Nike Inc Pest Analysis
PESTEL Analysis Political The main countries that Nike trades in are America (where Nike originated) and the United Kingdom and other European countries such as France and Germany. In these main countries that Nike sell products in there is stable political environments where there is a democracy meaning that the governments in this countries have been elected by the general public in that particular country. The majority of these countries home and export markets have been boosted with the inclusion of the euro meaning that it is easier to trade between countries.
This is an advantage to Nike, as they do not need to be influenced by exchange rates when exporting goods from one country to the other. In both the United Kingdom and The USA general elections are on the horizon they are still a long way away but the respective governments are now starting to enforce policies with election in minds. This could influence interest rates meaning that more people will have disposable income and then Nike may decide to use big advertising campaigns so that this disposable income can be spent on Nike. Nike has to be aware of pressure groups trying to get bans on methods that Nike use.
This could be things such as trying to stop Nike from being able to set up factories in undeveloped countries and also using certain leathers coming from animals to make football boots. Nike needs to be aware of any help they could get off the governments such as getting subsidies for setting up Nike factories in areas of high unemployment like Nissan setting up a major factory in Sunderland.
This could be a big help to Nike as it would mean getting planning permission for a factory and it would also mean they can import more goods into this particular countries markets.
Economical Social Nike are a multinational company so these affects the decisions that they make when designing a new product or making a new advertising campaign. A big decision for Nike to consider is how to make the products available to the customer. To do this Nike must research the buying habits of a customer. This can mean how much and how often they buy a product and therefore would it be easier for customers to have their goods delivered for convenience.
Nike have to assess the way in goods are purchased. They will have to look at the increase of Internet shopping and mail order compared to buying products from a shop and then make the decision to invest more in these types of shopping. Another factor Nike need to consider is the lifestyle of the customer and must answer questions such as the time that people have got to go shopping and whether they work unsocial hours meaning that internet shopping may be more affective to larger amounts of people.
Nike have to take into accounts religious and political features of the countries they are trading in such as restrictions on advertising such as advertising unhealthy products to children or religious restrictions to advertising such as bearing large amounts of skin in advertisements. Nike could also look at religious beliefs and may be able to make products around these religious beliefs. They may also need to know that certain religions and social groups may be against wearing a particular type of material such as fur.
Nike has to consider how many people live in these areas. For example you should not make to many products for the market they are trading in because the supply will go up and the demand will go down meaning that Nike have to reduce the price to sell the product. When a new product is being made Nike have to evaluate the climates and terrain they are selling in for example they will not be able to sell a product designed to keep the body cool in an area that is freezing cold such as Scandinavian countries.
Technological Nike use Technology in a number of different of areas within the business. The first area they use technology for is making the products and they have to be aware of any new advances in machinery that would make it quicker, easier and cheaper to make the products. Nike are always trying to make new products with new and unique designed to do a specific job, such as keeping the body cool. When these products are created these ideas will be patented and this will give Nike an advantage over the competition.
Another big area for Nike is the Internet this is for internet sales which is a big area for Nike to tap into. Nike will realise that if they can get into this market they will make a huge profit.
Nike also has to use technology to make their advertisements. Nike will always want to use more technology in their advertisements along with their stars as they can get a lot more sales from a good advertising campaign such as the recent ‘Freestyle” campaign. Environmental
Nike have to consider a number of factors to do with the environment when making their products these factors are as follows. Raw Materials Nike have to consider whether the raw materials. That they use to make their products are going to run out. The Raw materials that nike use are animal skins for leather.
Fortunately for Nike these materials will not run out animals can keep on re producing. Nike need to consider whether they could use synthetic materials instead of skins so that they stop killing animals and reduce the cost of obtaining these materials.
The trends will be changing for the type of materials used for the products and Nike need to consider how to obtain these materials while causing as little damage to the environment as possible. Nike need to understand that pressure groups will not like them harming the environment and that if Nike do not conduct good public relations with these groups and do harm the environment then Nikes goods could be boycotted which will mean losses of profit for Nike. Legal
For all companies legal issues are of key importance to the company as these laws can determine how an organisation conducts its business.
It is essential that a business complies with these rules or else they will have to pay a high price or even fold. The acts that have to be obeyed are the consumer protection legislation, The trade descriptions act. The sales and supply act, The weights and measures act, the equal opportunities act which is making sure that nobody gets an unfair chance because