Question

Company- NIKE

Location- GERMANY

For this location conduct an external environmental assessment.

What may be some of the entry barriers? How competitive is the market? How does the current political, economic, institutional, and regulatory scenarios effect business? What are some of the cultural factors to be considered?

Answer 1

The Germany footwear market was valued at USD 14.9 million by 2017, growing with 2.6% CAGR during the forecast period, 2018-2025.

Some of the entry barriers are that customers are loyal to the brand very much in germany so they are not likely to shift to some new brands , also the substitue product available in the market are of superior quality so consumers might not shift and the competition is very high so it doesnot allow new entrants.

The market is very competitive in Germany due to the two major sportswear and sports footwear industries in Germany are Adidas and Puma. These two were owned by brothers Adolf Dassler and Rudolf Dassler where after the relationship between the brothers deteriorated they decided to part ways in business, Adolf went on to open Adidas while Rudolf established Puma. These two companies compete with each other internationally and are the most vibrant current trend setters in the industry in Germany.

POLITICAL FACTORS=

Stable political climate in most major markets (opportunity)

Expanding free trade policies (opportunity)

Improving government support for infrastructure.

ECONOMIC FACTORS=

Economic stability of developed markets (opportunity)

Rapid growth of developing markets (opportunity & threat)

Slowdown of the Chinese economy (THREAT)

INSTITUTIONAL FACTORS=

Increasing individual wealth in developing countries (opportunity)

Increasing emphasis on product safety (opportunity)

Improving positive attitudes about leisure (opportunity)

REGULATORY FACTORS=

Improving employment law in developing countries (threat & opportunity)

Expanding consumer law in developing countries (opportunity)

Expanding health and safety regulations (opportunity)

CULTURAL FACTORS=

• Improving employment law in developing countries (threat & opportunity)
• Expanding consumer law in developing countries (opportunity)
• Expanding health and safety regulations (opportunity)