Name: Claudia Angelica Chavez Robles Student´s number: 2676193 Date: November 27 2015

1. Name: Claudia Angelica Chavez Robles
Student´s number: 2676193
Date: November 27 2015
Case: “Nike Considered: Getting Traction
on Sustainability”

2. • Let’s start with a brief introduction about Nike history, in Greek,
Nike means “victory” and since the beginning of the company in
1972, victory has been a term that has represented many things
about the Nike brand, but of course as any business story, Nike has
faced a lot of challenges to get where they are now, one of the
challenges they faced through the years, more exactly in 2008, was
to design an strategic scenario planning on corporate
responsibility-related global trends such as water, health, and
energy, alongside increasing worldwide concern about climate
change and try to integrate this factors in their products.

3. • It’s important to look into the sustainability of Nike shoes because of
a few simple reasons. Like innovative changes, if Nike were to change
its production standards for higher environmental quality it would
force a change in much of the rest of the athletic apparel and
sneaker industry. Besides, Nike is a brand that almost all Americans
can say they’ve heard of and many Americans can say they’ve bought
from but let’s not only focus in America nowadays with globalization
almost every develop country has heard of Nike’s brand and in that
way their shift as a corporation could have far reaching effects.

4. • Now let me tell you an important fact about Nike, sustainability
design was the key since the 90s, Nike became acutely aware of
their dependence on oil for materials and fossil fuel energy. They
were very vulnerable, to escalating oil prices and looming carbon
restrictions from anti-climate change regulation and the waste
production, use of materials and water by contract manufacturers
also posed major risks. All of these issues were important and
highlighted the areas of the value chain that had the most
potential for innovation. It eventually led to a long-term vision to
build a sustainable business and create value for Nike and their
stakeholders by decoupling profitable growth from constrained
resources.

5. • One of the main problems was that Nike didn’t have the skill-set
in the environmental team to translate what they knew about
environmental issues in a way that designers understood. Part of
the problem was they didn’t had tools in place.

6. • Until 2005, when an important event took place because the
Considered Group was formed by Hannah Jones the Corporate
Responsibility (CR) Vice-president who recognized that Nike
needed to be strategic in its response to its environmental, with
the help and surveillance of Mark Parker, who was then co-
president of the Nike brand, and who is now the CEO of Nike Inc,
in addition with the collaboration of John Hoke, the then Vice-
president of Footwear Design, who had an very important role in
the group providing the inspiration and tools to drive the
Considered design philosophy deep into Nike’s product creation
units and processes.

7. • One of the main group’s objectives included helping Nike
consider the impacts of choices on the entire product lifecycle
from design through end of life, and understand and reduce its
environmental footprint. Instead of commanding and controlling
the ways in which the businesses implemented sustainability, the
group placed responsibility for sustainability in the hands of
designers who birthed the product.

8. • I also found it interesting to look with more depth into a product that is
used by almost all of us. Shoes are a basic necessity in our society and
Nike shoes are very commonly found. By exploring the methods used by
Nike in particular we were given an idea as to some of the basic methods
of all shoe production and what it takes to make a sustainable,
economically viable and stylish shoe product.
• So you might be wondering why this situation was and is still being a
challenge to Nike, well is because in the past years Nike has made a
concerted effort to improve their reputation as an internationally active
corporation and improve their production and business practices,
because each day more and more consumers are concerned about
environmental and sustainability issues, so they want to know that the
products they are purchasing are eco-friendly.

9. • Back in 2008 they started doing footprint analysis in toxics, waste,
water, etc. and presented it and now designers are helping on
solve problems. That’s why one of their sustainability-based
endeavors has been to attempt to eliminate polyvinyl chloride or
PVC plastics in their footwear. This has been a fairly publicized
goal and though it has been part of a plan for about 10 years now,
it has not been fully implemented, though the plastics have been
removed from almost all products.

10. • The international role also plays an important factor to accomplish Nike
mission, The company was one of the first in the footwear industry to
embrace globalization, contracting manufacturing to other companies
located in countries with cheap labor at a time when most shoes were still
produced in the United States. Factories that Nike contracted with
employed 823,026 people, about half of which worked in footwear.
• Shoe factories from roughly 50 factories are located almost exclusively in
China, Thailand, Indonesia and Vietnam. With an outsourced
manufacturing network widely distributed across the world, from nearly
700 factories, totaling 800,000 workers, located in 52 countries, so it’s
important to know how to apply these ideas in all of the factories around
the world, issues like culture and diversity, politics and policies has to be
consider.

11. • President Obama dressed his campaign for free trade in the clothing of
"middle class economics, appealing to his liberal base to support a Pacific
trade deal he said would help American workers.
• Nike announced it would hire 10,000 workers in the United States over the
next decade if a Pacific trade agreement passes Congress. Introducing
Obama, Nike President Mark Parker said Nike's fast-growth success story
"was made possible because of the power of trade."
• Labor groups said that if Nike wants to hire American workers, it shouldn't be
contingent on a trade deal. "We have heard similar promises from companies
before, and very few have panned out. We hope this time is different," said
Eric Hauser of the AFL-CIO. "Decades of experience have taught us that
corporate-driven trade policy too often accelerates a global race to the
bottom.

12. • The impact of the primary sector in the Nike industry would be the
different suppliers who provide Nike with their raw materials for the
manufacturing of their shoes and the tertiary sector would be the shops
that sell their products around the world which are bringing a service.
• The secondary sector, also known as the manufacturing of goods would
be like mention before in the international environment slide the
different factories where all the Nike shoes are manufacture the
following picture is the representation of where are located the many
global manufacturing factories of Nike in the whole world. Which
represents about 43 countries, 679 factories and 1,023,714 workers.

14. •This sector is very important in Nike because they
have a great commitment as a global company to
play a role in bringing positive and systemic
change for workers within the supply chain and in
the industry. The needs of nearly 1 million workers
in Nike’s contract supply chain overshadows any
other group and they also know that the size and
scale of the combined manufacturing operations
has a considerable environmental impact.

15. • The athletic and outdoor cluster firms that design, develop,
manufacture, market, distribute and sell apparel, footwear and gear for
active outdoor recreation is a signature cluster for Portland and Oregon
which are one of the most important cluster in the Nike industry. This
cluster consists of more than 300 firms with a payroll, and employs more
than 14,000 Oregonians, In addition the cluster includes about 3,200
self-employed individuals with sales of $100 million annually.

16. • Oregon has the nation’s foremost concentration of athletic and outdoor
companies. The Portland metropolitan area has the highest location
quotients for footwear distribution and footwear manufacturing of any
large U.S. metropolitan area. Oregon receives more patents for footwear
than any other state. The region’s key domestic rivals include Los
Angeles and New York for apparel and Boston for footwear. Nike,
Columbia and Adidas are the pillars and foundation firms of this cluster.
• Nike played a decisive role in defining the athletic and outdoor cluster
and anchoring it in Portland. Nike s defined a business model, brought
thousands of talented workers to Oregon, and connected Portland to
the globe. And while Nike is still vitally important, the cluster is now
much bigger than one firm.

17. • It’s difficult for U.S. policy makers to have a major impact on the
sustainability of Nike’s footwear. Regardless of this hurdle, policy makers
can require transparency about corporate impacts on sustainability, as
well as the potential impacts of a changing climate on their business. This
is especially true for publicly traded companies like Nike, because the
Securities and Exchange Commission (SEC) can require them to release
information to benefit shareholders. The SEC recently issued an
interpretive guidance that clarifies what companies need to disclose to
investors in terms of climate-related, material effects on business
operations, whether from new emissions management policies, the
physical impacts of changing weather or business opportunities
associated with the growing clean energy economy.

18. After decades of phenomenal growth and becoming one of the
world’s top brands, Nike intentionally shifted its strategy to integrate
sustainability as a vehicle for growth. They have being through a long
way to get where they are now, from the association with the
discontent of globalization in the late 90s and subsequently
establishing one of the first corporate responsibility (CR)
departments, to setting the bar in embedding sustainability into
business practice. Nike no longer view sustainability as option. Rather
it is a business imperative, an innovation opportunity and a potential
competitive advantage.