1. Nike Sweatshop Practice Case

2. Problem Statement (1 point)
Their subcontracted workers are working below U.S. working condition standards.

3. Nike SWOT Analysis (2 points) See Page C4
Strengths (Internal to the Firm)
Access to financial resources.
Market share
Market power and leader
Good ad agency
Brand loyalty
Community service in U.S. and abroad
Innovation
Strong bonds with athletic organizations
Good distribution channels.
Quality products

4. SWOT Analysis Weaknesses (Internal to the Firm) Duck fans
Public relations
Subcontractor management (outsourcing)
Overcharging the product
Being number 1
Lack of cultural understanding of other nations

5. SWOT Analysis Opportunities (External to the Firm)
Can improve their world public image with proper response.
Could move manufacturing plants
Help improve world standards for employees.
Make more money through greater innovation
Buy-out subcontractors
Get better endorsements from non-athletes

6. SWOT Analysis Threats (External to the Firm) World public image
Impatient capital
Decreased market share
Increased competition
Lack of endorsements
Boycotts
Potential employee strike

7. Your Recommended Solution (2 points)
Nike should buyout all subcontractors and create companywide standards for employee quality. (This is a bad solution to the problem which we used as an example in class).

8. Strategic Implementation (2 points) Possible Implementation to Solution #1 Should be in essay format
Start negotiations to buyout subcontractors.
Put together universal standards have both internal Nike HR and external NGO representatives.
Actually buy the subcontractors.
Nike ex-pats will manage our new mfg. plants.
Build manufacturing infrastructure and create expertise in running plants, along with the logistics associated with shipping overseas.
Increase shoe prices and lower endorsement offers.

9. Strategic Implications (3 points) Should be in essay format
Increased costs
No managerial experience so we need to hire new managers with expertise and know the Nike way.
Potentially lose market share.
Increased accountability for labor practices.
Profit margins will shrink.
Increase price $10 to $15 per shoe.
Competitors eat our lunch through potentially lower prices and get better endorsees.
Loss of shareholders due to impatient capital.
Stock price will decline
Will improve public image with consumer market concerned with human rights.
Demographic market could change.
Business model will be altered.