Chapter 3 - Evaluating Environmental Threats - 9/17


Michael Porter created the most influential tool for firm to evaluate their environment or external threat.s It is called the port's Five Forces Model. They include the threat of rivalry, entry, substitutes, suppliers, and buyers. Nike's greatest threats come from rivalry or competition. Companies such as Adidas, Under Armour and Reebok serve as a few of Nike's primary competitors. These companies have similar product offerings and serve as Nike's greatest threat. The threat of buyers and substitutes both serve as moderate threats to Nike. While buyer's do have the option to purchase other brands, truly comparable substitutes are only moderately available. Hence why the threat of substitutions is also moderate. While substitutions do exist, they're performance level doesn't quite compare. The bargaining power of suppliers and new entrants are both fairly weak because suppliers are abundant and therefore don't have a lot of bargaining power, and Nike possesses so much of the market share, a new entrant isn't much of a threat to the sporting good giant. 

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 http://panmore.com/nike-inc-five-forces-analysis-porters-model

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