Nike Tows Matrix

Tows analysis for Nike

A TOWS Matrix can also be understood as an extension of the SWOT matrix. A SWOT matrix helps us identify the strengths, weaknesses, opportunities and threats for a business. However, a TOWS matrix helps with strategy formulation on the basis of the identified factors. It is an analytical tool that helps build over your strengths and make the best use of available opportunities while also minimizing the threats. For a better and deeper understanding go through this   example TOWS matrix of Nike.

Before moving on to a SWOT analysis, we must take a look at a short SWOT analysis of Nike. The TOWS analysis is based on the SWOT factors. Nike is the best known brand name in the field of sports shoes and apparel. While it makes products mainly for athletic use, its products have also grown popular as leisure wear. Apart from a strong image and a market leading position, the brand is also known for its excellent marketing capabilities. However, that does not mean it does not have changes in its way. Currently, Nike has outsourced its supply chain operations entirely.  It is focused on product innovation and extending its international presence. However, US is still its largest market. More points in the brief SWOT analysis below.

Strengths	Weaknesses
·         Brand Image ·         Excellent Marketing capabilities ·         Financial strength ·         International presence ·         Large and well managed supply chain and distribution network	·         Overdependence on the US market ·         Increasing marketing and overhead operating expenses
Opportunities	Threats
·         Digitization and product innovation ·         Acquisitions ·         International expansion ·         Backward integration	·         Stronger US dollar hurting earnings ·         Increased competitive pressure ·         Growing HR and marketing expenses ·         Higher legal pressures

 

	Strengths (S)	Weaknesses (W)
Opportunities (O)	SO – Using strengths to capitalize on available opportunities	WO – Overcome weaknesses to capitalize on opportunities
Threats (T)	ST – Use strengths to avoid threats	WT- Reduce weaknesses to avoid threats

SO – 

• Nike is a financially strong brand and it can invest more in digitization and product innovation. This will help it expand its ecommerce in more countries as well as expand its product range and design.
• Nike’s excellent marketing strategy can help it find faster growth in the Asian markets which are growing at the fastest rate in the world, specifically China and Asia.
• Since Nike is a financially strong brand, I can acquire new businesses in related fields and also acquire some of its supply chain to reduce its dependence on Independent manufacturers.

ST –

• Nike must use its marketing and innovation capabilities to keep the competitive pressure under control.
• Since it is financially strong, it can keep investing in marketing, R&D as well as HR management.
• It must remain focused on compliance using internal compliance teams to control legal and regulatory pressures.

WO –

• Nike can expand faster in international markets by investing more in them. Reducing its dependence on the US market will also open new channels of revenue.
• Controlling operational costs will allow it to spend on digitization and innovation.

WT –

• Controlling its dependence on US and shifting to new markets like Asian markets will help cut down on HR ad operational costs.
• Controlling operational costs will allow it to invest more in marketing and grow its brand faster.