Chapter 2

Nike operates in a complex external environment shaped by political, economic, sociocultural, technological, environmental, and legal forces. Global trade policies and supply chain uncertainty create cost and sourcing risks, while economic fluctuations affect discretionary consumer spending. However, sociocultural trends toward health, fitness, and athleisure strongly support demand for Nike’s products, and advances in digital technology and direct-to-consumer platforms provide significant opportunities for differentiation and growth. Industry competition is intense, with strong rivalry from established global brands, though high barriers to entry—driven by brand loyalty, economies of scale, and athlete endorsements—limit new entrants. Overall, while Nike faces ongoing competitive and regulatory threats, its strong brand, technological capabilities, and global scale position the firm to adapt effectively to external environmental pressures and sustain competitive advantage.