Nike is focused on success and has made a significant impact in athletic wear. There are always risks and weaknesses in any company. Nike, for example, has many manufacturers around the world, which can lead to problems in labor and human rights. To mass-produce their products at a cheaper cost, Nike may use low-paid labor or sweatshop workers. This isn’t the only problem this company has with their international business.
It is difficult to trade currency and Nike has to be careful. They have their manufacturing done in the United States and most of their production overseas. This means that they need to make sure that exchange rates remain in their favor to avoid losing money. Nike is a large company that faces many risks and overheads. However, they have been profitable each year with the exception of one. This is due to a solid marketing team that pushes products to a wide customer base. Despite this, the competition is fierce, particularly in Nike’s largest department, shoes. Nike’s Air Jordan sneakers have been a huge success, selling billions without any help from its entire shoe product line. With the trend towards sneakers becoming more popular, the competition for athletic footwear is fiercer than ever. Puma and Adidas lead in the race to make Nike’s sports shoe wear more popular. Despite their strong brand loyalty and diversification, Nike’s biggest threat is this competition. A company this large still has many potential growth opportunities and strengths. The stock market is not yet at its best, as the recent campaign featuring Colin Kaepernick (NFL quarterback) has caused a drop in their stock price.
Second, the company is able to purchase accessories with very little leverage and has ample capital to expand its business. The relatively under-tapped watch market is an ideal business for expansion. Apple may hold the watch market lead, but Nike has the strength to easily buy Fitbit, which specializes in sports watches for athletes.
Nike could also expand its reach into international markets. Nike could be a major player in any market that it enters, despite the challenges of culture differences and cost. Nike may be a formidable success story, even though they have their downsides and dangers.
