Global Governance Case Studies

Question 1

Talk about Nikes Background

Answer 1

Nike, founded as Blue Ribbon Sports in 1964 by Bill Bowerman and Phil Knight, rebranded as Nike, Inc. in 1971. It has since become one of the world’s leading transnational corporations (TNCs) in athletic footwear, apparel, and equipment.

Question 2

Why is Nike a good example of a TNC

Answer 2

It has become one of the world’s leading TNC’s, with a spatial organization, production strategies, supply chain linkages, trading patterns, and marketing strategies.

Question 3

Talk about the global headquarters of Nike

Answer 3

Nike’s headquarters in Beaverton, Oregon, employs around 5,500 people, primarily in R&D, marketing, finance, and executive leadership. The location benefits from:

• Proximity to skilled labor markets, particularly in sports science and engineering.
• Strong transport and communication infrastructure, facilitating global operations.

Question 4

Talk about regional divisions of Nike

Answer 4

Nike follows a matrix organizational structure, where regional offices manage operations within their territories.

• The Europe, Middle East, and Africa (EMEA) region oversees operations across 27 countries.
• China, Nike’s fastest-growing market, has a regional HQ in Shanghai and significant production capacity.

Question 5

Talk about manufacturing locations of Nike

Answer 5

Nike does not own factories; instead, it subcontracts production to independent manufacturers.

• Asia:
  
  • China: As of 2013, Nike had 206 factories employing 260,000 workers, 70% of whom were female.
  • Vietnam: A major manufacturing hub; wages are lower than in China ($250/month vs. $500 in Eastern China).
  • Indonesia, Thailand, Bangladesh, and Cambodia also host production due to low labor costs and government incentives.
• Newly Emerging Economies (NEEs):
  
  • Nike has expanded production to Brazil, Mexico, and Argentina, reducing shipping costs to North America.

Question 6

Talk about employment of Nike

Answer 6

• Directly employs approximately 25,000 people.
• Contracts over 700,000 workers across more than 765 factories in 43 countries.
• Over 75% of the workforce is based in Asia, where production costs are lower.

Question 7

Talk about financial facts of nike

Answer 7

• In 2004, Nike reported a profit of $1.6 billion.
• In 2024, Nike’s profits reached $5.7 billion, despite cost-cutting measures.
• Nike is undergoing a $2 billion cost-saving effort, including workforce reductions and retail strategy shifts.

Question 8

Talk about the digital presence of Nike

Answer 8

Nike leverages e-commerce and data analytics to drive direct-to-consumer sales, which were projected to reach $16 billion by 2020.

Question 9

Talk about the global reach of Nike

Answer 9

Nike’s ‘swoosh’ symbol is one of the most recognized logos worldwide, symbolizing the company’s dominance in the sportswear industry.

Question 10

Why does nike put their factories in NEE’s or LIC’s

Answer 10

• Lower labor costs compared to Western economies.
• Government incentives such as tax breaks and relaxed labor laws.
• Proximity to raw materials to reduce supply chain costs.
• Free trade agreements between host countries allow duty-free exports.
• Expanding markets—Nike tailors its marketing for growing economies such as China and India.

Question 11

Talk about Nike Production strategies

Answer 11

Nike outsources manufacturing to benefit from:
- Cost reductions—lower wages, cheaper materials.
- Flexibility—Nike can switch suppliers based on demand and costs.
- Focus on core competencies—Nike prioritizes design, branding, and marketing, rather than owning factories.

Question 12

Talk about linkages and trading patterns

Answer 12

Nike has a highly integrated global supply chain:

• Suppliers in multiple countries ensure continuous production.
• Just-in-time (JIT) manufacturing reduces storage costs and aligns production with demand.
• Distribution centers in North America, Europe, and Asia enable efficient global trade.

Question 13

Talk about Nike marketing strategies

Answer 13

Nike combines global branding with localized marketing:

• High-profile endorsements—sponsorship deals with athletes like Michael Jordan, Cristiano Ronaldo, and Serena Williams drive brand loyalty.
• Cultural adaptation—Nike customizes products (e.g., cricket gear for India, running shoes for Japan).
• Brand activism—Nike engages in social issues, such as racial equality and gender empowerment, strengthening consumer loyalty.

Question 14

Talk about impacts on host countries

Answer 14

• Foreign Direct Investment (FDI):
  
  • Nike injects capital into local economies, helping infrastructure and employment.
• Skill Development:
  
  • Training in advanced manufacturing and management enhances workforce skills.
• Technology Transfer:
  
  • Nike introduces modern production techniques, boosting industrial efficiency.
• Labor Concerns:
  
  • Reports of poor working conditions, low wages, and excessive overtime in factories in Indonesia, Vietnam, and China.
  • In 2010, 20,000 workers in Vietnam went on strike for higher wages.
• Economic Dependence:
  
  • Nike relocates factories when costs rise, leaving economies vulnerable.
  • In 2007, Nike’s factory closures in Indonesia led to protests due to job losses.
• Environmental Damage:
  
  • Dyeing and printing processes caused water pollution in China.
  • High carbon emissions from manufacturing and transportation.

Question 15

Talk about Nike’s impact on Headquater countries

Answer 15

• Employment and Economy:
  
  • Nike is a major employer in Oregon.
  • In early 2024, Nike announced 740 layoffs in Beaverton as part of a global 2% workforce reduction.
• Financial Performance:
  
  • Despite job cuts, Nike reported $5.7 billion in profit (2024), showing financial resilience.
• Innovation & Development:
  
  • The HQ focuses on sustainable materials, AI-driven customization, and digital innovation.

Question 16

Impact of Nike on the general public and consumers

Answer 16

• Consumer Engagement & Personalization:
  
  • Nike uses data analytics to personalize product recommendations, increasing direct-to-consumer sales.
• Market Segmentation & Targeting:
  
  • 18-34-year-olds are the primary target demographic.
  • Geographic segmentation ensures relevance in different climates and cultures.
• Brand Activism & Ethics:
  
  • Nike’s campaigns on racial equality, LGBTQ+ rights, and women’s empowerment attract socially conscious consumers.

Question 17

Talk about exporters of the banana trade

Answer 17

EXPORTS- In 2013, 16.5 million tonnes were exported. Ecuador is the largest banana exporter with 15million tonnes exported annually generating $3.8 billion. Exports normally go from LIC’s to HIC’s. Other big exporters include the philippines, ivory cost and costa rica

The banana industry is dominated by large multinational corperations like chiquita, DOle and Del monte. 80% of exports and trade is controlled by 4 TNC’s

Question 18

Talk about banana producers

Answer 18

PRODUCERS- The biggest producer is India with 30 million tonnes being exported yearly. However, these have low exports due to their large population- 1.4 billion. other big producers are china make ing 12 million tonnes and Indonesia with 8.7 million

Question 19

Talk about banana importers

Answer 19

IMPORTERS- The EU and USA consume 27% of total exports. While exports are high, 90% of price paid per product stayed in the richer north and never reaches the producers. This is due to costs staying low due to TNC’s who run plantations having their own transport and distribution centres. China and germany are also large importers with around 8% each.

Question 20

Talk about issues of banana trade

Answer 20

• Environmental Impacts- Plantations require extensive pesticide and chemical use causing soil degregation and water pollution. Deforestation for room also reduces biodiversity. The carbon footprint of banana transport is high due to long shipping distances
• Worker Exploitation- plantation workers often recieve extremely low wages and work in poor conditions along with seeing small amounts of the profit
• The Banana Trade War- between the EU, USA and Latin America where the EU gave special trade benefirs to African and Carribean Produces making it hader for banana growers in Latin America- backed by US companies- to sell products in Europe, After negotiations, the WTO ruled the EU to change trade rules.

Question 21

Talk about impacts of banana trade

Answer 21

On Host Country- creates local jobs, help develop surrounding areas via FDI and increased transport, multiplier effect. Low wages, long hours, exploitation, environmental damage

TNC’s- make large profits, price wars, prices can lower

Us- accessible even though our country doesn’t grow them and cheap. Ethical considerations

• however this is made better by fairtrade

Question 22

Talk about fairtrade in bananas

Answer 22

Fair trade 2018, 1 in every 3 bananas were fairtrade. This means that farmers recieve a minimum prioce to protect them from markey fluctuations as well as better rights and safer working conditions. There is also investment into community projects helping development of the area. Even thiugh prices have increased, sales maintain in Europe and other HIC.

The amount of profits from banana trade increases from 7- 40%

Question 23

Talk about the geography of antarctica

Answer 23

Antarctica is a vast and remote continent located at the South Pole which remains largely untouched by human activity due to its harsh climate and extreme environmental conditions. Antarctica and the Southern Ocean, as far north as the Antarctic convergence are considered a global common

Question 24

Talk about climate change as a threat to antarcrtica

Answer 24

The impact of climate change is most apparent in extreme latitudes like Antarctica. Here, global warming has driven significant changes in the physical and living environment like melting ice and deteriorating permafrost. Antarctic ice core analysis can be analyzed for carbon dioxide and methane content to help us understand these changes. According to the IPCC, Antarctica is facing the loss of ice from its huge ice sheet and further cra wcks and unstableness escpecially in the Ross ice sheet. The Antarctic peninsula is one of the most rapidly warming places in the world with air temperatures increasing by 3 degrees over the last 50 years.

Question 25

Talk about fishing and whaling as a threat to antarctica

Answer 25

Whaling for meat and oil became a large industry in Southern Ocean in 19th century. Fishing became the main economic use of the seas during the 60’s and 70’s during which large Russian and Japanese fhishing fleets fished cod and krill stocks. However, these collaped late 70’s. If the krill numbers disappear, the whole food chain will collapse.Many organisations protect seas and krill for these reasons.

Question 26

Talk about mineral and resources as a threat to antarctica

Answer 26

As of yet, there has been no mineral extraction. The Antarctic Treaty created a Protocol in Madrid 1991, banning all mineral extraction until 2048 where it will be revisited. Antarctica holds rich reserves of minerals that can only be used for scientific research. Countries alike US and China have stated thet want to revisit the ban sooner

Question 27

Talk about tourism and research on antarctica

Answer 27

The development of small-scale tourism began in Antarctica in the 1950’s with commercial tour opertors providing passenger ships. Since then, numbers of tourists has increased from 9,000 to 55,000. Although it is small-scale so relitivly sustainable but it can disrupt breeding patterns and land through oil spills and pollution. All tour operators are members of IAATO ensuring that tourism is environmentally friendly. The MS explorer capsised creating a 1 mile oil spill affecting 2,500 penguins.

Question 28

Talk about the UN environmental program (UNEP)

Answer 28

Main institution that governs the worlds environment responsible for reporting activity of Antarctica to the UN. The program is run by the commission for the conservation of Antarctic marine living resources which aim to stop illegal fishing and protect the ecosystem. This worked. The effectivnes is limited by countries protecting their own interests- it took 5 years to negotiate the creation of the marine protected area and hasnt reduced fishing quotas.

Question 29

Talk about the international whaling Commission (IWC)

Answer 29

seeks to conserve whale stocks by protection, catch limits and size restrictions. Designate whale sacturies in the southern ocean, declared a pause on commercial whaling since 1982. Is still in place, however, Japan evades it by a ‘special permit for scientific research’, NGO’s have reports saying its poorly monitored.

Question 30

Talk about the antarctic treaty

Answer 30

An agreement about how to sustainably measure Antarcticals ecosystem. Signed by 53 countries with the aim of keeping Antarctica ‘exclusivly for peaceful purposes’. MADRID PROTOCOL- Protocol on the protection to the Antarctic Treaty banning mineral extraction- revisited in 2048 All bases and equipment in Antarctica can be inspected at anytime and the ban bans all mineral extraction with a EIA required for new activities. However, inspections dont happen often so can be unsustainable and many countries are pushing for the ban to be revisited early.

Question 31

Talk about ASOC

Answer 31

NGO ensuring all various protocols and bodies are enforced and monitored to enhance protection. Dont work for any particular country, well positioned to observe wether countries are sticking to laws with their only aim is to protect Antarctica. They made meetings more transparent and probides important information for climate change. Due to constraints from governmental organisations so undertake very little impact and can only report on findings.