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TNC case study by Faraz Jamil 9.1- Nike (History and general information…
TNC case study by Faraz Jamil 9.1- Nike
Facilities
Nike's main Head Quarters and Research and Development are based in Oregon, USA.
They mainly manufacture in Asia as:
They, more specifically, manufacture heavily in China, why?
Land prices are cheap so they can build large factories for lower prices.
China has very lenient building regulations and they can make building poorly; they will not be sanctioned for this and this saves assets.
As labour costs are very low so they can, again, exploit workers in order to maximise output and resultant income.
Unions do not exist in China and they can get away with exploiting workers there very easily.
China has poor health and safety therefore Nike must spend less money on the up-keep of these conditions and protecting workers.
The market in China is strong as they have an emerging middle class who can afford Nike.
Nike made, 2.599 billion dollars from footwear alone in China in 2016.
China has 1.3 millionaires( the sixth most on Earth and they heavily buy Nike products, generating revenue.
They get tax rebates as they are a TNC and this saves them money and thus increases their income.
They can exploit cheap labour in order to maximise profits.
Nike products
They manufacture:
Shoes.World's largest athletic shoe seller.
A Nike shoe in Indonesia that costs 100 dollars, how the money is distributed;
13.5% of it is profit- it costs 85 dollars to make and they earn a 15 dollar profit.
Competition
Adidas is their main competition, sponsoring the other 4 of the most profitable athletes.
They competed in 2014 for who gets to manufacture the official Rio ball- Adidas won.
Puma is in competition with them for the sponsorship of footballers.
Under Armour is rising in influence and may rival them one day,
Merely 0.4% of the profit goes towards paying wages- exploitation of cheap labour.
The workers in Indonesia for Nike live on only 1.25 dollars daily, on average, and in slum conditions. They often work in sweat shops.
Rubber is dumped, by Nike, from unwanted shoes etc. around their homes. The rubber catches fire, burns and releases carcinogens and toxins into the atmosphere, the local people suffer with cancer etc.
Over 120,000,000 pairs of athletic footwear are sold by Nike each year.
Sports equipment.
Nike is the official football supplier to the Premier League which is amongst the largest in the world.
They have teamed up with the high-tech industry Apple to make equipment for the Apple watch such as wrist bands.
15 women are abused per hour in their factories, which produce sport equipment.
Apparel
Nike made 34.4 billion dollars in the US alone from selling apparel.
Nike is amongst the 20 largest apparel companies in the world.
They manufacture the football kits for major football teams such as Barcelona and Arsenal
Sponshorships
Nike sponsors Roger Federer who is the world's highest earning athlete from endorsements.
Nike sponsors Christiano Ronaldo who is among the best footballer in the world.
In 2015, Nike spent 6.2 billion dollars on sports deals such as commitments to teams. This was an increase of 32% from the previous year.
They sponsor 6 out of 10 of the most profitable athletes on Earth.
Many football shirts sold are recycled in numerous nations globally.
History and general information
Their slogan ' just do it' were the last words of Gary Gilmore- a murderer= who wanted the executioners to shoot him quickly. Perhaps this is why Nike is infamous for child labour and abuse.
There swoosh is trademarked and an internationally recognised symbol- 97% of Americans can recognise it.
Nike was founded by Phil Knight and Bill Bowerman on the 25th of January, 1964.
They have a revenue of 30.6 billion dollars.
Their CEO is Mark Peter.
Nike is the 12th most admired company in the world according to Fortune.
Their Market Cap is 91.77 billion dollars.
Subsidiaries
Nike owns multiple key subsidiaries:
Nike golf
Hurley International
Nike Flight
Converse
They have surprisingly not monopolised the sportswear and equipment market as the majority of the subsidiaries they own were set up by Nike and are more like sections of production the overall company.
