Nike Case Study

Question 1

Where Nike manufactured in 1970s

Answer 1

South Korea and Taiwan

Question 2

Where manufacturing changed to and why? Where is it situated in Vietnam?

Answer 2

• 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

Question 3

Why it is globalisation

Answer 3

• 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

Question 4

Benefits to Vietnam

Answer 4

• 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

Question 5

Disadvantages to Vietnam

Answer 5

• 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

Question 6

Benefits to global society

Answer 6

• 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

Question 7

Disadvantages to global society

Answer 7

• 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