Nike PESTLE (or PESTEL) Analysis assesses the brand on its business tactics across various parameters. PESTLE Analysis of Nike examines the various external factors like political, economic, social, technological (PEST) which impacts its business along with legal & environmental factors. Let us start the Nike PESTLE Analysis:
The political factors in the Nike PESTLE Analysis can be explained as follows:
Nike is a leading sports equipment & apparel brand with a global footprint. The company has its business spread across the world. Various political situations impact the business of Nike. Taxation policies on imported goods, labor laws or policies related to trade with USA can affect the business of Nike.
All these are politically driven scenarios which can hamper the growth for Nike in a particular country or region. Change of governments, corruption in deals etc can lead to a negative impact in business in the country of operation for Nike.
Below are the economic factors in the PESTLE Analysis of Nike:
Being a multinational company, Nike has a lot of dependency on economic factors. Some countries levy high import duties or have a low purchasing power.
In such countries, Nike has to run businesses on lower margins. Also, being an international company, there is always a constant dependency on exchange rates. Being an American company having a worldwide business, a slight fluctuation in forex rates has an impact of millions of dollars.
Following are the social factors impacting Nike PESTLE Analysis:
Nike has to be prepared to face several social & cultural factors which are prevalent by virtue of it being a global company. Nike has faced issue regarding alleged sweatshops or strikes amongst workers on salary or healthy & safe working environment. Apart from business attributes, lifestyle changes in the clothes people wear or constantly changing fashion preferences are elements which cause dramatic shift in business returns. Moreover, being a top of the mind brand, Nike is subject to criticism over petty issues on social media which otherwise would not cause an issue. Nike’s contribution to society as a part of its CSR activity is widely appreciated and helps boost its brand equity. Also a movie like 'Air' can have a positive impact on Nike.
The technological factors in the PESTLE Analysis of Nike are mentioned below:
Nike invests significantly in research & development of new products especially across different sports & for global athletes. Nike has several laboratories & experts working using technological tools to work on biomechanics, exercise physiology, engineering, industrial design etc.
Like Nike, other competitors also involve in R&D, and hence regular investments are required to ensure better product quality for consumers.
Following are the legal factors in the Nike PESTLE Analysis:
Nike, like every big company is always under the purview of the legal systems in the country of operations or even international legal guidelines. Consumer protection laws, copyright patent lawsuits, health & safety laws etc always keep on monitoring the business of Nike. Labor laws pertaining to working conditions & salaries have in the past lead to lawsuits against the apparel giant. Several ad campaigns have also come under legal scrutiny as they focused on extreme sports.
In the Nike PESTLE Analysis, the environmental elements affecting its business are as below:
Nike has always focused on having extremely environmentally friendly business processes, whether it is ecofriendly manufacturing products, conducting R&D or reusing waste material for creating footwear.
Nike is ranked as one of the most climate friendly companies globally. However, with a consistent pressure on saving environment from NGOs & environmentalists, Nike is always under the scanner for its processes. Ban on leather, deforestation, climate change policies from governments can hamper the business of even a multinational like Nike.
To conclude, the above Nike PESTLE Analysis highlights the various elements which impact its business performance. This understanding helps to evaluate the criticality of external business factors for any brand.
This article has been researched & authored by the Content & Research Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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