Nike Expansion Strategy

Although Nike expanded its operations and popularity in more than 120 countries of the world and its strategy outpaced all competitors, giving the company a huge market share, Nike Inc. ignored the inhumane attitude of its suppliers towards workers and did not do more to eradicate child and slave labor in these factories, therefore attracting criticisms that negatively impacted its brand.

• Explain how Nike came to that situation through its expansion strategy.

The case of Nike Inc. has been a unique and spectacular situation of tremendous growth and expansion. It has also become a symbol of great difficulties confronted by corporation striving to balance company performance and good corporate citizenship in today’s global world (Locke, 2002).

However, Nike Inc. decided to take advantage of the Japanese high-quality low-priced production strategy by outsourcing all its shoe production to Japanese producers (Locke. 2002; O 'Reilly, 2014). Nike Inc. strategy was to outsource its shoe production to the Japanese producers because the cost of production was relatively low in Japan and then, import the products back to the U.S where the products would be sold at a relatively fair price than its competitors’ products. In regard of selling at a more affordable price, where its competitors are selling at a higher price, Nike Inc. would have broken into the wider market and gain its market share. This strategy was immensely effective as Nike sold millions of products and profiting from the outsourcing. According to Locke (2002) report, between 1980 and 1990, Nike Inc. has successfully displaced it archrivals (Adidas and Reebok) and become the most important shoe company in the world. However, when the Japanese production price began to increase during the 1970s, Nike Inc. strategically relocated to alternative

If Nike Inc. has responded with the above suggestions, the consequences would have been different. First, organizations that boycotted Nike’s products would not have gone that far. Secondly, they would have gained the confidence of the market, locally and internationally with the strong brand the company has built for itself over a long period of time. Third and finally, the negative publicity Nike Inc. received from the media and the consequent tarnished reputation would not have occurred.

In conclusion, although Nike Inc. is famous because of its sportswear, the company ignored the inhumane attitude of its suppliers towards workers and did not do more to eradicate child and slave labor in these factories for two main reasons. First, the company did not implement responsive strategies to address various criticisms leveled against this neglect because the factories were not directly controlled by Nike’s management. But most importantly, the company refuses to take responsibility for the attitude of its suppliers because Nike Inc. wanted the factories to operate independently and was therefore harshly criticized for its lack of sensitivity and unethical conduct while amassing profits at the detriment of human