MultinationalCorporations: A case of Nike Inc
MultinationalCorporations: A case of Nike Inc
Nike,Inc is a multinational company that specializes in producing,branding and marketing its internationally known label, Nike. As amultinational, the company has a global business presence, but withheadquarters based in Oregon, United States. Like any othermultinational company, the Nike posses some characteristics thatdescribe its global business operations. One of the characteristicsis expanded global business. The firm sells its products to severalcountries in the world, a characteristic that has made its brands aglobal name in every household. A successful multinational must haveworldwide operations of its business empire through expansion andstrategic partnerships1.In the case of Nike, Inc, the establishment of global business isthrough aggressive marketing and opening of global branches in theglobal market.
Anothercharacteristic of Nike as a multinational is its strong globalmarketing. The company has invested heavily in marketing and brandingof the labels and the company. Multinational corporations invest alarge percentage of their fortunes in marketing to establish globalbrands. The marketing efforts are meant to expand their markets andestablish dominance through their advantage in terms of financialmuscle2.For Nike, the marketing and branding strategy has been to useinternationally acclaimed celebrities to endorse the Nike label. Thecompany has over time used top musician and athletes in the world tobrand its label by wearing the Nike products. This has worked for thecompany by using the global image of these celebrities to gainmarkets and customer loyalty all over the world.
Anothercharacteristic of Nike as a multinational is responsive to changes inthe global economy. Characteristically, multinational companies spenttime to understand the political, social and economic environment ofthe global market, and respond to the environment3.As a result, the clothing giant has adopted internal and externaloperation strategies that respond to the changes. Over time, thecompany has outsourced to the Asian countries to reduce the costs ofproduction. This way, the company has been able to produce itsproducts at low cost and sell at low prices, even when the Americaneconomy is not healthy. Since the market for its products is global,Nike has adopted the strategy to produce global products throughoutsourcing globally.
Moreover,Nike has enlarged in size in terms of its resources and management,as is characteristic with multinational corporations. It is a typicalcharacteristic of multinationals to expand their management structurealong with the growth in the global business4.This organization of the business for Nike has grown over time withthe central management in America. The diversification of itsbusiness operations globally called for the extension of itsmanagement structure with global branches. As a result, the companyhas over time increased its resources dedicated to global businessoperations and expansion strategies.
Asa global company, Nike has established global business as a majorcharacteristic of multinational companies. The company has achievedand maintained the global business through aggressive globalmarketing and branding strategies that are characteristic ofmultinational organizations. In addition, the company has observedchanges in the global market environment and successfully overcomethe challenges by adopting responsive business strategies. To managethe global business, the company has established an expansiveorganizational structure with headquarters in America. Through thesecharacteristics, Nike has established and maintained its globalstatus as a multinational company in the clothing industry.
Kogut, Bruce. Multinational Corporations. In: International Encyclopedia of Social and Behavioral Sciences, ed. N. J. Smelser and P. B. Baltes. Oxford: Elsevier, 2001.
Nau, Henry. Perspectives on International Relations : Power, Institutions, Ideas. Washington, DC: CQ Press, 2012.
El-Erian, Mohamend. The Political Economy of 2013. Accessed November 12, 2014. <https://www.project-syndicate.org/commentary/how-politics-will-drive-economic-performance-in-2013-by-mohamed-a–el-erian>
1 Kogut, Bruce. Multinational Corporations. In: International Encyclopedia of Social and Behavioral Sciences, ed. N. J. Smelser and P. B. Baltes. Oxford: Elsevier, 2001.
2 Nau, Henry R. 2012. Perspectives on International Relations : Power, Institutions, Ideas. Washington, DC: CQ Press
3 El-Erian, Mohamend. (2014). The Political Economy of 2013. Accessed November 12, 2014. <https://www.project-syndicate.org/commentary/how-politics-will-drive-economic-performance-in-2013-by-mohamed-a–el-erian>
4 Kogut, Bruce. Multinational Corporations. In: International Encyclopedia of Social and Behavioral Sciences, ed. N. J. Smelser and P. B. Baltes. Oxford: Elsevier, 2001.