Nike Case Study Flashcards
1
Q
Where Nike manufactured in 1970s
A
South Korea and Taiwan
2
Q
Where manufacturing changed to and why? Where is it situated in Vietnam?
A
- Indonesia, China and Vietnam
- bc Taiwan and SK wages started to rise and health and safety laws were tightened
- In new three places labour laws less regulated
- Near the Saigon River –> easy goods transport to SE and E Asia, also to USA across Pacific
3
Q
Why it is globalisation
A
- Based in USA but has 124 plants in China, 73 in Thailand 34 in Vietnam
- 1.02 million workers in 42 countries
- Raw materials: Cotton from India, China, USA, Turkey/ Eva foam from China/ Rubber mainly from China, Thailand and Indonesia
4
Q
Benefits to Vietnam
A
- 300,000 jobs + improved skill set for Vietnamese workers –> Nike is their biggest employer
- Increase in export which is 5% of the GDP
- More demand for material from local businesses
- More multinational companies attracted
- Pays tax to govt.
- Positive multiplier effect
- Building of infrastructure and roads nearby
5
Q
Disadvantages to Vietnam
A
- Workers exposed to carcinogens (177 times more than legal)
- 77% of workers suffer respiratory illnesses
- Child labour
- Long working hours (65/week) for minimal pay ($10)
- Pollution in atmosphere and Saigon River
- Most of the money/profit is sent back to the USA and isn’t used in Vietnam
- Traffic and noise pollution around
- Destruction of greenfield sites
- Lack of unions leads to physical, verbal or sexual abuse of workers
- Large demand for water and energy
- Jobs are lost if the company loses business
6
Q
Benefits to global society
A
- Products in 140 diff countries
- Nike products are cheaper, if in USA they would be higher priced
- Produced by lot of countries in Asia, better for Asia’s economy
- More transnationals are attracted to LEDCs –> benefit them bc multiplier effect
7
Q
Disadvantages to global society
A
- Majority of workers are under 25
- Abuse of workers internationally
- Erosion of culture –> more people wear nike clothing
- Impacts to local businesses/small stores
- More pollution bc transportation of goods
