PESTEL to Nike

“Just do it”, we may see this in Nike’s advertisement. From the analysis of PESTLE, we can know that how Nike can become a well-known sportswear company in the global market. PESTLE analysis describes a framework of external environmental factors and component of strategic management.

For the political factor, Nike has been helped by the US policies which enable it to advance its products. The support accorded to Nike by the US government, particularly in the low interest rates, stable currency conditions and the international competitiveness of the tax system, help the growth of Nike. As USA is a powerful country, she can enjoy a larger bargaining between countries in the trading policies. This can provide more opportunities to Nike to enter different countries’ market.

In economical factor, the global economic recession will be the largest threat to Nike. During recession, Nike’s growth will be adversely affected. A weak Euro and an Asian recession could mean weak sales for Nike. Consumer purchases would be slowing down. Additionally, the labor costs and material prices are going up. For instance, the manufacturing costs are increasing in China, so they are started to find another country to produce in a lower cost.

From the social-culture factor, people are more concerned about their health nowadays. Diet and health are getting more prominence. Consequently, more sportswear wears, shoes and equipment are needed for doing exercise.

In the view of technical factor, the research and development for their products is important. Just like the shoes for running, they need to design and find a lighter material for making a pair of new running shoes.

For legal factors, whenever any company enters a new country, it has to worry about the existing laws and practices. Every time they have entered a new country, they have done so after checking the local laws in detail. For example, the government policies with regard to foreign investment and franchise business are different in the developed world and the under developed world. It mostly depends on the government that is friendly or strict with them.

With environmental factor, they need to take care of green issue and environmental policies of the corresponding countries. They should reduce the pollutants and lower the effects to the environment.