Analyse Nike balance cost and safety in Bangladesh from the perspective of management control systems and risk management. Introduction Poor working conditions have been present for centuries, especially in third world countries. Often times little or nothing is done unless a tragedy occurs to persuade the public to rally for worker rights. It wasn't that long ago that Nike was being shamed in public for its labor practices to the point where it badly tarnished the company's image and hurt sales. The recent factory collapse in Bangladesh was a reminder that even though Nike managed to turn around its image, large parts of the industry still haven't changed much at all. Nike was an early target for the very reason it's been so successful. …show more content…
Porter’s 5 forces model analysis to understand Nike’s industry Fig 2. Porter’s five forces model 1. Threat of substitute - Low Substitutes in the footwear category can include any other types of shoes that consumers can choose to serve similar purposes. Substitutes here therefore include the likes of sandals, which can act as substitutes, even though they may not fulfill exact same purpose. It is difficult to think of other substitutes that can fulfill the same purpose as athletic shoes from the footwear industry since this an industry that has something very specific to offer to a targeted market. 2. Threat of new entrants - High The threat of entry is highest in the apparel market due to the relatively lower costs of manufacturing apparel compared to the footwear market where the biggest threat posed is basically from current rivals already established in the market e.g Adidas, Reebok and Puma. 3. Intense rivalry among existing players - …show more content…
• 1991: Problems start in 1991 when activist Jeff Ballinger publishes a report documenting low wages and poor working conditions in Indonesia. • Nike first formally responds to complaints with a factory code of conduct. • 1992: Ballinger publishes 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. • 1992-1993: Protests at the Barcelona Olympics in 1992, CBS' 1993 interview of Nike factory workers, and Ballinger's NGO "Press For Change" provokes a wave of mainstream media attention. • 1996: Kathy Lee Gifford's clothing line is shown to be made by children in poor labour conditions. Her teary apology and activism makes it a national issue. • 1996: Nike establishes a department tasked with working to improve the lives of factory laborers. • 1997: Efforts at promotion become occasions for public outrage. The company expands its "Niketown" retail stores, only to see increasing protests. Sports media begin challenging spokespeople like Michael
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Nike is Bad Imagine getting paid fourteen cents an hour to make a pair of running shoes that sell on average for one-hundred and twenty dollars. This is the average hourly wage for a sweatshop worker in Indonesia or China that make Nike’s running shoes and any of their other products. Thinking about this and how popular Nike products truly are, should we as consumers continue buying Nike products even though they participate in such “dirty” work. This issue about the sweatshops had first risen in 1991 when activist Jeff Ballinger published a post about low labor wages and poor working conditions in Indonesia.
3.2 Industry conditions (Porter 's Five Forces Analysis) Five forces which would impact an organization 's behavior in the market. Understanding the nature of these forces provides organizations the required insights to enable them to formulate the appropriate strategies to be successful in their market (Thurlby, 1998). 3.2.1 Threat of new entrants (high entry barriers) High capital investment for competitor entry into telecommunication industry. Companies in this industry maintain development, spend fairly large amount of capital on network equipment and incurred high fixed costs. Besides, technologies are also considered as barriers for new companies to enter the market.
In the documentary, the workers for Nike lived in poor living conditions and they could not afford a lot. The money that they earned couldn’t not even last for day. So, it was very difficult to live off of that salary. Jim Keady and his friend played a huge role in this Swoosh documentary.
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.
US footwear industry has a steady growth but manufacturing employment experienced a 40% decrease over the decade. Meantime, office and admin support jobs only declined by 25%, and other positions almost remain the same. The increased wages of labor at developed countries and high competition from low-cost countries like China and Vietnam are the main reason for the dramatic manufacturing employment decline. Nike supports the removal of tariffs on footwear because they think that US footwear industry will benefit, create high-value jobs, and increase consumer surplus by lowering costs and prices. Today, none of Nike’s 38,000 workers are manufacturing workers.
The ambiguity established through the M-Audit and CR are amongst the key problems encountered with Nike’s voluntary auditing system, which make it inefficient at measuring positive changes in working conditions in the long-run. For sustained improvements to be implemented in Nike’s global supply chain factories, an institutionalized downstream pressure must be implemented. NGOs’ creation of guidelines is important to guarantee uniformed labour standards across countries and states. However, without combined pressure from the State, the guidelines remain as advices. Henceforth, NGOs and States must collaborate in exerting increased pressure to Nike.
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.
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
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 .
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
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.
2.0 Competitor Analysis The industry that Under Armour is involved with is extremely competitive, with competing against big names such as Nike or Adidas. Although it’s hard at the beginning, but customers want to have the highest quality apparel therefore they turn to Under Armour. Under Armour stays in the competition by having high quality products, and also by signing endorsements deals with major athletes (Owusu, 2017). By having major athletes represent Under Armour, means the company will be bringing in "big money" because they will bring up the brand’s popularity. The major competitors in this industry are of course inclusive of big names such as Adidas, Nike, Dick’s Sporting Goods and Puma.
It will be easily giving the consumer make the decision in short time when buy the Nike’s product without compare with other Nike retail. Weakness 1. High Prices Nike is a strong brand at the global market and it normally sells the product in the market with high price to get higher margins and profit value. However, many competitors cost of the footwear is lower than Nike in the market, particularly in emerging markets, this can give consumers get many choice about the footwear.
Nike has only disclosed that information once, in a similar report released in 2001. At the time, some critics claim to challenge Nike for paying more than the minimum wage in each country it did business. It's been said that Nike has single-handedly lowered the human rights standards for the sole purpose of maximizing profits and Nike products have become synonymous with slave wages, forced overtime, and arbitrary abuse. One columnist said, "Nike represents not only