Outsourcing

            The Nike family is a fairly vast enterprise. Their suppliers, shippers, retailers and service providers employ close to 1 million people. The diversity inherent in such size is helping Nike evolve its role as a global company. Nike employs people worldwide, from Nike World Headquarters in Oregon and Nike European Headquarters in The Netherlands, to nearly every region around the globe, including Asia Pacific, the Americas, and Europe, Middle East and Africa.
             Nike's business model in 1964 is essentially the same as their model today: They grow by investing their money in design, development, marketing and sales, and then contract with other companies to manufacture their products.
             Nike currently produces their products in more than 800 contract factories throughout the world, including the United States. This has provided jobs for more than 600,000 contract workers who make Nike goods in more than 50 countries around the world. (www.nikebiz.com) .
             "Nike currently enjoys a 47% market share of the domestic footwear industry, with sales of $3.77 billion." (Van Dusen) They utilize an outsourcing strategy utilizing sub-contractors. "The majority of their output today is produced in factories in China, Indonesia, and Vietnam, but they also have factories in Italy, the Philippines, Taiwan, and South Korea. These factories are 100% owned by subcontractors, with the majority of their output consisting solely of Nike products." However, Nike does employ teams of four expatriates that make weekly visits to factories in China, Indonesia, and Vietnam that focus on quality of product and quality of working conditions. They also developed a code of conduct and have implemented it across the globe. It sets the standard for subcontractors to follow if they want to do business with Nike. However, due to a manufacturing network of this magnitude, they have faced numerous violations involving factory conditions and human rights issues, which have been widely publicized.