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Nike Case Essay

859 words - 4 pages

I. Introduction
International business and multinational corporations have grown rapidly in the past few decades. Expanded internationalism enables people in the world to enjoy the convenience brought by high quality international products and services. Meanwhile, the voice of anti-internationalism has been stronger with the growth of internationalism. Although many organizations seek international market expansion actively, they have been aware the risks of doing global business. Lessons and experience have been learned from the past and multinational companies are more cautious to keep a good corporate citizenship image. This essay will introduce the international process of Nike, In., ...view middle of the document...

Each year, Nike’s products are sold to more than 20,000 retail accounts outside the United States, excluding sales by independent distributor and licensees. As the largest seller of athletic footwear and athletic apparel in the world, Nike’s growth has come to symbolize both the benefits and risks inherent in globalization.
III. International process
Generally speaking, Nike has been implementing the global strategy to internalize itself and keep looking for the best cost options in the world. In the beginning of the business, Nike depended on Japanese shoe manufactures to provide low costs products. As the cost advantage in Japan diminishing in 1970s (caused by ‘combination of a tighter labor market, the impact of the first Oil Crisis on Japan’s economy, and a shift in the dollar/yen exchange rate as a result of the “Nixon shock”’), Nike started to look for alternatives. To meet the increasing demand of domestic market, Nike opened up its shoe factories in Maine and New Hampshire, but also began to search for potential suppliers in Korea, Thailand, China and Taiwan. By the early 1980s, all the factories in US were closed and Nike sourced almost all of its production from Asia, mainly in Korea and Taiwan, seeking the lowest costs in the world. When the costs in South Korea and Taiwan increased, the company transferred its manufacturing centers to China, Thailand, Indonesia, Philippines, Vietnam, and anywhere enabled Nike to gain low manufacturing costs. Until 1998, the company manufactured, distributed and sold shoes and apparel in 35 countries. Nike, like other international corporations, took full advantage of those Asia countries’ need to get rid of poverty by seeking more employment and government revenue tax. Indeed, most international...

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