Example #3: Nike

Nike is the worlds leading supplier of athletic shoes and apparel and a major manufacturer of sports equipment. It is headquartered in the U.S. and its brands include Nike, Umbro, Converse, etc. In 2009, Nike employed 34,300 people and its sales were $18.36 billion. Nike has contracted with more than 700 factories around the world and has offices in 45 countries outside the U.S.

Nike is the worlds leading supplier of athletic shoes and apparel and a major manufacturer of sports equipment. It is headquartered in the U.S. and its brands include Nike, Umbro, Converse, etc.

In 2009, Nike employed 34,300 people and its sales were $18.36 billion.

Nike has contracted with more than 700 factories around the world and has offices in 45 countries outside the U.S.

Nike is mainly engaged in offshoring. None of Nikes athletic shoes are produced in the U.S., and none are produced in a Nike-owned production facility. Nike subcontracts all of its footwear production to independently owned and operated foreign companies.

Why does Nike vertically fragment its production process? Why does Nike not control and manage its foreign production facilities?