Question

2. Nike, the US Sportswear company, produces all of its footwear in foreign countries (mainly in China, Vietnam, and Indonesia). The company sells the majority of its goods to Argentina, Brazil, India, and Mexico. What are the most common reasons for Nike to do business outside its national boundaries

Answer 1

Nike is the US Sportswear company, produces all of its footwear in foreign countries (mainly in China, Vietnam, and Indonesia). These countries are developing and labor is cheap there. In this way, the production is cheaper and maintain the price of their product competitive. This way, Nike follows and maintains a specific pricing strategy. Nike also follows a Cost Leadership generic business strategy to sustain a competitive advantage based on cost.

Nike also follows a competitive strategy of 'Product Differentiation', 'Focus on market Niche' and 'Strengthen customer and supplier intimacy' to improve its stand against its competitors. There is huge scope for varied market needs based on games played in different countries across the globe. Thus, there is a huge demand for Nike products outside of their national boundaries.