Topic 8: Nike Flashcards
How were Nike’s operations different from those of other sports apparel producers?
Nike outsourced 100% of its production to the lowest cost international labor and spent the saved money on marketing through celebrity endorsements.
What were the four major concerns of labor activists?
- Age (too young)
- Wage (too low)
- Conditions (really shabby… and by shabby I mean deadly)
- Unfair profit (ridiculously high markup for cheap labor)
What was Nike’s initial response to activist criticism? Did it work?
Nah bro… it failed. Nike tried to ignore the accusations (“We don’t make shoes,”) and push their celeb endorsements more (“Don’t you wanna be like Mike?), but activists dug their heels in and wouldn’t take no for an answer.
Did activists’ criticisms apply only to Nike?
No, other athletic apparel companies were also taking advantage of cheap foreign labor, BUT Nike was the dominant brand and possibly the biggest offender.
Why was Nike the target instead of the other brands?
Nike met all 6 of the characteristics we talked about in class (spoiler alert: Nike, Citigroup, and Starbucks ALL met the 6 characteristics).
- Prominent brand
- Leadership in the industry
- Consumer product firms
- Low switching costs
- Sometimes the “worst offender”
- Shown interest in NGO issues in the past.
What was the argument that it was unfair to target Nike?
They weren’t the only company making the business-savvy decision to minimize cost and maximize profit margin! Plus, “we don’t manufacture shoes.” We don’t make them… we just outsource the labor to independent contractors. These aren’t Nike employees.
What was the argument that it was fair to target Nike?
Nike depends on the cheap labor from the independent contractors, therefore the labor issues ARE Nike’s responsibility. Nike’s entire business model depends on evil and inhumane labor circumstances.
