Nike's Cost Structure Nike's largest expense is selling expenses
Posted: Mon Jan 20, 2025 4:17 am
(mainly inventory and warehousing), which total more than $21 billion a year. Another $3 billion goes to marketing, including advertising and promotions, sponsorships, media, brand events and retail brand presence. Other general and administrative expenses total more than $500 million a year. SWOT Analysis of Nike Below is a detailed SWOT analysis of Nike: Nike SWOT Analysis - Nike Business Model Production costs: Because Nike's business model outsources almost all of its production, the company has significantly reduced its operating costs and focused its efforts and capital on marketing and sales.
However, that doesn't mean Nike has lost control over production quality. It only relies on suppliers costa rica phone number data who can support the brand's standards; Minor sales variations: The demand for Nike products does not fluctuate much during the year. The sales of fashion products and clothing usually remain the same throughout the month. Due to some major campaigns, the company sometimes experiences a sudden increase. But in these cases, there have been many studies and it is ready to meet the demand; Quality: Because Nike produces higher quality products, compared to most of its competitors , the company is also able to raise prices.
This is precisely because quality has allowed the brand to build a strong and reliable reputation, resulting in market leadership; Speed: To make sales work, companies need to turn ideas into products on the shelves as quickly as possible. Nike has achieved this efficiency through its processes, keeping the audience engaged and avoiding losses. -> Read more about Nike's SWOT analysis . Conclusion The success of Nike’s business model is based on the combination of innovation and marketing.
However, that doesn't mean Nike has lost control over production quality. It only relies on suppliers costa rica phone number data who can support the brand's standards; Minor sales variations: The demand for Nike products does not fluctuate much during the year. The sales of fashion products and clothing usually remain the same throughout the month. Due to some major campaigns, the company sometimes experiences a sudden increase. But in these cases, there have been many studies and it is ready to meet the demand; Quality: Because Nike produces higher quality products, compared to most of its competitors , the company is also able to raise prices.
This is precisely because quality has allowed the brand to build a strong and reliable reputation, resulting in market leadership; Speed: To make sales work, companies need to turn ideas into products on the shelves as quickly as possible. Nike has achieved this efficiency through its processes, keeping the audience engaged and avoiding losses. -> Read more about Nike's SWOT analysis . Conclusion The success of Nike’s business model is based on the combination of innovation and marketing.