Nike and the External Environment

In order to have a successful company, it is necessary that people within the business are scanning the surrounding environment for potential factors that will have an impact on internal decisions and actions. These factors include the economic, technological, demographic, sociocultural, global and legal environment at the time and in the future. By paying attention to these factors, Nike can keep up with and attempt to stay ahead of their competitors.

First of all, Nike has to keep up with different age groups and determine who they want to focus on when manufacturing and marketing their products. Women have increasingly become interested in athletic wear not only for working out but also as fashion. With the expansion of age groups and gender, Nike has to diversify their products to fit the needs of more activities, as well as the tastes of each market segment. They also need to pay attention to the changing popularity of different sports. As a company that specializes in certain sports, as well as providing generic sports wear, Nike can benefit by understanding the market and the trends in popularity of sports in different parts of the world.

With the global focus shifting on health and lifestyle changes, exercise has become a spotlight within different cultures, especially in the United States. This benefits Nike greatly, as a higher percentage of people start exercising means higher sales of sporting equipment, as well as sports clothing and shoes. As they monitor different trends such as increases of marathon participants, they can alter their shoes, for example. Also, as yoga becomes a popular choice for a method of fitness, specialized apparel and equipment can be tailored for that segment as well.

When looking on a legal and political scale, Nike has to be careful about the scrutiny they have received over their manufacturing overseas. They have been known to use sweatshops, and not always have the best quality environment for their workers. They have outsourced a lot of labor to maintain the volume of production, and as a well known international company that is often times under the microscope, they have to ensure that their workers are safe and that they are producing their products in not only an efficient manner, but safe and legal manner as well.

In the economic environment, Nike has to make sure that they are releasing their products at a good time. In times of a recession, people will probably be cutting back on their high end clothing spending, which would include Nike products. Strategically, they should make sure their release of high end products is in a time when the economy isn't suffering, to increase their profitability.

Technologically, Nike makes good  use of different venues, such as their website, to create a personalized experience for customers. As a global business, they have made their website easy to maneuver, with different languages and specialized websites for different areas of the world. They also have the option of personalizing shoes, from different sports, styles, and colors. This has only enhanced their profits, and their use of computers for design and manufacturing has increased their efficiency.

By paying attention and analyzing their external environment, Nike can effectively achieve a sustainable competitive advantage over their competitors.