Prepapre an Analysis of Nike in Chinese Marketplace

Analysis of Nike in Chinese marketplace
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Analysis of Nike Inc in Chinese marketplace
This paper provides a detailed analysis of Nike’s operation in China. Reasons why the company chose to enter the Chinese marketplace are described, along with the type of entry mode that Nike used, the cultural dimensions that Nike focused on, hiring strategy used among other important points. The business strategy used by Nike in its expansion into China is also described exhaustively.
Nike Inc is a multinational corporation which designs, develops, markets and sales lifestyle and sportswear, equipment and apparel, services and accessories. Nike designs its athletic footwear products mainly for athletic usage. Even so, most of the footwear products are worn by consumers for leisure or casual purposes (Lashinsky, 2015). This company operates in the sportswear industry as it offers both sports footwear and apparel. China was not Nike’s first non-domestic market considering that Nike operates all over the globe. This multinational firm has operations in Japan, Europe, North America as well as emerging markets such as Argentina, South Africa, India and Russia (Cendrowski, 2012). Nike decided to expand globally in order to increase its share of the global sportswear market, to increase sales/revenue and profits by selling more and more in the global marketplaces outside the United States considering that the American market was saturated already, and to sustain its position as the largest sportswear company worldwide ahead of the number 2 brand Adidas.
Before expanding globally, the type of research that Nike carried out include type of market to expand into, precise reason for expanding globally, budget for the expansion, and the local culture of the market to expand into and its implications on Nike’s business (Carr & Pastorek, 2013). Nike decided to expand into the Chinese market because of the high demand of Nike’s products in China as a result of the huge potential market and rising income levels. The cultural dimensions that were focused on include communications, red tape and bureaucracy, business relationships, business culture, and human resources who are acquainted with hierarchical organization structure.
Some of the identified ethical issues which may really not align with American practices include the use of child labour, poor working conditions for the Chinese workers, and workers in the factories being paid very low wages which are lower than the minimum wage in the United States. China is one of the largest economies globally. China and the United States are the world’s 2 largest economies. China has a robust and effective legal system, and its political system is founded on communist ideals. There are considerable opportunities for Nike’s success in the Chinese marketplace thanks to the huge population of over 1.31 billion people which is a very large potential market in a land bigger than the United States (Johnson & Tellis, 2011). Although considered an emerging market with a per capita income of $11,850, China’s income per person is relatively high in comparison to that of many other developing nations. In essence, the risin...