Nike PESTLE Analysis | Nike Marketing | Marketing Analysis | Nike Incorporation
PESTLE Analysis is one of the very important tools that is used for analyzing macro-environmental factors that has an impact on the Company. PESTEL Analysis includes factors like Political, Economic, Socio-cultural, Technological, Environmental, and Legal.Nike PESTLE Analysis is described below:
Nike PESTLE Analysis
Nike Political Factors
Political factors affect every business organization and Nike Incorporation is also affected by political factors. Nike Incorporation being a multinational Company has got many tax benefits from the US government. The rules of the US government were favorable and the government is stable as well that is supporting the Company.
Nike Incorporation has its Production processes all over the world, especially in emerging Asian countries. These countries like Vietnam, China, Thailand, Indonesia, etc can suffer from political stress, instability, a strike that directly impacts the supply chain of Nike Incorporation (Nave, 2015). Also, the change in international law also affects the company. Some of the countries prohibit the sale of foods from other countries in order to protect their local products.
Nike Economic Factors
Nike Incorporation has set most of the production plants in Asian countries because of the low labor cost as compared to the United States. But after the boom of the economy, the living standards of the people also increased which directly impacted the rise of production cost as the labor started a strike for very low wages. China is the country with minimum wages and the strike by Chinese workers in around 2014 affected the Company.
Nike Incorporation has been affected by the Global economic crisis of 2007-2009 which led its customers to shift to another brand of low cost and the company has been affected by it a lot. The company might face this kind of Recession in the future as well for which the Company must be prepared from every point of view. With the acquisition of different footwear brands, the company has been able to strengthen its base around the globe.
Nike Socio-Economic Factors
The needs and demands of people are changing day by day as the consumers are becoming more brand conscious. Because of brand awareness, it has supported the growth of the Company. Since Nike Incorporation is the first company that has brought innovation in the footwear industry it has got the first-mover advantage. Nike has most of its production plants in Asian countries has been accused of having hazardous working conditions that directly affect the brand image of the company.
Nike Technological Factors
In the field of the footwear industry, Nike Incorporation is regarded as the Apple Incorporation which has introduced innovative products. The company has adopted the latest technology in order to cope with the growing competition placing it ahead of its competitors. The Company has been trying to cut the use of chemicals with the use of advanced technology.
Since this is the era of the 21st century, the company has made some changes in its marketing techniques by going digital in order to a large group of consumers. Nike being a global brand uses online media to reach a large group of people around the world which has helped ditto increase the sales of the product in recent years.
Nike Environmental Factors
The rise in concern for global warming has led the Company to reduce the waste and the chemicals that are harmful to the environment. Nike Incorporation must be abiding with a certain kind of environmental law in order to carry out its production process in different countries. The company has been using the latest innovative technology to reduce manufacturing waste. China is the most polluted country in the world. As we know most of the Production of Nike Incorporation is in China and in the recent few years the government of China is being more concerned about the pollution issues in the country for which it had made it mandatory for the company to use the resources in a proper way ultimately increasing the production cost.
Nike Legal Factors
Nike had a legal battle with its main competitor in the market “Adidas” for taking its product designs, marketing plans after they hired the former employees of Nike. Nike has filed a case of around $10 million. This type of legal battle directly affects the image of the company in general. Nike has been accused of Child Labor usage at various Production processes in different countries like Pakistan and Cambodia. It has been said that for the purpose of preparing Soccer balls they are using child labor. The company had lots of efforts to minimize these practice but still, it is facing many legal issues worldwide.
Nike has faced the allegations of minimum wages as the laborers in Indonesia claimed that they are receiving minimum wages than the standard. In California, Nike Incorporation has been sued for this illegal practice.
Around the world, Nike is the most counterfeited brand which affects the profitability of the company directly impacting its revenue. In some of the countries, there are contract manufacturers who manufacture and sell Nike Products. This affects the market share of its brand in that country. The counterfeited products are low in quality which impacts the brand image of the Company as a whole.
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