Can you help explain the findings and implications of the data identified in the EFE Matrix threats?
Threats Weight Rating Weighted Score 1 The Athletic and Sporting Goods Manufacturing industry's performance has been somewhat volatile due to currency and exchange rate dynamics. The trade-weighted index (TWI) is expected to rise an annualized 1.2% during the current period, 0.05 3 0.15 representing an appreciation that has led domestic manufacturers to struggle to compete with lower-cost imports. 2 Companies like Under Armor and Adidas are spending more on marketing and advertising campaigns, increasing the pressure on 0.08 4 0.32 Nike (Business Strategy Hub, 2020). 3 Trump Administration incentives to reshore built-up back to the US, Nike has announced plans to build additional manufacturing 0.03 2 0.06 plants in America. The Footwear Wholesaling industry has faced several challenges over the past five years. Growth in the volume of imports from countries with low production costs has negatively affected 0.03 2 0.06 footwear prices, as price competition has increased. 5 Nike was overwhelmed with reports on the company having sweatshops and child labor issues. According to Bain (2017), "on July 29, students and activists around the world participated in a day of protest against Nike, organized by United Students Against 0.03 2 0.06 Sweatshops (USAS)." The protests demonstrated a growth of allegations against Nike that have been slowly bubbling up (Bain. 2017). 6 Nike's revenue and reputation can be greatly affected by counterfeit products. Since the company is global, the risk of counterfeit products has increased. Many merchandisers and retailers offer counterfeit Nike products at lower prices. These counterfeit products are made from low-quality materials with 0.05 3 0.15 Nike's label. "This can tarnish the image of the brand as the customers might feel that Nike has started producing products that have low quality" (Business Strategy Hub, 2020). 7 In Hansae, Vietnam, employees at a Nike factory claim that they have "suffered wage theft and verbal abuse, and labored for hours in temperatures well over the legal limit of 90 degrees, to the point 0.02 0.02 that they would collapse at their sewing machines" (Bain. 2017). 8 Since Nike does business internationally, costs and margins are not stable over long periods of time with exchanging multiple foreign currencies. This means that "Nike may be manufacturing and/or 0.03 2 0.06 selling at a loss" (UKEssays, 2016). 9 Competition and new developing brands are threats to Nike. "Nike has to spend more money on marketing and advertising." In 2018, the company spent about 3.5 Billion dollars on marketing 0.05 3 0.15 Business Strategy Hub, 2020). 10 The rapid industrial exchange and customer expectations are significant risk factors for Nike. The market for Nike's products depends on the relative popularity of various sports and fitness activities as well as on developing design patterns, so any important 0.09 4 0.36 changes in these patterns may reduce the industry results. Total EFE Score 1.00 3.17
