1. Nike, Inc.

PEST Analysis and Recommendations

Nike Inc.s growth partly depends on external conditions. These conditions are outlined
in this PEST Analysis of the company. The PEST Analysis model identifies the external factors
that present opportunities and threats in the remote or macro-environment. In the case of Nike
Inc., the PEST Analysis enumerates such external factors that influence the companys strategic
decision-making processes. As one of the major firms in the global sports shoes, apparel and
equipment market, Nike Inc. must address these external factors to ensure business dominance in
the industry, especially when considering the presence of aggressive competitors like Adidas.
1.1. Political Factors Affecting Nikes Business
Nikes sports shoe business is subject to the effects of the political landscape. This
component of the PEST Analysis model deals with governmental influence on the remote or
macro-environment of businesses. The following political external factors determine some of
Nikes strategies:
1. Stable political climate in most major markets (opportunity)
2. Expanding free trade policies (opportunity)
3. Improving government support for infrastructure (opportunity)
Stable political conditions in most major markets present opportunities for Nike to grow its
business in these areas. Also, expanding free trade policies facilitate better market penetration
overseas. Moreover, improving government support for infrastructure, especially in developing
countries, gives Nike more opportunities to expand its operations in these markets. Based on
these political external factors, Nike Inc. experiences opportunities to improve its market
presence and global expansion in the sports footwear, apparel and equipment market.
1.2. Economic Factors Important to Nike Inc.
Nikes business performance depends on the state of economies where it sells its athletic
footwear, equipment and apparel. This component of the PEST Analysis model identifies the
economic concerns that affect the remote or macro-environment of the business. The following
economic external factors are significant in determining Nikes performance:
1. Economic stability of developed markets (opportunity)
2. Rapid growth of developing markets (opportunity & threat)
3. Slowdown of the Chinese economy (threat)
 Developed markets like the United States are relatively stable, thereby proving Nike Inc.
with the opportunity to continue its slow but stable growth in these countries. The company also
has opportunities to rapidly grow by increasing its operations in high-growth developing
countries. However, the rapid growth of developing markets also threatens Nike by increasing
labor costs in the companys supply chain and production facilities. In addition, the slowdown of
the Chinese economy threatens Nikes performance, which is now significantly dependent on the
Chinese market for sports shoes, apparel and equipment. These economic external factors show
that Nike Inc. must emphasize global expansion strategies while devising new ways to capture
growth in developing countries.
1.3. Social Factors Influencing Nikes Business Environment
Social issues impact the attractiveness of Nike athletic shoes, apparel and equipment.
This component of the PEST Analysis model deals with the effects of social conditions on the
firms remote or macro-environment. In Nikes case, the following sociocultural external factors
are most significant:
1. Increasing individual wealth in developing countries (opportunity)
2. Increasing emphasis on product safety (opportunity)
3. Improving positive attitudes about leisure (opportunity)
In developing countries, Nike has opportunities to tap consumers with increasing
individual wealth. Also, the company has opportunities to develop safer products and use
marketing campaigns that highlight the safety of its sports shoes, equipment and apparel. Nike
can also adopt new product development strategies to address needs for products for leisure
activities. Based on the external factors in this component of the PEST Analysis, Nike Inc. has
considerable opportunities for product development and business growth.
1.4. Technological Factors in Nikes Business
Nikes business changes according to technologies available for business processes and
athletic footwear, apparel, and equipment. This component of the PEST Analysis model
identifies the technological conditions that lead to significant change in the remote or macro-
environment of companies. The following technological external factors affect Nike Inc.:
1. Increasing R&D investment among firms (threat)
2. Rapid technological obsolescence (opportunity & threat)
3. Widespread use of mobile technology (opportunity)
 The increasing R&D investment among firms threatens Nike, as these competing firms
aim to develop more technologically advanced sports shoes, equipment and apparel. Rapid
technological obsolescence also threatens Nike by putting pressure on the company to increase
its product development efforts. Nonetheless, this external factor provides opportunities for Nike
to integrate advanced technologies in its products. In relation, the company has opportunities to
integrate mobile technologies in its products to capture consumers who frequently use mobile
technologies, such as mobile apps and online tools. These external factors show that Nike faces
considerable threats as well as opportunities based on new and changing technologies.
1.5. Nikes Recommendations
Nike Inc. must address a variety of opportunities shown in this PEST Analysis. It is
recommended that Nike must pursue a more aggressive approach to international expansion
based on free trade policies, with focus on high-growth developing countries. This action can
help address the potential decline of Nikes performance in the Chinese market. Another
recommendation is for the company to invest more in research and development (R&D) to tap
potential demand for sports shoes, apparel and equipment integrated with advanced computing
technologies. The external factors in this PEST Analysis also highlight the importance of
improving Nikes sustainability and employment practices. These actions address regulatory and
sociocultural concerns and, consequently, improve Nikes brand image and corporate image.
F. CONCLUSION
1. nhn xt mar strategy
2. recommendation cho nike
3. kt qu research lm c