However, the income of the business is still heavily dependent upon its share of the footwear market. This may leave it vulnerable if for any reason its market share erodes. The retail sector is very price sensitive. Nike does have its own retailer in
Though there could be arguments that Nike’s actions improved the lives of its poorly treated workers because no matter the conditions, it provided jobs that otherwise would not have existed, this is hardly the case. However, since this scandal in an attempt to improve its image, Nike has worked hard to improve, not only redeeming itself but becoming an industry leader in ethics. In the mid 1990’s Nike started facing criticism after several articles were released showing the poor labor conditions of its workers in sweatshops in places like China, Japan, and other Asian countries. As early as 1993 reports started being released about the poor working conditions. One such report was a CBS exposé by Roberta Baskin describing the working conditions of the Indonesian women working in the factories, explaining that they were making only $1.30 a day.
It must create efficiencies within the organization from the top down and emerge in its industry as a fierce competitor. Describe the Situation Although Best Snacks has been in business for a long time, its lack of changing with the times is hurting sales and demand for its products. With more organizations embracing a healthier alternative to snack food, Best Snacks has not moved along with the trend. By avoiding this, Best Snacks’ sales figured have declined over five years (University of Phoenix, 2010). Since Best Snacks has lagged behind on adapting these principles, it has led it miss opportunities in marketing, research and consumer
Furthermore, Nike adds fashion elements in the sportswear and that make Nike become the most popular brands among youths. The “Swoosh” logo is so cute and it was used from 1971 when Carolyn Davidson designed it until now (Nikebiz, nd, timeline). From 1964, Nike was still called “Blue Ribbon Sports”, the co-founder Bill Bowerman and Philip Knight didn’t think this company could become the biggest sports supplier in the world. In 1978, the company changed the name as the “goddess of victory”—Nike (Nikebiz, nd, timeline). Since that year, people will remember this brand.
Nike continuously diagnoses the current cultural problems within its organization and strives to find plausible solutions to these problems. Nike is an American multinational corporation that designs, develops, and manufactures footwear, apparel, equipment, accessories and services worldwide. The company headquarters are in Beaverton, Oregon and is one of the only two Fortune 500 companies headquartered in Oregon. Nike is one of the world’s largest supplies of athletic shoes and apparel. It is also a major manufacturer of sports equipment with revenue in excess of 24.1 billion dollars in the 2012 fiscal year.
Nike has outsourced a majority of its company’s footwear production in 2011 to Vietnam, China, and Indonesia. The reason Nike has outsourced many of its jobs, is to minimize production cost (NIKE). The third world factories are in licensing agreement with Nike, which means Nike does not own any of its factories even though its product is being produced there. Nike feels it is not their job to fix a problem because they do not own the factories. In 2006 The Fair Labor Assn.
They are barely paid above minimum wage, and the company has cut their salaries twice and increased their workload. Companies do this because it is a way to save money and increase profits but the main problem that I see is that costumer (us) don’t see or don’t know what really goes behind the scenes when making a product, they just buy the final product without thinking who make the product they buy and the conditions they work in. Coming back to the case, the good think in this case is that Nike has accepted the problem and has considerably improved the working environments. As we can see, this issue of sweatshops happens everywhere, even in the best countries. This is a situation that
The company needs to invest in R & D to come up with innovative models to stay at consumer’s top choice. Generic Strategy is differentiation Swot Threats DaBest is exposed to the international nature of trade so it sells its product in different currencies which destabilizes the costs and margins for profits over long periods of time. This type of exposure may cause DaBest to be manufacturing and/or selling at a loss, although that is not the case for a giant as itself. Price Sensitivity Consumers are constantly shopping
The power of the brand is also evident in the fact that Nike has well known athletes and other celebrities which will put further backing to the brand if it is deemed to be “cool” to wear. Athletes like LeBron James, Roger Federer and others such as Andrew Luck where each of these people represent a different sport from basketball to tennis to American football respectively. They promote the company by wearing Nike branded clothes from head to toe to more recently wrist in the form of the Nike FuelBand. Nike FuelBand The company is a clothing brand and there is little to innovate in. However, Nike has managed to find ways to innovate their products and to provide a range for various different price points to cater for different demographics.
After investigating of labor conditions of Indonesian, Ballinger stated that Nike paid “below-subsistence wages that did not enable workers to meet their daily requirements for food and other necessities”. The report, from Ballinger through the AFFLI, caused a media frenzy. Jeff Ballinger was very much inclined to investigate the labor practices and wage issue by overseas companies especially in Indonesia. Jeff revealed that Nike encouraged its contractors to hit some unrealistic production quotas by mistreating the labors and also revealed that there were heavy traces of corruption which was degrading the law practices. According to him, Indonesian workers were paid so low that it hardly fulfilled their basic necessities.