Sport in the Global Marketplace

Nike is a classic case study of how the sport market has been affected by globalisation. Nike dominates the world sports shoe industry, an industry that has shown phenomenal growth over the last 20 years. Nike accounts for nearly a third of the total sales of sports shoes worldwide. Nike started out as a company called Blue Ribbon Sports, based in Oregon, USA, and distributing running shoes produced by a Japanese company, Onitsuka Sports. By the early 1970s the company had severed ties with Onitsuka and was designing, marketing and distributing its own running shoes. In 1978 Blue Ribbon Sports changed its name to Nike. This company very quickly established itself in the lead in one of the fastest-growing leisure markets in the world. Although Nike produces other sportswear, sports shoes are its main area of activity and 75 per cent of the company’s turnover comes from shoes. There is some literature relating to the global production, distribution and marketing approach of Nike (Clifford, 1992; Willigan, 1992). What is perhaps surprising is that Nike is not a manufacturing company at all. All manufacturing is done by contractors, 99 per cent of them in Asia. Clifford (1992) described how Nike kept the cost of production down by constantly seeking out lowest-cost producers in the late 1980s and early 1990s:The company is forever on the lookout for cheap production sites. If costs in a particular country or factory move too far out of line, productivity will have to rise to compensate, or Nike will take its business elsewhere. The firm uses about 40 factories; 20 have closed in the past five years or so and another 35 have opened.