The Case Issue
The basic issue presented in this case boils down to Greed. Nike was a fast growing company who was able to capitalize on a very ingenious marketing campaign, everyone wanted to be like Michael Jordan and Tiger Woods. They appealed to the urban buyer, the die-hard athlete and the fashion conscious consumer. They controlled almost 50% of the market and had profits in the billions; they gave out endorsement contracts that could have paid their manufacturing workforce a living wage for the next 100 years.
After the manufacturing practices came to light in the early 90’s instead of Nike immediately getting serious about its implications they took a hands off approach. Instead they thumb their noses and the issue and continued making apparel and the workers were not paid a living wage.
The basic issue in the case is the same in all the other cases like this it boils down to greed and corporate responsibility.
Business Strategy & Manufacturing
Nike’s business strategy is a very simple one let the athleticism of the athlete do the talking. They were smart to get those who were at the top of the game to wear their shoes and clothes and it wasn’t that big of a leap for the consumer who wanted to be like that athlete to emulate what the athlete was wearing. They did a lot of marketing but, they spent their dollars wisely, every time there was a big sporting event somehow Nike was embedded into the marketing and/or branding of the event. Because the athletes are celebrities, other celebrities like rappers and singers started to wear Nike gear. This helped Nike reach an entirely different demographic and their clothes and shoes weren’t just seen as something you wear when playing a sport but, it crossed over into being fashionable. “To see name athletes wearing Nike shoes, “Knight insisted, “was more convincing than anything we could say about them.’ With the help of the “swoosh,” a distinctive and instantly recognizable logo, Nike became by the 1990s one of the world’s best known brands, as well as a global symbol of athleticism and urban cool. (Spar)
Nike’s biggest issue was producing products faster and cheaper without regard for the people making the products or how they were being treated. They assumed that because they did not own any of the manufacturing plants that they wouldn’t be held responsible for any violations. They believed that their “get out of jail free card” was the response “it’s not our facility, its and independent contractor and therefore you cannot hold us responsible.” Unfortunately for them they forgot about moral and corporate responsibility.
Manufacturing Conditions
Various countries around world have tremendously expanded their manufacturing capacity over the last 10yrs, and so has their ability and skill level in all facets of manufacturing. Manufacturing in its simplest form consists of using unskilled labor to produce items such as shirts, shorts, and jeans. As the economy develops and grows so does the type of manufacturing they produce i.e. footwear, outerwear and, performance sportswear. The next step towards growth involves the production of technical consumer products such as small electronics to televisions. The most developed economies can produce technical durables, which includes automobiles and computers. This progression represents the advancement of economies throughout the world today, and provides the reasoning behind sneaker companies manufacturing beginning in the United States and Germany, and passing through Japan, Korea, and Taiwan, to its present day central areas of China, Indonesia, and Vietnam. As these three countries progress over the next decade, and large amounts of new capital is pumped into their economies, their standard of living will rise along with their manufacturing expertise. Companies will be forced to relocate their manufacturing in countries such as Cambodia, Pakistan, and underdeveloped regions of Africa in search of lower