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Manufacturing Practices Of The Footwear Industry: Nike Vs. The Competition

2314 words - 9 pages

Of all the major fads and trends surging through popular culture, none is more prevalent than flashy footwear. Mainly with athletic sneakers, the footwear industry has experienced a major influx in the demand for the output of iconic shoes. The current manufacturing practices of the sneaker industry, in particular companies such as Nike, Reebok, Adidas, and New Balance, takes place all over the globe. With the industry experiencing severe competition and the product requiring intensive labor, firms are facing extreme pressure to increase their profit margins through their sourcing practices. No competing sports brand is more eminent and internationally established than Nike, Incorporated. Introduced to the world in 1964, Nike has made its way to the pinnacle of notable fashion and athletic brands with the acquisition of major subsidiary brands such as Hurley, Converse, and Jordan. Nike is now the world's leading supplier of athletic shoes and apparel and a major manufacturer of sports equipment. Due to the brand’s association with legendary Athletes and futuristically designed sneakers, Nike has fueled fervor among consumers, in which many will result to desperate measures just to own a pair of Nike’s iconic footwear. Aware of the risks and danger associated with the releasing of these highly sought-after sneakers, Nike has become infatuated with consumers’ overwhelming desire to purchase their product and has begun to release their most highly demanded sneakers in limited quantities to generate even more chaos and increase their profit margin. Due to the fervor that Nike has instigated over their product and the danger that it has brought upon shipment transporters, retailers, and the dedicated customers, Nike’s new-release sneaker practices can and must be reformed.
Nike’s current footwear policy is truly capitalistic. While the company claims that they have their employees’ and consumers’’ best interest at heart, Nike’s main goal is to cut expenses and maximize profits. Nike currently enjoys a 47% market share of the domestic footwear industry, with sales of $3.77 billion (Van Dusen). Nike has been manufacturing throughout the Asian region for over twenty-five years, and there are over 500,000 people today directly engaged in the production of their products (Van Dusen). They utilize an outsourcing strategy, using only subcontractors throughout the globe. Their majority of their output today is produced in factories in China, Indonesia, and Vietnam, but they also have factories in Italy, the Philippines, Taiwan, and South Korea (Van Dusen). In the1990’s, Nike was investigated for underpaying worker in Indonesia, child labor in Cambodia and Pakistan, and poor working conditions in China and Vietnam. They later faced further allegations of wage law violations, excessive overtime, physical abuse, and unsafe working conditions which surfaced from its suppliers and in 1992 (Ruiz 1). Nike responded to its sweatshop labor image by developing its...

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