Nike PESTLE Analysis
Published by MBA Skool Team, Last Updated: October 12, 2019
PESTLE Analysis of Nike analyses the brand on its business tactics. Nike PESTLE
Analysis examines the various external factors like political, economic, social,
technological (PEST) which impacts its business along with legal & environmental
factors. The PESTLE Analysis highlights the different extrinsic scenarios which
impact the business of the brand.
PESTLE analysis is a framework which is imperative for companies such as Nike, as
it helps to understand market dynamics & improve its business continuously.
PESTLE analysis is also referred to as PESTEL analysis.
Let us start the Nike PESTLE Analysis:
Political Factors:
The political factors in the Nike PESTLE Analysis can be explained as follows:
Nike is a leading sports equipment & apparel brand with a global footprint. The
company has its business spread across the world. Various political situations
impact the business of Nike. Taxation policies on imported goods, labor laws or
policies related to trade with USA can affect the business of Nike. All these are
politically driven scenarios which can hamper the growth for Nike in a particular
country or region. Change of governments, corruption in deals etc can lead to a
negative impact in business in the country of operation for Nike.
image: pixabay
Economic Factors:
Below are the economic factors in the PESTLE Analysis of Nike:
Being a multinational company, Nike has a lot of dependency on economic factors.
Some countries levy high import duties or have a low purchasing power. In such
countries, Nike has to run businesses on lower margins. Also, being an international
company, there is always a constant dependency on exchange rates. Being an
American company having a worldwide business, a slight fluctuation in forex rates
has an impact of millions of dollars.
Social Factors:
Following are the social factors impacting Nike PESTLE Analysis:
Nike has to be prepared to face several social & cultural factors which are prevalent
by virtue of it being a global company. Nike has faced issue regarding alleged
sweatshops or strikes amongst workers on salary or healthy & safe working
environment. Apart from business attributes, lifestyle changes in the clothes people
wear or constantly changing fashion preferences are elements which cause dramatic
shift in business returns. Moreover, being a top of the mind brand, Nike is subject to
criticism over petty issues on social media which otherwise would not cause an
issue. Nike’s contribution to society as a part of its CSR activity is widely appreciated
and helps boost its brand equity.
Technological Factors:
The technological factors in the PESTLE Analysis of Nike are mentioned below:
Nike invests significantly in research & development of new products especially
across different sports & for global athletes. Nike has several laboratories & experts
working using technological tools to work on biomechanics, exercise physiology,
engineering, industrial design etc.
Like Nike, other competitors also involve in R&D, and hence regular investments are
required to ensure better product quality for consumers.
Legal Factors:
Following are the legal factors in the Nike PESTLE Analysis:
Nike, like every big company is always under the purview of the legal systems in the
country of operations or even international legal guidelines. Consumer protection
laws, copyright patent lawsuits, health & safety laws etc always keep on monitoring
the business of Nike. Labor laws pertaining to working conditions & salaries have in
the past lead to lawsuits against the apparel giant. Several ad campaigns have also
come under legal scrutiny as they focused on extreme sports.
Environmental Factors:
In the Nike PESTLE Analysis, the environmental elements affecting its business are
as below:
Nike has always focused on having extremely environmentally friendly business
processes, whether it is ecofriendly manufacturing products, conducting R&D or
reusing waste material for creating footwear.
Nike is ranked as one of the most climate friendly companies globally. However, with
a consistent pressure on saving environment from NGOs & environmentalists, Nike
is always under the scanner for its processes. Ban on leather, deforestation, climate
change policies from governments can hamper the business of even a multinational
like Nike.
To conclude, the above Nike PESTLE Analysis highlights the various elements
which impact its business performance. This understanding helps to evaluate the
criticality of external business factors for any brand.
This article has been researched & authored by the Content & Research Team. It
has been reviewed & published by the MBA Skool Team. The content on MBA Skool
has been created for educational & academic purpose only.
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