Since the beginning, Nike’s business model has been criticized because it’s based on the exploitation of countries in which workers were not treated fairly. In each and every country Nike was manufacturing, many irregularities have been found and exposed by the international press. Nike’s Korean suppliers, to satisfy the ever growing demand, moves its production to Indonesia, where wages were lower and regulation was bland. Here workers were not paid the minimum daily wage, 1$, which was hardly enough to survive in that
(Locke, R. 2002) Nike felt the positive impacts of their business strategy, expanding their footwear product range and market share dramatically through the 1980’s. Adding various other apparel to their product line beyond footwear to sports clothing and equipment, and of course growing financially from a modest company to a $10 Billion annual revenue global powerhouse. Nike also expanded their market beyond US borders to become a true global player. This exponential growth and massive success could not have been accomplished without the same business strategy that soon would leave the developed world in shock. The negative impacts began.
Evaluate Nike’s response to societal and consumer concerns about its contract manufacturing. It is a shock for the media as they did uncovered that Nike’s the industry leader, has a twisted problem within its own company, and the topic itself had spread rapidly to the worldwide in no time because Nike’s company did not take an immediate measurement to face the problem. Since the mid-1990s, critics about Nike labour rights had arisen rapidly in a massive amount, not only from the public, there are critics of from the mainstream media, and from human and labour rights violations bodies as well, such as child labor. In order to counter and response the criticism, Nike has to take a quick and suitable decision, in goal to rectify the problem, but as well as to redeem its reputation. Therefore Nike’s new priorities is making sure that their factories were not taking advantages of its workers anymore, and to ensure for a competitive wage and a safe work environment is provided for each worker.
With globally operating manufactures, Nike Company gain more challenges and it more complicated. Nike Company has failed to maintain their oversight on factories that is subcontracted to produce it’s good. Nike became the first in its specific sportswear industry to publish a comprehensive list of its contracting factories in addition to thorough reports on its factory environments, factory pay and persisting factory issues in order to maintain its still-nascent pledge to corporate social responsibility. However, despite these minor change to its business policy, Nike is still claim that the mistreatment in its factories still happen. Specifically, workers claimed that supervisors would throw shoes at them and equate them to dogs.
Micro environmental factors Customer Analysis Nike is the market leader of sports footwear and apparel industry. Nike ‘s high-performance athletic gear is mostly targeted at professional athletes in categories such as soccer, basketball, running and etc. Nowadays, teenagers and young adults who participate in fitness activities are also targeted largely in sales strategies. Competitors Analysis The popularity of various sport activities and changing design trends affect the demand for products. Nike compete internationally with athletic and leisure footwear companies, sports equipment companies such as adidas, Puma, Li Ning, Under Armour for the direct competitors.
At the beginning it ignored the situation, claiming that it was not under her responsibility how the subcontractors the company was working treated its employees. The situation created dissatisfaction from many consumers. In addition, many NGOs focused on these Nike issues by publishing and disseminating Nike's situation around the World Wide Web. Nike began to understand that it needed to understand the international standards of work and corporate responsibility in this process of globalization. It was about time for Nike to respond to this.
China have four distinct seasons. China is a developing country; their target is customer living in urban and suburban areas. Demographic The key target customer of Nike is focusing on the age in between 18-39 in both genders. Their target customers are young people in all kinds of education levels, religions, race and nationality. The occupation of their target customers could be very wide but mainly are sports player and athletics.
In its 45 years of existence, Nike has developed from a small operation to a household name, present on all continents. However, in the 1990s Nike came under scrutiny for various unethical practices. • Explain how Nike came to that situation through its expansion strategy. Nike is a renowned sports brand, recognise all around the world for its products and for its fantastic collaborations with star figures. Their marketing’s campaigns are also remarkable and their message gets further beyond places that we could imagine.
When launching in India, Nike focus was on basketball and tennis and positioned itself as premium niche brand. But soon they realize that Indian target audience was more towards cricket and there was heavy competitors in market therefore it changed its strategy and made its more affordable however was still a premium brand. To globally expand, Nike applied one company owned distributor and showroom franchising strategy worldwide which made the brand to maintain its availability. Franchising is a business expansion strategy in which franchisor provides license to franchisee to use its brand name and sell the products under terms and agreements. Today, Nike worldwide has more than 700 showrooms, 45 offices in different countries outside the United States and most of the factories located in Asia and other Middle East countries including China, Taiwan, India, Thailand, Vietnam, Pakistan, and Malaysia.