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Nike Expansion Strategy In Globalization

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Nike.Inc is one of the top 10 footwear companies which have the business model of low-cost and high-quality products. Nike is a symbol of benefits and a risk-taking business pattern in the recent global market. The business model shapes the organization behaviors in the international market. This fast-growing firm was a multinational company (MNC) which went free trade in the 19th century. Although this MNC enjoys the benefits of globalization, it lacks clear of a good corporate citizenship in globalization. First, this paper examines the Nike expansion strategy in globalization and its negative and positive impacts on various factors. Next, the firm responded to controversial issues. In addition to these, I will state my opinions. I will end …show more content…

Some of them are the properties of Nike's Korean suppliers. The positive impact was the factory production increase, and it came under detailed examinations and careful investigations. The negative influence of the firms was greater scrutiny exposed to a variety of Non-Government Organizations and labor activists. They made a statement that these factories were exploiting Indonesian workers by applying exemptions to the legal minimum wage. These activists also found that the poor working condition and labor abuses happened in the plants. They demanded it against the human rights. In Indonesia, exemptions to the legal minimum wages were usual, and many other similar businesses applied to it. The company owners signed the petition to express their hardship to pay. It then handed out to the government for exemptions to the legal minimum wages. The legal minimum wages can only fulfill around 2/3 of the one worker basic living except for their family. The Nike's contractor is claimed to perform a bad behavior to local labors and stingy with wages. The author claimed that the employees and their colleagues were terrified of their employers from South Korean (Locke. R, …show more content…

It ignites harsh criticism against this MNC operated in the Pakistan. Several public leaders, trade unions, consumers groups expressed the disapproval to this branded products in the Pakistan. According to the author, one of the Vice President of the firm, responded to the article as a representation of several events. The events could be the understanding of international trade. It also could be one of the international labor standards. Or it could be the corporate responsibility to achieve its goals (Locke. R,

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Nike was rated to be one of the leading companies that practice child labor and sweatshops. Sweatshops is a workshop that employee works and are being paid with a very low wages for a long hours even under a very poor working environment. Nike has this workshop all over the world and report shows that Nike employees in Vietnam, Indonesia, Korean and some other Countries not mentioned earned below 25 cents per hour. Supervisors hit the workers and use abusive words, sometimes workers cannot use the bathroom or drink water without taking permission from the supervisor. It is widely found for workers to faint.

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Introduction Consumer awareness of the maltreatment of workers in global supply chains has caused backlash towards Multinational Corporations (MNCs), as they have moral and social obligations regarding the protection of human rights (Meyer, 1996). Nike, one of the dominating companies in the athletic footwear industry, was criticized for taking advantage of countries with low wages and poor working conditions (Richard and Romis, 2007, p.55). In fact, Nike became “synonymous with slave wages, forced overtime, and arbitrary abuse” (ibid.) due to the “lax health and safety standards, union repression, harsh disciplinary practices and sexual harassment” (Locke, 2013, p.6) found in its manufacturing subcontractors. This phenomenon provoked significant controversies on the corporate accountability of the company towards working standards.

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Problems started in 1991, when activist Jeff Ballinger published a report documenting low wages and poor working conditions in Indonesia. Then in 1992, Ballinger published an exposé of Nike. His Harper's article highlights an Indonesian worker who worked for a Nike subcontractor for 14 cents an hour, less than Indonesia's minimum wage, and documented other abuses. Protests at the Barcelona Olympics in 1992, CBS' 1993 interview of Nike factory workers, and Ballinger's NGO "Press For Change" provoked a wave of mainstream media attention, which began Nike’s realisation that they must

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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

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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

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Nike has sustained positive revenue in a worldwide market focusing on a healthy and active lifestyle. For the past 3 years Nike has gained a gross profit ratio of 8.73% in fiscal of 2013, 10.28% in fiscal of 2012, and 8.28% in 2011 . Thus showing the financial power Nike has, well the firm holds a net income of 2.5 billion in the fiscal year of 2013. Nike’s largest product category is footwear, representing over 55% of the companies revenue. Nike uses their financial resources ability to obtain large advertising plots, whether it is a commercial on television, advertisements on the Internet, or product promotion in athletic facilities.

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Nike has managed to shift their Manufacturing unit into Asian country’s were the labor is cheap to be exact wages of USD1 an hour were so little as one-tenth of those given in the US. No wonder that a pair of shoes which were sold for $150 in 1991 is made by indoasian women who were 58 cents a day but the situation has started to change and due to that reason the company has managed to minimize cost of production and not only double triple the the revenue as comparing to the year 1996. Finally we come up with promotion and advertising campaigns which became a grand success not only because they introduced sportspersons , they also introduced innovative ideas and wise strategies and the image of the Product, due to this process we can say that Nike targeted a huge no of audience and created a Prestigious brand which will be easily available for average people . they also came up with great tag lines such as ‘there is no finish life’ , and in the 1980 they changed it into “ JUST DO IT “ these quotes of tag lines are considerd very simple but very attracting and extremely encouraging for the customers .

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