Nike International Market Expansion Essay

1450 WordsDec 10, 20126 Pages
Trevor John E. Phadden Dr. Galligan BADM 340 October 8th, 2012 Nike: Success and Failure in International Market Expansion Introduction Nike, Inc., over the past thirty years, has transformed itself into the premier American supplier of athletic shoes, apparel, and sports equipment. Additionally, staples of the Nike brand, such as the slogan “Just Do It,” and the Nike swoosh, have become well-known worldwide. Throughout the sporting community, the Nike brand has become synonymous with high-quality performance apparel. Strategically, Nike has realized great success in its traditional markets located in North America and Europe. International market expansion is now the primary goal of the corporation. This expansion strategy is now particularly important because companies which are globalized experience greater revenue increases due to the expanded number of marketing avenues open to their products. Historically, American manufacturing companies, which distribute nationwide, have been unable to centralize production in one specific region. Production location is a vital aspect of Nike’s operations. This forced the corporation to decide whether to locate production close to their target markets, where significant labor costs are necessary during production; or in a region where production and labor costs are significantly cheaper due to unregulated labor pools in many overseas countries. Choosing to place production where there is low cost labor provides an opportunity for increased revenue, as well as profit maximization, but raises ethical concerns for the company. Despite the great financial success of Nike’s international expansionary process there were also many failures. These failures stemmed from the use of low-cost labor, a lack of competition by rival corporations, and several unsuccessful advertising techniques. Consequently, the

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