Development and Challenges of Nike Brand

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Phil Knight and Bill Bowerman founded Blue Ribbon Sports in 1964. The Nike brand was created in 1972 and renamed in 1978. Nike is the largest worldwide seller of athletic goods with about 168 Nike stores in the United States and is present in about 160 countries (Toulouse, 2012). Nike was exposed by celebrity athlete sponsors. The company’s manufacturing demands grew with the popularity of Nike’s products. In the late 1990s allegations about labor and human rights violations in Third World countries (Daniel Fund Ethics Initiative). Athletic footwear production has moved to other places with low labor costs. The assembly of shoes began shifting in the 1960s to Japan, Korea, Taiwan, and then China in the 1980s. Nike moved to overseas manufacturing as a way to cut costs on sports gear manufacturing. Japan became too expensive, so Nike moved to Vietnam, Indonesia, and China. Accusations of deprived conditions, child labor, harassment, and abuse have been issues for the company. The Asian factories have more subcontracted work and it is difficult for Nike to keep up with and control the working conditions and wages of the factories. In 1996, Life magazine published an article with photos of Pakistani children sewing soccer balls for Nike, Adidas, and other companies (Toulouse, 2012). The photos had an impact on Nike’s sales and their reputation. Nike experienced problems with Vietnam’s factory conditions. An audit was disclosed to the press and made front pages of The New York Times. The audit included intolerable levels of exposure to chemicals and documented cases of employees health problems related to the exposure. Nike had to take fast measures to redeem its reputation and fix problems in the policies and lack... ... middle of paper ... ...panies. Nike can develop more auditing tools to make sure factories are in compliance with its laws. With the Balanced Scoreboard, Nike should give the factories time to correct issues that has been reported and if they do not have the situation handled in the time frame given, Nike should stop its business with the factories. (5) As CEO of Nike I know that with a business comes many challenges and it is up to the company of how to handle the issues in order to stay on top. We should send our own people to visit the factories to ensure that they are abiding by the rules and regulations, instead of taking someone else’s word. International expansion is a great idea, but it will have to be managed closely to ensure that proper actions are being taken. Being an ethical company will attract more customers. Nike should create new products to increase revenue.

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