Commodity Chain Analysis of Nike Shoes Essay

NIKE Inc., known for its athletic shoes, apparel, and it wide variety of sporting goods is located in the state of Oregon. NIKE Inc. previously known as Blue Ribbon Sports was originated in 1964 with the idea of importing shoes from Japan and sells them locally. Once successful, the founders, Bill Bowerman and Phil Knight, decided to market their own brand of athletic shoes. As a result, NIKE Inc. was established. From there, NIKE Inc. has a long history of success in producing quality, durable athletic merchandise that focuses on the athlete. In

Nike is the leading and yet renowned supplier of athletic apparel and shoes. The company controls close to 33% of the global athletic shoe market (Dogiamis & Vijayashanker,2009).Nike was founded by Bill Power and Phil Knight in 1962 as a Blue Ribbon Support and then was later on renamed to Nike in the year 1968 (Patrow,2003).The company supplies very high quality product in close to 100 countries with major markets being located in the U.S,U,K, Asia Pacific as well as in the Americas. The company has managed to attain its lead and legendary position via the application of innovative and yet attractive product design which is backed by quality production as well as well crafted marketing strategies.

The key economic factor that we have over here that Nike company dose not involve in production in any kind of form , instead; it will design the logo or the format and it’s contracts with several hundred factories around the world to manufacture ( Just Do It ).

However, in the non-developed countries sweatshop workers cannot even afford their needs for themselves and their family. People who work in sweatshops have their own obvious reason to work in the factories, these reasons are regularly to support their families with food, clothes and shelter. Workers have no-choice except working in the sweatshops frequently because there are low opportunities for any other employment and a poor education level meaning not going to the school because lack of money in other words having low living skills. Sweatshop factories are located in the countries which have a great deal of unemployment, meaning no-competition regard to wages where, the sweatshop worker only earns $1.26 per day. Sweatshop factories take the advantage of workers who have a poor educational level by violating the Human Rights, such as Article 23 whereas, the workers are not paid equal amount of salaries and also Article 24 while, the sweatshop workers work 14 hours a day or 16 hours for overtime. Workers are often locked in the factories, forced to work through the night (WarOnWant, 2016). This has impacted the conditions of living for the sweatshop

The forces of Nike’s customer-supplier relationship is based on joint efforts of improved quality, mutually beneficial partnerships, reduced costs, and increased market share for both parties. According to Nike building customer-supplier relationship is one of the most important goals because it is the analysis of the value chain which is defined as the collection of all activities involved in designing, marketing, manufacturing, delivering and supporting Nike’s products. Having strong relationship with both parties helps Nike to predict and notice any problem at might rise in the supply chain; as a result Nike will be able to develop better solutions to avoid it (Wankel, 2009). The first tier supplier of Nike is located mainly in Taiwan and South Korea, which work closely with R&D personnel in Oreon making the most expensive footwear. Strategies have shown that Nike implements include the vertical integration strategy. In general, the vertical integration strategy allows a firm to gain control over distributors, suppliers and competitors (Nike report, 2015). Nike has implemented forward integration by having its own retail locations throughout the United States, foreign countries & online stores. Every partner has a hugely significant

These workers are “expected to endure terrible working conditions” (G, Denis 682). Workers are cramped into rooms without any sanitary insurance and are required to work very long hours. They are usually located “behind buildings surrounded with barbed wire” (Sweatshops in Bangladesh). These shops are filled with rats and expose workers to many dangerous bacteria that lead to illness and sometimes even death. When working in a sweatshop there is no guarantee to clean air to breath. There aren’t any heaters during the cold and any cool air during the summer. Most equipment used in sweatshops is old and unstable, which causes many workers to get severely injured. Workers are also exposed to chemicals that might be produced while doing the job. With slogans such as “if you don’t work hard today, look hard for work tomorrow” (Frank T) written all over the walls, workers are inspired to work hard. When workers do get sick, they don't get any benefits from the company. Unlike what most of us are used to, after one absence, they no longer get paid and are fired immediately. That's a setback for the worker, but not for business. Factory owners quickly find another uneducated person in need, who doesn't know their rights to take the job, and the cycle

Nike, Inc., is one of the leading designer’s, marketer and distributor of athletic footwear, apparel, equipment and accessories for a variety of sports and fitness activities. The company’s headquarters is near Beaverton, Oregon founded by Bill Bowerman and Phil Knight, who set out to reinvent athletic footwear. They wanted to improve upon one pair of running shoes called Onitsuka Tiger. Nike were more than distributors; they joined forces to design ideas and create better footwear (Vogel & Garcia, 2012). The beginning of Nike’s innovation stirred up a creative vision for a company with more than globalization and technology.

Currently, Nike stand as a leading figure in producing high quality sports and fitness equipment and apparels. Bearing just a simple start of selling Japanese imported shoes from a station wagon has transformed

(Global Exchange 2001) With more and more sweatshops developing it is allowing economies like China’s to boom. In a recent article by the New York Times “wages have risen from about $50 a month to $250 a month or more today.” (Kristof, Wudunn, 2000) Working in sweatshops may seem brutal and unfair to many of us who live in western society, but across the globe it can be very appealing. (Kristof, Wudunn, 2000)

Nike is a worldwide global corporation that has its shoes manufactured on a contract basis in places like Asia, China, and Vietnam. Although it does not actually own any of the manufacturing locations, it has long been accused of having its products manufactured in facilities that exploit workers. Although Nike admits some wrongdoing in the manufacturing facilities of its contractors, it claims to have started a commitment to improve working conditions in those facilities.

Nike has seldom manufactured products own premises, except their air bladders. The shoes are manufactured through outsourcing and alliances with other companies. A successful company like Nike formed its organization on the customer values that have the MOST impact on the consumers mind – Design/R&D, Marketing and Distribution. Even though manufacturing is a vital function to perform, Nike realized that there were other ways to go about this function and thereby save both cost and maintain its focus on the critical customer value areas.

After sluggish focus and growth in the 1980ies, Nike experienced strong growth in the 1990ies and cemented the position as global recognizable brand. The increased international focus created strains on the supply chain, which was consider inadequate to cater efficiently to the organization and the rapid changes consumer demands . As a consequence of the afore mentioned supply chain problem Nike faced inefficient inventory management, problems in flow of goods and poor demand

The Nike production system can be stratified into three classes; developed partners, volume producers and developing sources (Donaghu & Barff, 1990). Although Nike has developed different levels of supplier relationships with each class the production network is commonly classified as a ‘virtual enterprise’ where independent firms work together based on shared values and a common way of doing business to exploit a business opportunity through joint manufacturing (Pfohl & Buse, 2000).

Nike is an American multinational organization which has worldwide presence and their principal business is design, development and worldwide marketing and selling of high quality of footwear, apparel, equipment, accessories and services. It is the largest provider of athletic shoes and sports equipments worldwide. It is headquartered in Washington County, Oregon in the USA. It was founded way back in 1964 as Blue Ribbon Sports by Phil Knight and Bill

NIKE, Inc. is a multinational corporation, found in 1965 as Blue Ribbon Sports by Bill Bowerman and Phil Knight. It is headquartered at Beaverton, Oregon, US. Nike works to design, develop, manufacture, market and sell apparel, footwear, equipment, accessories and services. BRS was renamed Nike in 1971.