Nike: From Sweatshops to Leadership in Employee Practices

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Nike: From Sweatshops to Leadership in Employee Practices

A. Introduction

Nike is on of the world leaders in the footwear industry. It is doing very well in the environment and overall in the footwear industry. Nike has had some problems with its reputation due to the location of its suppliers and the linkage of Nike to sweatshops. Nike was publicly criticized for these things and it proceeded to avoid the problem and even mislead the public. Finally after having to settle on a legal case brought about by this lying Nike actually addressed the problem. Nike began taking an interest in its suppliers developing new ways of testing and screening the suppliers. The changes have lead to Nike earning many different awards or recognitions and Nike has become a leader in employee practices.

B. Situational Analysis

1. Environmental Analysis

Environmentally the US and entire world economy isn’t doing well. Every since the terrorist attacks in 2001 the US economy has been doing poorly. The housing market has crashed and oil prices have risen reaching over $100 a barrel. Both of these things have lead to higher prices on gas, groceries, and more. Consumers are afraid that their investments are going to default so they are pulling out of the stock market and losing faith; this had lead to dramatic drops in the stock market. In order to fix these problems Bush and the US government made $700 billion bailout for the US financial institutions. This helped the US regain some faith in its investments but overall has been ineffective. Outside of the US there have also been many economic problems; all markets are doing poorly.

2. Industry Analysis

Overall, the footwear industry is growing and it is doing fine in comparison to the environmental problems. The footwear industry is still seeing growth in the casual athletic footwear segment, basketball footwear segment, and running shoe segment. Growth is also expected in equipment and apparel, which is good for Nike because it has branched out to sell these things. The problem facing this industry is price deflation, which has lead to casual styles taking on more importance and a decline in the demand for premium-priced performance athletic shoes. Overall the industry is doing well as long as Nike can adapt its styles, features, and pricing to follow demand.

3. Competitor Analysis

Nike’s major competitors are New Balance, Reebok, and Adidas. Other competitors could include different brands of sports equipment and apparel.

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