Impacts of globalization on Nikes international operations

Multinational companies are concern entities that operate in more than one state. The typical transnational company usually map with a central office that in based in one state, while other installations are based in locations in other states. Multinational company is besides referred to as a transnational endeavor ( MBE ) or a multinational corporation ( TNC )

There are 3 type of theoretical account for a transnational company. One of the theoretical accounts is the common theoretical account for transnational company is the placement of the executive central office in on state, while production installations are located in one or more other states. This theoretical account normally helps the company to take advantage of benefit of integrating in a given vicinity, while besides being able to bring forth goods and services in countries where the cost of production is lower.

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Another structural theoretical account for a transnational company is to establish the parent company in one state and operate subordinates in other counties around the universe. This theoretical account is merely about all the maps of the parent are based in the state of beginning. The subordinates more or less map independently, outside of a few bases related to the parent.

A 3rd attack to the apparatus of a transnational company involves the constitution of a central office in one state that oversees a diverse group that stretches excessively many different states and industries. In the theoretical account, transnational company includes affiliates, subordinates and perchance even some installations that report straight to the central offices


Globalization is the system of interaction and integrating among the people, companies, authoritiess and states of the universe in order to develop the planetary economic system. This procedure has effects on human wellbeing, on the environment, on civilization, and on economic development and prosperity of societies across the universe. Globalization is involved of positive and negative.

Positive impact of globalisation

Globalization is really of import in the universe economic system right now. Peoples relied more on the market economic system, had more confident in private capital and resources, so that, transnational company started playing a critical function in the development of developing states. The globalisation has been affected the developing economic systems to a certain extent. It makes varied chances for the development states. It besides makes the transnational company easy to entree to the developed market. The engineering transportation promised better productiveness and therefore improved criterion of life.

Negative impact of globalisation

Globalization has besides created many jobs such as inequality across and within different states ; the fiscal market will be affected in the environment state of affairs. Another negative impact of globalisation was that a bulk of 3rd universe states lost of path. Until the 20 century, the procedure of globalisation in the Indian economic system had been protected by trade, investing and fiscal barriers. Due to this, the liberalisation procedure took clip to rush up. The measure of globalisation did non get down that swimmingly.

Introduction of Nike as transnational company

Nike Inc is an integrated company that designs, develops and markets worldwide athletic footwear, dress, equipment and accoutrements. Nike employs both traditional and non-traditional distribution channels in about 200 states with primary market parts in the United States, Europe, Asia Pacific, and the Americas.

Nike has some 20,000 retail merchants worldwide including Nike mill shops, Nike shops, Nike Towns, Cole Haan shops, and websites which sell Nike ‘s athleticss and leisure merchandise. Nike is the company which has 33 % of the planetary market portion in the athletic footwear industry.

Plague Analysis in host state

Nike is and transnational company, its focal point on macro environmental factors. Macro environmental factors consist to Political, Economics, Society, and Technology.


The authorities must make economic policies that will further the growing of concerns. Nike has been helped by the US policies which enable it to progress its merchandise. US authorities support Nike, peculiarly in the general macroeconomic stableness, low involvement rates, stable currency conditions and the international fight of the revenue enhancement system, organize the foundation critical to Nike ‘s growing.


In economic system, the biggest menace for Nike would be economic recession. Nike ‘s growing adversely affected during the economic recession. The US economic system is sing a downswing right now. The gross revenues of merchandises are lessening. Because of the recession, Nike ‘s feeling force per unit area. The Asiatic economic crisis besides affects Nike since the merchandises are manufactured in Asia and the labour costs and material monetary values are increasing

Nike ‘s growing is non merely affected by the local economic system but besides in the international economic system. Euro and Asia recession affected the gross revenues for Nike. The overall consequences in the gross revenues generated by Nike in athletic footwear. However, it ‘s still remained stable due to the planetary market makes up for the discrepancies in gross revenues, particularly between peek seasons.


Presents, people are more wellness witting. The people are acquiring more on diet and wellness due to more and more people fall ining fittingness nines. Because of that, the demand for attach toing fittingness merchandises, particularly exercising dress, shoe and equipment is addition. Demands of Nike merchandise addition due to people are looking for athletics places, dress and equipment.

Nike failed to anticipate jobs brought approximately by a sweatshop unmasking about the labour and mill conditions at production location in Asia. This caused bad promotion and worsening gross revenues as society and consumers demand more socially responsible companies.


Nike uses IT in its selling information systems really efficaciously. Nike applies marketing information system to the economic sciences of invention, cleavage and distinction for most of the concern. Nike is the leader of the market due to utilize of the highly valuable information engineering, and using it to every facet of the merchandise from development to distribution.

Nike is the universe leader in the athletic footwear industry which able to efficaciously uses its environment to better its selling attempts. This scheme has helps Nike do a good gross revenues in the merchandise.

Plague Analysis in place state


Nike has been accused of utilizing child labour to fabricate their merchandises in Pakistan. Although Pakistan has Torahs against kid labour and bondage, but the authorities has taken really small action through this job. An another position, Nike really help the local citizen, due to supplying occupation toward kids, their parents have less burden as comparison to before. Harmonizing to Stephen Chapman, the best manner the terminal the kid labour is purchase more the merchandise which produce by the kids. That will lift above the poorness degree and besides profit the households of the kids and the state due to the addition of the demand of the merchandise and they can bring forth more and gain more.


In Pakistan, citizen mean income is $ 5 per twenty-four hours as Pakistan civilization, usually they have burden of 10 kids in one household, in this low income state of affairs, Pakistan citizen really struggle for life. Due to this state of affairs, Nike assists Pakistan economic system due to the export from Pakistan brought income of about 385million USD. This may assist Pakistan cut down the rate of the rising prices.


Nike is worldwide ; it has contracts with 700 mills that employ 550,000 workers in 50 states. Nike sells different type of merchandise for the different states due to different states have a different life style. Nike besides produces some limited merchandise for people who like to follow the tendency as their aggregation. And some of them will sell it with higher monetary value due to the merchandise is limited.


Presents, engineering is maintaining better. Nike spends a big sum on R & A ; D to achieve invention and will gain more grosss due to the advanced merchandise will pull more and new consumers. E-commerce with flash is one portion of the new engineering which Nike utilizing. In e-commerce with flash, consumer can understand the item and the construction of the merchandise more clearly and how the merchandises look like.

Potential impact of Globalization

New development

Nike develops the new invention in footwear, dress, and equipment. Nowadays, people are concern in personal safety. A design of shoe will impact the reconciliation of people, Nike concentrating on this instance to develop their new merchandise particularly for sport individual. Sport individual usually will concern on the footwear, dress and equipment whether are suited for them and assist them execute good when they exercise. Many people will pass more money to purchase a footwear due to they want the footwear is suited for them and non easy to acquire hurt. For athletic individual, they want to acquire footwear which is really soft and every bit light as possible to execute good during the exercise. Another new development for Nike is the footwear with timer and calculates distance. The merchandise can be gauge the clip and distance when they running. This map can allow them put a mark and accomplish it.

Nike is running the design competition called “ Future Sole ” . This competition is merely for high school and college pupil. Nike gives the chance for them to prosecute their passion and acquire their ain design. As the consequence of the competition has shows, Nike will do it as a existent merchandise of the company and can be happening in Nike store all around the universe. Because of this, Nike can come out more design in the market due to passion of the campaigner.

Nike ‘s merchandise are planned to give consumer perform good in exercising. In every portion of the fabrication procedure is designed to accomplish the end of supplying the universe ‘s best athletic cogwheel. When Nike Air was introduced, it affected the athletics universe for its versatility. Based on the map of impact protection, it can be shaped and tuned to run into the specific demand of the athletics individual ( Nike, 2007,6 ) . Nike concern the athletics individual demands and alteration were implemented to do their footwear even better.

Brand Awareness

Nike is the universe ‘s prima athletics footwear company. Nike ‘s merchandises are all around the universe. In the hereafter, when consumer wants to purchase a footwear Nike is the first pick come their head. Consumer ever remember Nike slogan “ Merely make it ” , this means that Nike ‘s have a really strong trade name trueness.


Although Nike is one of the largest athleticss and fittingness companies in the universe, but Nike still has to dispute its rival with new merchandise thoughts. In the planning procedure, Nike needs to measure the consumer demands. For illustration, Nike decided to join forces with Apple combines the athletics and music together. Harmonizing to Nike ‘s CEO, Mark Parker, The Nike and iPod Sport Kit is a radio system that connects to the iPod nano to give people a personal running and exercise experience ( Apple, 2007, p. 1 ) . Nike is be aftering to do many merchandises with iPod such as jacket, tops, trunkss and armbands. Nike ‘s CEO and Apple ‘s CEO will go on to work together to maximise the Nike and iPod experience. This partnership will assist Nike to stay as the taking athleticss company.


Companies that specialize in concern moralss preparation and corporate societal duty instill workplace moralss among staff by making a concern morals policy ( Fieser, 2006 ) . The kid labour instances are affected Nike ‘s so much. Because of this, Nike had to be after and form a global public relation run to deliver their name and repute related to the ethical job. Without the proper direction taking and planning, Nike will endure from the job of kid labour. Nike has made a right determination from the negative media attending. And will go on to be successful, due to its strong concern moral principle and doctrine.

Change in life style

Nike is making different merchandise with different life style. Traditionally, most people are utilizing Nike with athleticss places. But it appears that, the new life style is needed in the new coevals. There is a lifting tendency of our teens take parting in multiple athleticss. Consumer will purchases different athletics shoe for different athletics activity. Nike knows some consumer ca n’t afford for that. So that, the program to plan a multi-purpose shoe that the consumer can have on for assorted maps. But the public presentation of the places now every bit good as the specific athletics places. The developments of new places have the possible to alter the life style.

Natural catastrophe

In China, there are holding snow catastrophe, this catastrophe lead to the job that the universe now confronting the deficit of cotton in planetary market. In the hereafter, there might be more catastrophe will be go on will take to another job of deficit of another natural stuff, when this go on this monetary value of natural stuff will increase in the market and interrupt the budgeting of Nike company and lead to another job to Nike fiscal because of the high natural stuff monetary value.

Strategy overcome the Potential impact

Go Green

Presents, Peoples are back uping the environmental friendly merchandise due to the planetary heating is acquiring serious. Nike besides starts to plan shoe which utilizing small measures of damaging adhesives and more of recycle stuff to bring forth the merchandise. Nike is practising to bring forth recycling places, phasing out the S hexafluoride and fabrication athletics accoutrements by utilizing the waste. For illustration, Nike has been runing Re-use plan to roll up the old shoe and bring forth it as a new recycle shoe.

Nike purchase so many corrugated composition board due to about 50 % of the Nike ‘s wadding such as shoebox and the transportation carton. Nike applied advanced design and utilize other different stuff to bring forth the shoebox and transporting carton for cut down the waste and the cost. Nike will seek to bring forth the box which salvaging 30 % of the stuff and assistance in salvaging 200,000 trees yearly. Nike besides controls the lighting direction in their retail shops for salvaging the energy.


Nike industries sportswear for so many old ages. However, the company has sought for new chances in manner market. In my suggestion, Nike collaborates with G.A.P Company. G.A.P has really good repute in bring forthing apparels, with wider scope of assortments. It is possible to come up with a new vesture line for athleticss with GAP in order to hike up gross revenues worldwide, which would indirectly increase trade name consciousness every bit good as acknowledgment by the populace as the anterior ground for such coaction is the consumers. Gatorade specializes in energy drink and provides the engineering that Nike can venture and bring forth their ain trade name of energy drink. In add-on, coaction can besides be done with energy drink Gatorade. Nike and Gatorade are in the same sector of sport field, to fulfill the athletics adult male demands and desire. Nike can now bring forth an energy drink to carry through and hike the current market demand and fulfill client gustatory sensation.

Change on the Management manners

The changing of the direction manners of Nike towards the industry in 3rd universe state. Nike can seek to develop some director to direct to the maker mill in 3rd universe states to steer the direction manner of the states. Those directors can command the direction manner of the mill. For illustration, the rewards pay, natural stuff use, the working status and the on the job environment.

The directors will command the rewards paid which must be higher than the wage which merely able to supply 3 repasts in a twenty-four hours, but the salary which able to give supernumerary for the labour to make salvaging and bask their life. For the on the job status, the maker mill should be holding a comfy and safe working status to the labour which is good airing and the safety environment due to the control of efficient and effectual of the machinery. A good working environment is needed for the labour which is the location of the maker mill is safety and environing with non dwell any unsure elements like radioactive of the atomic power from the mill environing Nike Factory, the spread of virus, interrupting environment like wood and upland.

Research for new engineering

In twelvemonth 2010, Nike had done a research and development in natural stuff to bring forth New Jersey. The research they done really is use the recycled plastic bottle to bring forth New Jersey. So to get the better of the job of the monetary value of natural stuff and the deficit of natural stuff in the market, Nike can seek to make more attempt in research and development section to happen out more new stuff which is bing in the market no affair is renewable or nonrenewable natural stuff. The new stuff demand to be environmental friendly, this really will assist the growing of consciousness of the planetary towards Nike merchandise because due to the high instruction degree of public, there are more and more public who care about the pollution of Earth. So when they are new merchandise which would non merchandise pollution and holding a high quality and better lastingness. This really will pull the attending from the populace to make buying on that merchandise.

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