Micro and Macro Environmental Factors : Microeconomic Environment of Nike

Nike
Micro and macro environmental factors;

Being the world’s leading innovator in athletic footwear, apparel, equipment and
accessories, Nike holds to their mission to bring inspiration and innovation to every
athlete in the world (Bowerman, 2011). Not only does Nike design, develop, and sell a
slew of products and services to help athletes, they also market sports-inspired
products for everyone else whom Nike classifies as an athlete because in their eyes, if
one has a body, then they are an athlete.
Microeconomic environment of Nike;

Micro economic factors;
Microeconomic factors are factors close to a business that has a direct impact on its
business operations, decision–making freedom and overall success.
Following are the micro factors
 Customers
 Suppliers
 Shareholders
 Competitors
 Customers: Customers Since the London Olympics there has been a strong
customer demand for Nike products, which helped them charge past their
competitors. Just like any other consumer products maker, Nike faces rising
costs for packaging, fuel and other raw materials. With the exposure at Olympics
and such sports regionally, Nike has opened doors for everyone in regional and
global markets. Since Nike is established on every conceivable media outlet, it
has created an increase in market demands for fashionable athletic footwear and
apparel.
 Suppliers: Suppliers by the end of 2009, Nike contracted roughly 600 factories in
46 countries to manufacture products. Around this same time Nike began
executing long-term consolidation strategies in order to streamline their supply
chain thus resulting in a 10% supplier decrease (NCRR, 2012). Being such a vital
element of Nike’s supply chain, suppliers are key to maintaining the company’s
opportunity to further their creation of positive economic, social and
environmental change.
 Shareholder: As a shareholder of Nike, these individuals are instrumental in the
prioritization of key issues and the development of Nike’s corporate responsibility
policies. In November 2011, Nike had raised its dividend 16 percent (Bloomberg,
2012).
 Competitors: Main competitor of Nike is Adidas. Nike is such a large company
that they and their competitors have been reaping the benefits of the economies
of scale. Prime example would be that of an oligopoly behavior called game-
theory done with Nike and Adidas (McConnell, Brue & Flynn, 2012).
Macro-economic environment of Nike;

Macro-economic factors
Macro-economic factors are those external forces that are uncontrollable and that
can affect how a business operates. With these factors being so out of the control of
the business, these often lead to a variety of changes in operating, management,
production, and marketing
Following are the macro factors;
 Political
 Economical
 Social
 Technological
 Environmental
 Legal
 Political factors: Political From a political standpoint, government must create

economic policies that will foster the growth businesses. Nike, fortunately, has
been helped by the US policies that enable it to advance its products and
business. The support allowed Nike, by the US government particularly in the
general macroeconomic stability (government sponsored enterprise obligations),
stable currency conditions (foreign subsidiaries major banks and money market
funds) and the international competitiveness of the tax system, form the
foundation critical to Nike’s growth.
 Economic factors; Economic By far, the largest threat for Nike would be the
economy. During recession, Nike’s growth will be adversely affected. With our
own economic strife in the U.S., Nike is feeling the pinch of the economic
recession internationally. This severely hinders Nike’s day-to-day production
because their goods are manufactured in Asia.
 Social factors; Social Nike believes in in the awesome power of the human
potential thus by using their size and reach, they can be a catalyst for long-term
change that empowers support for local communities addressing the basic needs
for health, safety and vitality; especially where they live, work and play (Nike
Responsibility, Community, 2011). For the past five years, Nike has worked with
CARE, a leading humanitarian organization fighting global poverty, to fund and
convene partners to create Sport for Social Change Networks in southern Africa,
eastern Africa, Brazil, the United Kingdom and the United States
 Technology; Technology Being the world’s leading designer and maker of
athletic apparel and footwear, Nike continues to win over these “lifestyle”
consumers as well as sports professionals through innovation and superior
technology. It would seem that every year Nike is trying to outdo themselves and
with that said, here are a few of the most recent technological advancements
Nike has created;
 Nike +
 Lunarlon Cushioning
 Flywire
 Flyknit
 Environmental factors; Environmental In a world that resource driven, Nike

uses innovation as a driver to conserve water, increase our energy efficiency,
reuse and recycle our products. Through this innovation Nike states that believe
they “need new modes of collaboration and new ways of thinking, making,
delivering, reclaiming and processing derived from scientific advancements in
fields far beyond our industry (NCRR, 2012).”
 Legal factors; Legal Nike’s manufacturers are all contracted thus posing a
potential risk for the company. Case in point, Nike was involved in potential
sweatshop-condition and child labor lawsuits in the late 90s and early 2000s
(Wilsey & Licktig, 2000). In 2005, Nike was the first company in the industry to
disclose its factory list. Nike is committed to supply chain transparency by
updating public disclosure of the contract factories worldwide that are producing
Nike-branded product (NCRR, 2012).
CONCLUSION
Conclusion With the analyzed macro and micro environmental factors in the Nike
Corporation, one can see that the company must be in-tune with every aspect of
a decision no matter how large or small the benefits may be. Whether it is a new
technological innovation or improving a certain process, it requires due diligence
on the decision makers part to research exactly who will be affected both in a
direct and indirect manner. It would seem that decision making at Nike, Inc. is
similar to an onion and its layers. Each layer is as important as the last and it
would lose structure if one of those layers were different in a uniformity sense.
On the same token, uniformity is needed in all companies, like Nike, in order to
keep the long-term success in line with how they handle and incorporate the
macro and micro factors in their daily operations.

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Nike

Micro and macro environmental factors;

Microeconomic environment of Nike;

Macro-economic environment of Nike;

 Political factors: Political From a political standpoint, government must create

 Environmental factors; Environmental In a world that resource driven, Nike

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