes which imposes direct impact on the organisation and their profit margin. In context of
NIKE maintain a fantastic policy that help in growth of business organisation and provide value
to its customer. They also impose low rate of interest to its customers which will be beneficial
for the company. On the other and due to rise in the political conflict they suffer the different
kind of problem that is related to import as well export that negatively affects the company.
Economical factor involves interest rates, taxes, unemployment and many more. NIKE
Company offers all kind of goods to its user for fulfilling their requirements They also offer
superior quality product to its customer at relatively less price that increases their profit margin
of the company. Due to frequently change in the need and wants of customer then it is necessary
for organisation to cope up with the changes at Marketplace. It is difficult for the company to
cope up with the changes in an effective manner.

Social factor includes market trends which imposes direct impact on the organisation. Due
to increase in the health consciousness of the customer it is important for organisation to provide
better lifestyle to its user. Therefore the NIKE provides the plenty of sports apparel to its
customers that help in increasing sales of the company. Nike faces a criticism regarding the
production process and there is a issue regarding the sweat shop so that imposes negative impact
on the image of the company.
Technological factor Technology is necessary for the company it gives the capability to
bring innovation in various ways within business organisation. Therefore it is necessary for
interacting with its consumer in improved way to design product that provide value to its user in
an appropriate manner. Therefore NIKE focuses on implementing innovative technology in order
to provide comfortable products to its customers that increase the brand image. On the other
hand, due to continuously changes in the technology it is not easy for company to implement that
technology that negatively affects the income of the company.
Legal factor It involves rules, regulations, legislation and many more it is necessary for
organisation to follow the laws and regulation that increases the brand image of the company in
front of customer at Marketplace. On the other hand, due to frequently change in laws, it is not
possible for the company to follow all the rules that imposes negative impact on the Goodwill of
the company (Hill, 2017).
Environmental factor: Environment is the major issue nowadays. Therefore due to
increase in the pollution that affects the environment in both positive and negative manner. There
are various factors that produce the product of Nike that increases the pollution which causes
negative impact on the company. It reduces the brand image of the company in front of customer
at Marketplace. Therefore the NIKE focuses on changing in their present practices and provide
eco- friendly environment to its user that increases the profit margin in future period of time.
SWOT Analysis
SWOT analysis help in analysing the strength, opportunity, threat as well as weakness
that imposes direct impact on the company. They also offer better understanding for taking
present as well as future decisions of organisation. The SWOT analysis of NIKE Company that
is given below:

STRENGTHS WEAKNESSES
 Nike is considered as one of the biggest
fashion retailing company of UK with
25% of market share. It increases the
brand image of the company in front of
customer at Marketplace.
 Nike provide superior quality product
to its customers that increases the value
of its product in front of customer at
Marketplace that increases the profit
margin in future period of time.
 Nike has a diverse brand portfolio that
increases the profit margin of the
company.
 Due to too much dependence on US
market it imposes loss for the company
because due to change in the policies of
American market then it negatively
impact on the company and downward
the profit
 The other weakness is due to increase
in too much dependence on footwear
then the Nike company cannot diversify
its market in other countries therefore it
negatively affects the company
(Kerzner, 2019).
OPPORTUNITIES THREATS
 The Nike expands their business across
the world and achieves leading position
that increases profit margin in future
period of time.
 They provide the product as per the
market trends which emerge in the
market that is considered as a main
opportunity for organisation.
 Due to increase in the competition level
from Adidas, Puma as well as many
more it create a threat for the company
that decreases the profit of organisation.
 Due to implementation of Advanced
technology it increases the cost for the
company is considered as a main
weakness.
Development of a Strategic direction
The Fashion Market in UK will grow upto16.6% over the next five year to reach £51.2
billion. Therefore it increases the growth that is more than 2012-17 (Venkateswaran and Ojha,
2017). Their main purpose is to increase their growth with 20 1.2 % from the current time and it
will increases by 2022 within retailing sector. They also focus on growing “care as well as social
excellence” by 16.6% in next 5 year that is more than in compared to last years. Therefore, the

main purpose of organisation is to grow their business from 16.6% to £51.2 billion in upcoming
5 years.
Mission: “The Fashion Market in UK will grow upto16.6% over the next five year to
reach £51.2 billion. Their main purpose is to increase their growth with 20 1.2 % from the
current time and it will increases by 2022 within retailing sector.
Vision: “The main purpose of Nike Company is to achieve leading position across the
world”.
Strategic choices: Herein, the organisation adopts differentiation strategy that helps in
attracting large number of customer at marketplace.
Strategic and financial goals/objectives: They also focus on growing “care as well as
social excellence” by 16.6% in next 5 year that is more than in compared to last years. Therefore,
the main purpose of organisation is to grow their business from 16.6% to £51.2 billion in
upcoming 5 years.”
Evaluation of strategy: It is necessary to evaluate the strategy related to differentiation
of product that must be provided to its customer at Marketplace. It helps in increases profit
margin and sales in future period of time that is good for its user.
Porter generic strategy used by NIKE
Porter generic strategy is considered as important model that helps the organisation in
taking appropriate decisions by executing strategy and they bring the differentiation, cost
leadership as well as focus strategy and many more that is given below:
Cost leadership strategy The organisation emphasised on qualitative goods to its user at
relatively low price in order to competitive edge at Marketplace. They also maintain
modification or alteration in their goods as well as services that increases the profit margin in
future period of time. They also target the market that is helpful for the organisation in upcoming
period of time. NIKE focuses on providing good product to its customer as per their need that
help them in satisfy them (Balaman, 2016).
Differentiation strategy: Here in the organisation offer differentiation or unique product
or services to its customer in order to satisfy them. Nike company focuses on making appropriate
research that help in achieving goal in targeted period of time. Therefore they offer innovative
product to its customer for satisfying them. The differentiation strategy divides the product of

organisation from the competitive product. It is possible by transferring the large number of
product or administration to its user. The main purpose of organisation is to provide the value to
its customer for gaining competitive advantage over rival firm at Marketplace.
Focus strategy: They focus on Niche market in order to achieve a good position within
Marketplace. It also helps in achieving competitive advantage over rivalries at Marketplace.
They focus on providing differentiation or unique products and services to its customer at
relatively low price that increases the profit margin and sales of the company in future period of
time (Ateba and Prinsloo, 2019).
From the above mentioned analysis it has been said that the Nike Company adopt the
differentiation strategy in order to provide unique and specific product and services to its user for
satisfying than. It increases profit margin and sales of the company n upcoming period of time
that is helpful or beneficial for organisation.
2. Evaluate the level of progress related to development as well as implementation of strategy.
Strategy structure is considered as the one of the main factor that helps in evaluating
organisation. They focus on providing a clear recommendation regarding boost in the cost by
reducing the level of risk. It is necessary for organisation to develop a clear plan for achieving
strategic position at Marketplace. The organisation use Ansoff matrix for maintaining
appropriate strategy which will be beneficial for organisation in future period of time.
Market penetration herein the organisation focuses on providing existing product to its
user in the existing market. Therefore they offer product that is available and make modification
that help in satisfying the customer in upcoming period of time and it increases the profit margin
during the particular phase of the time period.
Market development The organisation focuses on introducing existing product in the new
market. The main purpose is to produce or launch their product in innovative market. Therefore
they take entrance in the China as well as Japan market in order to boost their business across the
world. They continue to grow their business in Japan and attract the large number of customer
that help in increasing profit margin in future period of time (Kałkowska and Kozlov, 2016).
.
Product development Nike focuses on introducing new product in the current market. It
helps in providing lot of opportunity that increases the profit margin in upcoming period of time.

Their main purpose is to increase the experience level of the customer that is providing benefit in
future period of time.
Diversification the main purpose of Nike Company is to expand their market in China as
well as Japan. The main purpose is to introduce new products in the new market that increases
the profit margin of the company. Therefore their main purpose is to grab the opportunity that is
good for the company in future period of time.
They focus on providing a clear recommendation regarding boost in the cost by reducing
the level of risk. It is necessary for organisation to develop a clear plan for achieving strategic
position at Marketplace. On the basis of above mentioned strategies it has been analysed that
Nike grab opportunities that emphasis on market penetration that is connected to the product mix
by using innovative method of production. They adopt market penetration in order to provide
existing products and services to its user. They make necessary alteration or modification in
current products for satisfying its user. In addition to this, they use social media tool such as
advertising, sales promotion as well as personal selling that helps in attracting ample of customer
at marketplace (Frandsen and Johansen, 2017).
3. Analyse the sustainability of given strategy
For analysing sustainability of present strategy the NIKE Company adopts porter five force
models that is going to be mentioned below:
Porter five force model of NIKE
Porter five force models was given by Michael Porter in 1980. It assesses the five forces
that help in achieving competitive advantage over rivalries at Marketplace. These tools and
technique adopted by Organisation in order to understand the level of competition at
Marketplace and it also helps in reducing the competitive pressure at Marketplace that is going to
be mentioned below:
Bargaining power of suppliers herein the bargaining power of suppliers in relation to
Nike Company is low because they operate their business at global level in approx 42 countries.
There is various numbers of suppliers who provide the product across the world. It is necessary
for supplier to set the standard for supplying their product otherwise buyer switch to the other
brand. And therefore it is necessary for supplier to set the price as per the standard in relation to
brand for increasing profit margin otherwise the customer switch their brand to the other product

it provide losses to the company. Therefore it has been analysed that overall bargaining power
of suppliers in relation to the Nike Company is low (Tekin and Konina, 2017).
Bargaining power of buyers Herein, the bargaining power of buyer is from low to
moderate range. There are a number of competitive firms available at marketplaces such as
Adidas, Puma, Reebok and many more they operate their business at large level. But the Nike
company operated business in local as well as International brands Therefore the customer
switching cost is low. Because NIKE focuses on providing designable product to its customer in
order to gain competitive advantage over rivalries at Marketplace. They also emphasised on
bring loyalty as well as trust of customer during the particular phase of time period. Therefore it
has been analysed that the bargaining power of buyers is between low to moderate range. The
company focuses on offering the product which is designable and their performance level is too
good that help in achieving competitive advantage of a rival firm at Marketplace.
Threat of substitute the threat of substitute product is considered as a moderate for Nike
Company because there are various companies who provide the similar kind of product to its
customer for satisfying them. There are various brands that provide the product at relatively low
price in comparison to NIKE. Thus, it is necessary for company to provide superior quality
products and services to its customer at fewer prices in order to gain competitive advantage over
rivalries at marketplace. Their main purpose is to provide the design and the performance of their
product in such a manner that increases the competitive advantage over rivalries at Marketplace.
Threat of new entrant’s threat of new entrants in respect of Nike Company is low
because it is necessary for the start-up or new organisation to have large amount of money to
operate their business at that level in which NIKE operates. Therefore it is not possible to small
organisation to operate their business at that level in which Nike is operating. In addition to this
the production, marketing as well as supply chain management, skilled worker it is very difficult
for the company to carry out their business with large capital (Emeagwal and Ogbonmwan,
2018). Therefore, the Nike achieves leading position at Marketplace so that the threat for new
entrants is considered as a low because the new or start-up organisation requires large amount of
money which is not possible for them to invest too much money in order to cope up with the
organisation. Hence the NKIE provide the innovative or unique products to its customer as per
their need in order to satisfy them.

Level of competitive rivalry there are various competitive companies that provide the
similar kind of product such as Adidas, Puma as well as many more. Therefore, there is a tough
competition within Marketplace, it is necessary for Nike company to offer product as per the
need of the customer that help them in increasing competitive advantage over rival firm at
Marketplace. Therefore it has been analysed that competition level is strong for Nike Company
so that it is necessary for Nike Company to make necessary modification in order to increase
profit margin and sales of the company in future period of time.
On the basis of above mentioned strategy, it has been analysed that the Nike Company
adopt the competitive rivalry strategy in order to gain competitive advantage over rivalries at
Marketplace. Their main focus is to provide designable product as per the need of customer for
satisfying them. They offer its products and services at relatively less price that increases profit
margin and sales of the company in future period of time.
Strategic Management plan
Strategic management plan is a plan in which there are various numbers of employees or
subordinate within business organisation along with higher authority focuses on making
appropriate plan that help in achieving goals as well as objective in pre-decided period of time.
There are various strategies which are adopted by Nike Company in relation to the strategic
management plan that is going to be mentioned below:
Mission: “The Fashion Market in UK will grow upto16.6% over the next five year to
reach £51.2 billion. Their main purpose is to increase their growth with 20 1.2 % from the
current time and it will increases by 2022 within retailing sector.
Vision: “The main purpose of Nike Company is to achieve leading position across the
world”.
Strategic choices: Herein, the organisation adopts differentiation strategy that helps in
attracting large number of customer at marketplace (Dixit, 2016).
Strategic and financial goals/objectives: They also focus on growing “care as well as
social excellence” by 16.6% in next 5 year that is more than in compared to last years. Therefore,
the main purpose of organisation is to grow their business from 16.6% to £51.2 billion in
upcoming 5 years.”
Extensive marketing herein the marketer focuses on grabbing opportunity in order to
achieve leading position at market place. The organisation focuses on making appropriate

marketing approach that promote the product as well as services at international or national level.
The main purpose is to operate their business at both National and international level that is
helpful for the company in future period of time.
Market research the NIKE Company focuses on conducting appropriate research in
order to assessing the need or wants of the user. It helps in attracting large number of customer
which increases profit margin in future period of time. Market research is considered as the most
important factor that helped the business organisation in drawing different conclusion regarding
the behaviour or attitude of user.
Tactics in order to accomplish the goals as well as objective of NIKE Company it is
necessary for business organisation to consider the incentive for clients of business organisation
which is good for company. The Nike Company adopt the competitive rivalry strategy in order to
gain competitive advantage over rivalries at Marketplace. Their main focus is to provide
designable product as per the need of customer for satisfying them.
Evaluation of strategy: It is necessary to evaluate the strategy related to differentiation of
product that must be provided to its customer at Marketplace. It helps in increases profit margin
and sales in future period of time that is good for its user (Lan, 2016).
CONCLUSION
From the above mentioned analysis it has been assessed that the Nike Company plays an
important role in fashion retailing sector. They offer fashionable product to its customer as per
the prevailing trend and fashion. Therefore, it is necessary to bring innovative ideas within
business organisation in order to cope up with the fashion retailing industry. The Nike Company
achieves leading position by operating their business in both national and international level.
There are different model which is explained in this report for achieving competitive advantage
over rivalries at market place it also helped in analysing the micro as well as micro
environmental factor which imposes direct impact on the company. It develops understanding in
relation to Porter five forces model. They also describe the STP plan for sustainability of
company which is also discussed in this report.

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South Africa. Utilities Policy, 56, pp.92-103.
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enterprise: Fuzzy sets theory application to strategic management. In Information Systems
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