Nike: A Multinational Company in China
Nike is one of the largest athletic shoe brands in the world and sells millions of shoes and clothing each year. The company was founded on January 25, 1964 by a University of Oregon track athlete Philip Knight and his coach Bill Bowermanas. It was first named Blue Ribbon Sports and it officially became Nike, Inc. on May 30, 1978 (Nike). As a multinational company, it operates retail stores domestically and overseas and all of the products it sells are manufactured by independent contractors located predominantly in foreign countries. Nike first entered the international market through China overcoming the many challenges it faced while trying to do business with them. Nike has no involvement in the manufacturing of its products and all of its production has been outsourced, mainly to manufacturers based in low-wage countries. In 1980, Nike created its first joint-venture with the People's Republic of China (Nike Inc.). It entered into the emerging economy just after the country rose from the turmoil of the Cultural Revolution. In James Austin’s case study of Nike in China, he described Nike’s entry strategy into China to be very difficult and found the Chinese government almost impenetrable to do business with. To gain entrance into the tough country Nike hired David Ping-Ching Chang, who was originally from China, as a consultant to help arrange a deal between them (Austin 34). Chang had the experience and knew the language and customs that it would take to create a successful agreement. The first thing they set out to do was write a proposal to the Chinese government outlining their objectives and the advantages their joint venture would bring to China. Chang was familiar with how the Chinese performed business transactions and used that as an advantage to get their foot in China’s tightly closed door. The Chinese are relationship-orientated and to them a transaction is not only business. After writing a very well...
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