Nike & Corporate Social Responsibility

Nike & Corporate Social Responsibility Basic facts / Problems - Outsourcing to LDC’s Savings from not manufacturing poured into marketing / endorsements Labor unrest Living Wages? Company Responsibility? NGO role in creating media attention against Nike Child Labor / Health and safety Corruption in outsourced countries Huge profit margins can turn against them Issue of protectionism for US Labour What should Nike do? Nike - Get more information of situation. Hired external auditor, NGO contested validity due to Nike paying auditors. Language issues / translator undermines credibility - Minimum wages. Whose minimum wages to apply? - Industry competitors - Reality vs. perceptions LDC - Economic development issues - Poverty / productivity - Force a rise in living standards NGO / Labor - Good use of Media - Coalition of NGO’s - Are they pushing for protectionism? Subcontractors - Establish standards for their suppliers Interactions between MNC and the local economy Why are there differences in different countries when MNC leave? Is what is left sustainable? I.e.: Taiwan / Korea Competitive analysis Five forces Buyers - Consumers participation in improving conditions in LDCs - Segmented buyers o high price points surveys show people are willing to pay more o People do not usually do what they say Suppliers - Really powerful suppliers. One company is producing 40% of worldwide shoes. - How can you impose your standards on them? What about the other companies? - They can forward integrate, they have the technology New entrants - Competing shoes and new companies coming in Rivalry - Competitors are doing the same thing. Low production cost / High marketing Substitutes