1

Internal Business Environment Analysis of Nike

Name

Institution

Course Number and Name

Instructor

Date
 2

Internal Business Environment Analysis of Nike

1. Organizational Structure - Nike has a divisional organizational structure with three main

business divisions: Nike Brand, Converse, and Hurley. Each division is responsible for its own

P&L. Nike Brand is the largest division focusing on football, running, basketball, and other

sports (Jaworek & Karaszewski, 2020).

2. Resources - Nike has significant resources that serve as its strengths for sustainable business

growth:

 Strong brand recognition and reputation as a leading sports brand globally. The Nike

swoosh is one of the most recognized logos in the world (Jaworek & Karaszewski, 2020).

 The corporation has set aside a large marketing budget for prominent celebrity

endorsements and global advertising campaigns. Marketing expenditure was about $4.29

billion in 2024 (Nike, 2024).

 Extensive distribution network with over 1,000 Nike-owned retail stores globally and

partnerships with major retail chains such as Foot Locker (Heinemann, 2022).

 It promotes significant manufacturing capabilities with large-scale factory operations and

outsourced manufacturing to partners. However, production has faced disruptions due to

COVID-19 factory shutdowns.

 The firm has invested heavily in robust research and development efforts to create

innovative products.

 It has a large workforce of over 75,000 employees globally with expertise in design,

marketing, and retail operations (Liang, 2024).

3. Capabilities - Some of Nike’s key capabilities that have driven success include:
 3

 Substantial innovation in product design resulting in performance-enhancing and

fashionable athletic shoes, apparel, and equipment. This keeps the brand relevant.

 Efficient global supply chain managing outsourced manufacturing and worldwide

distribution of products.

 Effective brand management through consistent marketing campaigns with iconic slogans

and celebrity endorsements.

 Omnichannel strategy connecting the digital and physical customer experience through

owned stores and websites.

 Customer insights from analytics of sales, social media, and sports data that influence

new product development.

4. Culture - Nike has a performance-driven, competitive culture focused on innovation (Kim,

2023). Key aspects include:

 “Just Do It” is an empowering motto encouraging athletes and customers to achieve their

potential (Yan et al., 2022).

 Passion for sports and striving for excellence in athletics.

 Entrepreneurial and risk-taking spirit balanced with discipline.

 Collaborative teams and diversity of skills and perspectives across functions.

 Results orientation and accountability for hitting targets.

 Nike facilitates intrapreneurship to nurture new ideas from employees within the

company (Darcis et al., 2024).

5. Financial Performance - Nike has generally performed well financially, despite declines in

2020/21 due to COVID-19 impacts:

 4

 Revenue grew from $37 billion in 2019 to $51.2 billion in 2023, thus showing a

steady trend in the firm’s financial performance (Nike, 2024).

 Net income increased from $4.2 billion in 2017 to $6.0 billion in 2022 but fell to

$5.0 billion in 2023 before rising to $5.7 billion in 2024 (Nike, 2024).

 Strong cash flows have allowed growing dividend payments and share

repurchases.

6. Human Resource (HR) Management Policies - Key human resource policies and practices

at Nike that support the culture include:

 The company implements a competitive compensation program, including salary,

bonuses, and stock options (Liu, 2024).

 Progressive benefits such as health insurance, retirement plans, and leave

policies.

 It also promotes learning and development initiatives for continued skill building.

 The corporation has diversity, equity, and inclusion programs fostering an

inclusive workplace.

 It executes a performance management system focusing employees on goals and

feedback.

Nike has built robust internal capabilities, a strong culture of success, and generally

sound financial performance. However, ongoing challenges include managing global supply

chain disruptions and intensifying competition in the industry.

.
 5

References

Darcis, A. C., Hahn, R., & Alt, E. (2024). Putting entrepreneurship in corporate change agency:

A typology of social intrapreneurs. Business Ethics, the Environment &

Responsibility, 33(2), 170-183. https://doi.org/10.1111/beer.12600

Heinemann, G. (2022). Examples for the Stationary Retail Trade of the Future. In Intelligent

Retail: The Future of Stationary Retail (pp. 231-330). Wiesbaden: Springer Fachmedien

Wiesbaden.

Jaworek, M., & Karaszewski, W. (2020). The largest athletic apparel, accessories and footwear

multinational companies: economic characteristics, internationalization. Journal of

Physical Education and Sport, 20, 3053-3062. https://doi.org/10.7752/jpes.2020.s5415

Kim, Y. (2023). Change Management and Nike's Sustainable Product Innovation. In The

Routledge Companion to Leadership and Change (pp. 219-230). Routledge.

Liang, Y. (2024). Corporate Social Responsibility (CSR) exploration in the era of digital

transformation: A case study of Nike. In Exploring the Financial Landscape in the

Digital Age (pp. 676-681). CRC Press.

Liu, H. (2024). Business Model and Compensation Strategy of Sporting Goods Industry: A Case

Study of Nike. Highlights in Business, Economics and Management, 24, 442-448.

https://doi.org/10.54097/5gwmt563

Nike. (2024). Nike's advertising and promotion costs from the financial years of 2014 to 2024 (in

billion U.S. dollars). Statista. https://www.statista.com/statistics/685734/nike-ad-spend/

Nike. (2024). Nike's net income worldwide from the fiscal years of 2005 to 2024 (in million U.S.

dollars). Statista. https://www.statista.com/statistics/241685/net-profit-of-nike-since-

2005/
 6

Nike. (2024). Nike's revenue worldwide from the fiscal years of 2005 to 2024 (in million U.S.

dollars). Statista. https://www.statista.com/statistics/241683/nikes-sales-worldwide-since-

2004/

Yan, C., Brown, C., & Greenleaf, A. (2022). Just Do It: Analysis of Nike’s Marketing Strategies

and Growth Recommendations. Journal of Student Research, 11(4).

https://doi.org/10.47611/jsrhs.v11i4.3520