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What are some advantages and disadvantages that come to Nike as a company because of...

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lkballer24 | Student, Grade 11 | (Level 1) Valedictorian

Posted September 10, 2012 at 3:34 PM via web

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What are some advantages and disadvantages that come to Nike as a company because of international business.

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

Posted September 10, 2012 at 3:55 PM (Answer #1)

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The major advantage that comes to Nike from international business is lower costs.  Nike produces its shoes in countries where labor is cheap, thus cutting down on its costs.  If we expand the definition of international business, we see that Nike also gets more brand recognition by sponsoring teams and athletes who are famous in other countries than the US.

The main disadvantage that can face Nike is the possibility of bad publicity.  If Nike plants in other countries are found to have working conditions that seem abusive to Westerners, the company can get a lot of bad press, thus degrading its image in the eyes of its customers.  Another danger that Nike faces is from political and social instability in countries where it manufactures.  A change in government in such countries can lead to radically different policies that can seriously damage Nike's ability to operate profitably.

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