Multinational companies are business entities that operate in more than one country. The normal multinational company normally function with a head office that in based in one country, while other facilities are located in locations in other countries. Multinational company is generally known as a multinational organization (MBE) or a transnational firm (TNC)
There are 3 type of model for a multinational company. One of the models is the normal model for multinational company is the placement of the professional head office in on land, while development facilities are found in one or more other countries. This model usually helps the company to take advantage of benefit for incorporating in confirmed locality, while also having the ability to produce goods and services in areas where the price of production is lower.
Another structural model for a multinational company is to base the father or mother company in a single land and operate subsidiaries in other counties round the world. This model is merely about all the functions of the parent are based in the united states of origin. The subsidiaries more or less function independently, beyond a few bases related to the parent.
A third method of the setup of a multinational company includes the establishment of any headquarters in one country that oversees a diverse group that exercises too many different countries and industries. In the model, multinational company includes affiliate marketers, subsidiaries and perhaps even some facilities that article directly to the headquarters
Table Of Contents:
- Positive Impact of Globalization
- Negative Impact of Globalization
- Introduction of Nike as Multinational Company
- PEST Research in Sponsor Country
- PEST Examination in Home Country
- Potential Impact of Globalization
- New Development
- Brand Awareness
- Change in Lifestyle
- Natural Disaster
- Strategy Overcome the Actual Impact
- Go Green
- Change on the Management Styles
- Research for New Technology
Globalization is the system of conversation and integration among the list of people, companies, government authorities and countries of the world to be able to build up the global economy. This technique has effects on individual well-being, on the environment, on culture, and on economical development and wealth of societies across the world. Globalization is involved of positive and negative.
Positive Impact of Globalization
Globalization is vital on the globe market right now. People relied more on the marketplace economy, had more confident in private capital and resources, so that, multinational company began playing a vital role in the development of developing countries. The globalization has been afflicted the growing economies to a certain degree. It makes diverse opportunities for the growing countries. It also makes the multinational company accessible to the developed market. The technology transfer promised better output and thus upgraded quality lifestyle.
Negative Impact of Globalization
Globalization has also created many problems such as inequality across and within different nations; the financial market will be influenced in the environment situation. Another negative impact of globalization was a majority of under-developed countries lost of trail. Until the 20 century, the procedure of globalization in the Indian current economic climate had been covered by trade, investment and financial obstacles. Due to this, the liberalization process had taken time to speed up. The step of globalization did not start that easily.
Introduction of Nike as Multinational Company
Nike Inc can be an designed company that designs, grows and market segments worldwide athletic shoes or boots, clothing, equipment and accessories. Nike uses both traditional and non-traditional distribution channels in almost 200 countries with main market regions in america, European countries, Asia Pacific, and the Americas.
Nike has some 20, 000 stores worldwide including Nike stock stores, Nike stores, Nike Towns, Cole Haan stores, and websites which sell Nike's sports and leisure product. Nike is the business which has 33% of the global market share in the athletic footwear industry.
PEST Research in Sponsor Country
Nike is and multinational company, its focus on macro environmental factors. Macro environmental factors are made up to Political, Economics, Contemporary society, and Technology.
The administration must create financial procedures that will foster the development of businesses. Nike has been helped by the united states policies which allow it to advance its product. US administration support Nike, particularly in the overall macroeconomic stability, low interest, stable money conditions and the international competitiveness of the duty system, form the building blocks critical to Nike's development.
In economy, the biggest menace for Nike would be economical recession. Nike's expansion adversely affected through the economic recession. THE UNITED STATES economy is experiencing a downturn right now. The sales of products are lower. Because of the downturn, Nike's sense pressure. The Asian economic crisis also affects Nike because the products are made in Asia and the labor costs and material prices are increasing
Nike's growth is not simply affected by the local overall economy but also in the international economy. Euro and Asia recession influenced the sales for Nike. The entire results in the sales generated by Nike in athletic shoes or boots. However, it's still remained stable because of the global market accocunts for for the variances in sales, especially between peek conditions.
Nowadays, people tend to be health conscious. Individuals are receiving more on diet and health credited to increasing numbers of people joining fitness night clubs. Because of that, the demand for accompanying fitness products, especially exercise outfits, footwear and equipment is increase. Requirements of Nike product increase scheduled to people want for sport shoes, outfits and equipment.
Nike didn't foresee problems as a result of a sweatshop expose about the labor and stock conditions at creation location in Asia. This brought on bad promotion and declining sales as world and consumers demand more socially liable companies.
Nike uses IT in its marketing information systems very effectively. Nike is applicable marketing information system to the economics of advancement, segmentation and differentiation for most of the business enterprise. Nike is the first choice of the marketplace due to make use of of the extremely valuable information technology, and putting it on to every part of the merchandise from development to syndication.
Nike is the globe head in the athletic sneakers industry which in a position to effectively uses its environment to boost its marketing work. This strategy has helps Nike make a good sales in the product.
PEST Examination in Home Country
Nike has been accused of using child labor to manufacture their products in Pakistan. Although Pakistan has laws and regulations against child labor and slavery, but the government has taken hardly any action through this problem. An another view, Nike actually help the neighborhood citizen, scheduled to providing job toward children, their parents have less burden as compare to before. Corresponding to Stephen Chapman, the simplest way the end the child labor is buy more the product which produce by the children. That will go above the poverty level and also gain the families of the children and the country because of the increase of the demand of the product plus they can produce more and earn much more.
In Pakistan, citizen average income is $5 each day as Pakistan culture, normally they have burden of ten children in one family, in this low income situation, Pakistan citizen actually struggle for life. For this reason situation, Nike helps Pakistan economy because of the export from Pakistan brought income of almost 385million USD. This may help Pakistan decrease the rate of the inflation.
Nike is worldwide; it includes contracts with 700 factories that use 550, 000 staff in 50 countries. Nike sells different kind of product for the several countries credited to different countries have a new lifestyle. Nike also produces some limited product for individuals who like to follow the pattern as their collection. And some of them will sell it with higher price because of the product is bound.
Nowadays, technology is keeping improve. Nike spends a large amount on R&D to realize innovation and can earn more income because of the progressive product will attract more and new consumers. E-commerce with adobe flash is one area of the new technology which Nike using. In e-commerce with flash, consumer can understand the depth and the structure of the merchandise more clearly and the way the products appear to be.
Potential Impact of Globalization
Nike builds up the new technology in footwear, clothes, and equipment. Nowadays, people are matter in personal protection. A design of sneaker will affected the balancing of individuals, Nike concentrating on this case to build up their new product specifically for sport person. Sport person normally will concern on the shoes, garments and equipment whether are ideal for them and help them succeed when they exercise. Many people will put in more income to buy a footwear due to they need the shoes or boots is ideal for them and not easy to get damage. For athletic person, they want to get shoes or boots which is very gentle as light as is feasible to perform well during the workout. Another new development for Nike is the footwear with timer and calculates distance. The product can be estimate the time and distance when they operating. This function can let them arranged a aim for and achieve it.
Nike is operating the look competition called "Future Sole". This competition is merely for senior high school and college learner. Nike gives the ability for them to pursue their enthusiasm and get their own design. As the result of your competition has shows, Nike will make it as a real product of the business and can be finding in Nike store all over the world. Because of this, Nike will come out more design on the market due to enthusiasm of the prospect.
Nike's product are prepared to give consumer perform well in exercise. Atlanta divorce attorneys area of the manufacturing process is designed to achieve the purpose of providing the world's best athletic items. When Nike Air was presented, it affected the activity world for its versatility. Based on the function of impact cover, it could be shaped and tuned to meet the specific demand of the activity person (Nike, 2007, 6). Nike concern the activity person needs and change were integrated to make their shoes or boots better still.
Nike is the world's leading sport shoes company. Nike's products are all across the world. In the future, when consumer desires to buy a shoes Nike is the first choice come their mind. Consumer remember Nike slogan "Just do it", which means that Nike's employ a strong brand commitment.
Although Nike is one of the most significant activities and fitness companies on the planet, but Nike still has to challenge its rival with new product ideas. In the look process, Nike needs to measure the consumer demands. For example, Nike made a decision to collaborate with Apple combines the sport and music mutually. According to Nike's CEO, Symbol Parker, The Nike and iPod Sport Set up is a radio system that attaches to the iPod nano to give people an individual running and workout experience (Apple, 2007, p. 1). Nike is planning to make many products with iPod such as coat, tops, shorts and armbands. Nike's CEO and Apple's CEO will continue to work together to maximize the Nike and iPod experience. This partnership can help Nike to stay as the primary sports activities company.
Companies that specialize in business ethics training and commercial sociable responsibility instill workplace ethics among personnel by creating a business ethics insurance plan (Fieser, 2006). The kid labor conditions are influenced Nike's a whole lot. Because of this, Nike had to plan and coordinate a world-wide public relation plan to redeem their name and reputation related to the moral problem. Without the proper management leading and planning, Nike are affected from the problem of child labor. Nike has made the right decision from the negative multimedia attention. And can continue to be successful, because of its strong business ethic and beliefs.
Change in Lifestyle
Nike is creating different product with different lifestyle. Usually, many people are using Nike with sports activities shoes. Nonetheless it looks that, the new lifestyle is needed in the new era. There is a rising trend of the teens participating in multiple sports activities. Consumer will buys different sport sneaker for different sport activity. Nike is aware some consumer can't afford for that. So that, the plan to create a multi-purpose footwear that the consumer can wear for various functions. However the performance of the shoes now as effective as the precise sport shoes. The trends of new shoes have the potential to improve the lifestyle.
In china, there are having snow catastrophe, this disaster business lead to the problem that the earth now facing the scarcity of cotton in global market. In the foreseeable future, there could be more devastation will be happen will lead to some other problem of shortage of another uncooked materials, when this happen this price of uncooked material will increase in the market and break the budgeting of Nike company and lead to another problem to Nike financial as a result of high raw material price.
Strategy Overcome the Actual Impact
Nowadays, People are supporting the environmental friendly product due to the global warming is getting serious. Nike also starts to design shoe which using little quantities of detrimental adhesives and even more of recycle materials to produce the product. Nike is practicing to create recycling shoes, phasing out the sulfur hexafluoride and developing sport accessories by using the waste. For instance, Nike has been working Re-use program to accumulate the old sneaker and produce it as a fresh recycle footwear.
Nike purchase so many corrugated cardboard scheduled to almost 50% of the Nike's packaging such as shoebox and the shipment carton. Nike applied innovative design and use other different materials to create the shoebox and shipment carton for decrease the waste and the cost. Nike will attempt to produce the package which conserving 30% of the materials and assist in conserving 200, 000 trees and shrubs each year. Nike also manages the light management in their shops for saving the vitality.
Nike makes sportswear for so many years. However, the company has searched for for new opportunities popular market. In my recommendation, Nike collaborates with G. A. P Company. G. A. P has very good reputation in producing clothes, with wider selection of varieties. It is possible to think of a new clothing collection for sports with GAP to be able to improve up sales worldwide, which would indirectly increase brand consciousness as well as reputation by the general public as the prior reason behind such cooperation is the consumers. Gatorade specializes in energy drink and provides the technology that Nike can project and produce their own brand of energy drink. In addition, collaboration may also be done with energy drink Gatorade. Nike and Gatorade are in the same sector of sport field, to satisfy the sport man needs and desire. Nike can now produce a power drink to fulfill and raise the current market demand and gratify customer flavour.
Change on the Management Styles
The changing of the management varieties of Nike towards the manufacture in third world country. Nike can make an effort to train some director to send to the manufacturer factory in third world countries to guide the management design of the countries. Those professionals can control the management style of the factory. For instance, the wages pay, uncooked material use, the working condition and the working environment.
The managers will control the wages paid which must be greater than the salary which only in a position to provide 3 dishes in a day, but the salary which able to give extra for the labor to do keeping and enjoy their life. For the working condition, the manufacturer stock should be creating a comfortable and safe working condition to the labor which is good ventilation and the safety environment because of the control of productive and effective of the machinery. A good working environment is needed for the labor which is the location of the maker factory is safety and bordering with not comprise any uncertain elements like radioactive of the nuclear vitality from the stock surrounding Nike Manufacturing plant, the pass on of virus, disrupting environment like forest and highland.
Research for New Technology
In 12 months 2010, Nike acquired done a study and development in natural material to produce jersey. The research they done actually is use the plastic bottle to create jersey. To overcome the situation of the price of raw materials and the scarcity of raw material in the market, Nike can try to do more effort in research and development department to discover more new materials which is existing on the market no subject is alternative or unrenewable fresh material. The new material have to be environmental friendly, this actually can help the development of knowing of the global towards Nike product because because of the high education level of general public, there are increasingly more public who value the pollution of earth. So when they are new product which wouldn't normally product pollution and having a high quality and better toughness. This actually will catch the attention of the interest from the public to do purchasing on that product.