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` THE IMPACT OF THE INTERNATIONAL BUSINESS ENVIRONMENT ON NIKE IN JAPAN CHINGCHONG LECTURER: MS MAI NGOC TRAN JUST DO IT! FULL NAME LE DUC HAI TRUONG THI MY DUYEN DUONG HOANG DUC ANH NGUYEN CHI CUONG NGUYEN DUY NGOC SON DUONG KIEU TRANG NGUYEN THI NGOC MAI STUDENT CODE 24A4051251 24A4052888 24A4052660 24A4050163 24A4052032 24A4052062 24A4051797 TABLE OF CONTENTS I INSTRUCTOR 1.1 Study the problem 1.2 About NIKE II EXTERNAL ENVIRONMENT ANALYSIS 2.1 Porter's Five Forces 2.1.1 Pressure from competitors 2.1.2 Pressure from substitutes 10 2.1.3 Pressure from suppliers 11 2.1.4 Pressure from customers .11 2.1.5 Entrance threats 12 2.2 PESTLE C 13 2.2.1 What is the PESTLE C model? 13 2.2.2 Political Environment .15 2.2.3 Economic Environment 16 2.2.4 Social Environment 20 2.2.5 Technological 22 2.2.6 Legal 24 2.2.7 Ecological 26 2.2.8 Competitive environment 28 2.3 Traffic light chart 33 III INTERNAL AND EXTERNAL AUDIT 36 3.1 Internal environment analysis 36 3.2 Recommendations: 39 IV CONCLUSION 43 CONFERENCES 45 I INSTRUCTOR 1.1 Study the problem A country's business environment can affect the activity of an international company Thus, to succeed in business, companies need to have a clear understanding of the busines s environment of the foreign markets in which they operate Nike is one of the world's largest sports and footwear companies and has expanded its operations in many countries around the world, including Japan Japan is a large and important consumer market for Nike Therefore, studying the impact of Japan's business environment on Nike will help the company better understand cultural factors, economic policies, legal regulations, and the competitive market in Japan This information will help Nike create a suitable business strategy to enhance its operational efficiency in this market The research could also help Nike find ways to interact with Japanese consumers, improve the quality of their products and services, and enhance the company's contribution to the Japanese economy 1.2 About NIKE Brand name: Nike Founders: Bill Bowerman & Phil Knight Abbreviated name: NKE Phone Number: Nike US Customer Service: 1-800-344-6453 Nike Canada Customer Service: 1-800-663-6453 Nike Europe Customer Service: +44 (0) 2076604453 Asia Pacific and Latin America customer service: +65 6671 6100 Website: www.nike.com Nike, originally known as Blue Ribbon Sports (BRS), was founded on January 25, 1964, by University of Oregon’s athlete Phil Knight and his coach, Bill Bowerman Initially, the company operated in Eugene, Oregon as a distributor for Onitsuka Tiger, a shoe brand from Japan Nike's sales are mainly derived from partnerships with the brand Bowerman's design in 1972 led to the creation of the "Moon Shoes" Further innovation created the "Waffle Trainer" in 1974, the first square-soled shoe made of urethane resin to possess outstanding grip on any terrain Along with the running trend blooming in the US in the early 70s, it can be said that Nike had the perfect starting year This is the milestone that helped drive the explosive growth of Blue Ribbon Sports/Nike Also in 1971, relations between BRS and Onitsuka Tiger appeared fractured It was during this time that Bill Bowerman decided to launch the Nike brand with shoes designed and manufactured by the company The brand will carry the all-new Swoosh accent designed by Carolyn Davidson The "Swoosh" mark was first used by Nike on June 18, 1971, and registered with the United States Patent and Trademark Office on January 22, 1974 After the success in the sports shoe market with the "Waffle Trainer", Nike chose to focus on developing technical characteristics and applying new technology to launch shoes with special designs to maintain its position in an increasingly competitive market For example, Nike Air – shoes with air cushioning on the sole launched in 1979 The shoe received recognition from the most famous basketball star of all time – Michael Jordan with Nike Air Jordan in 1987 Nike made its breakthrough with Pegasus in 1988 The famous slogan "Just it" we see today was coined by Dan Wieden, co-founder of Wieden+Kennedy for Nike's advertising campaign in 1988, was voted by Advertising Age as one of the top five advertising slogans of the 20th century and is kept in the Smithsonian Institution in the United States Throughout the 1980s, Nike expanded its product line to increase coverage across sports as well as different regions worldwide In 1990, Nike moved to the eight-building World Headquarters campus in Beaverton, Oregon Nike's first retail store, named Niketown, opened right in downtown Portland in November of the same year Today, Nike is present in more than 190 countries worldwide and is one of the largest companies in the footwear and sports products industry - Products and services Nike is a global company that designs, develops and sells products as well as providing sports-related services such as clothing, footwear and sports accessories Nike's product line includes a wide range of athletic shoes, from running shoes to basketball shoes, football shoes and many other types of training shoes Nike's apparel offerings are also quite diverse, covering everything from shorts and T-shirts to jackets and pants Besides, Nike also offers accessories such as hats, socks, bags and sports equipment In addition to providing sporting goods, Nike also offers a wide range of services to its customers The first is that Nike grants access to the Nike Training Club app to its customers The app provides personalized workout plans and workouts, as well as access to Nike's global community of athletes and coaches Nike also offers customizations for its products, allowing customers to personalize their footwear and apparel with unique colors and styles This helps customers get the best experience when they can wear clothes and shoes with their own design - Mission Nike's mission statement is to "Bring inspiration and innovation to every athlete in the world." Nike's mission statement reflects the company's focus on designing and developing products as well as providing innovative services that help athletes of all levels achieve their goals The company's commitment to innovation is reflected in the use of new materials, technologies, and design methods to create products that perform well and express their own style Up to now, when it has become a "giant" in the sports market, Nike continues to dedicate and strive for passion for sports, accompanying athletes to victory Nike is also committed to the environment, in order to minimize the impact of its manufacturing operations on the environment The company aims to reduce emissions and waste, increase the use of renewable energy sources and reuse resources - Vision Nike's vision is to become "the Best Sports Products Company in the World" To achieve this vision, Nike always strives to improve and innovate its products, offering innovative solutions to meet the needs of customers and competitors In addition, Nike is committed to promoting progress and sustainable development in the sports community The company regularly supports community sports activities, while promoting diversification and actively participating in social activities - Scale and scope of activities Nike is a company with immense coverage Today, Nike has a presence in more than 190 countries worldwide, employs more than 75,000 people globally, and the company's revenue in 2021 was estimated at $44.5 billion There are many ways to measure the size of a sports brand, but of the three companies reviewed below, Nike is the largest As of January 6, 2023, Nike has a market capitalization of more than US$194 billion, while Adidas and Under Armour have market caps of around $25 billion and $5 billion, respectively Nike is a global brand, owning more than 1000 stores operating around the planet While the U.S is Nike's core market, Nike's supply chain and distribution network span across countries Nike has 384 stores in the U.S and 768 internationally as of 2019 Each year, Nike is estimated to spend about $100 million to ensure its coverage in sports arenas, from tennis, golf, baseball and track to football and basketball - Stakeholders As a large and complex organization, Nike has a lot of stakeholders, including: Customers: This is the main stakeholder group that helps Nike drive the company's revenue and growth This related group helps the company sell goods as well as expand the market, increasing the brand's coverage to different age groups By responding to the needs and complaints of customers, Nike can outline the development direction of the company as well as have appropriate directions and promotion methods to help the brand affirm its position as a "giant" in the field of sports Employees: Nike currently has more than 75,000 employees worldwide Nike employees are an important group of stakeholders because they are responsible for designing, manufacturing, and selling Nike products Shareholders: Nike shareholders are individuals and organizations who own shares of the company They are an important group of stakeholders because they invest money in the company in the expectation of receiving a return on their investment Suppliers: Nike partners with thousands of suppliers around the world to manufacture its products These suppliers play an important role in the company's supply chain Communities: Nike operates in communities all over the world, and Nike's activities can have an impact on these communities Governments and regulatory agencies: Nike is subject to many laws and regulations in the different countries where Nike operates Governments and regulators are the stakeholder groups that have a strong impact on Nike's operations and profitability To be able to expand the scale and scope of operations in many different countries, Nike must have appropriate policies and terms that meet the requirements of the governments of those countries Non-governmental organizations (NGOs): NGOs are a group of stakeholders that can have an impact on Nike's reputation as well as its operations NGOs may advocate for specific causes or challenge the company on issues such as labor practices or environmental impact Overall, Nike's stakeholders are diverse and diverse, all have different impacts on Nike's operations, and play an important role in developing the brand globally The company needs to balance the interests of all these groups to ensure the long-term success of the brand built nearly 60 years ago II EXTERNAL ENVIRONMENT ANALYSIS 2.1 Porter's Five Forces 2.1.1 Pressure from competitors In the footwear industry in Japan, Nike encounters competition from various competitors such as Adidas, Puma, New Balance, Asics, Mizuno, and many others Adidas: Adidas is one of Nike's biggest rivals in Japan Adidas is also a well-known sports brand and has a wide range of products suitable for all ages and styles in Japan For Nike, the threat from Adidas is extremely fierce product competition and marketing strategies Under Armour: Although Under Armour does not yet have a large stock in the Japanese market, it is a brand that is growing strongly in Asia, including the Japanese market For Nike, the threat from Under Armour comes from the rise of this brand globally, especially because Under Armour focuses on sports therapy products of good quality Puma: Puma is another competitor in the sports and beauty industry in Japan Puma has many sports-related products and is of good quality, which is a potential threat to Nike Therefore, Nike often creates differentiated products for the Japanese market to be able to compete with competitors in the industry Styles and colors: Nike often offers designs specifically for the Japanese market, including styles and colors For example, Nike has launched the "Japan City Series" featuring designs typical of Japanese cities such as Tokyo, Osaka, and Nagoya These products are often favored by people and get the interest of sneaker fans all over the world Product structure: Nike also creates products that differentiate in product structure to meet the unique needs of each market For instance, they have introduced products that add water or moisture resistance to the Japanese market, where wet winters and natural disasters are frequent Pricing: Nike has also made price adjustments to suit the Japanese market Cheaper sneakers are available to cater to middle-income customers and low-income residents 2.1.2 Pressure from substitutes: Uniqlo is one of Nike's biggest competitors in Japan The brand specializes in the production of clothing and accessories with diverse products and reasonable prices Uniqlo also has a multimedia marketing strategy and strives to create creative Asics Asics Brand Asics shoe company is a high-end shoe brand specializing in manufacturing sports shoes originating from Japan Asics shoe company is considered the pride of Japan The predecessor of this shoe company is Onitsuka Tiger which was founded in 1949 In the first years of his business, Onitsuka specialized in designing and manufacturing basketball and volleyball shoes for the Japanese domestic market And until 1066, Onitsuka made a big splash thanks to the super product Mexican 66 shoes with beautiful design, attracting consumers From its market launch until 1977 Onitsuka Tiger merged companies GTO and Jelenk, creating the Asics brand Since then, the brand has been well appreciated by consumers around the world, the annual consumption is at a very high level Puma Puma Brand Puma is a famous German brand founded in 1948, the founder is Mr Rudolf Dassler The company was known for its line of football shoes and was a sponsor of football competitions of that time Today, Puma is not only famous for shoes but also for products in the field of apparel fashion (sports shirts, sweatpants), fashion accessories (Puma glasses, Puma hats, Puma backpacks, Puma socks ) or products related to sports equipment and equipment When it comes to the image of the "leopard", everyone knows that this is a powerful animal representing strength, speed and agility Ruda chose the image of cheetah hunting as a symbol for her brand He wanted to let people know the company's ability to adapt and develop constantly in all conditions and circumstances Over 74 years, Puma Group has overcome all difficulties by constantly innovating, constantly developing, bravely moving forward, establishing a solid foothold in the global fashion market, proving itself to be a mighty leopard in the competition for market share 2.3 Traffic light chart Environment Opportunities and challenges Politics O1: Japan is a politically stable country and has a free trade policy favorable to trade with other countries T1: Conflict between Japan and North Korea Economic O1: Japan is a large market for leather shoes in the world, people focus on using high-quality products at stable prices O2: Partners and manufacturers of diverse and reputable materials Level of assessment O3: Per capita income in Japan is always stable and increasing every year T1: The exchange rate of the local currency and foreign currency fluctuates a lot over time T2: Production costs are always high O1: Japan's population is aging O2: Japanese culture is rich and rich with traditions from ancient times and outstanding Japanese festivals Society O3: Japanese people emphasize health and sports as a part of their lives T1: Diversity in language culture makes it difficult to grasp how much user psychology is focused T2: Strict preferences and requirements from the Japanese culture of living and working habits, consumer interests at a high level O1: Japan is one of the leading countries in the world in the field of science and technology, with inScience and depth research achievements, bringing great results to humanity technology O2: Robotics, AI and automation technologies are developing strongly in manufacturing O3: Japan is the world's 3rd largest e-commerce market O2: The government has developed the Personal Information Protection Act to protect the interests of customers Law O1: The Private Monopoly Prohibition and Maintenance of Fair Trade Act prohibits agreements and practices that restrict unfairness, including cartels and tender fraud unilateral acts, including price monopolies and price controls T1: Japan has relatively few restrictions on foreign direct investment in the country but for some sectors, at least six months' notice must be given to the Bank of Japan: T1: Japan has one of the strictest environmental protection regulations in the world Environment T2: Japan is vulnerable to the impacts of climate change, including rising sea levels, increased frequency and intensity of extreme weather events, and disruptions to agricultural production T3: Japan is one of the biggest victims of natural disasters such as earthquakes, tsunamis, and typhoons III INTERNAL AND EXTERNAL AUDIT 3.1 Internal environment analysis 3.1.1 Nike's strengths in Japan Strong brand value: According to Brand Finance, a global brand valuation and consulting firm, it has come up with a review and ranking of the most valuable apparel brands in the world Once again, for the sixth consecutive year, Nike has earned the number one spot with a total brand value of $34.8 billion, up 7% from 2019 This is a strong point to pay attention to when analyzing Nike's SWOT model Brand Finance defines "brand value" as the "net economic benefit that a brand owner derives by licensing a brand on the open market" and signs of its overall growth On this list, behind Nike is Gucci, which last year ranked fifth Adidas, whose brand value fell 1%, ranked third in the ranking, followed by Louis Vuitton, Cartier, Zara, H&M, Chanel, Uniqlo and Hermès This is a strong point to pay attention to when analyzing Nike's SWOT model Wide range of products Besides popular sports such as football, basketball Nike also competes with other brands, surely not many people know Nike has shoes for boxing, shoes for weightlifting Nike has made it easier for buyers to come up with products that match their shoes for sale Focus on product quality: Nike focuses on improving its products to meet the needs of the Japanese market This allows Nike to retain its leading position in the field of sports in Japan Buying Nike shoes in Japan, you have a lot of options, you have a lot of choices of styles and colors when shopping on the homepage of Nike Japan Nike invests heavily in product research and development in Japan, with the goal of creating advanced, unique and high- quality products This helps Nike maintain its position in the Japanese sports market Strong brand positioning: Nike has been known as a sportswear brand for a long time with multifaceted marketing strategies However, behind it all, there is one factor that plays a fundamental role, and that is product positioning The Nike co-founder once shared: "A pair of shoes has to have three things It has to be lightweight, comfortable and has to go long distances." For Nike, they focus on the professional athlete segment, those who are active in sports or have a healthy lifestyle This market has great potential and consumers must take their purchasing decisions seriously unique properties of Nike shoes that make it easy for customers to decide whether to buy Nike shoes or find another brand NIKE was founded in 1964 in the US as Blue Ribbon Sports then became the name NIKE in 1971 The Swoosh logo was created by University of Portland freshman Carolyn Davis for $35 and is now estimated at $30 billion (as of 2019) The Swoosh logo has always appeared with the trademark "Just it" meaning "just it" since a 1988 media campaign, these seemingly simple things have shaped the face and success of Nike throughout time Distribution System There are Nike stores in locations such as: Narita Airport, Osaka, Kyoto, Fukuoka, Harajuku, Karuizawa, Musashino, Besides, Nike products are also distributed to many stores and booths in shopping malls in Japan Nike has a strong distribution system in Japan, with many retail stores and outlets nationwide This helps Nike reach more customers and increase sales in Japan Powerful Marketing Activities: Nike uses athletes as brand ambassadors, making a lasting impression on customers through a series of advertising initiatives Effective marketing campaigns and the development of products in Japan These achievements help Nike strengthen its reputation and brand in the Japanese market Focus on sports and sports culture of Japan: Nike focuses on popular sporting events in Japan such as football, basketball, baseball and tennis They also collaborate with local partners to promote sports-related activities and sports culture Nike stands out for its promotional communication strategies such as Emotional Marketing strategy, using celebrity images, diverse promotions on social networks, inspirational ads To meet the needs of Japanese customers, Nike often launches products exclusive to this market This helps the brand increase competition and interaction with customers Nike Japan often has limited editions and celebrity collaborations around the world that are not available anywhere else in the world like Nike x "Slam Dunk" Nike has used a lot of local sports stars like Keisuke Honda of the Japanese football team to advertise and showcase their products This helps the brand increase its closeness and interaction with local customers Digital use: Nike uses digital channels (social, website, email) to reach and interact with customers in Japan This helps the brand increase virality and engagement 3.1.2 Weakness Media scandals After launching the ad "The future isn't waiting" in early December 2020 in the Japanese market, Nike has faced a wave of criticism from a large number of Japanese people However, even during the tense time of the boycott, the number of customers coming to the flagship store in Tokyo was surprisingly large Some Nike products have caused negative reactions from Japanese customers in the past For example, a Nike shoe that was said to have a similar design to a Japanese religious symbol was strongly opposed This affected Nike's image in Japan The sportswear category in Japan remains a lucrative market, expected to continue to grow and reach 1.6 million yen (~$15.3 million) this year Despite being ahead of Adidas, Nike still has a foothold in the Japanese market by repeatedly threatening the position of domestic brands Asics and Mizuno However, the cost of Nike products in Japan is quite high compared to other local brands This makes many customers opt for other sports products with lower prices Difficulties in adaptation: The Japanese market has different regulations and business culture compared to other markets in the world This requires Nike to adapt well to meet the needs and regulations of this market Tax and financial management difficulties: Managing tax and financial regulations in Japan can be as challenging for Nike as it is for many other international businesses 3.2 Recommendations: Opportunities: Land and property rights: There are no restrictions on foreign investors buying real estate in Japan This is a great advantage for Nike to expand its branches, distribute more stores across Japan, reach more customers Diversify its product portfolio: In recent years, NIKE has begun to diversify into accessories and other luxury products outside of its footwear business This is also an effective way to use the "strengths" of the brand, and will aim to overcome the "weaknesses" of trading only a few types of product If this product diversification becomes a good direction, it can lead to securing a revenue stream beyond the usual signature products and stabilizing the company's profitability The influx of Western culture: As popular culture from the West entered Japan and Japan's social codes of conduct became a little more relaxed, low-soled shoes began to gain popularity This trend is not as strong as South Korea, where casual dress at the office is acceptable, but overall, it has grown Between 2014 and 2016, the Japanese sports shoe market grew from US$1.3 billion to US$1.65 billion per year, with Nike occupying the largest market share in this segment The rapid development of the footwear industry has made Japanese buyers more interested in exploring different aspects of this industry that may not have been popular in the past That opens immense opportunities for brands like Nike Differences in demand: Nike found that Japanese runners were looking for a very different product than the usual U.S product The Japanese body requires shoes that are very fast, have a lot of elasticity and are less prone to lag, so Nike created a specific design team to meet their needs Sometimes, the products are decorated with Japanese motifs, starting as a product exclusively for Japan and gradually applying to the whole world Threats: Competitors come from domestic brands: Japanese customers love comfort, so sneakers are always the preferred product Sneakers — both stylish and performance — dominate the sector in the country, with giants like Nike and Adidas leading the way Following closely behind are local brands like Asics and Mizuno, which shoppers tend to favor when actually hitting the gym or running, according to Kaori Kawabata, a sneaker analyst at The NPD Group Inc., a market research firm with offices in Japan "Local labels are seen as quality options that are better suited for exercise." That is why they are still doing well, despite the large wave of Western companies that we have seen in recent years People trust them." The economic downturn following the ongoing Covid-19 pandemic has taken a heavy toll on Nike as consumers become more price conscious and retailers demand higher profit margins The combination of retail at third-party stores and competing brands offering discounts has left Nike struggling Nike has to make sure it doesn't dilute its focus like some of its competitors are currently in the doldrums Must know how to identify their core competencies and implement appropriate strategies in diversifying products The fact that NIKE has a global supply chain poses unpredictable and uncontrollable risks to labor strikes in countries, currency fluctuations that reduce profit margins, and geopolitical events happening around it Strengths Strong brand value Wide range of products Strong brand positioning Distribution System Weakness Media scandals Difficulties adaptation in Difficulties in tax and financial management Strong marketing Opportunities Strategy (S4.5 + O1): It is possible to Land and design stores in property different areas rights according to the Product cultural diversification characteristics of The landing of each region, both showing the Western integration and cultures adaptation to this country, while Strategy (W2 + O3.5): Thoroughly study customer needs, produce essential items related to the sports industry, open advertising campaigns about the combination of new and old products Combining The rapid attracting the the spread of development attention of Western culture of the indigenous people along with the footwear adaptation and industry integration with Japanese culture to Differences in create business and demand production strategies in accordance with consumer needs It is possible to create special collections dedicated to important and prominent events in Japan Threats The competitors come from local brands Post-COVID19 economic recession Prone to dispersion of concentration Global Supply Chain Strategy (S3 + T1): Actively promote, open campaigns to increase brand awareness, affirm brand quality with customers, provide incentives and privileges to loyal customers Strategy (S1 + T3): Focus and maximize your strengths to come up with appropriate business strategies and bring effective economic benefits IV CONCLUSION Nike is a big and popular brand all over the world, including Japan Nike has been present in Japan since the 1960s and is still one of the most popular footwear and sportswear brands in Japan today Therefore, it can be said that Nike has had a longstanding presence in Japan However, determining Nike's growth potential in Japan depends on various factors, including competition with local and international brands, economic, cultural, and consumer trends in the Japanese market, Nike's marketing strategy and product management, etc Japan is a large and competitive market in the sports and fashion industries, with the emergence of many local and international brands Nike faces competition from local brands like Mizuno and Asics, as well as other international brands like Adidas and Puma In order to develop effectively in the Japanese market, in addition to identifying the company's strengths and weaknesses, thereby offering solutions to access opportunities and limit risks and threats through the SWOT matrix, Nike launches new products or improves existing products to match trends and tastes of Japanese consumers is also a breakthrough solution when Japan is the cradle of many modern and advanced technologies in the world The analysis of factors in the PESTLE C model helps Nike have a more intuitive view of the consumer market in Japan, through which the brand can propose age-appropriate marketing options, build trust and especially affirm its reputation in the eyes of consumers Most importantly, Nike has started implementing an online business strategy in Japan This makes it easier and more convenient for consumers to buy Nike products To be able to implement the above strategy, Nike has done a great job in researching environmental factors to implement an online business model Increasing advertising and reaching out to users through social media and sporting events in Japan is also an important step in the process of increasing consumer attention in the country In general, as a "giant" in the sports industry, Nike is not difficult to develop and affirm its position in the Japanese consumer market With careful analysis of the customers that the company is targeting as well as coming up with an appropriate marketing strategy, Nike will be able to easily win the favor of subjects of all ages Nike's coverage across countries around the world is a testament to Nike's strong development so far CONFERENCES 2022, “Mơ Hình PEST, PESTLE, STEEPLED, DESTEP – Phân tích mơi trường kinh doanh”, Hoài AnZ, https://hoaianz.com/mohinh-pest-pestle.html 2022, “Here's how Japan has become a leading technological power”, Newonjapan, https://newsonjapan.com/html/newsdesk/article/124622.php 2021, “Tìm 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