Strategic Marketing Management Case Study: Nike Industry Analysis, UK

This case study provides a comprehensive analysis of Nike's strategic marketing management, focusing on the UK market. The analysis begins with a PESTEL analysis, examining political, economic, social, technological, environmental, and legal factors impacting Nike's operations. It then delve...Read More

Running head: STRATEGIC MARKETING MANAGEMENT
STRATEGIC MARKETING MANAGEMENT
Student’s Name
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Q1. PESTEL analysis for NIKE industry in United Kingdom
Pestle analysis is a tool that helps the business organization to access the external
business environment. This tool will be used to access the political, social, economic,
technological, environmental and legal factors that affect smooth running of the business
organization in the selected nation United Kingdom (Shatskaya, Samarina, & Nekhorosheva,
2016). Nike Corporations provides trendy footwear, functional sportswear throughout the
country. It is one of the largest sport apparel companies in the entire nation. However, the UK
apparel market is highly competitive.
Political factors: Frequent changes in political environment might affect manufacturing and
production of the company and its profitability. The United Kingdom government has favorable
politics and regulations for the growth and smooth operations of the business organization
especially for Nike Corporations. There are low interest rates with proper international tax
agreements. However, Nike corporations are subjected to significant changes in tax and
manufacturing laws (Shatskaya, Samarina, & Nekhorosheva, 2016). There are various political
conflicts that take place in the country from time to time.
Economic factors: Nike corporations provide medium ranged products so as to make it
affordable to various consumer segments. Therefore, the business organization is less vulnerable
to economic factors. United Kingdom is a nation with top leading companies such as Reebok and
other shoe manufacturing companies which increases the level of competition in the market (Sun
et al., 2014). The economic conditions of United Kingdom are favorable for Nike. However,
labor and other operating costs are higher. These might be challenging for Nike.
Social factors: The UK population is growing older with more than 18% of the people are more
than 65 years and over. This impacts the labor market and health care system. This is an

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opportunity for Nike to crater to the needs of the older generation. The population of UK is
multicultural; therefore the company has to cater to the needs of different races and religion (Sun
et al., 2014).
Technological factors: UK is one of the most technologically advanced countries. Therefore it is
highly favorable for business organizations (Dockalikova & Klozikova, 2014). The advanced
technology provides abundant opportunities to the business organization.
Environmental factors: Economic activities have significant impact on the environment. The
government takes various measures and initiatives which can hinder the functioning of the
business organization. UK faces challenging weather conditions which also might impact proper
functioning of the business organization (Dockalikova & Klozikova, 2014).
Legal factors: The UK government s improving the employment law which can be a threat to the
business organization as it might increase the labor costs and affect profitability of the company.
Q2 Stakeholder analysis and impact of globalization on each stakeholder
Nike has wide variety of stakeholders who has significant influences on the sales and
manufacturing of the company’s shoes and other products. The mission ad vision and the
corporate social responsibility programs of Nike targets major stakeholder groups (Lawrence &
Weber, 2014)..
The major stakeholder groups of Nike includes
1. Customers
2. Communities or societies
3. Employees
4. Government officials

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5. Other interest groups
Customers: As per analysis, it has been identified that Nike provides top most priority to its
customers. They are the top stakeholders of the business organization. They have significant
impact on the revenue and profitability of the business. The company addresses their needs
through R&D investments and provides them with high quality products implementing advanced
technology (Lawrence & Weber, 2014).. Through these efforts they satisfy the interests of the
customers. Hence customers and consumers have high power. Globalization influences the
interest and purchasing behavior of the consumers.
Communities: Societies and other community groups have significant influence on the
company’s standing. They are the second most priority of Nike Corporations. The corporate
social responsibility of the business organization is geared towards the society and other
community groups. The interest of these stakeholder groups provides help and support for the
development and betterment of the communities (Crane, 2020).. The expectations of the
communities have widened due to increased globalization.
Employees: The employees are also major stakeholders of the business organization. They
influence the effectiveness of the organization (Crane, 2020).. They protect the interest of the
stakeholders through fair compensation, sense of purpose and other training and development
opportunities. The company provides top most priority to this stakeholder group. The company
focuses on internal leadership development, team building and talent/ knowledge management to
address their interest (Randall, Leavy & Gouillart, 2014).. Employees demand for higher wages
as they have increased opportunities in the global market.
Government: The government and its laws and policies have significant impact on the
profitability of the business organization. Hence they have significant power and authority over

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the functioning of the business organization (Randall, Leavy & Gouillart, 2014).. The company
operates considering the permits, limits and laws and regulations of the government. They are
interested in the regulatory and legal compliance of the business organization. Nike Inc. ensures
compliance with the laws and regulations. The government alters and changes the laws and
regulations frequently to regulate foreign investments (Randall, Leavy & Gouillart, 2014)..
Other interest groups: Nike addresses the interest of some interest groups. They have
significant impact of the operations of the business in terms of consumer perception and potential
government intervention (Crane, 2020). The interest of these interest groups lies in labor
practices, sustainability and environmental conservation.

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Q3 Competitive positioning Maps and firms competitive position
Figure 1: Perpetual positioning of Nike
Source: (Lawrence & Weber, 2014)
Nike Corporation operates in a higher competitive business environment. The shoe and
apparel industry is large and growing. The competition in sport and fitness footwear is intense
especially in the UK market. The presence of leading competitors in the industry such as Adidas
and Reebok take away much of the market shares (Lawrence & Weber, 2014). This intensifies
the level of competition prevailing in the market. Furthermore, there are new entrants in the
market with new advanced technology. This increases the level of competition in the market.

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Changes in consumer preferences and rapid technological advancements have further increased
challenges in the country. Reebok International Ltd is a global business organization which
offers designs, market sports, footwear, apparels and other accessories (Randall, Leavy &
Gouillart, 2014).. The company has strong research and department which improves their
product offerings. Further the company implements DMX technology along with airflow systems
for comfortable footwear. Adidas is also another footwear company which directly competes
with Nike Inc. They mainly focus on strengthening and developing its brand to attain company
goals. They offer high shoes which are premium priced. Both the competitors provide their
products at a price cheaper than Nike products (Randall, Leavy & Gouillart, 2014).. This takes
away majority of the consumers. Further, Adidas implements tactics and strategies to achieve
leadership position in the market in the sport and leisure footwear industry in UK. There are
other competitors who directly indirectly compete with Nike Corporations such as PUMA, Fila,
sketchers and others. However, Nike corporations despite operating in a highly competitive
business environment, has successfully established itself as global leader and gained a string
position in the UK market (Crane, 2020).. The brand has been the number one choice of the
people. The culture of Nike largely impacts sponsored athletes. The consumers brand perception
also influences the buying decision of the people (Crane, 2020). The company also has a strong
marketing strategy which has enabled the business organization to gain a strong position in the
UK market.
Q4 Porters Five force model and Porters Diamond Model analysis for the industry
Nike’s Porters Five Force analysis

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There are various external factors which determine the smooth operations of the business
organization.
Competitive Rivalry: There is intense rivalry among the existing firms. There is high level of
competition prevailing in the industry. These conditions create a strong force. The competition
firms in the industry are competing to gain higher market shares (Dobbs, 2014). There are
number of firms which have significant impact on Nike.
Bargaining power of the customers: The customers have high bargaining power. They demand
for lower price and discounts. They bargaining power of the consumers are high as the switching
cost is low (Dälken, 2014). The competing firms offer the same products at a comparatively
lower cost. The availability of substitute products enables the consumers to buy their products
instead of Nike.
Bargaining power of Nike’s Suppliers: The availability of raw materials affects operations and
business of Nike. The suppliers have strong power in the market due to presence of competitors.
However, the large population of suppliers weakens the power of the suppliers in the market
(Mahdi et al., 2015).
Threats of substitutes: Presence of substitute products and services in the market threats the
profitability and sustainability of Nike. The switching costs of the consumers are low. This
imposes string force against Nike (Mahdi et al., 2015). It is more likely that consumers consider
the substitute products if the costs is slightly higher than the alternatives.
Threat of new entrants: New entrants bring in new innovation and new ways of providing
products to the consumers. They disrupt the market environment. However, presence of stiff
competition in the industry and large competition firms like Nike, Reebok and Adidas dissuades

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the attractiveness of the new entrants. Brand development has high cost and therefore it is
different for the firms to establish themselves in the market (Dobbs, 2014).
Porters Diamond Model
Figure 2: Porters Diamond Model
Source: (Mboya & Kazungu, 2015).
Factor conditions – As per the Pestle analysis, it has been identified that UK has availability of
advanced technology. The country is highly advanced with availability of natural and manmade
resources. There is presence of skilled labor in the nation along with good infrastructure. These
conditions are favorable for the business organization (Mboya & Kazungu, 2015)..

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Demand Conditions – The competitive pressures from the industry largely affects the demand
for Nike’s products and services. These challenge the business organization and provide better
opportunity to grow and expand. Nike provides better quality products as compared to other
competitors. The products offered by Nike are long lasting and affordable (Mboya & Kazungu,
2015). Further, they provide wide product range with varieties to meet the needs of multicultural
nation.
Related and supporting industries: The related and supporting industries provide the foundation
on which the company excels. The company is dependent on other partners and collaborations to
provide additional values for the customers (Mboya & Kazungu, 2015). The collaborations
between United Nations’ International Labor Organization and other associations to become
more competitive. The suppliers are also major supporting industries which provide efficient
service and timely feedback. They benefit the organization to a large extend.
Firm strategy, structure, and rivalry: Nike Inc. has organized and well managed structure. The
company has unique and sustainable strengths and capabilities (Mboya & Kazungu, 2015). The
presence of intense rivalry forces the company to innovate its products to maintain its
competitive advantage.
Q5: TOWS Matrix and VRIO model
SWOT analysis (Gürel & Tat, 2017)
Strengths Weaknesses
Strong brand image – Nike Inc. has a strong
brand image. This is a biggest strength of the
Dependence of US market: The company is
highly dependent on the US market which

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company. weakens Nike operations.
Excellent marketing strategies – Nike Inc. has
excellent marketing capabilities and strengths.
Operating expenses: The company has to bear
high marketing and operating expenses.
Global presence- The company has a global
presence with financial strength. This boost the
brand image and reputation.
Supply chain – The company has a large and
well managed distribution network and supply
chain.
Opportunities Threats
Innovation – Advanced technology provides
opportunity for innovation.
Competition – presence of strong competitors
and new entrants’ threatens profitability.
Globalization – provides opportunity for
international expansion.
High expenditure – Operating and marketing
expenses are high in the industry.
TOWS matrix - (Byun, 2015)
Strengths (S) Weakness (W)
Opportunities (O) SO- Excellent marketing
strategies and strong brand
image can be used to bring
innovation and further expand
its business in the global
market.
WO- It can overcome the
weakness by innovating its
products and expand business
globally.

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Threats (T) ST- Strong global presence
can be used to overcome stiff
competitive.
WT- It can overcome
weakness to avoid threats.
VRIO analysis - (Knott, 2015)
Resources
Does the Organization have
Value Rarity Unable
to
Imitate
Organize
d
Properly
Competitiv
e
Advantage
1. A Strong Financial
foundation
Yes Yes Yes No Yes
2. Valuable Facilities Yes No No Yes Yes
3. Unique and Innovative
Products
Yes No No Yes Yes
4. Effective Management Yes No No No Yes
5. Experienced and Capable
Employees
Yes Yes Yes Yes Yes
6. A Strong Relationships with Yes Yes Yes Yes Yes

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its Customers
7. A Strong Relationships with
its Suppliers
Yes Yes Yes Yes Yes
8. A Strong Relationships with
its Channels
Yes Yes Yes Yes Yes
9. A Strong Brand Reputation Yes No No Yes Yes
10. Efficient Operations Yes No No Yes Yes
11. Social Responsibility Yes No No No Yes

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References
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