Nike Strategy Analysis
SWOT Analysis
A SWOT analysis can be used to carry out a detailed analysis of the internal and external environment of the company, which can provide management with useful information for decision making. The analysis of the strengths of the organization can enable the organization to know how it creates value and where it excels in different areas of its operations. Key strengths of the organization include the strong brand value of the organization, a loyal customer base, a diverse range of products, and financial stability that can be used by the company for growth. The strengths of the company act as the basis for the strategy selected by the company, as growth can only be attained by leveraging on the company’s strengths (Reading, 2019). An analysis of the weaknesses of the organization, on the other hand, can aid in identifying areas of the company’s operations that need improvement. Key weaknesses identified by the company include a reputation for unfair labor practices, overreliance on one market, and high long-term debts. These weaknesses can be taken into consideration when formulating the strategy of the company. The analysis of the opportunities and threats facing the company can also be used as a basis for strategy formulation. An analysis of opportunities can provide management with information on areas that can attract growth, while an analysis of weaknesses, on the other hand, can enable management to select a safe strategy that can safeguard the assets of the company.
The BCG Matrix
The BCG matrix can be used to analyze possible areas of growth for the company to identify the most suitable ones that would result in the highest returns possible, while at the same time minimizing the risk that the organization faces in its operations. The BCG matrix compares the relative market share of a company’s products to its market growth. It is, therefore, possible for the company to identify products with the highest growth rate and ones that are likely to grow slowly and reduce profits.
Dogs are products with a small market and a low growth rate. Non-sports fashion items produced by Nike, for example, have had a low growth and market share. Question marks are products whose market can grow quickly, but their current market share is low (Jurevicius, 2013). Nike, for example, has a small market share in middle-income and developing countries that have rapidly growing markets. Stars are products with both high growth rates and high market share, while cash cows are products with a high market share but which has low growth prospects.
By understanding where each of its products is categorized, Nike can create an effective organizational strategy that will ensure resources are allocated to products that will generate the highest returns.
The IE Matrix
The internal-external matrix can be used by the organization to analyze the internal and external factors that affect the performance of the organization. Different divisions are analyzed based on the returns they can generate in both the short term and long term. The company can, as a result, allocate resources to the most profitable divisions that will generate the highest returns for the company. The company can therefore formulate a long-term strategy that includes divisions that will enable the company to meet its long-term growth goals.
Conclusion
A SWOT analysis, BCG analysis, and the IE matrix can be effectively used by the company to evaluate different alternatives and identify one that will result in the most value to the company.