Nike Case Study
There are three basic concerns about Nike's manufacturing policies and practices that have left critics, including Jeff Ballinger, wary of their employment policies. The first practice is that the Nike manufacturing plants are not considered to by their critics to be run in a safe and efficient manner. The second practice is that Nike has employed workers younger than it could legally employ in the United States. The third practice is related to the first two practices and is more comprehensive; "Nike was an early target for the very reason it's been so successful. Its business model was based on outsourcing its manufacturing, using the money it saved on aggressive marketing campaigns" (Nisen, 2013). The three problems are distinctly interrelated. The reason that outsourcing becomes a money-saving business option is that many locations outside of the United States fail to offer the same protections for workers that the United States offers. Laws regulating safe working conditions, minimum wages, the number of hours an employee may work, and the minimum age for workers vary wildly around the globe and manufacturers can optimize profits by choosing to construct factories in areas with the lowest worker protections. Nike did so, as did many other companies, and it reaped significant profits. However, its willingness to exploit child labor and engage in dangerous employment practices while offering slave-level wages for many of its factory workers resulted in tremendous backlash from many of its consumers.
However, from a purely economic perspective, Nike's business strategy, including its decision to outsource much of its labor, seemed to provide significant rewards. This financial success was occurring contemporaneous to the public outcry against its outsourcing practices. Moreover, Nike chose to use subcontracting factories to manufacture its produces. In 1998, Nike had a 47% market share of the domestic footwear industry, with almost all of its manufacturing done in Asia (Van Dusen, 1998). "Their majority of their output today is produced in factories in China, Indonesia, and Vietnam, but they also have factories in Italy, the Philippines, Taiwan, and South Korea. These factories are 100% owned by subcontractors, with the majority of their output consisting solely of Nike products. However, Nike does employ...
8 million in reduced utilities costs" (Young 56). Thus, Sun has reduced costs significantly, while keeping its workforce solidly on American soil. There are ways for smaller companies to utilize these types of solutions, as well. Flextime, telecommuting, and even satellite offices can help save money while creating a more motivated and productive workforce. Often, after implementing flexible work options such as these, output increases, because employees are happier and
Global Three cross-cultural differences to consider if company expands into the global market basing on a selected Asian country. Companies in developed economies are increasingly moving into the developing world searching for new customers and talents, a situation that has been brought about by their hard struggle in their own home markets. (Unit, 2012). Culture, as noted to influence consumer market and behavior, should therefore be greatly considered when choosing the international
Nike Inc. Operations Evaluation of Nike Incorporated Marketing Mix Price Marketing Mix Place Market Situation Factories Based on Region and Product Current Situation of Footwear Industry Marketing Mix Product Nike Current Situation Strengths Marketing Mix Promotion Weaknesses Opportunities Threats Critical Evaluations PEST Analysis Growth Opportunities Political Evaluation Economic Evaluation Social Evaluation Technological Evaluation Changes in Operations Workers at Factories Code of Conduct Grade Assessment Operations Evaluation of Nike Incorporated Understanding how globalization affects a company will be analyzed to explore how Nike Incorporated handles the multiple risks and capitalizes on the benefits of such
It is precisely because the company decentralized its controlling brands into less bulky packages that the CEO could streamline their production process and achieve greater results. However, the Hard Rock Cafe article showed exactly the opposite business strategy. Whereas traditionally all Hard Rock Cafe's and Hotels provided their own entertainment, the new strategy that Hard Rock is attempting to create will link many of these operations together through the
Business Society and Corporate Values There has indeed been a great deal of discussion regarding CEO compensation, which is rightly viewed as being completely out of line. The core problem and cause of inflated CEO salaries cannot be attributed to a single reason, but is rather the result of a range of inter-connected factors. What is definitive is the fact that these salaries have inflated over time; this is in part
Nike Women's Case Nike's Global Women's Fitness Business: Driving Strategic Integration Case Study Need for Organizational Change Business Case Kotter's 8 Step Model for Change Create Urgency Build the Change Team Create a Vision for the Change Communicate the Vision Remove Obstacles Create Short-Term Wins Build on the Change and Anchor the Changes in the Corporate Culture Other conditions for change. Need for Organizational Change It became evident to many executives at Nike that women had evolving needs that were not being met under
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