The Manufacturing Practices of the Footwear Industry: Nike vs. the Competition

The Manufacturing Practices of the Footwear Industry: Nike vs. the Competition Steven Van Dusen The current manufacturing practices of the sneaker industry, in particular companies such as Nike, Reebok, Adidas, Converse, and New Balance, takes place throughout 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. The following paper will analyze the sneaker industry, while examining the multitude of viable manufacturing options, and critiquing their current manufacturing structure. Footwear Industry – Players, Revenues, Market Share To properly review the manufacturing in the footwear industry, it is necessary to first gain an understanding of the dominant leaders in the marketplace. The industry is currently experiencing hypercompetition, led by six main firms – Nike, Reebok, Adidas, Fila, Converse, and New Balance (see exhibit 1), with nearly $7 billion in revenues domestically. Nike is the industry leader, with a 47% market share, followed by Reebok, a distant second at 16%, and Adidas at 6% (see exhibit 2). This category is facing decreasing demand and the rising popularity of alternative footwear, resulting in more pressure than ever before to achieve high gross margins through effective global sourcing practices. Manufacturing options Footwear companies have two basic options in the manufacturing of their products, they can both own and operate the factories that produce their products, or subcontract their products out to secondary manufacturers. These facilities can be located either domestically or internationally, and both present a myriad of positives and negatives. Firms that produce domestically benefit from ease of monitoring, skilled workforce, government stability, job creation, and well understood labor rules, while suffering from the relatively high wages required in the U. S. as compared to developing countries. By manufacturing products overseas, in particular in third world economies, tremendous efficiencies are gained in the form of reduced wages, but are countered by the increased difficulty of monitoring the quality of their products and the actual working conditions in the factories. Companies that are vertically integrated, who own and operate the factories where their products are manufactured, are faced with large capital expenditure requirements and the management of the factories themselves, resulting in lower profit margins. Strategic Outsourcing In analyzing the sneaker industry, we are faced with the question, â€Å"What are these firms core competencies? † If manufacturing falls under this umbrella, then firms should look to produce internally. However, the core skills that set these companies apart from the competition, are their marketing, distribution, and technological expertise. Applying the dominant sneaker companies areas of expertise, let’s review the following questions: Is internalization a source of competitive advantage? Is manufacturing a skill our firm does better than anybody else? Will firms be able to leverage their manufacturing expertise in the future? Are we releasing any of the firm’s proprietary skills/information by outsourcing? With all of the above questions posed to any of the big four sneaker companies, they would respond with a resounding â€Å"no†. Therefore, in today’s global environment, the most strategically viable manufacturing strategy is the outsourcing of their products. The efficiencies that are gained, in the form of shifting of risk, reduced capital requirements, lower wages, and ability to focus on their core competencies, strongly outweigh all other manufacturing options. The Evolution of Manufacturing in Third World Countries As the economies of countries around world expand, so does their ability and skill level in all facets of manufacturing. Beginning in London in the early 1900’s, and followed through to the present day, manufacturing in its simplest form consists of light manufacturing, which uses unskilled labor to produce items such as shirts, shorts, and jeans. As the economy develops along with the skill of manufacturing, countries begin moderately technical light manufacturing, which includes footwear, outerwear and, performance sportswear. The next step in this growth involves the production of technical consumer products such as radios, calculators, and wristwatches. With the most developed economies gaining high levels of technical expertise, manufacturing grows to include technical durables, which includes automobiles and computers. This progression represents the advancement of economies throughout the world today, and provides the reasoning behind sneaker companies manufacturing beginning in the United States and Germany, and passing through Japan, Korea, and Taiwan, to its present day central areas of China, Indonesia, and Vietnam. As these three countries progress over the next decade, and large amounts of new capital is pumped into their economies, their standard of living will rise along with their manufacturing expertise. Companies will be forced to relocate their manufacturing in countries such as Cambodia, Pakistan, and underdeveloped regions of Africa in search of lower wages. Nike Nike currently enjoys a 47% market share of the domestic footwear industry, with sales of $3. 77 billion. 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. 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. These factories are 100% owned by subcontractors, with the majority of their output consisting solely of Nike products. However, Nike does employ teams of four expatriates per each of the big three countries (China, Indonesia, Vietnam), that focus on both quality of product and quality of working conditions, visiting the factories weekly. They also developed their code of conduct in 1992 and have implemented it across the globe, as its goal is to set the standard for subcontractors to follow if they wish to do business with Nike. However, due to a manufacturing network of this magnitude, they have faced numerous violations involving factory conditions and human rights issues, which have been widely publicized. They have responded to these issues through the Andrew Young report, the Dartmouth Study, and Ernst & Young’s continual monitoring, but are still approximately two years away from completely addressing these problems throughout the globe. Reebok Reebok, as the second leading manufacturer of footwear, has domestic revenues of $1. 28 billion and a market share of 16%. Similar to Nike, they also utilize a 100% outsourcing strategy and manufacture their products throughout Asia. They have created and implemented their own code of conduct for manufactures to follow, but have less infrastructure than Nike across the globe to enforce it. They are facing scrutiny in regards to wage, overtime, and air quality issues, and like Nike, are working to address these issues. However, their strength, the creation and distribution of a global brand, is allowed to foster under this manufacturing strategy, as they focus on their core competencies, and outsource their production. Adidas Adidas is currently enjoying the fastest growth of any brand domestically, with a market share of 6% and revenues of $500 million. They have been shielded from bad publicity by the two Goliath’s of the industry, Nike and Reebok, and are reaping the rewards substantially. They have adjusted their manufacturing strategy, from a vertical operation in Germany in the 60’s and 70’s, to an outsourcing focus today throughout Asia. Unlike the big two, they do not have a code of conduct, and their factories are considered to be the worst in the industry. It is just a matter of time before they are exposed, with an underground swelling of negativity already occurring today. In order to avoid the negative effects and lost revenues that Nike and Reebok have received, they need to immediately begin to take a proactive stance in regards to the working conditions of their factories. Converse With a market share of 3% and revenues of $280 million, Converse manufactures their products both domestically and internationally. It is important to note that the only product they continue to manufacture in the U. S. oday, is the Chuck Taylor All Star, with plants in Lumberton, NC and Mission, TX. This is a product where the â€Å"Made in the USA† label is crucial to its success, and internalization is a source of competitive advantage. These two factors serving as the sole reason why the production remains within the U. S. All other shoe models are outsourced in Asia, with the explanation of reduced wages driving this strategy. Converse, lik e Adidas, must also generate a higher degree of internal monitoring of their subcontractors, or they will soon face increased scrutiny New Balance New Balance is the one company that has kept a substantial amount of manufacturing in the United States, and has a 3% market share with sales of $260 million. They currently operate five plants in New England, employing over 1400 workers, that produces 50% of their output. With this mixed strategy, of vertical integration and outsourcing, they are very unique, with their strategic reasoning based on the advantages gained through higher levels of quality domestically, and the â€Å"Made in the USA† label. They are in a highly specialized, niche business, running shoes, and closeness of factories is more essential to their customer base than the other companies because of special orders. For their most technical products they employ outsourcing, following the strategy of their competitors. Although there is something to be said for manufacturing domestically, they are straying away from the skills that they do better than anybody else – the design and marketing of the premier running shoe in the industry. Their long-term strategy should shift to a 100% outsourcing model, allowing them to control this niche for the future. Summary Manufacturing in the footwear industry has evolved dramatically over the course of the last century. As economies grow and skills are enhanced, production has been forced to spread to less developed regions around the world. While Nike, Reebok, Adidas, Converse, and New Balance each have their own manufacturing structure, the reason behind their rise to dominance in this industry is their ability to focus on the core skills that they perform better than anybody else. The outsourcing trend that dominates the industry today will only increase in the future. The major issues facing these firms today, working conditions and human rights, must be addressed in the short-term. Through either one firm’s leadership, or all footwear companies strategically aligning, these issues will be addressed; the question is â€Å"Just how long will it take before the footwear companies say Just Do It? † Copyright, 1998 Van Dusen, INTS 092 UNC – Chapel Hill

Can Theories of Management Apply to Media manager, Organisations and, Essay

Can Theories of Management Apply to Media manager, Organisations and, are Such Theoretical Applications Redundant Discuss in Relation to the Film and TV Industries - Essay Example The main objective o media industries are successful customer acquisition and retention start with a focus on creating a positive return on investment to grow businesses through measurable marketing solutions that leverage the convergence of media and the newest technologies. Then why is it that anytime any news about the advertising or video game industry, both of which are massive profitable and pretty much icons of society and culture, they always claim to be struggling Are industries based upon rapid fire information inherently less stable than ones based on selling material goods How to turn creative ideas into a successful business How to adapt conventional business and management skills to the unpredictable market for culture Management theories are applicable in to cut across different industries that includes Film production and distribution Broadcasting, music industry, Publishing, Crafts and design, Computer software, games, animation consultancy and a survival kit for the small creative firms. The media manager in film and media enterprises focuses on the special relationship between creative imagination and strategic management. Efficient management skills cater for profit creative sector at the national and international level, including funding officers, project managers and policy makers. (Sharan & Surar, 15) In Media and TV industries, media manager's collaboration, togetherness, change in thinking cannot happen through annual conferences and conference room presentations. It needs to be a discipline and has to start from the top. There should be a set of management theories, which all media managers adhere to for better performance. The top manager will have to consciously become selfless, understand management theories practiced management skills can genuinely spread this culture in the workplace for this process to be successful. This will also eliminate mutiny in the ranks and help ideas to flourish! Management theories are applicable to all business organisations. Introduction to organisations and management includes: (1) PLANNING: Decision-making, the essence of a manager's job, foundations of planning, strategic management, planning tools and techniques .Media managers must develop own approaches to organisation, strategic planning and marketing develop critical faculties and research skills. Indeed there is a need to look into all aspects of branding and marketing from strategy and tactic development to budget allocations and metric tracking and integrating a variety of traditional and digital tactics. (2) ORGANISING: Organisational structure and design also includes Human resource management, managing change and innovation techniques. Media managers must acquire a critical overview of the commercial, legal and cultural frameworks within which creative and media enterprises operate. (3) LEADING: Leading the industry and the people, understanding groups and teams motivating employees, Leadership, managerial communication and interpersonal skills. Media managers must explore the business opportunities and make decisions in the environment of a rapidly changing media industry. The challenge for media corporations today is to keep pace with new technology and to continuously learn and create knowledge in this fast changing environment. (4)

A look into the Accounts of Love as depicted in The Symposium by Plato Essay

A look into the Accounts of Love as depicted in The Symposium by Plato - Essay Example According to Aristophanes the unification between a man and a woman results in an offspring whereas the unification between a man and man results in pure satisfaction with no other strings attached (Symposium, 191c-d) Thus, according to Aristophanes it is natural for a human being to pursue pure love where love actually "is the name for our pursuit of wholeness, for our desire to be complete" (Symposium192e-193a). Aristophanes' idea of human civilization is based on this love which is in its complete sense and this idea of love is the constant source of inspiration that makes the greatest of arts and formulates history (Symposium193c). Aristophanes also makes comments that devise the idea that the lovers with no strings attach are not able to evoke more desire as there is no structure of desire and the lovers would not be able to state anything substantial out of this union because they were unable to state what they did desire. According to Aristophanes this is the basic shortfall of human love but mentions that the desire to unite one's soul with its other half is what love truly is. Similarly, Alcibiades states that he is basically homosexual in nature because he's crazy about beautiful boys and it is in his nature that he pursues for their love whenever and wherever it is possible (Symposium216d). Alcibiades was a soldier by profession and what he said followed a straight path with comparatively less intellectuality involved in it though he was able to express his mind and thoughts without any philosophical doctrines involved. He was clear and unrepentant in his views. He clearly stated his views on love by expressing himself as an ardent pursuer of beautiful young boys though he did mention that whatever it is Socrates remained his lifelong love and explicitly stated that only he, Alcibiades, could be the true love of Socrates. Alcibiades explains to Socrates that as he is his only true lover, and this he can prove in a numerous way, his views to love is unscratched and pure therefore it is Alcibiades' idea of love, which corresponds with Aristophanes, which should stand true at the end. It is this reason Socrates should always support his views on love and finding a worthy lover in Alcibiades Socrates is better fit to help him reach that aim than anyone else (Symposium219c-d). But on the other hand there was Socrates. According to Socrates "love is neither beautiful nor good- as he desires good and beautiful things, it is clear that he is, in fact, lacking these things" (Symposium 200a-201c). This was Socrates' view on love in a nutshell but he began to explain love as a whole and in totality. For this he took the help f his memories where he had a chat on the same topic with the priestess Diotima. According to Socrates Diotima was the one who taught everything about love (Symposium 201d) and most of Socrates' idea of love is based on Diotima's idea on love and her idea of 'ladder of ascent'. Everything that Socrates narrates hereon in the symposium reflects the idea of Diotima on love and Socrates is presenting proof after proof to justify her views.According to Diotima, "love, in fact, is not a god, as he desires beautiful and good things, which the gods already have neither is he mortal- just as love's lack of beauty does not make him ugly" (Symposium 2 02a).

Japan Essay Example | Topics and Well Written Essays - 4000 words

Japan - Essay Example Today the process of reclamation of land from the sea is going on but it is faced with resistance from environmentalists that argue the bay is more important as an ecological buffer for both the land and the commercial fishing industry. Future land development is this area will now have to deal with balancing environmental concerns and the need for space in the face of limited supply on Japan's Island nation. This paper will explore the alternative ways in which Land reclamation project in Tokyo bay could proceed in light of all the competing motivations that exist. After introducing the history of land reclamation in Tokyo Bay it will look at the the way in which construction would ideally have to be implemented using the ideas of famed Japanese Architect Kenzo Tange. It will look at the arguments for conservation projects in the area that would perhaps be more attractive to the Japanese population than monolithic construction projects and it will touch on the possibility of using f loating structures to expand construction. In exploring these alternatives this paper will place the rationales for these approaches in their appropriate historical, social, cultural and scientific context. Tokyo Bay formed about 12000 years ago following the last glacial age(1, Tomoyuki). Over the millenia an intricate network of coral grew in the pattern of coral in all coastal regions. This coral today provides a vital role in the protecting the delicate ecosystem that exist in the area. There are many life forms that presently exist. Major groups of corals were only discovered within the last decade but now there is found to be an extensive network of coral all throughout the area. Indeed the bay is teeming with life. A rich population of plankton that have ironically thrived on the treated sewage waste that has been released into the bay provide the food base for a number of fish that live in the area, including bass, parrot fish,and shrimp to name just a few. The area has long been noted to produce fish stock at a higher rate than the surrounding ocean precisely because of the plankton. The problem has been that the encroachment by land reclamation has also claimed much of the fl at land that surrounds the bay. Over 90 % of this land has been reclaimed in the last 50 years(4 , Mason) . The reasons for this expansion are rooted in Japan's need for more space. There are 127 million people in Japan living in a geographical area the size of only five times the size of Britain(6, Mason). Land reclamation therefore is almost an historical inevitability. The earliest example of land reclamation occurred in the Edo era over 400 years ago. While this reclamation undoubtedly effected the delicate ecosystem the scale was small enough that the system was able to absorb the shocks. This remained the case till the postwar period when industrialization proceeded at a rapid pace. Ironically the first widespread utilization of land reclamation arose out of a need to curb pollution. The Asanao Cement Corporation was the principal culprit in the the pollution of the inland areas of Fukagawa. A plan was therefore devised, ill conceived in retrospect, to reclaim land along the Tokyo bay and situate much of the heavy industry in this area(5, Amazaki). This was in 1912 and the growth expanded during the years of World War II, but only really dramatically increased in the post war rapid economic expansion. Amazaki describes the

Analysis of Terrorist Attacks in International Law Research Paper

Analysis of Terrorist Attacks in International Law - Research Paper Example Hague Convention considers the unlawful seizure of an aircraft, an international criminal offense and even the accomplices of the hijackers are charged with the same offense and even the states that get connected to the offense are asked to abide with the international law of hijacking. "The Convention requires each contracting state to take such measures as may be necessary to establish its jurisdiction over the offense when the offense is committed on board an aircraft registered in that state, or when the aircraft lands in that state with the offender on board, or when the alleged offender is present in its territory and it does not extradite him to one of the other states just mentioned" American Society of International Law.1" The use of the hijacked aircraft as lethal weapons, resulting in the deaths of hundreds if not thousands of persons, may be a crime against humanity under international law. The Statute of the International Criminal Court, which is in the process of obtaining the necessary ratifications to enter into force, defines a crime against humanity as any of several listed acts "when committed as part of a widespread or systematic attack directed against any civilian population, with knowledge of the attack." The acts include murder and "other inhumane acts of a similar character intentionally causing great suffering, or serious injury to body or to mental or physical health." When the attack happened in 2001 on the World Trade Centre, the International Criminal Court was not yet functioning. Still, the crimes were held as crimes against humanity that would be subject to all domestic criminal courts of the world and eventually they came under the jurisdiction of International Criminal Court. Under the jurisdiction of international law, not only any country could try the terrorists for the terrorist acts within the borders of that particular country irrespective of their nationality and citizenship according to the statutes that are in force, but also the terrorists could be sent to another country for trial if that country's grievance against such terrorists is more severe. All the countries can exercise the universal jurisdiction for the crimes committed against their State. According to the universal law, any country can bring such terrorist offenses under its own law and prosecute the offenders if 'they are within its custody'.International law issues can also crop up if any country is obviously harboring terrorists who have already committed acts of terrorism anywhere in the world. Military action against such a country is definitely not advised, but the country could be the target of many other international actions like sanctions, trade embargos etc. If there is an extradition treaty between the two countries, it should be honored immediately and not doing so, can earn the status of a rogue nation to the un-obliging country.

Individual article analysis Essay Example | Topics and Well Written Essays - 1250 words

Individual article analysis - Essay Example How a person sees oneself along these lines helps marketers to speculate the kind of products that may appeal to the person. However, the way a person perceives oneself is often far from reality(Gration, Raciti and Arcodia 650). This paper reviews the article by the title above. Brands confer value to consumers in multiple ways(Khare and Handa 63). One way is by enhancing the personality of their user. Besides functional attributes, the non-functional features of the product may determine the consumers decision to buy or not to buy. The article under review reports the findings of the research that explored the degree to which self-concept and brand personality interact to influence how a consumer evaluates brands and arrives at purchase decisions. The research involved a number of secondary school students whose individual self-concept was measured using a scale developed by Malhotra in 1981. The respondents were then made to evaluate one out of three imaginary brands of mobile phones, rate the brand on the basis of the general quality then indicate whether or not they would buy the phone. Having set the stage, the authors proceed to define key concepts in their paper. These are self-concept, personality and Indian youth. They contend that self-concept studies have understood the concept as being multi-dimensional(Khare and Handa 64). The concept enables the consumer to evaluate oneself under different circumstances. Most self-concept studies, they report, have focused on explaining why a consumer buys one brand of a product and not the other. It is crucial that marketers comprehend and appreciate the impact of self-concept, both individual and social, on purchase decisions. Self-concept studies have been based on the hypothesis that the way a consumer sees oneself influences the types of brands they buy. Brand personality entails giving brands human characteristics. For example, a car manufacturer

Interview Assignment Essay Example | Topics and Well Written Essays - 500 words

Interview Assignment - Essay Example Obviously, a lot of other applicants already have uttered these words which do not at all make me stand out from the rest. Aside from that, sincerity is not achieved. Thus, if I were to assess myself as a candidate employee, I would so easily look to others who might have a more personal story, something that would include personal experiences of how one was able to overcome a pressuring situation before or how one was able to handle difference of opinions without causing a fight. With this said, I would say that I would change the manner of telling about myself in a manner by which I would focus not on what I wish to do in the future, instead, how I would use my experiences to nurture good working relationships and maintain a good performance in their company. This is because of the fact that, in this manner, I would not be making up stories which appears to be obviously made up or idealistic. On the other hand, my second video was very attractive to employers because how I told about myself and my experiences were now hinged on how these will benefit the company if they hire me. With much thought about what a certain company I am applying for would need and want, I am able to choose relevant experiences of mine to tell them instead of just going around a bush and not really connecting to what the interviewer is looking for. Aside from that, showing willingness to learn from the experience the company will give me, should they hire me, instead of pretending like you know it all, is the time when I start to not stutter and not feel uncomfortable. In this activity, I have learned that being truly yourself is indeed very helpful in landing for a job that you like because it avoids one to sound superficial or trying too hard, which is a common trait of all other applicants. However, being truly yourself should also be accompanied with knowing the background, purpose, and goal of the company you are aspiring to be a part of because it shows that you