Nike and International Labor Practices Case Study

Nike and International Labor Practices - miscue Study ExampleNike experienced some problems in the 1990s with respect to their labour party policies primarily in Indonesia and China. Unions and NGOs accused them of paying wages that were insufficient for subsistence and using child labor. Activists continued to press Nike for action to settlement the labor disputes, but Nike refused to take responsibility. An onslaught of bad earthity resulted in falling sales, plummeting income, and reduced linage value. In 1998, after Nike tax r withalue fell, they began to accept the responsibility for the contractors in their outsourced business model. The financial cost to Nike has been estimated at $400 million for failing to address the issue promptly.Nike is secure in its food market sector for the show up term. There are only a few companies that can match Nikes ability to advertise and market their product. They have the largest market share and even a merger between number 2 and 3 could non exceed them. Adidas-Reebok and bare-ass Balance combined still come in behind Nike. New entrants are not likely to take on these formidable competitors.The large market share that Nike enjoys is too a challenge for them. They can not grow with increased market share. For the near future, they are forced to enter new transnational markets to sustain the levels of growth they have seen in the last 3 years. Markets in China and India are their primary targets and they have made some progress there. India has contributed substantially to their revenue and they have gained the sponsorship of the Beijing Olympics.Nike has considerable brand recognition and customer loyalty. They have made use of jumper cable sports figures to market their products with great success. Their well-known logo, the Swoosh, is easily one of the most recognized symbols in marketing. In contrive with their strong financial position Nike is well positioned. However, they must continue to be vigil ant to avert the public relations disaster of the past. Nike should be a world leader in the movement in international workers rights movements. Their recent recovery indicates they have the confidence and the support of the market when they take action to correct the faults of the past. However, they will be subject to public scrutiny. They need to be pro-active at correcting and improving their image with the public through community charity programs. With their market position, their history of innovative marketing, and their ability to set trends they should be well positioned to spank any damage that their reputation has suffered.CASE ANALYSISThroughout the 1990s, Nike was repeatedly accused of violating fair labor practices through their affiliation with international contractors. Nike consistently denied any wrongdoing and contended that any violations were the fault of the contractor and not Nike. Several groups formed alliances to come to the aid of the workers primarily i n Indonesia and China. These groups came from international rights groups, competitors, US activists, students, and possibly even the Indonesian government.International watchdogs accused Nike of failing to pay an adequate wage. They allied with religious groups on estimable grounds. As early as 1991 the Asian American Free Labor Association (AAFLI) and the Institut Technology Bandug (ITB) had produce reports critical of corporate practices in Indonesia (Spar 153-154). They had an international responsibility to bring these issues to light and