Lecture Notes on PESTLE Analysis of Nike

Introduction

• Speaker: Mark Salinger
• Position: Marketing expert at MyAssignmentHelp.com
• Topic: Conducting a PESTLE analysis on Nike
• Background on Nike:
  • Established: January 25, 1964, by Phil Knight and Bill Bowerman
  • Formerly known as Blue Ribbon Sports
  • Global brand value (2019): $32.4 billion
  • Net income worldwide: $4.03 billion
  • Product range: athletic footwear, apparel, support equipment, and accessories

PESTLE Analysis

Political Factors

• Business processes depend on government type and stability.
• Opportunities for growth in stable political environments:
  • Low interest rates in the U.S.
  • Favorable international tax agreements
  • Government support for infrastructure
• Challenges:
  • U.S. sanctions on Iran hindered expansion plans.
  • Controversial marketing campaigns (e.g., Colin Kaepernick) led to backlash.
  • Political lobbying expenditure increased (e.g., $750,000 in 2016).
• Other political determinants:
  • Legal framework for contracts, antitrust laws, tax rates, industrial safety regulations, etc.

Economic Factors

• Performance influenced by economic conditions in markets:
  • Stable growth from 2005 to 2018 despite fluctuations.
  • Positive contributions from rapid growth of developing markets.
  • Low labor costs in Far East countries.
  • Outsourcing since the 1990s supports revenue growth.
  • Opportunities in stable markets like the U.S., UK, and Australia.

Social Factors

• Influences on attractiveness of Nike's products:
  • Growing collective consciousness about fitness and sports.
  • Individual wealth rising in developing countries.
  • Emphasis on product safety and quality.
• Challenges:
  • Issues with labor conditions and low wages could harm brand image.

Technological Factors

• Business processes shaped by technology:
  • Advanced IT infrastructure for operations.
  • Use of SOAP and MPPS for transactions and supply chain.
  • Automation reduces labor costs.
  • Effective integration of mobile technologies and digital platforms.

Environmental Factors

• Commitment to environmental standards:
  • Adopts ISO 1400 for product development.
  • Focus on carbon footprint and waste management.
  • Use of organic cotton and recyclable materials in products.

Legal Factors

• Legal challenges faced:
  • Litigations over gender discrimination and workplace conditions.
  • Issues related to tax evasion and marketing practices.

Conclusion

• Nike has opportunities for growth amidst challenges across various factors.
• Importance of understanding PESTLE analysis for strategic marketing and operations.