Environmental Factors -Nike Inc

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Environmental Factors: Nike Inc. Ian Kent MKT/421 June 30, 2013 Norb Gray Environmental Factors: Nike Inc. Whether a company desires to engage in marketing its goods or services internationally or domestically, it must consider several environmental factors. Of all the environmental factors affecting how a company markets its products, seven stand out as the more influential in regard to the shape of international and domestic marketing decisions: Global economic interdependence; trade practices and agreements; politics; culture; technological advancement; and social responsibility and ethics. This paper will address these factors as they relate to Nike, Inc., the leader of the sports apparel industry. Global Interdependence Nike does not own any manufacturing facility. However, because of American firms historical success of offshore outsourcing associated with low cost of production, which contributes to its ability to set prices at a profitable level, Nike decides to depend on factories such as Yue Yuen in an industrial estate in Dongguan, China. Asian factories are geared towards Nike standards and reflect Nike needs. Moreover, the leather used for its shoes comes from South Korea. Production happens in mainland China in a factory owned by a Taiwanese. Some components come from Japan and Indonesia, and the design and marketing come, of course, comes from America (Pervez, 2009). Global interdependence has not only shaped the way Nike produces its goods but also how they promote them. During international events like the Olympics, Nike’s high cost advertisement is seen throughout. Nike is also a ubiquitous sponsor of huge international events such as soccer's World Cup (Pervez, 2009). Trade Practices and Agreements Marketing for Nike also comes in the form of trade practices and agreements that boost a positive reputation. This

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