NIKE – A TNC

In 1962 Bill Bowerman, the legendary University of Oregon track & field coach, and Phil Knight, a University of Oregon business student and middle-distance runner, struck up a partnership to form a company called Blue Ribbon Sports (BRS). BRS imported shoes from Japan to the USA. First-year sales totalled $8,000, and in 1972 BRS changed its name to Nike, named for the Greek winged goddess of victory, and so began the birth of one of the modern worlds biggest and most famous companies.

Nike employs 22,000 people worldwide, from Nike World Headquarters in Oregon and Nike European Headquarters in Hilversum, The Netherlands, to nearly every region around the globe, including Asia Pacific, the Americas, and Europe, Middle East and Africa. This includes manufacturers, shippers, retailers and service providers, and nearly 1 million people help to bring Nike to athletes and the public around the globe.

It’s this sheer scale and variety of operating bases that makes Nike a TNC, and a rather large one at that. Nike’s main headquarters is in Portland, Oregon, USA. Yet very little, if any, of Nike’s trainers and apparel are manufactured in the USA. Nike, like many large companies, has moved its production into areas of the world that are cheaper, in an effort to reduce manufacturing costs and therefore maximising profit margins.

Nike’s HQ, based in an MEDC, is the centre for all Nike’s research and development. In an MEDC the best, most intelligent, experienced and well-educated workers are available for Nike’s development program. Being in a rich country also gives access to the latest in technological equipment and research techniques. This allows Nike to stay at the forefront of shoe and sportswear technology, developing shoe technology such as Max Air, Zoom Air, Tuned Air, Shox, as well as clothing technology and fabrics such as Dri-FIT, Clima-FIT, Therma-FIT and Storm-FIT. The increases in technology and innovation mean Nike keeps ahead of its biggest competitors both on the running track and the high street. MEDC’s such as the USA and Europe are also Nike’s biggest selling grounds, and keeping the HQ in these countries results in closer company-customer relations – Nike can see what the consumer wants and needs, and alter its product line-up accordingly. Nike has an established market in the USA, and people like the idea that it’s a ‘local’ American company, despite the fact that you’ll rarely if ever find a Nike product made in the USA.

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Nike’s main production centres are in the far-eastern areas of the world, but in reality Nike would set up their production centres in the cheapest area possible, no matter where it was in the world. Communication and transport have improved so much in the 21st century that it’s financially cheaper to do this than to keep all your manufacturing and development together. The Internet, e-mail, telephones and fax machines mean that controlling production and retail centres from the HQ is cheap and easy. Cheap carrier ships and airlines means that no matter where in the world a product is made, ...

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