Business Analysis Assignment Critically Evaluating Case of Nike

Question

Task: Your task is to prepare a detailed report on business analysis assignment critically analyzing the case scenario of Nike using academic sources.

Answer

Introduction
This report on business analysis assignment aims to analyze the strength, weaknesses, opportunities, and threats of the most recognizable sports brand Nike. The report talks about how Nike can eliminate the potential threats from its competitors, how it can grab new opportunities by making its holds stronger in new evolving countries like China, Brazil, and India. Nike still has to depend on the US market for most of its revenues. So, in this report, there is a discussion over how Nike can boost its sales all over the world. The advertisement and marketing techniques of Nike have also been discussed in this report. How can new technologies like self-lacing be available to athletes and normal people is also mentioned in this report.

SWOT Analysis
SWOT analysis is a kind of technology that helps an organization analyze strengths, weaknesses, opportunities, and threats associated with competition, business, project planning, etc. In this section, we will do a SWOT analysis of Nike.

Strength
The brand Nike itself is one of the biggest strengths of Nike. There is a massive brand awareness of Nike across the world. A recognizable brand that does not only have a great craze among athletes but also among normal non-athlete people. The symbol of Nike has become the symbol of a genuine sports brand. More than fifty percent global athletic footwear market is held by Nike. There are millions of loyal customers of Nike across the globe. Nike has always considered the issue of the Environment and sought sustainable development. The strengthening of its sides brands like hurley and converse have made Nike enjoy exceptional success for many years. Nike has always been able to keep its manufacturing cost low by establishing its manufacturing units in foreign countries like China, Vietnam, and Indonesia, India, Brazil, Mexico, Italy, and Brazil (Lopez-Gonzalez et al. 2017).

Weakness
Though it is a recognized global brand, still it has to depend upon the US market with regard to revenue and sales. For growth and considerable sales, Nike still has to depend upon the US. Although Nike is prospering, it needs to resolve its debt issues. The debts of Nike are disturbing, it is $9.45 billion. This is a kind of financial threat for Nike. Nike had been targeted for using sweatshops to produce footwear. poor working conditions, low wages, child labor, forced labor are some of the issues that were raised against Nike by activists many times. There were also controversies like lawsuits and sexual harassment. Nike needs to consider and resolve these issues asap. The retailers have become one of the major weaknesses of Nike as the retailer goes for more margin.

Opportunities
There is no doubt that Nike has strongholds in almost every country in the world, but evolving markets like China, Brazil, and India can bring plenty of opportunities for Nike. Direct Interaction with customers through digital business has become a boon for Nike. It has closed many of its physical stores and mainly focuses on digital business. Online sales of Nike cover more than 34% of the total sales of Nike. As Nike is associated with many famous celebrities so, they can start manufacturing other sports accessories like sunglasses and other fashion accessories related to sports.

Threats
Counterfeit products can become one of the biggest threats to Nike. It can hamper the reputation and revenue of Nike. Counterfeit products are low-quality products with the Nike symbol and are sold at low prices by merchandisers. These things can create a bad impression of Nike among its customers. New evolving brands in the athletic industry are posing considerable threats to Nike, it needs to keep working on its marketing strategies and new technologies to maintain its hegemony in the athletic industry. As most of the revenues of Nike come from big markets like the US and China so, trade issues between China and US can hamper the sales and revenues of Nike (Bijleveld and Dellaert 2020). Patent disputes are always a matter of concern for big giants. One such patent issue is with Adidas and Nike. These types of disputes expose the dirty secrets of both sides that can hamper the reputation of a brand. There is always a risk of foreign exchange currency when a brand like Nike operates globally. Since Nike shows its earnings in US dollars so, fluctuation in Foreign exchange rates sometimes affects the revenues of Nike.

Future Plan
Nike never lags behind when it comes to innovation. One of the new innovations of Nike is Bluetooth shoes. It was a long dream of Nike to build a self-lacing shoe. Nike wanted to connect tech with their sneakers and make smart sneakers. It wanted to use the technologies like wireless charging, using applications for their sneakers, and the replacement of batteries like we do with our normal smartphones. Adapt BB MAG shoes are Bluetooth-enabled athletic shoes and self-lacing shoes (Kratschmann and Dütschke 2021). The shoes adjust themselves accordingly to give an experience of comfort to the athlete. It is a future product for not only athletes but for common people also as it will soon provide people with the technology of self-lacing and app-controlled sneakers.

Marketing and Advertisement
Marketing and advertisement are very important aspects for a brand to grow and evolve. There are many ways that Nike uses to advertise its brands. The use of digital advertising has become one of the most accepted ways of advertising and marketing. Promotion of brands is done through different social media platforms be it OTT platforms, social media platforms like Facebook, Instagram, and even online sites. Brand endorsement is done with the help of famous sports personalities, actors, actresses, YouTubers, and people who have big fan followings on social media. Michael Jordan was one of the popular personalities in sports (Priya et al. 2020). So, Nike chose him as the brand ambassador of Nike. The use of popular Phrases like ‘Just Do It’ in ads was one of the popular slogans in the history of advertisement. They chose personalities as their brand ambassador who has big fan followings in their respective countries. And there are many conventional ways of advertising like poster and banner advertising.

There are many unpaid promoters of Nike who are promoting the brand without any formal association with Nike. As Nike is a reputable and recognizable brand, it gets a good deal of recognition from the community of influencers without sponsoring it. Searches that are related to Nike are very popular on Youtube. There are more than 100 unsponsored videos that are related to the reviews of Nike and its unique products on youtube. Nike hires the finest brains and talents to advance advertising campaigns and marketing strategies for its brand. The main advertising agency that does advertising for Nike is Wieden & Kennedy. The marketing and advertising of the global market are handled by Wieden & Kennedy. The slogan "Just Do It" of Nike is one of the most accepted slogans for its brand promotion.

Recommendations for Sales Improvement
There are a lot of areas where Nike needs to work upon to improve its sales. Although it has strongholds in almost all developed countries, evolving markets like China, Brazil, and India can become a boon for Nike. It needs to work upon its prices so that lower-class people can afford to buy its product. It needs to counter the counterfeit products that have over time become one of the common reasons for the decline in its revenues (Nice et al. 2021). Customer feedback is an important aspect to increase sales. Nike needs to get its current customers to feedback so that they can analyze the areas where it is lacking, and identify the problems. If a firm wants loyal customers and also increase their sales then it needs to give good customer service. Serving the customer in the best possible should be the motto of the company to attract customers and make them loyal to the company. Examples of good and excellent customer service are speedy disposal of email queries, free guidance on different services, products, and useful information, making deliveries more attractive and personalizing by adding handwritten notes of appreciation and thanks, organizing educational and informative content on social media, and website pages grounded on buyer comments and questions.

Conclusion
A recognized sports brand like Nike needs to work hard consistently to eliminate the potential threats from its competitors as the competitors have enough potential to surpass Nike in terms of brand value, revenues, and awareness of the brand. It needs to decrease its dependency on the Us market for revenues as most of the total revenues of Nike come from the US alone. It also needs to resolve the allegations of poor labor conditions, forced labor, and child labor that Nike is facing for the past two, three decades because such severe allegations can hamper its image badly. Advertisement and marketing are very significant in terms of sales so, Nike needs to consistently work upon how it can promote and endorse its brands globally. Innovation is something that should be pursued by every successful company to sustain a long competitive advantage so, Nike should also keep working on connecting tech with their products.

References
Kratschmann, M. and Dütschke, E., 2021.Selling the sun: A critical review of the sustainability of solar energy marketing and advertising in Germany. Energy Research & Social Science, 73, p.101919.

Lopez-Gonzalez, H., Estévez, A. and Griffiths, M.D., 2017. Marketing and advertising online sports betting: A problem gambling perspective. Business analysis assignmentJournal of Sport and Social Issues, 41(3), pp.256-272.

Bijleveld, C. and Dellaert, N., 2020 Creating insights and predicting the future of demand in order to plan capacity for a distribution center of a sportswear retailer.

Priya, M.K., Srinivasan, R., Harshitha, G., Zingade, S., Jeena, N., Daim, T.U. and Meissner, D., 2020.Impact of Technology in the Future of Sports.In Innovation Management in the Intelligent World (pp. 45-53).Springer, Cham.

Nica, I., Chiri, N. and Ionescu, , 2021. Using of KPIs and Dashboard in the analysis of Nike company's performance management. Theoretical & Applied Economics, 28(1).