An Overview of Nike's External and Internal Environments

Nike’s Internal and External Environment
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Nike is one of the largest global manufacturers, designers, producers, and sellers of sports shoes, clothing items, equipment, and clothes. The company was founded by Phil Knight and Bill Bowerman in 1964, and it became the number one innovator of athletic footwear, accessories, apparel, and equipment. Since then, the company has been able to occupy several markets worldwide, including markets in China, Japan, North America, western and central Europe, and many other various markets (Roslan and Roslan, 2019). The company owns four major and famous brands: the Jordan brand, Nike’s brand, the Hurley, and Converse brand. The biggest consumers of the company products are the younger generation, the company sells most of its products through its retail outlets, online shops, distributors, and licensees (Jun, 2018). Several internal and external factors of the environment affect the general performance and success of Nike.Inc.
General Environment
The major two segments of the general environment with great influence on Nike are the political and technological factors. Political factors significantly affect and influence Nike as they play a major part in improving its market presence. Stable political conditions and free trade policies by the government both at the home market and other major markets allow the Nike to grow its business and operations (Alsaffar, 2020). On the other hand, the advancement in technology is another major factor influencing Nike as it offers the company a chance to improve and increase its output and the quality of the products produced. However, the advancement of technology has facilitated the emergence of other major competitors with better and advanced sports equipment, shoes, and apparel (Alsaffar, 2017). The emergence of better competitors can decrease its market base, thus affecting its general performance and growth.
The two significant forces of competition for Nike include competitive rivalry and the threat of new entrants.
Competitive rivalry
Under competitive rivalry, the company is affected by various competitors willing and able to invest their capital in acquiring a wider market base than Nike. Some of the major competitors of Nike include Adidas, Puma, Fila, and Reebok, and all these firms are aggressively forcing their way to a bigger market share (Rowland, 2017).
Threat of new entrants
The other competition force that can majorly affects Nike is the new entrants since the shoe industry does not have many entry barriers or hurdles that can affect new entrants. Even though it is difficult to build a major brand similar to Nike’s, small manufacturers can out-compete Nike in some regions or countries and customers (Adamkasi, 2019). Since most of the products produced by Nike are expensive, a small manufacturer can decide to produce products similar to Nike’s but at a cheaper price and thus force out the company out of the market in a given region or to a given group of people.
Future Improvements
For the threat of new entrants, especially small manufacturers, Nike should increase its economies of scale to produce better quality products at low prices and...