Nike in Brazil: a Host Country View

Negative effects of Nike from Brazil’s point of view Brazil is rapidly privatizing many industries and its attitude toward a free market economy has changed significantly in the past 10 years. However, it seems the country still has a perception that often times associates capitalism with “greedy” developed countries. If the opinion of Brazil’s president is a reflection of how some of its people feel this is certainly the case. In 2008, Brazil’s president lambasted US corporations and the US government for “infecting his nation with problems that were not of its making (The New York Times, 2008).” This attitude seems to have created some problems for Brazilians in terms of their view of Nike. The kind of leverage and control that such a large company can exert on football in the country is huge. This issue was thrown into the light when in 1998 the Brazilian national team lost in the World Cup finals to France. Earlier on in the year, Nike had invested a record amount ($200 million US) for the right to sponsor the Brazilian national team in the World Cup. As a requisite for sponsorship, Nike demanded that the team play an inordinate amount of exhibition games leading up to the event. Many Brazilians, including Brazilian football legend Pele (who filed a lawsuit against Nike), still blame Nike for Brazil’s loss. They claim that the unusual number of exhibition games tired the players out. Similarly, another interesting problem is Nike’s effect on competition in Brazil. Nike’s recent acquisition of UK sporting wear company Umbro allowed it to eclipse Adidas as the biggest brand in the world of football (The Financial Times, 2007). This is particularly troubling for Brazilian retailers, who worry about the concentration of brands between two large Multi-Nationals and the effect this might have on their business. Lastly, as with many interactions between MNC’s and developing countries environmental issues have been a problem. Brazil is a massive supplier of

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