Answer: Nike was founded in Oregon in the 1960s and has since expanded to become a global company that produces Nike shoes and clothing in 42 countries, working with a variety of subcontractors, employing one million people in production facilities, and bringing in 37.4 billion US dollars annually.
How Does Nike Grow Internationally?
The unrestricted and smooth movement of goods, services, and people around the globe is referred to as globalization. It can be characterized as the outcome of the opening up of the world economy and the consequent rise in international trade.
Put another way, when nations that were formerly restricted to trade and foreign investment expand globally and open up their economies, the world’s economies become more integrated and linked. Moreover, liberalizing import restrictions and attracting foreign investment into strategic economic sectors are two more implications of globalization that governments may face. That is to say, governments attract global capital by opening their economies to multinational firms.
The Effect of Globalization on Nike
Globalization has affected Nike in many different ways, bringing both success and disaster to the company. The following are the main reasons.
Political
The US government backs Nike, especially when it comes to overall macroeconomic stability, low participation rates, stable exchange rates, and the global fight against the revenue enhancement system—factors that form the basis of Nike’s expansion.
Economic
Recessions pose the biggest threat to Nike’s financial health. Nike has experienced a serious setback with the economic downturn. At the moment, Nike is under pressure from the financial crisis. Nike is impacted by the Asian economic crisis as well because some of its products are manufactured in Southeast Asia.
Technology
In terms of its sales information systems, Nike uses technology quite well. Nike uses an information system for marketing to the economic sciences of innovation and differentiation most of the time. Nike leads the industry because it uses a lot of highly valued information technology in every part of the product lifecycle, from development to distribution.
Society
These days, people are becoming more aware of their health and placing more emphasis on their diet and general well-being. Fitness gear, such as gear, shoes, and clothes, is therefore becoming more and more necessary. The demand for Nike products is rising as a result of people looking for places, apparel, and equipment.
Positive Impacts of Globalization on Nike
Some of the positive impacts of Nike’s globalization in developing nations are listed below.
Elimination of Poverty
The local economy in the areas where Nike stores are located and where they develop resources has an impact on Nike’s globalization as well. Its fees and taxes support the economy, and poverty can be eliminated in an expanding economy.
Technology
Nike is always coming up with fresh concepts and methods for producing goods that people will buy. Because of this, Nike conducts research and creates new technologies that it can use to make its products, such as shoes and clothing. Technology is being updated to discover more methods of converting raw materials into new materials, as this has a significant impact on it. In addition, Nike created a flash-based e-commerce website that makes it simpler for customers to comprehend the specifics and design of the goods.
Work Availability
At the moment, Nike operates more than 20,000 retail locations worldwide. There are now more options for trade and employment because they were formed and there will be more in the future. As a result, more residents in various countries are beginning to place a higher value on living standards and education in their particular communities. This is because applications for positions other than those at Nike stores require schooling.
International Investments
Globalization has brought about many changes in these countries, one of which is foreign investment. For example, some investors would prefer things and raw resources to reach the market and industry faster.
Nike can establish outlets abroad. Plants have also been established by it in Southeast Asia and other Asian nations including China. By investing in these factories abroad, Nike can utilize the resources of these nations to make footwear, apparel, and equipment.
Education
Education is another source of motivation for Nike’s business. Students from senior high schools and colleges compete in events like the “Future Sole,” which they organize. They are able to share their enthusiasm with others by using their designs to create new goods for Nike. Students can use their abilities and creativity to aim high in these events.
Negative Impacts of Globalization on Nike
Nike’s globalization has benefited developing countries much, but it has also had several unfavorable effects, which are:
Employee Displacements
There are countless career opportunities across the globe as a result of Nike’s globalization. However, the majority of them had to leave their families behind throughout the years to work at different Nike facilities, infrastructures, and retail locations abroad. As a result, quite several families have split up, gotten married again, and given their kids over to shelters and volunteers.
Lack of Employment
About half of the workforce and working conditions in almost every country Nike had grown to before globalization took hold relied on informal labor in certain areas. These professions have grown less prevalent as technology and Nike’s manufacturing process have evolved, but there is still a growing need for trained workers worldwide.
Rise in Lifestyle-Related Diseases
Numerous lives of individuals have been profoundly impacted by Nike’s globalization. Due to Nike’s popularity, some people tend to give up a lot to purchase a Nike product and adopt the Vogue lifestyle. Nike things are purchased with money that ought to be spent on food and other necessities.
Ignorance of Culture
There are values, beliefs, and cultures unique to each group, civilization, and country. They are essential because they define acceptable behavior within a given community. The leaders, or elders, ensure that the people abide by moral laws. However, globalization mixed several cultures.
In general, the effects of globalization in the future will differ between and within nations. At the same time, protectionism is an inaccurate and ultimately ineffective tactic to counteract the massive economic and technological factors driving globalization.
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