Nike Ine: What does the Future hold?

SUMMARY

            The article entitled “Nike Inc: What does the Future hold?” is written by Bob Cramer on September 19, 2014 for Bidnessetc.com. Since Nike was established in 1964, the company has grown very well in the athletic community across nations. Nike’s fiscal performance reports have been strong. This indicates the company’s strength in matters such as consumer relations and innovations. Nike is also working on improving its digital interaction with its markets which will allow consumers to interact with Nike’s representatives and to customize their purchases. The author writes “Nike’s core competency is its unbeatable innovation across its product portfolio and its ability to transform insights from top athletes into quality products.”[1] Lastly, shareholders have been voicing their concerns over Nike’s suspension of several athletes and how such endorsements could affect Nike’s brand image going forward. The company has assured shareholders that it will not tolerate being associated with individuals who violate ethical standards.

OPINIONS

            I think the future holds a lot for Nike. With new technology being introduced each day, Nike stands to continue to be one of the largest competitors in the market. They are very innovative and there is so much more they can do. They already employ devices such as the Nike+ device that works seamlessly with an application on your phone. They also have their own Nike Training Center (NTC) app directed towards the more health conscious individual who prefers to work out at home for example. They offer many different varieties of athletic wear targeted at many different sports such as Running, Training, Soccer, Football, and Basketball, just to name a few. My only concern is that Nike assures its shareholder that it will not tolerate being associated with unethical practices, when a lot of their merchandise is produced by unethical means. The contradiction is troubling and can have a negative impact in the long term. Overall, I find they will succeed long into the future and only continue to grow and expand.

QUESTIONS/FEEDBACK

1)    What do you think will be next for Nike?

2)    How do you feel Nike as a brand will be in the future?

REFERENCES

Cramer, Bob. "Nike Inc: What does the Future hold?" Businessetc, 19 Sep. 2014. Web. <http://www.bidnessetc.com/25968-nike-inc-what-does-the-future-hold>.

---

[1] Cramer, Bob. "Nike Inc: What does the Future hold?" Businessetc, 19 Sep. 2014. Web. <http://www.bidnessetc.com/25968-nike-inc-what-does-the-future-hold>.

Nike helps Design Airplane Interior focused on Athlete-Specific Needs

SUMMARY

            The article read is entitled “Nike helps Design Airplane Interior focused on Athlete-Specific Needs” is written by Kyle Newport, a featured columnist for the Bleach Report on September 9, 2014. Nike has helped to design a plane that makes travelling across the coast for athletes a bit easier as travelling can be tough on the body. The plane cabin is specifically designed for a sports team which will have fewer seats, sleep bunkers, and overall bringing the training room on the go. Nike hopes to help to eliminate the negative aspects of being 40,000 feet in the air. Below are a few pictures of what the interior place may look like once Nike and plane manufacture Teague have finished their designs. However, the aircraft is just a concept at the moment.

                             

                             

                                              Photos taken from Article by Kyle Newport

OPINION

            I find that since Nike’s brand is focused on sports, it only makes sense for them to help with this initiative since they have already accumulated large amounts of research on athletes in order to better understand their needs. I think the idea of this plane is cool and will be beneficial to athletes. Based on the pictures viewed, it seems quite comfortable. If the concept does become a reality, it will help teams be more relaxed and hopefully less jet-lagged when flying across the coast. If this is the case, teams will do much better, not only increasing revenue for themselves but for Nike as well. Thus, Nike’s participation in this matter will be very fruitful for them.

QUESTIONS/FEEDBACK

1)    What are your thoughts on this aircraft? Is it a good idea or a bad one?

2)    If you could add any one thing into this plane that is athlete based, what would it be? (Your answer can be anything from a water jug to blankets)

REFERENCES

Newport, Kyle. "Nike Helps Design Airplane Interior focused on Athlete-Specific Needs" Bleach Report, 9 Sep. 2014. Web. <http://bleacherreport.com/articles/2192671-nike-helps-design-airplane-interior-focused-on-athlete-specific-needs>.

Inside Nike's Struggle to Balance Cost and Worker Safety in Bangladesh

Photo taken from Article by Shelly Banjo

SUMMARY

The article entitled “Inside Nike’s Struggle to Balance Cost and Worker Safety in Bangladesh” was written by Shelly Banjo of the Wall Street Journal on April 21, 2014. According to the article, Nike’s head of sustainable business --Hannah Jones-- had urged the company for years about the dangers of using Bangladesh manufacturers. While Bangladesh features some of the cheapest factories in the world[1], the practices they use are a safety concern. Hannah and her colleagues visited their manufacture base in Bangladesh and were dismayed to what they seen. “Rolls of fabric were strewn across the production floor and some windows were bolted shut.”[2] After their encounter, the executives cut their ties with the company. Their decision came not to long after another manufacturer in Bangladesh collapsed and killed many workers. The author states that “Nike’s experience offers a lesson in the difficulty of managing the twin priorities of controlling costs and maintaining acceptable working conditions.”[3] While Nike could begin to put safety controls in place, they wouldn’t be able to guarantee working conditions would continue to be safe. Over the past few years, Nike has increased wages in some factories and improved some features.

OPINION

It has become increasingly evident that Nike, and other companies like it, have expediently taken advantage of impoverished countries lax labour laws in order to increase their gross margin. A pair of Nike Air Jordan’s can retail for $350; meanwhile, a worker may make 6 cents on the hour to produce it. I agree with a statement made in the article. “Ignorance is not bliss. You have to understand the systemic issues and work with factory partners to solve them.”[4] While Nike may think they have no control in guaranteeing the procedures for safety they put into place will continue when they are not there, they could easily hire a representative in Bangladesh to oversee such actions. They could also make periodic surprise trips to ensure their manufacturer is adhering to the policies put in place. There are a few options for this multi-million dollar company.

I think that even if Nike lost a few dollars at first to ensure their practices were ethical, they would stand to gain much more once people understand what their brand is trying to do. Although Nike does not have a legal obligation to ensure the general health and well-being of their manufacturer’s workers, it would help with public perception if they implemented safety conditions and required a minimum wage for workers. Otherwise, Nike’s continued negligence could potentially lead to brand erosion, since people will not want to buy their products.

QUESTIONS/FEEDBACK

1) After reading this summary, do you think the same about your Nike garnets (if you own any)?

2) Do you believe that the use of overseas manufacturers had given Nike a bad reputation?

3) After the collapse of a manufacturer last year, many companies pulled their production out of Bangladesh. Do you think Nike should completely pull all their production out of Bangladesh or just the one company they already did?

REFERENCES

Banjo, Shelly. "Inside Nike’s Struggle to Balance cost and Worker Safety in Bangladesh" Wall Street Journal, 21 Apr. 2014. Web. <http://online.wsj.com/news/articles/SB10001424052702303873604579493502231397942>.

---

[1] Banjo, Shelly. "Inside Nike’s Struggle to Balance cost and Worker Safety in Bangladesh" Wall Street Journal, 21 Apr. 2014. Web. <http://online.wsj.com/news/articles/SB10001424052702303873604579493502231397942>.

[2] Ibid.

[3] Ibid.

[4] Ibid.

Nike Suspends contract with Adrian Peterson

September 24, 2014

Photo taken from article by Marie Cabural

SUMMARY

“Nike Inc. suspends contract with Adrian Peterson” is an article written by Marie Cabural for ValueWeek.com on September 17^th, 2014. As per the title, it speaks on the contract suspension for sponsorship Nike had with the running back for the Minnesota Vikings, Adrian Peterson. The reason for this suspension was due to the child abuse allegations against him. In a quote from the article, Nike has said “Nike is in no way condones child abuse or domestic violence of any kind, and shared our concerns with the NFL.”[1] The author states that this happened when the Minnesota Vikings removed Adrian from the active roster to deal with these allegations against him and that Adrian was advised to stay away from any activities that directly related to the team. Adrian was accused for injuring his child when he spanked him with a wooden switch. While he admitted to the incident, he claims he never meant to injure his child. Nike recently has also terminated its sponsorship deal with another running back Ray Rice because of a public domestic violence issue.

OPINION

            I completely understand why Nike suspended their contract with Adrian Peterson. They’ve built their company from the ground up and in order to protect their name from being dragged through the dirt, they cut all ties with the party bringing them down. In relation to my last post, Nike endorses so many athletes that cutting one probably will not matter financially for them. Their sales in the football league will still continue to be on the rise as they have other players endorsing their products. Just like in a job, you represent the company you are with and any action either in bad faith or that can irrefutably hurt the business, will be terminated. Not directly in response to this particular situation but in recent light of scandals regarding Nike's endorsees, I think it is right that Nike and many other companies do not entertain the tomfoolery that high paid celebrities and athletes tend to get away with due to their income. I believe if you make an example, it will deter people from trying to be above the law and in turn they will appreciate the opportunities they have more as they know they can be taken away despite who they are.

QUESTIONS/FEEDBACK

1.    Do you think that Nike was justified in their decision?

2.    If no, would you have any amendments added to his contract?
3.  When do you think an athlete comes a liability for a company?

---

[1] Cabural, Marie. "Nike suspends contract with Adrian Peterson" ValueWalk, 17 Sep. 2014. Web. <http://www.valuewalk.com/2014/09/nike-inc-suspends-contract-with-adrian-peterson/>.

Is Nike Spending Too Much on Superstars?

Photo: Allyson Felix from Marie Claire

SUMMARY

                “Is Nike spending too much on superstars?”[1] was written by Kyle Stock for the online sports section of BusinessWeek.com and was published March 20^th, 2014. The author of this article is trying to explore why Nike spends vast amounts of money endorsing athletes to represent their brand. The author feels that it is important as a global company to spend money to keep its superstars in their corner. It is said that Nike uses “1 in 10 of its revenue dollars on such costs…and has spiked again in recent months”. Nike’s advertising sponsorship tends to fluctuate based on different seasons and events. Recently in March of 2014, Nike had released a new line of “burly –looking sneaker boots and a line of patriotic sportswear”[2], which ultimately was not cheap exposure based on the event it was released at. “Nike has said its fans can expect an increase of more than 20 percent in “demand-creation” expenses for the recent quarter, which comes to an added $124 million”.[3] The author feels that as a business you must first spend your money if you’d like to make a profit but at some point feels this may be harmful.

OPINION

                In my opinion, I agree with the author that you ultimately need to spend the extra dollar in order to make a profit and keep your brand alive. I believe Nike spends a lot of money endorsing athletes for different product lines and various other activities, however I do feel it is justified. In order to have your business grow, you need to build your brand. Celebrities are given a high regard and are often imitated. In my opinion, many consumers look to celebrities when selecting certain sports attire as it’s a common notion that people believe if you see someone use a specific product and it works for them, it will then in turn work for you as well. To me it is also a monkey-see monkey-do concept. I feel all their advertising does them justice or they would not still be in business. Their brand is easily noticed, easily known, and is in every sports match and workout video, etc. By endorsing various athletes , Nike ultimately gets their brand out into the public sphere where it is recognized and the functionality of their design is exhibited.

QUESTIONS/FEEDBACK

1.       Do you feel that Nike spends too much endorsing their athletes? If so, do you believe they would get the same result with less endorsements?

2.       How much do you think Nike spends a year endorsing athletes?

REFERENCES

Stock, Kyle. "Is Nike Spending Too Much on Superstars?" BloomburgBusinessWeek. Bloomburg LP, 20 Mar. 2014. Web. <http://www.businessweek.com/articles/2014-03-20/is-nike-spending-too-much-on-superstars>.

---

[1] Stock, Kyle. "Is Nike Spending Too Much on Superstars?" BloomburgBusinessWeek. Bloomburg LP, 20 Mar. 2014. Web. <http://www.businessweek.com/articles/2014-03-20/is-nike-spending-too-much-on-superstars>.

[2] Ibid.

[3] Ibid.