Bargaining Power Of Customers – Big wholesale customers could exert some bargaining power
Nike caters to its customers through both the wholesale and direct-to-consumer channels, which accounted for 80.6% and 18.9% of total Nike brand’s sales respectively, in fiscal 2013.
Direct-to-consumer sales rose by 23% in fiscal 2013, as compared to 6% growth in the wholesale channel; hence Nike is looking to strengthen its direct channel.
Certain big wholesale customers hold bargaining power as they could widen their partnership with Nike’s competitors or provide their own private label offerings to earn higher profitability.
Bargaining power of end-customers is low as Nike has a very strong brand image and holds an innovative product portfolio.
However, customers could also choose other brands owing to factors such as price, advertising, product sponsorship, and changing styles.