Globalisation or Greediness?

Where Do We Come From?

What Are We?

Where Are We Going?

Globalisation

The process of international integration arising from the interchange of world views, products, ideas, and other aspects of culture.

eg. Small company developing into a brand known all over the world

Nike is an American multinational corporation that is engaged in the design, development and worldwide marketing and selling of footwear, apparel, equipment, accessories and services. 

 It is one of the world's largest suppliers of athletic shoes and apparel and a major manufacturer of sports equipment, with revenue in excess of US$24.1 billion in its fiscal year 2012 (ending May 31, 2012). The brand alone is valued at $10.7 billion, making it the most valuable brand among sports businesses.

The athletic footwear industry experienced and explosive growth in the last two decades. In 1985, consumers in the United States alone spent $5 billion and purchased 250 million pair of shoes. In 2001, they spent over $13 billion and bought over 335 million pair of shoes. the global athletic footwear market. Since displacing Adidas in the early 1980s and Reebok in the early 1990s, Nike has become the largest and most important athletic shoe company in the world.

Knight (Founder of Nike) realized that while lower-cost, high-quality Japanese producers were beginning to take over the US consumer appliance and electronic markets, most leading footwear companies (e.g., Adidas) were still manufacturing their own shoes in higher-cost countries like the United States and Germany. By outsourcing shoe production to lower-cost Japanese producers, Knight believed that Blue Ribbon Sports (Nike) could undersell its competitors and break into this market. Globalisation? 

In the 1970s, Nike developed a strong working relationship with two Japanese shoe manufacturers, Nippon Rubber and Nihon-Koyo, but as cost prices increase in Japan due to the Crisis on Japan economy. Nike began to search for alternative, lower cost producers. In 1982, 86% of Nike athletic footwear came from Korea and Taiwan.

However, over time as Korea and Taiwan began to develop cost began to rise in these countries as well. As a result, Nike urge its suppliers to relocate their operations to other lower cost countries, which lead to opening up plants in Indonesia, China and Vietnam.

Regional & Product Distribution of Suppliers

In footwear, Nike has been able to develop long-term relations with several large Korean and Taiwanese firms. With some of these firms, Nike designers create and then relay via satellite new footwear designs and styles for upcoming seasons to suppliers, who in turn, develop the prototypes. Once these prototypes are approved, these lead suppliers fax the product specifications to their various plants throughout Southeast Asia, where production can take place almost immediately. The benefits of globalisation? Maybe.

The same factors that permitted Nike to grow at an impressive rate over the last several decades. Taking the advantage of global sourcing opportunities to produce lower cost products and investing these savings into innovative designs and marketing campaigns have also created a serious problem for the company.

In 1980s, Nike had been criticized for sourcing its products in factories or countries where low wages, poor working conditions, and human rights problem were rampant. In addition, in 1990s, a series of public relations nightmares involving underpaid workers in Indonesia, child labor in Cambodia and Pakistan and poor working conditions in China and Vietnam.

As Nike do not own any factories, because i uses subcontractors to run them, they are not in control of what happens inside. However they have been made aware of what happens from media publicity and yet they choose to ignore it. They choose to ignore people working for up to 16 hours a day for less than living wage in an environment where some people eventually die from fumes as most of the factories lack ventilation.

How Nike, a company associated with athleticism, health and fitness, and innovative marketing and design, came to become the poster child for the anti-globalization movement provides an interesting window into the potential risks and problems which globalization creates for all multinational corporations.

Globalisation? or just plain greediness?

After  everything we have seen and discuss, is globalisation still a good way to expand a business? Should businesses treat their workers or employee this way just to earn the money they dreamt off and ruining others life. Should there be better ways to earn the bucket of gold and also treating the society fairly. 

Even though there are drawback on how globalization, there are also some benefits. Hence, in conclusion, globalization plays an important part in making this world a borderless environment and to achieve a better understanding of each country. However, there are always pros and cons in everything, thus we should not only focus on the advantage we can achieve but also the disadvantage that we can avoid or overcome.

Coca Cola Swot Analysis

Coca-Cola is a carbonated soft drinks sold in stores, restaurants, and vending machines throughout the world. It is produced by The Coca-Cola Company of Atlanta, Georgia, and is often referred to simply as Coke. Originally intended as a patent medicine when it was invented in the late 19th century.

Swot Analysis

A SWOT analysis is commonly used in marketing and business in general as a method of identifying opposition for a new venture or strategy. 

Short for Strengths, Weaknesses, Opportunities and Threats, this allows professionals to identify all of the positive and negative elements that may affect any new proposed actions.

Strengths
The best global brand in the world in terms of value. According to Interbrand, The Coca Cola Company is the most valued ($77,839 billion) brand in the world. Coca Cola holds the largest beverage market share in the world (about 40%). Coca Cola’ advertising expenses accounted for more than $3 billion in 2012 and increased firm’s sales and brand recognition. Coca Cola serves more than 200 countries and more than 1.7 billion servings a day. The firm enjoys having one of the most loyal consumer groups.

The Coca Cola Company is the largest beverage producer in the world and exerts significant power over its suppliers to receive the lowest price available from them. Coca Cola is increasingly focusing on CSR (Corporate Social Responsibility ) programs, such as recycling/packaging, energy conservation/climate change, active healthy living, water stewardship and many others, which boosts company’s social image and result in competitive advantage over competitors.

Weakness

The overall consumption of soft drinks is stagnating and Coca Cola Company will find it hard to penetrate to other markets (selling food or snacks) when it will have to sustain current level of growth.Nearly $8 billion of debt acquired from CCE’s acquisition significantly increased Coca Cola's debt level, interest rates and borrowing costs. The firm is often criticized for high water consumption in water scarce regions and using harmful ingredients to produce its drinks. Coca Cola currently sells more than 500 brands but only few of the brands result in more than $1 billion sales. Plus, the firm’s success of introducing new drinks is weak. Many of its introduction result in failures, for example, C2 drink

The business is still focusing on selling Coke, Fanta, Sprite and other carbonated drinks. This strategy works in short term as consumption of carbonated drinks will grow in emerging economies but it will prove weak as the world is fighting obesity and is moving towards consuming healthier food and drinks. Unlike most company’s competitors, Coca Cola is still focusing only on selling beverage, which puts the firm at disadvantage. 







Opportunities

Consumption of bottled water is expected to grow both in US and the rest of the world. Due to many programs to fight obesity, demand for healthy food and beverages has increased drastically. The Coca Cola Company has an opportunity to further expand its product range with drinks that have low amount of sugar and calories. Consumption of soft drinks is still significantly growing in emerging markets, especially BRIC countries, where Coca Cola could increase and maintain its beverages market share. Coca Cola will find it hard to keep current growth levels and will find it hard to penetrate new markets with its existing product portfolio. All this can be done more easily through acquiring other companies.

Threats 

Consumers around the world become more health conscious and reduce their consumption of carbonated drinks, drinks that have large amounts of sugar, calories and fat. This is the most serious threat as Coca Cola is mainly serving carbonated drinks.
Water is becoming scarcer around the world and increases both in cost and criticism for Coca Cola over the large amounts of water used in production.
Some Coca Cola’s carbonated drinks have adverse health consequences. For this reason, many governments consider to pass legislation that requires disclosing such information on product labels. Products containing such information may be perceived negatively and lose its customers. Coca Cola’s gross profit and net profit margin was decreasing over the past few years and may continue to decrease due to higher water and other raw material costs. PepsiCo is fiercely competing with Coca Cola over market share in BRIC countries, especially India. The business significantly relies on the carbonated drinks sales, which is a threat for the Coca Cola as the market of carbonated drinks is not growing or even declining in the world.