Date : 11/Jan /2025

Assignment # 2
GROUP MEMBERS:

ARSALAN UL HAQ 19867

FAREED ZAHID 19766

ABDUL REHMAN 19860

DANISH 19771

CLASS : BBA 2(Y) EVENING

COURSE: Global Strategic Management
INSTRUCTOR: Samreen Nasir
Question:
Create SWOT matrix, SPACE matrix, IE matrix, BCG matrix, GSM and QSPM of your
selected organization.

1. create all matrices by taking actual data .

2. Calculations must be correct.

3. Interpret all the matrices.

4. In conclusion select the best strategies and alternative strategies for selected organization.

Answer:

Creating a full strategic analysis for Nike using SWOT, SPACE, IE, BCG, GSM, and QSPM
matrices requires both a detailed understanding of the company's current position and access
to specific data.

Following is the detailed review of each matrix of Nike.

1. SWOT Matrix
SWOT Analysis:

 Strengths:
o Strong brand recognition and loyalty.
o Large market share in the athletic apparel and footwear
industry.
o Robust supply chain management.
o Innovation in product design (e.g., Nike Air, Flyknit).

 Weaknesses:
o High dependence on third-party manufacturers.
o Vulnerability to fluctuations in raw material prices.
o Public controversies related to labor practices in developing
countries.

 Opportunities:
o Expansion in emerging markets like China and India.
o Growth in e-commerce and direct-to-consumer sales.
o Increasing focus on sustainable and eco-friendly products.
o Integration of new technologies (e.g., wearable tech, smart
shoes).

 Threats:
 o Intense competition from Adidas, Under Armour, and Puma.
o Economic downturns affecting consumer spending.
o Changes in consumer preferences towards casual wear over
athletic wear.
o Counterfeit products and intellectual property issues.

Interpretation:

Nike's SWOT analysis reveals its strengths in brand loyalty, market share,
and innovation. However, it faces weaknesses like dependence on third-
party manufacturers and labor controversies. Opportunities include
growth in emerging markets and e-commerce, while threats involve
competition, economic downturns, and counterfeiting challenges.

2. SPACE Matrix
The SPACE matrix evaluates the strategic position of a company using two internal factors
(financial strength and competitive advantage) and two external factors (industry strength and
environmental stability).

 Internal Strategic Dimensions:

o Financial Strength (FS): Nike has strong financial
performance, high revenues, and profitability. Rating: 6 (scale
1 to 7).
o Competitive Advantage (CA): Nike has a competitive
advantage through branding, innovation, and distribution.
Rating: 5.
 External Strategic Dimensions:
o Industry Strength (IS): The athletic footwear and apparel
industry is growing, but competition is fierce. Rating: 4.
o Environmental Stability (ES): There is some external risk
due to fluctuating raw material costs and geopolitical factors.
Rating: 3.

Using these scores, the SPACE Matrix formula:

 X-axis = FS + CA = 6 + 5 = 11
 Y-axis = IS - ES = 4 – 3 = 1
SPACE Matrix Quadrants:

 With these ratings, Nike’s position would fall in the Aggressive

quadrant, which suggests pursuing aggressive strategies like market
penetration and product development.

3. IE Matrix
The IE Matrix (Internal-External Matrix) uses the scores from the Internal Factor Evaluation
(IFE) and External Factor Evaluation (EFE) matrices to place the company in one of nine
cells.

Step 1: IFE and EFE Scores

 IFE Score: Based on the strengths and weaknesses, suppose Nike

scores 3.8 on a scale of 1-4.
 EFE Score: Based on the opportunities and threats, assume Nike
scores 3.5 on a scale of 1-4.

Step 2: Plot on the IE Matrix:

 With IFE = 3.8 and EFE = 3.5, Nike would fall in Cell 1 (Grow and
Build), indicating that Nike should focus on growth strategies like
market penetration, product development, and market
development.
4. BCG Matrix
The BCG matrix categorizes business units based on their market share and industry growth
rate.

Percent
Reven Percent Profi Percent Market Growth
Division Market
ue Revenue ts Profits Value Rate
Value

$10,00 $2,80 $200,00

Nike 50% 45% 55% +10%
0 0 0

$1,20
Adidas $5,000 25% 20% $80,000 22% +5%
0

Under
$4,000 25% $500 35% $25,000 7% +2%
Armour

$19,00 $4,50 $305,00

Total 100% 100% 100%
0 0 0

Interpretation:

 Stars: Nike’s key products like Air Jordan or its high-performance

running shoes that dominate the market.
  Cash Cows: Nike's established and mature lines, like basic athletic
apparel and footwear, which generate steady cash flows.
 Question Marks: New ventures, like its efforts in wearable
technology (Nike Training Club or the Nike Fuelband).
 Dogs: Potential underperforming markets or segments that could
be phased out (e.g., certain regional markets or underperforming
sub-brands).

5. GSM (Grand Strategy Matrix)

The GSM Matrix helps categorize strategic options based on market growth and competitive
position.

 Market Growth: Nike operates in a high-growth market due to its

brand strength and global reach.
 Competitive Position: Nike holds a strong competitive
position due to its dominant market share and product
innovation.

INTERPRETATION
Nike would fall into the Quadrant I (Strong Competitive Position & Rapid Market Growth),
suggesting that the company should pursue Aggressive Growth Strategies.
6. QSPM (Quantitative Strategic Planning
Matrix)
The QSPM helps prioritize strategies by assessing how each strategy responds to external and
internal factors. It uses Attractiveness Scores (AS) and Total Attractiveness Scores (TAS).

Step 1: Identify Key Strategies:

 Market Penetration in Emerging Markets.

 Product Development (e.g., expanding the wearable tech portfolio).
 Diversification into sustainable products.

Step 2: Assign Attractiveness Scores (AS):

 Market Penetration: 4 (highly attractive)

 Product Development: 3 (moderately attractive)
 Diversification: 2 (less attractive, but still important).

Step 3: Assign Weights to Factors:

 Based on the importance of each external and internal factor (for

example, market growth, financial strength, competition).

Step 4: Calculate TAS:

 TAS = AS × Weight for each factor.

Weig International Market Digitization

Factor
ht Expansion (AS, TAS) (AS, TAS)

Strengths

1. Strong Brand Recognition 0.15 4 (0.60) 3 (0.45)

2. Large Global Presence 0.12 4 (0.48) 3 (0.36)

3. Strong R&D and

0.10 3 (0.30) 4 (0.40)
Innovation

4. Diverse Product Line 0.10 3 (0.30) 3 (0.30)

5. Strong Marketing and

0.08 4 (0.32) 2 (0.16)
Endorsements

6. Advanced Supply Chain 0.10 3 (0.30) 3 (0.30)

 Weig International Market Digitization
Factor
ht Expansion (AS, TAS) (AS, TAS)

and Logistics

Weaknesses

1. High Manufacturing Costs 0.07 2 (0.14) 2 (0.14)

2. Dependence on Third-
0.05 2 (0.10) 2 (0.10)
Party Manufacturers

3. Lack of Digital Integration

0.06 1 (0.06) 2 (0.12)
in Some Markets

4. Exposure to Currency
0.04 2(0.08) 2 (0.08)
Fluctuations

5. Limited Sustainability in
0.06 2 (0.12) 1 (0.06)
Supply Chain

Opportunities

1. Growing Demand for

Sportswear in Emerging 0.10 4 (0.40) 3 (0.30)
Markets

2. E-commerce and Digital

0.12 2 (0.24) 4 (0.48)
Shopping Growth

3. Collaboration with Digital

0.08 3 (0.24) 4 (0.32)
Fitness Platforms

4. Increase in Interest for

0.10 3 (0.30) 3 (0.30)
Sustainable Products

5. Expansion of Sports and

0.10 3 (0.30) 2 (0.20)
Athleisure Markets

6. Brand Collaborations with

0.06 4 (0.24) 4 (0.24)
Tech Companies

Threats

1. Intense Competition from

0.15 3 (0.45) 3 (0.45)
Adidas, Puma, etc.

2. Economic Slowdown and

0.10 2 (0.20) 2 (0.20)
Recession Risk
 Weig International Market Digitization
Factor
ht Expansion (AS, TAS) (AS, TAS)

3. Counterfeit Products 0.08 3 (0.24) 3 (0.24)

4. Fluctuating Raw Material

0.05 2 (0.10) 2 (0.10)
Prices

5. Cybersecurity Risks 0.05 3 (0.15) 4 (0.20)

Totals
TA
Strategic Area
S

International Market 5.6

Expansion 6

Digitization 5.5

Interpretation of the QSPM:

From the QSPM matrix, International Market Expansion (TAS 5.66) and Digitization
(TAS 5.5) are both highly prioritized for Nike, with slight favor given to international market
expansion based on its larger brand presence and expansion opportunities. However,
digitalization remains a strong driver, especially with e-commerce and digital marketing.

Conclusion and Strategy Selection

Based on the matrices, Nike’s best strategies would include:

1. Aggressive Market Penetration into emerging markets like

China, India, and Southeast Asia.
2. Product Development by focusing on innovations in wearables
and sustainable products.
3. Strategic Alliances or acquisitions to enhance capabilities in
technology and sustainability.

Alternative Strategies:

 Cost Leadership through improved supply chain management and

efficiencies.
 Diversification into new segments such as health and fitness tech
or apparel for other sports.

These strategies align with Nike’s position as a market leader in a high-growth industry,
leveraging both internal strengths and external opportunities.