Throughout a long period of time, analysts and consumers regarded Nike highly and never considered it exposed to threats. Yet, the company's recent financial report has investors and customers concerned about the potential of this worldwide leader in athletic supplies. Despite a 6% increase in income, the results for the fourth quarter of 2016 show rising difficulty (http://www.marketwatch.com/investing/stock/nke/financials). The company underperformed expectations, and stock prices fell following the release of the financial report. Even while there is some promise on the surface, things may not improve in the future. Worse, economic specialists recommended against buying Nike stock. The rise of competitors like Adidas, Under Armour, Reebok, etc. partly explains the poor performance of Nike in recent days. Despite the fact that Nike is established and larger than its competitors, these rivals can reduce the market share of Nike thus affecting its income due to limited growth.
In response to these challenges, this paper studied the premises for the decline of Nike’s retail business and channels to restore the company to its former splendor. The study entailed comprehensive researches through literature reviews, data analysis, and journal review. The study noted the rise of three competitors, Adidas, Under Armour, and Reebok and these are performing well in the environment while Nike’s market share is declining. The survey underscores the fact that poor working conditions at Nike factories in Asia, negative media publicity, lack of expansion of Nike markets to emerging economies, not taking threats seriously, and the impact of modern technologies underscore the reason for Nike’s decline. Without committed efforts to avert managerial limitations, which resulted in this challenge, it will take some time for Nike to gain competitive advantage.
II. Recommendations
From the SWOT analysis, Nike Inc. has enough capacity to bounce back to dominance in sport's shoes, apparel, and other sports equipment. However, the firm must address challenges arising from poor labor practices, replication of its products, and patent rights protection.
Observations from external threats and opportunities, Nike need to address several concerns. The company must pursue aggressive marketing strategies to develop markets in fast-growing countries based on favorable trade policies. Besides, Nike management needs to heavily invest in research and development to keep pace with competitors who have massively invested in R&D to benefit from for athletic costumes and equipment. Further, the company needs to be on the front line in employing modern technologies in manufacturing and communication.
III. Conclusion
Overall the study applied literature review, analysis of journals, and reference to the company financial trends in past fear years to complete this study. It is true that the firm has some limitations and without fast changes; the performance will not match the financial results and profits of the past few years. However, the market environment is still favorable, and if changes are made quickly, then success is possible within few days in the future.
Looking at the internal situation of the company, still, chances of doing well are there. The loyal workforce is promising though the motivation is down. The company must resolve labor issues which tarnished its name in recent past; further, the company needs to have adequate knowledge about labor laws in foreign countries to avoid friction with these governments. The prospects in fast-growing countries are high, especially because of massive investment in infrastructure, information technology, and education. This will necessitate availability of skilled labor, efficiency in communication, and ease of running operations. Finally, the company must seek to invest in research and development to get precise information about markets in every geographical region. When demand needs supply, then several transactions are completed, and profits grow fast.
References
(http://www.marketwatch.com/investing/stock/nke/financials).
