This website uses cookies to ensure you have the best experience. Learn more

Nike Case Study

1688 words - 7 pages

Nike Case Study
Shiffaun L. Alston
Jack Welch Management Institute
Professor R. Chua
JWMI 550
Sunday, December 7, 2014

Executive Summary

Nike’s business model was based in outsourcing its manufacturing, then using the money it saved on aggressive marketing campaigns. However, the process of outsourcing work internationally proved to be problematic for Nike in a variety of ways particularly in regards to low wages provided workers and poor working conditions and environment. This paper intends to evaluate Jeff Ballinger’s argument against Nike, as well as determine how convincing Nike’s response was to Ballinger’s allegations. Lastly, strategies are ...view middle of the document...

Furthermore, considering the value chain model by Porter and Kramer, Ballinger’s argument attacks both Nike’s Indonesian Human Resource Management System (SUPPORT ACTIVITIES--compensation) and Operations (PRIMARY ACTIVITIES--sporting apparel and equipment assembly). Yet, considering Ballinger’s perceived dislike for Nike, it is not unfair to assume that arguments made were not totally objective. Safety standards and worker age can be universally applied across the globe; however, “fair” wages cannot considering not all countries are developed fully. It’s important to note that a company really has to be careful when interacting with foreign societies.

Nike’s response to Ballinger’s allegations—convincing or not?

Overall, Nike’s response to Ballinger’s allegations was not convincing at all. It is not absolutely definitive whether or not consequences of having cheap and irresponsible labor practices abroad could’ve been forecasted; however, extensive research to ensure that policies and culture of international partners are in alignment with your own company is good practice.

Nike’s initial response could be summed up as “without an in-house manufacturing facility, the company simply could not be held responsible for the actions of independent contractors”. This response was a total PR blunder, if ever there was one. All other efforts in the year’s following were half-hearted attempts to address the situation including the internal Code of Conduct & Memorandum of Understanding, The Ernst & Young audit, Apparel Industry Partnership, internal Labor Practice Department, and Andrew Young audit.

Moreover, had Nike proactively tackled the issues immediately before it spiraled out of control the way it did, it is my assumption that a very convincing argument could have been made in regards to Ballinger’s allegations. Crisis is inevitable! Yet, Jack Welch notes that there are 5 assumptions that can be assumed about how crisis will unfold—(1) assume the problem is worse than it appears, (2) assume there are no secrets in the world and that everyone will eventually find out everything, (3) assume you and your organization’s handling of the crisis will be portrayed in the worst possible light, (4) assume there will be changes in processes and people. Almost no crisis ends without blood on the floor, and (5) assume your organization will survive, ultimately stronger for what happened. Had Nike kept these assumptions in the forefront of their mind, then there could have potentially been a more convincing argument presented early on versus years later. There was a terrible lack of understanding in regards to the situation, as well as foresight on the part of Phil Knight and Nike management at the onsite of this crisis. While in the thick of it, it’s hard to see a way out or resolve all that is going on in one single swoop. However, now that the smoke has cleared quite a few strategies and policies, if put in place and implemented...

Other Papers Like Nike Case Study

Nike Rebound Essay

4394 words - 18 pages waiting for a magic number to emerge from the algorithm - the basic concept behind demand-planning software - doesn't work well anywhere, and in this case didn't even support Nike's business model. Nike depends upon tightly controlling the athletic footwear supply chain and getting retailers to commit to orders far in advance. There's not much room for a crystal ball in that scenario. Indeed, Nike confirms that it stopped using i2's demand planner

Nike- Ethical Issues Essay

1448 words - 6 pages Ethical Case Analysis: Nike Introduction Nike was established in 1972 by Bill Bowerman and Phil Knight. These two men were visionaries. The goal for Nike was to carry on Bowerman’s legacy of innovative thinking by helping every athlete reach their goal or by creating lucrative business opportunities that would set the company apart from any competition. This included

Nike Cost Of Capital

1017 words - 5 pages Nike, Inc.: COST OF CAPITAL CASE ANALYSIS Importance of Cost of Capital The concept of cost of capital is used in finance decisions. Acceptance or rejection of an investment project depends on the cost that the company has to pay for financing it. Good financial management calls for selection of such projects, which are expected to earn returns, which are higher than the cost of capital. It is therefore, important for the

Nike Inc Developing An Effective Public Relations

1361 words - 6 pages rights than the distancing of Nike from the suppliers, Nike's Corporate Responsibility teams realized that paying the role of a corporate citizen not responsible for their supply chains was only going to make matters worse over time (DeTienne, Lewis, 359). Instead of incrementally creating programs that sought to bridge the gap in both critics and the publics' trust that Nike was indeed concerned about unethical and immoral practices in

Canadian Law

995 words - 4 pages to make in depth study of globalization impact on Nike brand. I am concentrating on points such as how this brand is competing in global market and overcoming the challenges by beating other brands in same industry. What strategies are they using to be a leader and successful? Nike inc. produces in 45 countries worldwide and headquarters in Oregon, USA. Nike’s mission is “to bring inspiration and innovation to every athlete in the world” with

Mt203

728 words - 3 pages Nike: Hiring Gets Off on the Right Foot Brandy Taylor Kaplan University MT203-05: Human Resource Management Professor Eric Freeman September 6, 2010 Nike: Hiring Gets Off on the Right Foot The case study in Managing Human Resources textbook states, Nike one of the largest shoes manufactures uses computer assisted interviewing. They have many different processes such as interactive voice response in which applicants respond to

Internal Supply Chain Analysis

1956 words - 8 pages forecasts and decisions that produce inadvertent accumulation of inventories, excessive lead times, delays in production and product being left unsold finally. In this report consisting of four parts, a number of internal supply chain issues will be examined. In the first part, three items of concern will be analysed and illustrated based on the case study of Nike Europe as following. a) Analysis of the supply chain structures by showing

Celebrity Endorsements

916 words - 4 pages for example David Beckham advertises for Adidas and Roger Federer for Nike. The two are sporting brands with different celebrity’s, which differentiate them. A further positive could be that the value that is associated with the celebrity is carried through to the brand/ product. Through this the brand can become established and through having the celebrity endorsement may see an increase in sales. (Sonwalkar, Kapse and Pathak). A study was done

Student

4706 words - 19 pages , E ectiveBrands—in partnership with the Association of National Advertisers, the World Federation of Advertisers, Spencer Stuart, Forbes, MetrixLab, and Adobe—initiated Marketing2020, which to our knowledge is the most comprehensive marketing leadership study ever undertaken. Coauthor Keith Weed, the CMO of Unilever, is the chairman of the initiative’s advisory board. To date the study has included in-depth qualitative interviews with more than

Consumer Behaviour

5204 words - 21 pages Masters Program in Business Administration (MBA) Note :- Solve any 4 Case Study All Case Carry equal Marks. CASE I Sunder Singh Sunder Singh had studied only up to high school. He was 32-years of age, lived alone in a rented room, and worked eight-hour shift at one petrol pump, then went to the other one for another eight-hour shift. He had a girl friend and was planning to marry. One day when he returned from work, he got

Management

2865 words - 12 pages study and if you think this is a reasonable assessment of Singapore culture. Try to compare to other cultures represented in your group. The findings will be discussed in class. Session 10 Activity 1 – refer to appendix 7A 1) Read the case, and in a group of four discuss the question and develop answers to be shared in class. 2) Following this, discuss the forms of communication you most commonly use and how any of these translate into the

Related Essays

Nike Case Study

1027 words - 5 pages NIKE INC. Cost of capital estimation | GROUP FINN- 400 | NIKE INC. Cost of capital estimation | GROUP FINN- 400 | Background: The case is built around the stock buy decision of Nike Incorporation by the North-Point Large Cap fund. The mutual fund manager, Kimi Ford is evaluating Nike’s financial performance. Nike’s revenues had stabilized at $9 Billion since 1997 and Net Income had fallen from $800

Nike Case Essay

515 words - 3 pages . Case 3: Nike MaxSight Contact lenses: Seeing a Need 1. To identify different markets and products for MaxSight, Nike has used an analysis of consumer needs bases on the present products in the market. In fact, there were some kinds of contact lens but none of them reach consumer needs, which is a contact lens can protect the eyes as a pair of sunglasses. Nike has given MaxSight to take full advantage of visual acuity and is suitable for

Nike Labor Essay

405 words - 2 pages Many billion dollar shoe companies prefer not to do their own manufacturing. They subcontract production with foreign businesses in Asia where workers receive rock bottom wages. The shoe companies that are participating in this cheap act include Nike, Reebok, Adidas, Puma, Hi-Tec, and many others. All of these companies stick to their own advertising, product development, and distribution while contracting Third World factories to produce their

Nike Swot Essay

283 words - 2 pages Patrick Hartrich ICM 409: Methods of Integrated Marketing Communications Due: 2/2/15 SWOT Analysis for Nike stores Strengths 1) Wide selection of products: each category has a variety of choices to choose from 2) Targets a number of age groups and genders, along with your fitness enthusiast and “average joe” 3) Perception of stylish workout attire, compared that of Under Armour and Adidas 4) Have store locations/headquarters all around