Porter's Five Forces - Nike

Extract

[...] Nike's products are developed and designed to appeal to professional athletes but also to discerning fashionistas. They are constantly researching, innovating and improving on their products to afford the highest level of apparel to their customers. By understanding their customers and the needs at various levels and ages, Nike have been able to develop products aimed at every wish and demand. Customers will not get bored with their products either, as there are constantly new ranges and merchandise available. Going online with technology and developing apps in collaboration with Apple, they designed the Nike+ running sensor. [...]

[...] Through constant market understanding via research, they are able to identify their top customers globally by country and region. Focus is put on designing and developing products that appeal to those regions. While the US market has tapered down significantly, North America remains Nike's largest market, with China catching up fast. With over 110,000 points of distribution, customers are sure to find their product and design of choice without looking too hard. Nike launched their Triple Double Strategy in 2017 which looked at doubling their speed in terms of innovation, marketing and customer delivery. [...]

[...] Due to these various factors and the vast number of suppliers, the power of suppliers over Nike is considered a weak force. IV. Power of Customers Customer power is a rather moderate threat when it comes to Nike's business performance. Switching brands and products is simple as the cost to the customer is low. As consumers are demanding in terms of what they want and what they want to pay for their products, Nike needs to ensure they have a large customer base. [...]

[...] Nike Porter's 5 Forces Analysis As part of their brand strategy and constant analysis within their business, Nike have adopted Porter's 5 Forces Analysis. The 5 forces are a study conducted on external threats according to their competitive intensity and influence over the company. This enables Nike to assess the threats such as competition, customers and substitute products and focus on how to maintain their strength and profitability in the market accordingly. I. Nike's Competitive Rivals Nike is faced with some strong competition in the sportswear industry. [...]

[...] Nike's demands on the supplier is that they receive the best quality materials and products from them and that the supplier will abide by the strict codes of conduct. Nike's products are made globally in over 42 countries and in around 620 factories. This ensures that they generally hold strong control over their suppliers. Due to the high number of suppliers that Nike uses, they are not able to form a monopoly and apply any serious pressure or demands on Nike. [...]