IPE Case Study on Nike.

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Ernie Gilbert

Ken Gilmore

IPE Case Study #3

        Nike. The word in Japanese means victory. However in the past two decades it has become synonymous with sweatshops and anti-globalization. Nike’s image has grown into one of a sweatshop employer, forcing young women especially to toil long hours in difficult conditions for substandard wages. Le, a 19-year old woman living on the outskirts of Ho Chi Minh City in Vietnam, worked in a factory making Nike shoes. She worked six day weeks for $1.84 per day or $48 per month in 1998, slightly better than Vietnam’s minimum wage for the region. With the rise of Multination Corporations or MNC’s in the past 50 years several key questions are being debated. Labor activists, nongovernmental organizations (NGOs), women’s groups, and human rights activists have long claimed that the footwear and apparel industries have relied upon “sweatshops”. The most common of their concerns have been wages, hours, working conditions, the ability to organize unions, and physical treatment of workers. Laborers in the Less Developed Countries (LDCs) they charge arrive at work and are frequently overseen by supervisors who don’t speak the same language, who often use militaristic discipline and corporal punishment, and require long overtime. So what does this boil down to? Is Nike responsible to the factories and workers that make their products, but do not directly employ. And to what extent is Nike responsible to NGOs and consumers as a whole?

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        Nike has always imported their shoes and other products from foreign soil. This is because of the competitive nature of the industry. In table 1 of the case study, we see the break down of pricing for a 70 dollar pair of shoes. From that pair of shoes about $2.75 goes into workers’ hands. A common theme runs throughout the very competitive industry of athletic products, branding. Both the largest barrier to entry and the most valued angle of production is this concept of branding. With fads rampant in the developed world your brand name means that much more. This ...

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