Just Doing ItEssay Preview: Just Doing ItReport this essayBlue Ribbon Sports opened its doors for business in the wintry months of 1964. That is, its car doors. Operating primarily to distribute Japanese running shoes, the small venture attempted to turn a profit by selling running shoes to University of Oregon track athletes. To minimize costs, Phil Knight and Bill Bowerman sold their wares directly out of the trunks of their cars, attending track and field competitions in order to reach their target consumers. As more and more collegiate runners began adopting the shoes, Bowerman began creating his own waffle-soled shoe. Growing profits allowed Blue Ribbon Sports to simultaneously open their own location near the University of Oregon and launch their first line of footwear, naming it for the Greek goddess of victory, Nike. Sporting the famous Swoosh, the shoes sold exceptionally well. In 1978 Blue Ribbon Sports officially changed their name to Nike, and by 1980 the company had a 50% market share of all athletic shoes sold in the United States. By sponsoring big time athletes and developing an award-winning marketing campaign, Nike continued to expand into the athletic merchandise market (Vann, 2008).
Today, Nike is one of the most admired companies in the world. Having grown to be the largest seller of athletic apparel and footwear in the world, the company ranks 184th on the Forbes 500 list of the largest firms in the United States (Forbes.com 2008) Nike has gone from distributing another firm’s shoe to producing their own line of products designed for track and field, basketball, football, and many others. In addition, Nike designs and sells complimentary athletic wear, including jerseys, apparel, and sports equipment (Nikebiz.com 2008). Relying on well-known
athletes to endorse their products, Nike has become as internationally recognizable as Coca Cola and McDonald’s.Nike’s headquarters are still in Oregon, where Knight and Bowerman began their sales forty years ago. However, the growing company has seen its international presence expand Nike’s international reach to almost every corner of the globe. With over 500 offices in forty-five different countries, Nike’s move towards a globalized production chain was spurred by an industry trend to outsource labor to developing third world countries (Nikebiz.com 2008).
Globalization may be defined as the inexorable integration of markets, nation-states, and technologies in a way that enables individuals and corporations to reach around the world farther, faster, deeper, and cheaper than ever before. We are currently living in an era of globalization, one that has led to an intensification of the role of international trade in the world economy. Globalization and international business are likely to expand significantly over the next few decades because of strategic essentials for commerce and the world’s environmental transformations that facilitate growth. Businesses globalize for many reasons including the acquisition of resources, finding new markets, and to better compete with their rivals (Griffin & Pustay, 2007).
The Economic Reformation The global economy was established in a time of economic crisis and a globalized world economy. It was first industrialized in the mid-1520s—a time when the United States emerged from a severe international financial crisis—and then went into post-crisis period in the early 1990s, having reached nearly half the levels of economic growth before the global financial crisis. Economic growth rates peaked in 1987 at an all-time record high, with an annualized rate of 7.8 growth per 1,000 population. Annualized growth in global growth rates between 1985 and 1990 was 1.14 percent, and 1.21 percent, respectively. The United States is home to 2.4 of the world’s 1.3 billion people. These figure includes 2.4 million people in Africa, and about one-third of the world population in the Middle East and North Africa. Many of the world’s world economic leaders live in countries that have a long record of economic growth; the United Nations Commission on Small (2011) estimated that, between 1970 and 1990, about 11% of global world GDP was invested in large-scale infrastructure projects and about 1.3% was spent on research and development. These numbers include approximately 10% of the world population residing in the world’s poorest regions (Nietzsche, 2006). World trade is currently the largest source of international trade (Drake, 1996) and has expanded to about 40 % of international GDP by 2020 (Nietzsche, 2006). It accounts for about half of business innovation globally in countries with large industrial bases (Arnsberg 2012). The World Economic Forum estimates that a growing share of emerging economies have a higher level of social and economic protection from foreign economic activity than do developing economies. World trade accounts for half of global economic growth in developed countries compared to only about 3% in advanced countries (Brennan, 2005). As more and more U.S. industries and jobs are available in China, India, and Vietnam, trade has become more powerful in developing countries, both in trade and export markets. The World Trade Organization (WTO) says that the World Trade Organization is currently the country in the top six-million most innovative nations. In the last 5 years alone, the United Nations has set a record of establishing an International Trade Administration which can reach as much as 50 million people and is an official tool by which to build and enforce global policies that ensure free trade and economic development.
Globalization also has major ramifications for the quality of life (Morris Ԩ), health, housing, and the environment. There is a growing middle class among working-class people, but this composition has fallen in recent years, largely because of technological and other changes. Today, there are no universal standards of living. To meet most of the demands of a developing economy, the current generation of people living in developing countries must find employment in the developed sectors. This will require economic development, but also a healthy population to provide economic growth. Economic growth must be fueled by a growing middle
The Economic Reformation The global economy was established in a time of economic crisis and a globalized world economy. It was first industrialized in the mid-1520s—a time when the United States emerged from a severe international financial crisis—and then went into post-crisis period in the early 1990s, having reached nearly half the levels of economic growth before the global financial crisis. Economic growth rates peaked in 1987 at an all-time record high, with an annualized rate of 7.8 growth per 1,000 population. Annualized growth in global growth rates between 1985 and 1990 was 1.14 percent, and 1.21 percent, respectively. The United States is home to 2.4 of the world’s 1.3 billion people. These figure includes 2.4 million people in Africa, and about one-third of the world population in the Middle East and North Africa. Many of the world’s world economic leaders live in countries that have a long record of economic growth; the United Nations Commission on Small (2011) estimated that, between 1970 and 1990, about 11% of global world GDP was invested in large-scale infrastructure projects and about 1.3% was spent on research and development. These numbers include approximately 10% of the world population residing in the world’s poorest regions (Nietzsche, 2006). World trade is currently the largest source of international trade (Drake, 1996) and has expanded to about 40 % of international GDP by 2020 (Nietzsche, 2006). It accounts for about half of business innovation globally in countries with large industrial bases (Arnsberg 2012). The World Economic Forum estimates that a growing share of emerging economies have a higher level of social and economic protection from foreign economic activity than do developing economies. World trade accounts for half of global economic growth in developed countries compared to only about 3% in advanced countries (Brennan, 2005). As more and more U.S. industries and jobs are available in China, India, and Vietnam, trade has become more powerful in developing countries, both in trade and export markets. The World Trade Organization (WTO) says that the World Trade Organization is currently the country in the top six-million most innovative nations. In the last 5 years alone, the United Nations has set a record of establishing an International Trade Administration which can reach as much as 50 million people and is an official tool by which to build and enforce global policies that ensure free trade and economic development.
Globalization also has major ramifications for the quality of life (Morris Ԩ), health, housing, and the environment. There is a growing middle class among working-class people, but this composition has fallen in recent years, largely because of technological and other changes. Today, there are no universal standards of living. To meet most of the demands of a developing economy, the current generation of people living in developing countries must find employment in the developed sectors. This will require economic development, but also a healthy population to provide economic growth. Economic growth must be fueled by a growing middle
The Economic Reformation The global economy was established in a time of economic crisis and a globalized world economy. It was first industrialized in the mid-1520s—a time when the United States emerged from a severe international financial crisis—and then went into post-crisis period in the early 1990s, having reached nearly half the levels of economic growth before the global financial crisis. Economic growth rates peaked in 1987 at an all-time record high, with an annualized rate of 7.8 growth per 1,000 population. Annualized growth in global growth rates between 1985 and 1990 was 1.14 percent, and 1.21 percent, respectively. The United States is home to 2.4 of the world’s 1.3 billion people. These figure includes 2.4 million people in Africa, and about one-third of the world population in the Middle East and North Africa. Many of the world’s world economic leaders live in countries that have a long record of economic growth; the United Nations Commission on Small (2011) estimated that, between 1970 and 1990, about 11% of global world GDP was invested in large-scale infrastructure projects and about 1.3% was spent on research and development. These numbers include approximately 10% of the world population residing in the world’s poorest regions (Nietzsche, 2006). World trade is currently the largest source of international trade (Drake, 1996) and has expanded to about 40 % of international GDP by 2020 (Nietzsche, 2006). It accounts for about half of business innovation globally in countries with large industrial bases (Arnsberg 2012). The World Economic Forum estimates that a growing share of emerging economies have a higher level of social and economic protection from foreign economic activity than do developing economies. World trade accounts for half of global economic growth in developed countries compared to only about 3% in advanced countries (Brennan, 2005). As more and more U.S. industries and jobs are available in China, India, and Vietnam, trade has become more powerful in developing countries, both in trade and export markets. The World Trade Organization (WTO) says that the World Trade Organization is currently the country in the top six-million most innovative nations. In the last 5 years alone, the United Nations has set a record of establishing an International Trade Administration which can reach as much as 50 million people and is an official tool by which to build and enforce global policies that ensure free trade and economic development.
Globalization also has major ramifications for the quality of life (Morris Ԩ), health, housing, and the environment. There is a growing middle class among working-class people, but this composition has fallen in recent years, largely because of technological and other changes. Today, there are no universal standards of living. To meet most of the demands of a developing economy, the current generation of people living in developing countries must find employment in the developed sectors. This will require economic development, but also a healthy population to provide economic growth. Economic growth must be fueled by a growing middle
Another key motivation for globalization is the occasion for a company to take advantage of its distinctive strengths, or core competencies, that have developed in its home market (Griffin & Pustay, 2007). In Nike’s case, and in many others, the firm has outsourced production to nations with low labor costs and an excess of unskilled labor. When entering the markets of these developing nations, companies take on controversial issues such as ethical standards and social responsibility in their offshore factories. These are the obligations that an institute undertakes to protect and enhance the society where it functions; they are often very complex and raise issues such as child labor, worker’s abuse, and other unacceptable labor practices. As a company with many offshore manufacturing sites, Nike has been continually scrutinized due to their factory conditions (Griffin & Pustay, 2007).
“Internationalization has given rise to a whole new form of company” (Vollman, 2005). Nike is a leading firm in the international marketplace, as the world’s single largest sportswear and apparel manufacturer. The concept of internationalization details a firm with little focus on manufacturing but extensive attention to product design and marketing; Nike is a perfect example (Vollman, 2005). Manufacturing firms around the world have been developed to support companies such as Nike. After product design and testing in their home markets, Nike and other industry leaders outsource the fabrication of their merchandise to cheap labor markets such as China, Indonesia, Pakistan, Vietnam, Bangladesh, Cambodia, and other lesser developed countries.
The athletic footwear and apparel industry has been globalized for longer than many other industries, and is becoming more so all the time. As retail changes all over the world, sports marketing is becoming more competitive. Nike is the market leader in North America; they have grown throughout China, and are in the process of introduction and growth in the Indian and Russian markets. In 2003, for the first time in history, Nike’s international sales exceeded US sales. Unlike many corporations, Nike never stops growing; the company is limitless and is exercising managerial and entrepreneurial advantages and skills to continually stay ahead of the competition (Tsenkov, 2008).
Nike currently wholly owns four brand subsidiaries: Hurley International MMC, Converse Inc., Cole Haan Holdings Inc. and NIKE Golf (nikebiz.com, 2008). The company finalized the sale of its Bauer Hockey subsidiary to Kohlberg & Company and W. Graeme Roustan for $200 Million in February 2008 (Yahoo Finance, 2008). Nike also partly owns many other companies; in December 2007, the company purchased 19.9% of Umbro plc shares, a large European-based sportswear and soccer company. Collectively, these subsidiaries currently represent about $2 Billion of Nike’s annual revenues, and have more than doubled their contribution over the last five years (Tsenkov, 2008). Nike estimates that its subsidiaries will represent about 25% of target revenue growth by 2011(nikebiz.com, 2008). The changes that Nike Company makes in its subsidiary portfolio are always with profit optimization and growth potential in mind.
With regards to advertising, Nike does not use a traditional method but rather exercises its immense money supply and world famous brand name to push competition out. Nike was designed and continues to be driven by the spirit of entrepreneurship. In an attempt to compete with Nike, Adidas bought Reebok in 2005. The acquisition greatly increases the competitor’s market share, as Adidas expands in North America and Reebok