PESTEL Analysis - Nike - published: 29/07/2020

Extract

[...] Secondly, Nike is recommended to make improvements in its social and environmental sector. Indeed, if Nike continues to apply too rapid obsolescence on these products, as is currently the case, customers will no longer buy them, and the company faces going under in the coming years. Even if extending product life means fewer purchases, this is only a small decline compared to the brand's forecast. Finally, Nike should try a more aggressive approach in its free trade policy, especially for developing countries. [...]

[...] Nike Pestel Analysis I. Presentation of the brand and the sporting goods market A. Presentation of the brand Nike is an American brand that is now known throughout the world and is legally run by a limited company. This brand was created by two businessmen, Philip Knight and Bill Bowerman. It specialises in the innovation, manufacture and sale of sports equipment, clothing and mainly shoes. With a total capitalisation in 2019 of 142,289 million euros, the brand is expanding worldwide by building three head offices, one in the United States, one in Europe and one in Asia Pacific. [...]

[...] In this way, it will enable Nike to target potential threats to avoid them and respond to opportunities for the company over time. II. Nike's detailed Pestel analysis A. Policy What are the criteria of the Political sector? The main question that needs to be answered is the political stability of a country, as this plays a very important role in the economic sector of a company. However, it also concerns fiscal policy, foreign trade (European Union, but also worldwide) or social protection. Nike is a world-renowned company that is very much subject to government political effects. [...]

[...] This Pestel analysis shows that Nike, as with the previous factors, has many opportunities, but also various changes need to be made that are a threat to the company at the moment. F. Legal The Legal factor directly concerns the legal aspect and the laws surrounding the company's activities. It can, therefore, touch on several themes such as health, safety standards, work, the environment, but also the setting up of help or leave units when necessary. For a multinational company such as Nike, the legal framework for the company's commercial strategy is very important, as the laws of the World Trade Organization organize the operation of the company's activities, particularly those of footwear, clothing and sports equipment during import/export. [...]

[...] The company is once again threatened by its lack of effort in the sustainability of its products (programmed obsolescence very/too fast), which could, however, save the purchase of additional goods. The problem remains the same: if the company extends the lifespan of its products, it will sell less and its profit will be smaller. Finally, Nike still has a positive aspect, as it applies all the standards of the ISO 14000 compliance policy. Thus, the brand works to reduce carbon emissions and eliminate waste and recycling. All of this is organized by managers, who steer the various aspects of the business. [...]