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Nike Case Analysis

In: Business and Management

Submitted By kmoraes
Words 330
Pages 2
Karina Bezerra
BusMgt 799
Prof. Brian Saxton
May 15, 2012
Nike Case Analysis

Nike is a sneaker company based in Beaverton, Oregon. It has a great aptitude to influence customers with its fashion trends and to astonishingly increase its profits. It was founded by the athlete Philip Knight (Nike’s CEO) and his coach Bill Bowerman in January 1964 from the University of Oregon. By 1970 Nike had pushed its revenue drastically from $60,000 to staggering $49 million. Few years after that, the company went Public what accounted for an unstoppable growth. By 1998 Nike had over 40% of the U.S. athletic footwear market. Knight’s main strategy for differentiate themselves over their competitors was based on a simple formula: to outsource its production over cheaper contractors and the capital saved is invested back into the business for marketing purposes.
Knight also believes that the firm should invest in celebrity endorsements, so to make the company identity strong as well as to serve as the company image. In order to follow its strategy of outsourcing for cheap producing, Nike shifted its manufacturing to firms in South Korea and Taiwan. However, as these two countries developed it became pricey to leave operations in these locations. Rapidly manufacturers moved their facility to cheaper countries such as, Indonesia and China. Though Nike was experiencing the excitement moment of its existence with incredible growth and brand image, it found itself trapped in a wave of labor conflict that brushed Indonesia in the 90’s. Nike’s manufacturing has been the place for several labor incidents and even a fatal one, when a 23 year-old Vietnamese women died being hit by metal parts while making sneakers. This and other episodes made Nike to hit its mainstream. It was pointed out as committing abusive labor practices by encouraging contractors to mistreat their workers, employing children, not offering a safe work environment and providing low wages to workers. The dilemma faced in this case is: Should Nike

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