Nike The Promise And Peril Of Globalization Case Study
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The Promise and Peril of Globalization: The case of Nike.
Nike was started in 1964 as a sportswear company dealing with shoes, but later diversified to start the production of other sports wares such as clothes and balls and other sporting equipments. Nike has since become a household name and is present in all continents.
Growth.
Nike started by importing sporting shoes from cheaper producing countries, and selling them in the USA and thus providing the market with cheaper, quality products in comparison to the expensive home product of other companies. With this strategy, Nike was able to capture a good market share.
This growth made the company to start designing their products, and contracting manufacturers from countries with cheaper…show more content… The Strategy.
The expansion of Nike was done by offshoring although at one point, Nike had started a production plant in the US which is the resident of the Nike company. In this procedure the company designs products and and sends them to the contracted company abroad who make a prototype and one approved production begins.
When sourcing from abroad, there are advantages and disadvantages, one of the main advantage of this is cheap labour, since one is able to choose where labour costs are minimal to reduce the cost of production. The disadvantage of this is that one may not be able to control fully unethical practices of the companies such as child labour or minimum wage requirements, and other state laws on environment and…show more content… But with all this a challenge remains since in the poor countries, money comes first and the entire family unit is united in the process of money making, which could prove a difficult issue where people make products at home and sell to the producing companies for