Products sourced from these suppliers are sent to various markets through the regional offices and distribution centers of Nike. SAGE. *You can also browse our support articles here >. Trade agreements on an international level are vitally important to Nike and their management will be central to the overall success of Nike. This development of a premium brand has been the central strategy for Nike and all of its acquisitions have been done with enhancing the brand image of Nike in mind. Nike’s local sales for the current quarter in China, for instance, are forecast to be roughly flat year on year, rather than declining. Rapid innovation processes 3. The Memphis, Tennesee based distribution system holds footwear, apparel and equipment of Nike and Jordan brands. Nike has a strong business strategy, centred on quality and premium branding. Investing in research and development is helping brands create innovative products and grow their sales and market share. These forces can have a direct impact on their sales and profits. Digitization and product innovation â For further growth, Nike needs to remain focussed on digitization and product innovation. Economically, Nike faces considerable challenges. Registered office: Venture House, Cross Street, Arnold, Nottingham, Nottinghamshire, NG5 7PJ. One of the ways that this has been achieved is to have key individuals in critical roles within Nike and the subsidiaries. The Nike brand has expanded fast internationally which is evident from its growing revenue over the last five years. & Eisenhardt, K.M., 1998. Top design ability and high quality products have been the central factor to Nike’s success. Nike however, remains a dominant name in this market whose sales and revenue have grown steadily over the past five years. For example, Lee Bird was hired as president of the subsidiaries who had the express role of managing the subsidiaries in a way that encouraged long term growth. There are also untapped markets for Nike to consider entering, in developing countries that are able to spend more money than was previously possible. Submitted to University of Sunderland Submitted by: BIJAY GURUNG Student code: 109122858 BA (HONS) BUSINESS MANAGEMENT (YEAR 3) WORD COUNT: 3498 (excluding executive summary, references and relevant appendices) Table of Contents 1. Sports leisure has become the largest category across athletic footwear in US. In 1988, Nike began to acquire additional subsidiaries with Cole Haan and by 2008 a further three brands have been acquired making Nike one of the fastest growing companies of the late 20th century (Ramaswamy, 2008). In 2016 and 2017, Nike spent higher than 3 Billion USD on marketing. Customer loyalty: Nike also enjoys a very high level of customer loyalty and trust among its customers. The following strengths are the most notable in the case of Nike Inc.: 1. It is not just the governments but other agencies are also actively watching for the carbon footprint of businesses. To retain its growth rate, the brand must retain focused on product innovation and marketing. Competitive pressures against the brand have also kept growing. In this regard, it also reduced the number of suppliers to have only those onboard who are committed to quality and sustainability. Its marketing tactics have earned it some serious appreciation over time. Nike is headquartered in a state of art building that has a lake and more excellent and extraordinary facilities for its staff. Looking at the political, economic, social, technological, legal and environmental factors surrounding Nike will allow the choice of business strategy to be seen much more clearly. Asia is particularly a very fast growing market full of space and opportunities for Nike. McGraw Hill Professional. Careful management and a determined strategy has ensured Nike’s continued success within the sports apparel market, something that substitutes and rivals have, so far, failed to achieve. The PESTEL framework can be used to analyse how the most important forces in the international environment can affect large and global businesses. Currently, Nike is supplied by 127 footwear factories in 15 nations and 363 apparel factories in 363 nations. Each segment is carefully examined in terms of physical capabilities, sociological needs, and design preference. These products are shipped to the Nike Distribution centers and then to retail stores for sales. In terms of internal strengths, the main thing that Nike has in its favour is its singular and well recognised brand. Werther, W.B. There are a large number of brands operating locally and internationally in the global market that are selling sports shoes and apparel.  Human Resource Management International Digest, 2005. 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