When it comes to transporting their sweatshirts and other products, Nike is making progress in reducing their CO2 emission, reducing their “carbon footprint”. According to one source (RankABrand), they were given a B (in terms of grades), which in comparison to other athletic gear brands, was one of the better ones. Reducing their CO2 emission also ties in with the production aspect of things, where Nike is aiming to source 100% sustainable cotton before the year 2021. With the transportation side, they are getting creative in not only reducing their carbon footprint, but also effectively saving money. According to a source (Cargo), Nike made the decision to transport their products on cargo ships instead of using airplanes. It claimed to have saved Nike $8 million in one year. By this change in transportation, Nike projects their reduced carbon footprint to have decreased by 30% in 2020.
We were unable to access the specific details regarding the exact factories where Point Loma’s Athletic Department have their sweatshirts and other athletic gear produced. Although, we have the general area of Asia as a direction. However, referring to Nike’s general website (Nike Sweatshirts), general Nike sweatshirts can range from around $60 to $175, including many different styles and colors. These may not be the exact ones that Point Loma purchases, although many of them should be fairly similar as I searched Men’s hoodie and sweatshirts and 286 options appeared on the screen. I clicked specifically on the Nike Tech Fleece Crew, which costs $85, comes in 4 colors, and is made of 66% cotton and 34% polyester.
The ones that are given out to the Point Loma Nazarene athletes are given to them for free for participating on a team, and all are customized with Point Loma’s logo along with the team that they are a part of. This customization means that these specific requests from the consumers (Point Loma Nazarene Athletic Department) go all the way back to the factory in which they are produced. The heads of the athletic department were unable to answer questions regarding how much they pay to purchase all of the gear, but there is a possibility that there could be some sort of discount since they are purchased in bulk to provide for all of the athletes at Point Loma Nazarene University.
Nike is the sponsor of Point Loma Nazarene University’s Athletics, and according to a source (Nike Lead) Nike is “the world’s leading supplier of athletic Nike shoes and apparel” which assumes that Nike has a major influence on commercialization and consumption. The hype from the end of last year was their new Nike Tech Pack, which in the youtube link below, shows famous athletes from around the world sporting Nike sweatshirts. Setting this standard in society encourages many people, especially college athletes with the potential hopes to make it into the big leagues, to want to sport Nike as well. Whether or not it is the athlete’s choice to wear Nike, Point Loma Nazarene University’s Athletic Department has chosen Nike for their custom athletic gear and products.
NIKE Collegiate Baseball Cleats
Economic impact on commercialization/consumption
by Cole Chandler
Point Loma Nazarene’s Athletic department has chosen to use NIKE as its official supplier and sponsor for all the sports teams on campus. It is uncertain whether the PLNU athletic department purchases the Nike Air MVP Pro Metal baseball cleats from an undisclosed dealer or receives a sum of money from Nike for putting their swoosh on all PLNU athletic apparel. Referring to Nike’s general baseball website, baseball cleats are sold in the price range of $29-145. The Nike Air MVP Pro Metal baseball cleats are sold for $80 each, so a team of thirty baseball players would cost the athletic department $2,400 alone just for the cost of the entire baseball team’s cleats.
Nike is the leading global athletic supplier. It’s products are consumed all over the world by amateur and professional athletes, as well as the common consumer. Nike does an incredible job focusing on the economic impact it has on its factories and factory workers across the world. They continue to an exceptional job in offering reasonable prices for superior products.
Nike’s footwear industry is extremely profitable. According to following article, “The footwear apparel giant posted per-share earnings of $1.14 for the fiscal first quarter, well ahead of Wall Street’s $1.01 estimate. Revenue rose 8% to $5.2 billion, in line with Wall Street’s forecast. And the future looks promising, with worldwide orders of $7.1 billion in place for September through January. The figure is up 10% from the year-ago period.” The article talks about how Nike has also had a successful fiscal quarter. “Nike Inc. (NKE: 79.57 +1.90 +2.45%) posted strong fiscal 2011 first-quarter earnings of $1.14 per share, which reflects a growth of 10% from the year-ago earnings of $1.04. Earnings for the quarter also surpassed the Zacks Consensus Estimate of $1.01 per share.” (1) A higher gross margin and effective inventory management were highlights of the quarter. The company will continue to improve on its economic growth as long as it continues to have a positive impact on creating superior products and making the world a better place.
Nike’s Air MVP Pro Metal baseball cleats are manufactured in over 43 countries. Nike’s goal as a global company is to play a role in bringing about positive change for workers within their supply chain and in the industry. When Nike looks at their overall impact on the world, the needs of nearly 1 million workers in Nike’s supply chain overshadows any other group. Nike realizes the size and scale of their combined manufacturing operations has a considerable environmental impact.
Nike has pulled together to develop internal team to enforce their codes of conduct on their factory workers and are always working to monitor its factories and engaging with stakeholders. However, Nike has learned that monitoring the factories alone hasn’t solved all their manufacturing and distribution problems. Nike’s focus now is on getting to the root of the problems. They are constantly evaluating their supplier and manufacturing relationships,which has given them new ways to define and share responsibility in the production of their products.
Nike was the first company in the industry to disclose their factory list. This list provides a complete list of all their contracted factories of the NIKE brand. (1) This factory list can be filtered by brand, product type, or event (Including collegiate manufactures). Nike has aligned their sourcing practices and purchasing power to incentivize those contracted factories that prove they’re going beyond compliance and demonstrate practices that build teams of motivated, productive and healthy workers who produce innovative, high-quality and sustainable products.
Nike is making an effort in reducing their “carbon footprint”, when it comes to transporting their baseball cleats and other products. Nike made the decision to transport their products on cargo ships instead of using airplanes. This new way of transporting their products claimed to have saved Nike over $8 million in one year. By this change in transportation, Nike projects their reduced carbon footprint to have decreased by 30% in 2020. (2) Nike’s article on their Targets & Peformance, says that, “Nike’s Sourcing & Manufacturing Sustainability Index (SMSI) includes assessments of health and safety, worker empowerment, protection and compensation, and factory lean progress along with environmental performance.” The Sourcing and Manufacturing Sustainabilty Index is one component of the Manufacturing Index which weighs sustainability alongside quality, cost and delivery. This Index helps provide filters for sourcing decisions and incentivizes progress. Nike requires factories to measure and report on key performance indicators tied to worker empowerment. These performance indicators include health and safety, and investing in their employee training. Nike continues to make strides in being environmentally engaged on a global scale.
NIKE Collegiate Baseball Cleats
Economic Impact on Production
by Cole Chandler
Nike’s Air MVP Pro Metal baseball cleats are the team issued cleats for the Point Loma Nazarene University Sealion’s baseball program. Nike, Inc. has done an exceptional job at creating a sustainable business by continuing on addressing impacts throughout their supply chain. Our world faces significant environmental challenges, such as water shortages, rising energy use, shrinking natural resource availability and the potential for drastic climate change impacts. These challenges had lead Nike to question its major expectations of their business and what success will look like for Nike in the future. Nike continues to improve on its innovation and design to minimize its footprint and address their own impacts up front, during the design stage of each of its products. Considered Design is Nike’s standard for innovation and sustainability, which is constantly being cultivated to assess each of their products. Considered Design is a program that is aiming to reduce the overall waste throughout the designing and manufacture of each of their products. They are making a better effort to use environmentally preferred materials and eliminating the amount of toxins in the production phase of producing their products.
Nike has set up factories in Indonesia during the past year. (1) They choose to do this because it would offer the lowest rate for worker’s wages. These workers would be paid $3.50 each day, and approximately $21 per week. Although these wages seem incredibly low, Nike is matching the prices of the local minimum wage. Nike is not paying its workers any wages lower than the local minimum wage of the country it is producing products in. The minimum wage of Indonesia could always be increased in the near future, and when that day comes Nike will have to adjust its prices accordingly.
Nike’s production of cleats overseas has given foreign workers a stable job. This stable job has provided thousands of families a way to escape living in poverty, giving them a better overall standard of living and quality of life. Nike’s workers overseas have become more productive citizens, and have been given the ability to rely less on government assistance programs. Nikes products are now global manufactured in 43 countries, 744 factories, and have provided jobs to over 998,880 workers. (2) Some of the countries involved in the production of Nike products are developing regions such as Brazil, Argentina, Taiwan, and Bosnia.
From an economic standpoint, Nike will continue to produce its products in locations and factories where they have the possibility of gaining the most profit. This strategy can be seen as a way to provide citizens of developing counties stable jobs and better overall life, or Nike can be viewed as a corporate giant that is wrongfully intruding on countries to take advantage of the cheaper wages the country requires for its workers.
According to one of our sources (PhilStar), it claimed that just this past year in Indonesia, where Nike has set up factories because there they would have some of the lowest wages, the typical workers would make the equivalent of around $3.50 each day, $21 each week. I could not research further as to how long it takes to make one sweatshirt (to compare the consumer price per sweatshirt with the wage), however according to some of our other sources, it says that Nike is doing its best as a company in matching the prices of the local minimum wages as well. While that is good to not be paying less than the other locals, there is still a possibility that the local minimum wages could be improved overall as well, and that these workers are not receiving the full benefits they have earned. Some of the benefits of these workers were taken away when Nike struggled a bit economically, but Nike plans on bringing the benefits back when it is affordable to their budget entirely.
Also, with Nike choosing the more rural towns for their factories in Asia, providing employment for some of these people has helped their families from living further in poverty and pulled these families away from the typical malnutrition and illiteracy. These workers are said to have become productive citizens according to one article (PhilStar), in saying that these factory jobs stay fairly consistent economically for them and that they no longer have to heavily rely on charities and government assistance. Many of these workers would rather receive less than minimum wage than losing their work.
A manufacturing map on Nike’s website (Nike Map), shows that for Nike’s apparel production (only for collegiate products), there are 36 countries, 355 factories, and 341,726 laborers in the factories as of February 2014. Some of the countries with Nike factories for collegiate apparel production are within the United States, Thailand, Nicaragua, Sri Lanka, Italy, China, Vietnam, Turkey, Malaysia and Mexico. While economically, Nike strategically will pick locations for factories where they can gain the most profit, it can be seen from two different perspectives: that they are also providing income in some places where people need employment, or Nike can be seen as an unwanted intruder in places where factories are just causing more problems. These may be somethings to investigate further.
Using the same source (Nike Map), looking specifically into Indonesia’s production, there are 16 factories, 20,257 current workers, and an average of around 85% of those workers being women producing the collegiate apparel for Nike. The Point Loma Nazarene University’s golf team wears custom sweatshirts that are made in Indonesia. Using the above source (PhilStar) to further observe Nike’s compliance with meeting the local minimum wage requirements, according to this source (Indonesia Wages), in 2012 the minimum wages were adjusted, increasing at least 27%. Looking into the local wages in Indonesia, according to Indonesia Minimum Wages, $1087 was the average yearly income in US Dollars which was effective as of November 12, 2012. Dividing $1087 by the 52 weeks in a year, the minimum wage weekly was $20, which then would assume that Nike is actually paying their employees in Indonesia more than the minimum wage, at most likely a little more than $21 weekly (PhilStar).
However, the Point Loma Nazarene’s Baseball Team wears sweatshirts made in Vietnam. According to Nike Map, there are 31 factories in Vietnam producing collegiate apparel. If the same policy used in Indonesia to applying the same if not more minimum wage requirements to Nike’s factory workers is the same in Vietnam, (Vietnam Minimum Wages) the average annual income in US Dollars, effective as of January 1, 2014, is $614 in Vietnam, which would mean almost $12 is made each week – which is a little over $1 if they work all seven days each week.
Consumers of Nike products may have noticed a small increase in pricing over the past few years, according to articlesfactory.com. In 2012 Nike apparel and shoes increased in price by five to ten percent. This was because of the continuous rise in materials, but more specifically because Nike is using sustainable and environmentally friendly practices.
Nike continues to be a popular product among athletes and those sports-enthused. Specifically, Nike has a strong following of young, college-aged athletes. Many universities and colleges in the United States, including Point Loma, are sponsored by Nike or choose to sport Nike apparel. Each time someone purchases a Nike product, they are partaking in the company’s decision to become more sustainable and just. Increased activism and awareness has led Nike to a shift in business goals.
“NIKE, Inc.’s commitment to a more transparent and sustainable future is stronger than ever” says President and CEO Mark Parker. “To fulfill our potential we know we need to operate in completely new ways, making sustainability integral to our innovation and performance.”
In 2010, Nike created the “most environmentally-friendly and technologically advanced football jersey to date” for the world cup in South Africa. All Nike sponsored teams, including Brazil, Portugal, South Africa and the Netherlands, wore jerseys made entirely from recycled polyester. According to Nike, each jersey was produced from up to eight recycled bottles. Additionally, Kenyan marathon champion Abel Kirui wore a similar design made from bottles and dyed without water.
Other companies are competing with Nike, and as Nike becomes more marketable to sustainable-minded consumers, one can hope that other companies will adopt similar practices. Nike has stated that they want to engage consumers more with what they are doing in order to encourage them to become more sustainable. They have launched a digital website called nikegamechangers.com for those who are passionate about sustainable and environmental issues.
Nike is also involved in an advocacy program which they cofounded called Business for Innovative Climate and Energy Policy (BICEP) in hopes of urging legislation and other businesses to practice clean energy production and reduce global warming pollution.
Finally, Nike is committed to helping create positive social changes in lower-income communities by encouraging physical exercise, unity within the community, and helping children use sports to heal from traumatic experiences.
Nike products, such as the sweatshirt used by Point Loma, are a quality and hearty clothing that can be worn time after time. This helps reduce waste in landfills by encouraging wearers of the clothing to keep the apparel as long as possible.
While Nike has some pretty lofty goals, they have done an excellent job at beginning to implement their ideas and inspire change for a more sustainable world.