Industrial Environment

8/2/2019 Industrial Environment

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It is monitoring, evaluating and disseminating ofinformation from the external and internalenvironments to the key people within thecorporation.


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It comprises of:-

Remote environment Industry environment Operating environment


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The major external and uncontrollablefactors that influence an organization's

decision making, and affectits performance and strategies.

These factors include the economicfactors; demographics; legal, political, andsocial conditions; technological changes;

and natural forces.


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It deals with the functioning of the economy and

its impact on the industry collectively and on thebusiness firms individually.


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Interest rates Labor demand and rates

Regulatory legislations Inflation rates GNP Trade cycles Employment rates


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Healthy competition leads to innovation andproduct development. Industrial marketers should ensure that there offerings have cuttingedge in terms of technology, services ,etc.


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Trying to reduce unnecessary costs Working on after sales services Buying out smaller firmsAchieving economies of scales Providing best and competitive offerings Focusing on maintaining long term relationship

with customers Engaging in CSR activities.


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Technological obsolesce can result in firms losingits market share very easily. So, industrial

organization in particular have to keep abreast ofthe changes in the technology.

Technological innovation should aim at satisfying

customers needs in much more refined manner.


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The social elements refer to cultural attitudes,

ethical beliefs, shared values, level ofdifferentiation in lifestyle, demographics,education levels, etc. Observing social factorshelps organizations maintain their reputation

among stakeholders


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Age distributionAttitude towards health and environment Education Leisure activitiesAttitude towards career Changing lifestyle Gender Role


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Political stability Taxation laws Entry mode regulations

Trade regulations such as NAFTA Pricing regulations Intellectual property rights Anti trust laws Entry requirements Tariffs Employee wages and benefits


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Nike, Inc. is a major publicly traded sportswear and

equipment supplier based in the United States.

The company is headquartered near Beaverton,Oregon

It is the world's leading supplier of athletic shoes andapparel and a major manufacturer of sportsequipment .


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The Nike company began in 1964 as Blue Ribbon Sports.

Was founded by University of Oregon track athlete PhilKnight and his coach Bill Bowerman, first distributingJapanese brand of running shoes in the USA.

1972 was the first year of using the famous mark knownas the Swoosh on Nike's first line of footwear.


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Ilie NastaseJohn McEnroe Rafael Nadal, Tiger Woods Michael Jordan, etc.


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Shoes Caps T-shirts Sports equipments (skateboarding , golfstick

,tennis racket, baseball stick)


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In economy, the biggest threat for Nike would be economic

recession. During recession, Nikes growth will be adverselyaffected. The US economy is experiencing a downturn right now.Consumer purchases are slowing down. Currently, Nike's feelingthe pinch of the economic recession. The Asian economic crisisalso affects Nike since its goods are manufactured in Asia. Thelabor costs and material prices are going up.

Nike's growth is not just affected by the local economy but also inthe international economy. A weak Euro and an Asian recessioncould mean weak sales for Nike. The overall results in the salesgenerated by Nike in athletic footwear, however, remained stable.The global market makes up for the variances in sales particularly

between peak and lean seasons.


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People are more health conscious nowadays. Diet and health are getting more prominence. Consequently, more and more peopleare joining fitness clubs. There is an accompanying demand forfitness products particularly exercise apparel, shoes and

equipment. Nike is at the forefront of this surge in demand aspeople are looking for sports shoes, apparel and equipment.

Nike, however, failed to foresee problems brought about by a sweatshop expose pertaining to labor and factory conditions atproduction locations in Asia. This caused bad publicity and

declining sales as society and consumers demand more sociallyresponsible companies.


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The support accorded to Nike by the US government,

macroeconomic stability,

low interest rates, international competitiveness of the tax system,


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Nike uses IT in its marketing information systems veryeffectively. Nike applies marketing information systems to theeconomics of innovation, segmentation and differentiation formost of its businesses. Nikes leadership status owes in largepart to the use of extremely valuable Information Technology,and applying it to every aspect of the product from

development to distribution.

Nike, being the world leader in the athletic footwear industry,is able to effectively harness its environment to boost itsmarketing efforts. This strategy has translated into robustsales of Nike's products.


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Industrial Environment

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