Commodity Chain Analysis of Nike Shoes Essay

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Commodity chain analysis of a Nike Shoe Introduction Since its creation, Nike has proven itself as a popular brand and it has created niches by selling products such as footwear, apparels and various types of sports equipment. This paper will attempt to trace the product development of Nike shoes from its origins in conception and design to the manufacturing and production process located in contract factories in developing countries to advertising and marketing of Nike as a cultural commodity and finally, the retailing of the footwear around the world. Conception/design The blueprint of a Nike Shoe originates from the Nike Research Lab located at the Nike World Headquarters in Oregon. At the Nike Research Lab, researchers carry…show more content…
This further strengthens brand loyalty as consumers develop further attachment to the brand when they are self-involved in the design of their footwear. Production Nike subcontracts the production process of its footwear to 900 contract factories located worldwide with Asian developing countries such as China, Indonesia and Vietnam accounting for the bulk of total world production. Production of the footwear is based on a vertically integrated model. In the primary stage, raw materials such as rubber, leather and plastic are extracted from places located in close proximity from the factories. In the secondary stage, the extracted resources are sent to the factories or “Sweatshops” for manufacturing. It should be noted that the whole production process of Nike footwear are being carried out by independent private contractors. In these sweatshops, workers are generally offered low wages with little nonwage benefits. In certain factories, workers have been denied of a “living wage” as their take-home pay have been insufficient to satisfy basic standards of living. Typically, in these countries, the minimum wage laws were violated and workers were weakly unionised to bargain for higher wages. For example, a typical Chinese worker earns a wage of Rmb$250-$350 while the minimum wage was supposed to be Rmb$350. In addition, labour control is exercised harshly in these factories. The measures to minimise soldering manifest itself in the
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