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Nike's Forced Labor Problem - Coggle Diagram

- - - - Because of the advantageous tax arrangements in the USA, Nike is more tax efficient and is able to keep a bigger share of its income to reinvest in a variety of business activities.
    - - Nike can carefully allocate resources to innovation, marketing, and growing its product lines, including money that would otherwise go to taxes.
    - - Nike's ability to operate under advantageous tax laws strengthens its competitive edge in the worldwide market, allowing it to provide competitive prices and make investments in product quality.
    - - Nike can support long-term growth goals, such as increasing its sustainability initiatives and entering new markets, by optimising its tax structure without being unduly burdened by tax responsibilities.
  - - - The tense ties between Canada and China might make it more difficult for Nike to import completed goods or raw materials, which could have an impact on its supply chain and raise manufacturing costs.
    - - Nike may incur greater manufacturing expenses as a result of heightened trade barriers, tariffs, or delays. This might have an effect on the company's profitability and pricing policies.
    - - To lessen its reliance on Chinese suppliers and to lower the risks associated with tense bilateral ties, Nike may think about expanding its sourcing regions.
  - - - Nike is encouraged by lower financing rates to invest strategically in areas like innovation, sustainability, and market expansion.
    - - Nike's ambitions to expand internationally, which include building new shops, entering new countries, and investing in e-commerce infrastructure, can be aided by cheaper borrowing costs brought on by falling interest rates.
    - - Favourable government interest rates contribute to Nike's financial stability by allowing the firm to invest in long-term growth opportunities and reduce short-term economic risks.
    - - As a result of the lower interest rates in the USA, Nike has access to inexpensive money for a range of commercial operations, including growth, R&D, and marketing.
  - - - Increased tariffs might disrupt Nike's worldwide supply chain, which could have an impact on its ability to compete and maintain market share owing to higher production costs.
    - - Increased taxes on clothing and footwear might result from trade disputes between the US and China, which could have an impact on Nike's pricing strategy.
    - - Nike is shifting production from China to countries with lower tariffs and stable trade relations, such as Vietnam and Indonesia, to mitigate trade tension risks.
  - - - China is an important part of Nike's worldwide supply chain since China hosts a sizable number of its manufacturing operations.
    - - For Nike items to continue to be produced without interruption, political stability in China is essential.
    - - For Nike to achieve manufacturing deadlines and guarantee prompt product delivery to markets worldwide, stability in China is crucial.
    - - Nike's manufacturing regions may face production delays and supply chain disruptions due to potential political instability, protests, or labor strikes.
    - - Instability in certain production locations could negatively impact Nike's ability to meet customer demand and manage costs, potentially affecting its global operations.
- - - - Nike keeps close eye on developments in U.S.-China trade agreements since they might affect how much a product costs. Tariffs on Chinese goods in 2019 increased import prices, which can have an impact on pricing tactics.
    - - Nike faces market access uncertainty due to fluctuating U.S.-China relations, which could potentially limit its presence or growth prospects in these markets.
    - - By diversifying its source areas, minimising its reliance on China, and maintaining manufacturing and distribution flexibility, Nike intends to optimise its global supply chain in order to combat trade concerns between the United States and China.
  - - - Territorial conflicts in the South China Sea can have an unforeseen influence on Nike's worldwide supply chain, leading to manufacturing bottlenecks and higher operating expenses. These occurrences include port closures and shipping delays.
    - - Due to trade tensions and geopolitical concerns, Nike's supply chain is unclear, which has an impact on production plans and may result in inventory problems or delivery dates that are missed.
    - - Geopolitical tensions may increase Nike's expenses by requiring the company to use other shipping lanes, faster transportation, and buffer inventories, which might have an impact on profit margins and financial performance.
  - - - Nike is under fire from human rights groups and customers worldwide over claims that it engaged in forced labour and violated the rights of Uyghur and other minorities in Xinjiang, China.
    - - Geopolitical tensions and concerns over human rights increase consumer awareness, which results in boycotts of companies associated with nations that violate human rights.
    - - Nike bears reputational risks from human rights disputes, necessitating proactive responses, audits, and supply chain transparency to keep stakeholders' trust.