English III Honors
21 February 2012
The Nike Company originated in 1962, and has now grown to be the world’s largest
marketer of athletic footwear and apparel. Due to this increase in the popularity of the brand,
other companies have found it easy to counterfeit their original products. Not only does this
mean that the company loses money, but it is also losing credibility among shoppers that buy
Nike products. Originally Nike running shoes were Philip H. Knight’s idea. After finishing
business school, Knight got in touch with a Japanese firm that made athletic shoes, and arranged
to import some of its products into the United States. Nike was born from a small scale import
operation that Knight started.
Nike is now a worldwide brand name, with this expansion all items today are
manufactured by independent contractors. Nike is only involved in the design, development, and
marketing. Nike operates retail stores and factory outlets, and has to compete with many well
known brands. Nike has a goal to carry on the legacy of innovation thinking, whether to develop
products that help athletes of every level to of ability reach their potential, and to create business
opportunities that set Nike apart from the competition and provide value for our shareholders.
However with such a large amount of money flowing into the company, there are factories
overseas that manufactured and sold “fake” Nike products. Even with the production of copied
Nike products, they have built factories in Italy, the Philippines,, Taiwan, and South Korea.
These factories were one hundred percent owned by subcontractors, with the majority of their
output consisting solely of Nike products.
With a manufacturing network of this magnitude, they have faced numerous violations
involving human rights issues and factory conditions, which have been widely publicized. For
example, in the past Nike has been accused of using child labor in the production of its soccer
balls in Pakistan. Pakistan has a per-capita income of nineteen hundred United States dollars per
year, meaning that a typical person survives barely on five dollars per day. While Pakistan has
laws against child labor and slavery, the government has taken very little action to combat it.
Only a boycott by the United States and other nations will have any impact on slavery and child-
based industries. Child labor is spread all over Pakistan but has the greatest impact in the north-
west of Punjab province, which is Sialkot. Pakistan has a population of approximately one
million and is an important center for the production of goods for export to international markets,
particularly sporting goods. Manufacturing and distribution by factories not belonging to Nike
brings problems again in this aspect, because they may also be using child labor in their
manufacturing and accuse Nike of the same practices if they get caught. In 1994, exports from
Sialkot brought income of almost three hundred and five million United States dollars into the
Pakistan economy. Sialkot is one of the world’s most important centers for production of
sporting goods. While the production of sporting goods has brought the economy up, it should be
done without the use of child labor. Children should be going to school and enjoying their
childhood, and not being forced to work in a factory that does not guarantee them going home
every day to their families.
Most people would think that throwing the owners in jail would end this. The issue
however, is not that simple. Increasing the demand of the products produced by child labor
means encouraging more child labor, encouraging more birth rates, more slavery, increasing
sweatshops and discouraging education- as parents of the children working in factories would
want them to work more and earn more. If this is the case, then more and more children will be
bought and sold on the black market, so there is virtually no end to this problem.
Aside from the lawsuits caused by child labor, Nike has made positive changes in the
areas of environmental health and safety. In 1998 it announced a program to replace petroleum-
based solvents with safer water-based compounds. In 1999, an independent expert was allowed
to verify this in the case of the Tae Kwang Vina factory in Vietnam. The investigator found that
the factory had substituted less harmful chemicals in its production, installed local exhaust
ventilation systems, and trained key personnel on occupational health and safety issues. The
report concluded that the factory had implemented important changes that significantly reduced
worker exposures to toxic solvents, adhesives, and other chemicals. All this was done to decrease
the amount of pollutants that each individual worker breathes in causing problems in the future.
Nike hires many workers, but not all of them manufacture their supplies. Corporate
functions keep Nike’s business. This ranges from applications engineers to tax managers.
Corporate functions roles also offer an attractive and exciting variety of opportunities at Nike,
including lucrative jobs in Administrative Support, IT, Child Development, Finance, Facilities,
Legal, Human Resources, Program and Process Excellence and Sustainable Business and
Innovation. Nike States, “It’s not a single product model, nor a single manager, nor one ad, nor a
single celebrity, not even a single innovation that is key to Nike. It is the people of Nike, and
their unique and creative way of thinking together.” From footwear and apparel to equipment,
Nike does excel designing innovative products for athletes. Their design team works with
athletes and products. The company also has to compete with many well-known competitors. For
example, a pair of VANS skating shoes is approximately fifty five dollars versus a pair of Nike
running shoes at around sixty dollars, a fake pair of Nike shoes is around thirty dollars. These
days not only does Nike sell their products in retail stores but it also sells products throughout
websites. Amazon, Jordan, and Nike are all popular sites used to sell Nike products. Prices on
these websites can vary from a pair of socks for seven dollars to a pair of shoes that can cost one
hundred and fifty dollars. These websites are used to buy and order authentic Nike productions,
and all the items on these websites have a guarantee of authenticity. The internet has made it
easier to shop from your house, and guarantees your satisfaction. This has helped Nike a little on
the fact that now it’s harder for companies offering fake products to sell them on the internet.
Most people might think that Nike shouldn’t worry about the production of these fake products
because they are making a lot of money with their own products, but the truth is that these
overseas factories will decrease profit for Nike over a long period of time. Furthermore, the
company will lose credibility with customers about whether what they are buying is an authentic
Nike product. Most people would be quite hesitant to buy a Nike product if they knew someone
that bought a pair of Nike running shoes that were bad quality because the manufacture was not
Nike, but instead, an unknown company that used the Nike brand to sell their products.
Manufacturing in the footwear industry has changed dramatically over the course of the
last century. With modern technology evolving each day, companies have used this to make
more products, with much less money used to pay workers. With the industry experiencing
severe competition, and the products requiring intensive labor, firms are facing extreme pressure
to increase their profit with their manufacturing practices. Nike currently has a forty seven
percent market share of the footwear industry, which sales annually of three point seven billion
dollars. Many of their factories moved to China, Indonesia, and Vietnam to increase production
at a reduced cost. Consumers are the basis behind the design of authentic performance products.
There are jobs that require passion for creativity, aesthetics, an eye for detail and the ability to
create designs that help athletes perform better. Nike also cultivates jobs in merchandising,
production management, product development, engineering, manufacturing, retail corporate,
retail stores, sales, and sports marketing.
The Nike Corporation has many obstacles with not only competitors, but with their
manufacturing practices, since they have large scale production. In the future they should inspect
their overseas factories, so that they do not have any more problems with the law. Also they
should inspect their products offered online more, due to the increase in websites offering fake
Nike products. All this along with the careful watch of the spread of child labor will increase
their profit, and credibility with their customers about their products.