Most people are familiar with the Nike logo. Most people also know that Nike is a multi-million dollar company that sells name brand shoes worldwide. Millions of pairs of Nike shoes are sold daily, but what people don’t know about Nike shoes is how and where they are made, who makes them, and how Nike spends its money in this process.
According to the “Sweatshop Fact Sheet,” Tiger Woods is paid over fifty five thousand dollars a day to be their spokesman. Another famous person that is a spokesman for Nike is Michael Jordan. According to the article “Running Away With the Profits,” (Environmental Action, Academic Search Elite), Michael Jordan is paid twenty million dollars in endorsement fees. Big name sport teams advertise Nike to appeal to the common person.
Indonesia is one of many countries around the world that is home to numerous Nike factories. Indonesia is a third world country of 214 million people. The main part of the economy is farmers, with half of these being the labor force. This happens to be an ideal country of choice for Nike to set up their factories for manufacturing their shoes. It allows Nike to take advantage of the local people. These people need to work in these factories to make a living, and they are stuck with the poor working conditions that Nike has provided.
One way in which Nike is taking advantage of their workers is through long and hard work hours. According to the article: “We are not machines,” the Nike’s code of conduct states that the employees in their factories can only work sixty hours a week, and it’s mandatory to have one day off per seven days worked. The task force in the article went in and interviewed the workers at the Nike factory in early 2001 and found that workers’ weeks consisted of seventy hours and more. This depended on the seasonal orders that the workers were obligated to fill. The top worker was working 84 hours a week. When asked if this worker wanted to work this amount of hours, his reply was no. Another worker stated, “Although overtime is voluntary in my factory, it is forced by nature, since we cannot survive without it.” (“We are not machines” article) He has to work this amount of hours or he can’t afford anything for his family.
Another thing that you might not know about Nike workers is the low pay they receive. The same report, “We are not machines,” also found that the average monthly range of pay was from $37 to $44. This averages out to 25 cents per hour. They are stuck working the long hours that Nike demands, or they loose their jobs. Nike says that they are meeting minimum wage standard, which is $2.28 per day, but the workers are working many more hours than required to earn this wage. They are not paying them for their overtime. It takes the average worker one hour of wages to be able to buy 1 kilogram of rice. The average farmer makes about a dollar a day, where the average factory worker makes about two dollars a day. Sure this is more money, but there is a catch 22. The catch 22 is that the factory worker puts in double plus hours each day, in poor working conditions, with no rights. They aren’t learning any basic skills for survival in their country, such as farming. Their children aren’t learning any basic skills either, because they send them away to live in another village with a relative. They basically can’t afford to provide day care while they work, nor the food to feed their children or themselves. The shoes that these workers are making cost Nike about five dollars per shoe, and on an average, they sell for one hundred dollars or more depending on the shoe.
The Nike workers also have to go through the workday in unhealthy work conditions. The process of making shoes involves many chemicals, and if these chemicals aren’t properly managed, the worker’s health is at risk. Dara O’Rourke, a trained health and safety specialist, was allowed in to inspect the Nike factories in Indonesia. He found excessive noise and heat. Levels of toxic chemicals were still present, but reduced. He found misuse of equipment and poor tracking of worker illness. Because of this investigation, Nike went ahead and introduced water based chemicals, which reduced the level of toxic chemicals. When they interviewed some more workers after this, they found that they still had health issues that were unresolved.
Another issue that these workers face is not having the right to form unions. According to the article, “We are not machines,” the workers not only fear for their jobs, but also for their lives, if they even talk about unions. There have been many cases in which workers have been threatened and fired. There was even a case where there was a murder attempt on a worker’s life related to the union. I think it’s pathetic that Nike, which is an American founded company, will not support union activities in their own factories.
Many people would ask the question: why is Nike hardly concerned about the welfare of its workers? This can be easily answered by looking at the global economy. The global economy consisted of many companies using third world countries as their base for their factories that make their products. All these companies are backed by the WTO. According to the article: “Ten Arguments against the WTO,” the WTO is not concerned with where a company manufactures its products or the conditions that it takes place in. The reason that Nike gets away with having factories as such in Indonesia, is that they are backed by the a very powerful world organization, the WTO, thus allowing Nike to make huge profits. Now I am not saying that Nike is free to do what they want. They have been pressured by many independent organizations, which fight for the rights of the factory workers, and the types of conditions described in this article. Because of this, Nike has made some changes throughout the years that benefit the workers, but it is still not enough.
In conclusion, it seems that Nike is making a huge profit at the cost of human live and dignity. Instead of spending millions of dollars on their workers, who are the backbones of making the actual shoes, they are spending it on their advertisements to promote their company. I realize that advertisement is essential to the success of a product, but it should not be at the cost of another human being to make a profit. I know that Nike is just one of thousands of companies that have taken their labor overseas, so that the product can be made at a fraction of its cost. Unfortunately the public sees Nike as a company whose product is worn by the rich and famous, therefore it is something that they would want for themselves. We the consumer enable them to continue this kind of business, because we buy the product. Through global media, we the public are becoming more aware of this kind of exploitation of workers. Overall, I think there is no pride to be found in companies that exploit their employees at the cost of a better profit for themselves. Awareness is going to be the key to hopefully fix it in the near future.
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Nike Marketing Plan Essay
1675 Words7 Pages
This paper endeavors to recommend a viable marketing plan for the footwear giant, Nike. The plan has been adequately substantiated with thorough research on different factors affecting the firm along with various ways of addressing future challenges. This research paper highlights that Nike is confronted with multifarious issues which need to be negotiated amicably. Result of the study concludes that there is still a world waiting for the Nike to be exploited, outsmarting its competitors employing its innovative and creative business strategy.
MINI BUSINESS / MARKETING PLAN NIKE, INC.
In 1962, two individuals from the University of Oregon established a small company with the name of Blue Ribbon…show more content…
The footwear has been sub categorized into various product lines including sports culture, running, basketball, soccer, women fitness, baseball, football, track and field and kids. The equipment products comprise of bags, golf items and timing tools. [All products, Nike.com]
Nike is the top shoe manufacturer and holds major chunk of the US athletic shoe market. It has 36 competitors of which top three include Reebok, Adidas, and Fila. [Catherine Colbert, Hoovers.com] The industry is faced with multiple challenges like decreasing demand and increasing popularity of alternative footwear. Nike currently enjoys 47 % of market share with Reebok following with 16 % and Adidas having 6 %. [Steven Van Dusen, Nike vs. the Competition, web-link] With the merger of Reebok and Adidas, Nike is likely to confront a tough future.
Nike's SWOT analysis in brief is as following. [SWOT, marketingteacher.com]
1) Nike derives its strength from its strong research and development capability. It is constantly evolving innovative products of high quality with comparatively low price.
2) Nike's major weakness lies in her heavily reliance on footwear. This makes her exposed considerably to market fluctuations. More-so, Nike has very little share of retailing its own products hence the low price pressure is often passed on to the company by the retailers who refuse to lower their own profit margins.
3) Nike owns a globally recognized