Nike's Five Forces

Threat of Entry

Low to Medium

Threat of Entry

Low to Medium

Appendix D: Porter’s Five Forces Framework for your chosen company (1 page)

Bargaining power of customers

Low to Medium

Bargaining power of customers

Low to Medium

Bargaining power of suppliers

Low

Bargaining power of suppliers

Low

Rivalry (within the industry)

Medium to High

Rivalry (within the industry)

Medium to High

Threat of substitute products

Low

Threat of substitute products

Low

Rivalry: Firstly, with presence of a large number of players such as Puma, Adidas, V.F Corporation, etc within the global market. Secondly, NIKE needs to adapt to continuous change in customers’ preference. Besides, if can’t attract customers through low prices, NIKE need to turn the direction into differentiating its product through a constant innovation and also continuous efforts in strengthening their brands.

Bargaining power of suppliers: NIKE’s products are manufactured by third-party contract manufacturers in low cost countries, and there are plenty of suppliers. Furthermore, no single footwear factory or apparel factory accounted for more than 6% of total Nike brand footwear production and Nike brand apparel production respectively in fiscal 2013.

Bargaining Power of Customers: Certain big wholesale customers hold bargaining power as they could widen their partnership with Nike’s competitors or provide their own private label offerings to earn higher profitability. Moreover, wholesale channel accounted for 80.6% total Nike brand’s sales in fiscal 2013. An important point is customers have their rights to choose the brand, which impact sales.

Threat of entry: Significant capital resources are required for creating a new brand as large investments are needed for marketing and procuring floor space; hence, this restricts the entry...