The fourth expansion strategy of Nike Inc. was product diversification. While it is essential to emphasize that the outsourcing strategy was enormously effective, it is also important to know that Nike Inc. did not rely on footwear production and importation alone, rather the company diversified into producing and selling apparel. According to the company’s financial report, revenue from the sales of apparel was estimated at 29% while footwear was 59% respectively (Locke, 2002). This diversification, no doubt, combines with outsourcing its factories to lower-cost countries and selling its products at an affordable price was the catalyst to Nike Inc. expansion strategy. Explain what the positive and negative impacts of this strategy were. Whatever that has a positive would likewise have a negative. The …show more content…
Yes! Nike first response of ignoring and deflecting these criticisms, coupled with the self-defense was apparently a lack of concern for human lives. Nike would have responded differently by first accepting the responsibilities of what transpired in these factories. The fact that employees working in these factories were not directly employed by Nike was not a yardstick to exonerate itself from atrocities that took place under its watch in these countries. In my perspective, the second response, instead of the initial lackluster defense the company came up with, a code of conduct should have been immediately put in place to correct the anomalies and publicly apologize for what was going on. The company should have immediately embarked on a training mission to educate both contractors and employees on what is acceptable and what is unacceptable in any factory connected with Nike. This training mission should have been the third response of the company. Although the company applied the above suggestions, but it was rather too late while some significant damages were already inflicted on the company’s
David Montero explains that in Sialkot, Pakistan there is a business, Saga Sports, that creates the Nike soccer balls by hand, the problem Nike has with the company is that they employ children to work in unjust conditions. “In November, Nike severed its contract with Saga Sports, its chief supplier, saying Saga's poor management exposes Nike to the threat of child labor and other labor violations,” (Montero). The chief executive of Nike is trying to reduce the amount of children that produce their goods in unfair conditions. The executive wants consumers to know that they are buying products that were manufactured the proper way of not having children make these items in appalling conditions that could threaten their health. The evidence suggest that working conditions is another reason that the United States consumers should not buy products that are made by
UNETHICAL BUSINESS CASE STUDY ON NIKE Summary This project is focused onthe unethical behaviors of Nike. The essay will be exploring the ethical situation of Nike, the unethical behaviors, as well as the company’s role in reducing and correcting its unethical issues. Nike is no doubt one of the world’s leading footwear and apparel company, but continues to outsource its manufacturing to factories in Asian countries like China, Thailand, Bangladesh, India, and South Korea.
1) Explain Nikes success in Football since 1994 Nikes strategy in the marketing world has evolved every year, growing and becoming stronger and more world wide known. In 1994, Nike in the football world was small and wasn’t keeping up with the big competitor of Adidas. Nike took every chance they received to grow their brand internationally which started off with the world cup in 1994 in the United States.
A-Four support activities: 1- firm infrastructure and finance : -Strong brand, product, marketplace solution, delivery and support. (brand value from 35$ in 1973 to 10.7 billion in 2014 ). -Empowerment of top management –geographic structure. -Low debt, short term debt 2.9 billion, and long term debt 1.1 billion. Cash in hand 2.2 billion.
Internal Analysis When conducting an internal analysis you must know the firm’s resources and capabilities. Nike’s resources are assets from succeeding in their industry. These resources include financial resources, physical resources, human resources and organizational capabilities. Firms Resources & Capabilities: Human Resources-. The company displays a strong workforce of over 30,000+ employees.
When a person hears or sees the word America, what do they think? America is a country that almost everyone in the world knows about because there are certain words and phrases that can be used to describe it. Some common terms are sports, equality, the melting pot, powerful, freedom, hard working, and some more. All of these words make up what is known as the American Identity. This American Identity has been built up over time by people’s actions and thoughts.
NIKE The Factors that Led to Success and Failure of Nike in its Venture across International Markets Abishek TR* Abstract- Key words: INTRODUCTION The largest American suppliers of athletic shoes, apparel, and sports equipments .At the same point of time ,this company is known worldwide .The Success of this company is the result of the various strategies used in the international market expansion which helped them to enter into new markets and to strengthen its position in the traditional ones .
Nike’s first globalization strategy was outsourcing. Nike Inc. realized that manufacturing its products (footwear) in the U.S was expensive and to further export these products to distributors outside the U.S would be a massive challenge. This is because price affordability was a major concern for customers outside the U.S who would not comprehend why sportswear should be that expensive to buy. However, Nike Inc. took advantage of globalization by using the Japanese high-quality, low-priced production strategy by outsourcing all its shoe production to Japanese producers (Locke,
In the assignment, it will discuss the sports brand Nike which specifically focuses in Chinese market. There are three main content areas in this assignment. The first part is a macro environmental analysis; the next part is the target customer profile; the last part is the analysis of marketing strategies. Macro Environmental Analysis: Nike is a very well-known market leader. It is an international brand, their products are selling in the worldwide including China.
International marketing strategy is a combination of marketing principle that could be used to formulate a marketing strategy for specific products and services within one or more countries to extend or internationalise the company. The research paper is based on the international marketing strategy of Nike Inc. (a Sports Apparel retail company working internationally) to help the management of the company shortlist and identify potential market for them to expand their business. It utilised macro and micro analysis of the sports retail market to identify the potentials of the industry that would help them to increase their business performance in the international marketplace. Macro Factors PESTLE It is noted that PESTLE is one of the most important and effective that often used by organisations in order to assess different macro factors that influence their activities in a negative manner (Li, et al., 2014).
This is due to Nike gets its merchandise generally from foreign manufacturers. To operate profitably, Nike need to get good value on products and supplies and, in turn, offer good value to its customers with accessible solutions. Publics: Many colleges and universities, especially anti-globalization groups as well as several anti-sweatshop groups
Simply put, Nike’s target market is mainly customers who have more concern for the quality and utility of the product than they have for the price at which the product is being sold. This helps to ensure that pricing never has to be adjusted downwards in attempts to woo in a larger number of customers. For any company to achieve success from the marketing strategies that it has put in place, it has to ensure that its strategy is flexible enough to keep up with the changing times and to also accommodate a large variety of customers. So as to do this, it is imperative that the products being produced by the company be innovative enough to exceed what is being provided by competitors in every possible way. Nike chose to take this into deep consideration and this resulted in it making a few changes on its marketing strategy.
Probable factors that could affect Nike’s business judgements are a range of demographic, social, economic and political. A few have already started to transpire, though others are purely likelihoods. External factors affecting this mix is one of the most common, technology. Before Nike releases its brand new product line to the market, it’s always prepared to authorize that whether or not there has been any sort of major advances from the other competitors that would tracker its launch. Thus they must time this carefully, as other competition may demand to shadow its release with their marketing
Price Strengths 1. Low Cost Manufacturing Nike has a company who use the low cost manufacturing for production footwear. All of the Nike’s footwear virtually is manufactured outside of the United States by independent contract manufacturers such as Vietnam, China and Indonesia. Nike was operate multiple factories around the worlds. In 2014, Vietnam, China, and Indonesia manufactured roughly about 43%, 28%, and 25% of total Nike branded footwear and it has also operations in other country such as Argentina, Brazil, India, and Mexico.
Nike moves its factories to Indonesia, Vietnam, and China, when the cost in Japan became expensive. And the source of crisis is the working condition in these factories because of the accusation of poor condition, child labor, and widespread harassment