Nike Inc.’s History and Strategic (SWOT) Analysis


Nike Inc. is a globally reputed multinational corporation engaged in designing, developing, manufacturing, marketing, and selling apparel, footwear, services, accessories, and equipment. Established in 1964 and headquartered in Beaverton, Oregon, the organization has grown and expanded to become the leading supplier and manufacturer of sports shoes and apparel globally. Nike Inc. sells its products under its brand name alongside other renowned subsidiaries such as Converse and Jordan Brand. The company has progressively established a robust research and development unit, an effective global production and distribution network, and an expansive product portfolio, contributing to its impressive performance over the years. However, these results can be enhanced by implementing various recommendations, including improving labor practices, expanding its market lead beyond footwear to boost its revenues, and exploiting the lowered cost of goods sold to increase sales. Although Nike Inc. has an extensively elaborate global distribution network, it can accelerate its performance by capitalizing on the high growth potential in developing countries’ markets.

Nike Inc.’s History

Nike Inc. was founded in Oregon in 1964 by a track-and-field coach, Bill Bowerman, and his former trainee, Phil Knight. It initially operated under the name Blue Ribbon Sports as a distributor for Onitsuka Tiger as a strategy to undercut the competition by importing and selling cheap European-styled athletic shoes from the Japanese shoe manufacturer (Zawawi & Razak, 2017). In 1971, the company ended its business relationship with Onitsuka Tiger and launched its line of footwear rebranded as Nike and with a newly designed swoosh logo. Following the transition from an importer to a manufacturer, Blue Ribbon Sports changed its name to Nike in 1978 and went public in 1980 with a 50% share of the United States athletic shoe market (Pannu, 2017). In the subsequent years, the company expanded its product offerings extensively to encompass numerous sports and spread its footprint worldwide. Throughout its operations, Nike has acquired many apparel and footwear companies, including Cole Haan, Bauer Hockey, and Converse, to strengthen its competitiveness and market position globally.

Nike Inc.’s Products, Major Competitors, and Subsidiaries

Although Nike Inc.’s initial product was track running shoes, it has progressively expanded its product portfolio to encompass many sports equipment, apparel, collectibles, and street fashion. For instance, the company manufactures shoes for track, aquatic, racing, field sports, baselayers, jerseys, and cleats. Over the years, a significant proportion of these sport-oriented products have been adopted as everyday clothes, leading to the eventual introduction of NikeLab, a premium line focusing on the production of high-end streetwear (Yu et al., 2020). Nike Inc.’s major competitors include New Balance, Umbro, Adidas, Under Armor, Puma, and Fila. In past years, Nike Inc. owned various subsidiaries, including Cole Haan Holdings Inc. and Bauer Nike Hockey, which are intended to facilitate the sale of additional sports-related merchandise and materials. Currently, Converse, Nike Cortez, and Datalogue are the company’s principal subsidiaries.

Financial Performance and Condition of Nike Inc.

Over the years, Nike Inc. has posted impressive performances, profitability, and growth, mainly due to the expanding demand for apparels and the company’s innovativeness in exploiting new opportunities. For instance, the company’s net operating income recorded a 122.7% increase in 2021 to reach US$6.937 billion from the previous year’s US$3.115 billion. For the twelve months ending February 2022, Nike Inc.’s revenues were US$7.12 billion, reflecting a 70.09% increase from the earnings realized in 2021. However, the company’s operating income declined significantly in 2020 to US$3.115 billion from US$4.772 recorded in 2019 (Badkar, 2020). The loss was attributed to substantial business and sporting activities disruption occasioned by the Covid-19 pandemic, which led to a decline in the demand for company products. The net income for 2019, 2020, and 2021 in billions were US$4.029, US$2.539, and US$5.727, respectively. Notably, 2020 was the only year that Nike Inc. posted a decline in its profitability, a phenomenon attributed to the disruptive effects of the pandemic.

Key comparative financial ratios demonstrate that Nike Inc. is operationally efficient, liquid, stable, and profitable. For instance, the organization’s debt-to-equity ratio of below 1.5 reflects the preference for equity capital relative to debt. Although this indicates that the company is not susceptible to the risk of high debt levels, it is an illustration of technical inefficiency and could result in low returns (Husna & Satria, 2019; Nurhikmawaty et al., 2020). From this perspective, the financial condition of Nike Inc. is healthy and is expected to maintain profitability, solvency, and liquidity at ideal levels in the future.

Nike Inc.’s SWOT Analysis

Strengths Weaknesses
  • Expansive global production and distribution system.
  • Robust brand image.
  • Effective research and development unit and superior marketing.
  • Poorly developed product mix.
  • Limited presence in emerging economies and developing countries.
  • Poor labor practices.
  • Outsourced manufacturing.
Opportunities Threats
  • Focus on emerging economies and developing countries.
  • Business diversification.
  • Enhance product mix and improve labor practices
  • Growing competition.
  • Negative publicity and emergence of counterfeits.
  • Availability of cheaper products.


Nike Inc.’s strengths are the key drivers of the organization’s growth and global leadership in the sports shoes, equipment, and apparel markets. They include a robust brand image anchored on product quality, superior marketing strategies, and rapid innovation processes, which enable the creation and development of cutting-edge commodities. Additionally, Nike Inc. has an extensive production and distribution system spread across the globe, which facilitates easier dominance of the worldwide market (Meng et al., 2021). From this perspective, the organization has the potential to retain its global market leadership.


The existing weaknesses which could potentially detail Nike Inc.’s growth trajectory include poor labor practices, outsourced manufacturing, poorly structured product mix, and limited presence in emerging economies and developing countries. For instance, the organization has been accused of child labor, exploiting sweatshops, and imposing unsanitary working conditions on workers (Lucchini & Moisello, 2019). Similarly, Nike Inc.’s profits are mainly dependent on footwear due to the poorly developed product mix. These weaknesses impede the company’s global growth and adversely impact the brand image.


Nike Inc. can enhance its performance, growth, and profitability by improving its labor and employing practices and minimizing controversies on this area to boost its brand image. Further, the firm can re-engineer and diversify its product portfolio to attract more non-athlete customers and reduce dependence on footwear. Additionally, Nike Inc. should improve its presence in emerging economies and developing countries to exploit the high growth potential in these markets.


Despite Nike Inc. being the global leader in sports shoes, apparel, and equipment markets, some threats could impede its performance, profitability, and growth. For instance, the company faces stiff competition from such companies as Adidas, and the competitive pressure is increasing speedily due to rapid technological innovation, making cheaper products readily available. Moreover, the company experiences negative publicity, particularly due to its labor practices, and undercutting from counterfeit products. According to Astray et al. (2021) and Mangundap et al. (2018), Nike is the most counterfeited brand globally. This growing trend dilutes brand image and equity, especially where such counterfeits compromise the health and safety of the consumer.

Specific Areas that Require Changes

There are various specific areas and concerns that Nike Inc. should address to strengthen its global leadership position, enhance performance, and boost profitability. For instance, the organization should reform its current labor practices, aggressively pursue patent protection to limit imitations, and implement strategies that promote the attainability of optimal leverage ratios. Anwar and Abdullahi (2021) contend that the implementation of sound employment practices fosters organizational citizenship behavior and better customer relationship, ultimately improving firm performance. Moreover, it is imperative for Nike Inc. to re-engineer its product portfolio and global expansion strategies. This will improve the firm’s revenues by minimizing overdependence on the American market and footwear.

Required Interventions to Improve Nike Inc.’s Position Within the Market

Nike Inc. should implement various interventions to improve its position in the market, including collaborating with governments to explore an effective mechanism for eliminating counterfeits and imitations. This can be achieved by reviewing the existing patent laws, sealing loopholes, and imposing hefty penalties on violators. Additionally, the company should reform its labor and employment practices, entrench ethical practices, and ensure strict compliance across the entire value chain. For instance, Nike Inc. should cease operations in countries that embrace child labor and severe ties with manufacturers who do not observe ethical practices in their operations. To stimulate returns, the firm should transform its financial policies to facilitate the adoption of optimal leverage ratios by ensuring the appropriate investment mix of debt and equity.


Nike Inc. is a global leader in the design, manufacture, marketing, and sale of sports shoes, equipment, and apparel. Over the years, the company has registered impressive financial, growth, liquidity, and profitability performances, which have cumulatively enabled it to become and sustain market leadership globally. Such performance is threatened by rising competition, imitations, and negative brand image occasioned by poor labor practices. However, Nike Inc. can strengthen and sustain its market position by re-engineering its product portfolio, penetrating emerging markets and developing countries, and adopting sound employment relations.


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