Nike Business Plan

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Nike Business Plan

Nike Business Plan


Nike's business model is to market high end consumer products that are manufactured in low cost supply chains. In the 1990's, NIKE has faced many bumpy roads regarding managerial practices. NIKE was scrutinized against sweatshop conditions at its overseas suppliers. Accounting firms have found many unsafe working conditions in their overseas factories. Many employees were exposed to carcinogens and 77 percent suffered respiratory problems. Also, they were forced to work 65 hours a week, far more than the law allows, for a low pay. They were faced with unexpected criticism that considered them irresponsible and greedy. This was reported at the time when NIKE was spending millions of dollars at athletes to endorse their product. At the managerial stage, a plan was carried out. The company realizes that it's facing a long-term problem that cannot be solved through public relations.

Business Plan

The company had to give managers responsibility to analyze the problem and come up with a solution. The company had slashed overtime, improved safety and ventilation and reduced the use of toxic chemicals. Nike understands that complying with labor standards in the global supply chains is very difficult but they made many changes to correct them. Like many American apparel makers, NIKE uses many subcontractors in Asia, with some 150 factories employing more than 450,000 workers. It's very hard to impose American style business practices on factories all over the world. They are now doing a better job with managing inventory and sales forecasting. NIKE has ended up on top and continues to grow in every aspect although there may still be labor problems arising.

As is with all companies, there are a few threats that Nike should be aware of. Firstly, there is heavy competition. While Reebok and Adidas only hole 16% and 6% ...
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