The sportswear company
Nike is one of the truly global players, whose well-known trademark, the Swoosh,
has become an icon of the sports world and leisure industry. In the following
text, the author Michael Veseth looks at some of the reasons behind Nike's
international success story. - Michael Veseth, Selling Globalization.' The
Myth of the Global Economy (Boulder/London: Lynne Rienner Publishers, 1998).
50-52.
Throughout its history, Nike has consistently combined technical innovation
and aggressive marketing. Its business still includes running shoes but now
includes a wide range of other products in both footwear and sports-related
markets. I have not yet seen a Nike perfume or cologne, but it would not
surprise me if one exists. Nike's trademark is that well known.
Nike is truly global by my definition because it swims in both pools. It
has helped create a global consumption pool for its sports-related products,
which it makes by drawing resources from the global production pool. It works
hard at making both production and consumption global, reaps enormous profits,
and takes a good deal of criticism in the process.
Nike does not have many employees (only about 14,000 in 1995) for a
corporation with almost $ 5 billion in sales (1995) and a market value of
nearly $10 billion (1995). The key to this high productivity is that Nike's
core business employees do not make shoes: Their job is to make customers. To
do this, they make images and icons. Shoes, I think, are almost an
afterthought. Nike invests heavily in creating demand for its products by
building its stable of celebrity endorsers and making the swoosh a symbol of
their lifestyles.
Nike's success at creating a global trademark makes it vulnerable to
charges of cultural imperialism by people who argue that globalization is the
end of culture.
Nike does not own the factories that make its shoes. It typically forms
partnerships with local firms or with Korean or Taiwanese investors. Nike pays
wages that are usually high by local standards. In Indonesia, for example,
factory wages of $ 2.28 per day are both legal (the national minimum wage is $
2.28) and high enough to attract 120,000 workers to factory jobs making Nike
shoes because so many other jobs do not pay even this legal minimum wage. (The
Nike-contracted factories in Indonesia therefore employ almost 100 times as
many workers as Nike itself!)
"Whether you like Nike or don't like Nike, good corporations are
the ones that lead these countries out of poverty", said Nike Chairman
Philip Knight in an interview. "When we started in Japan, factory labor
there was making $ 4 a day, which is basically what is being paid in Indonesia
and being so strongly criticized today. Nobody today is saying, 'The poor old
Japanese.' We watched it happen all over again in Taiwan and Korea, and now
it's going on in Southeast Asia."
Swoosh (n.): Nike's trademark, often used without the
company's name; (v.) making a sound by moving quickly through the air - consistent
(adj.): continuing to happen or develop in the same way - range (n.): a
set of similar products made by a particular company - drawing resources:
using what is available to the company - reap (v.): get as a result of
what they have done - core business: main business - afterthought
(n.): something that you mention or add later because you did not think of it
or plan it before - celebrity endorsers: a famous person saying in an
advertisement that they use and like a product or service - charge (n.):
accusation - Nike-contracted (adj.): companies have signed a contract in
which they agree formally that they will produce for the company