Strategic and Operational Perspectives
I have selected Nike, the top global sportswear and sporting apparel company, to illustrate the straight extension strategy of export, involving little modification of its products in foreign markets.
Corporate America has been the marketing and financial arm of American globalization throughout the world, having benefited enormously from the international penetration of American made-films, TV programming, music and other media in the second half of the 20th century. As a result of this historic domination of modern communications, the American lifestyle has come to be identified with wealth, status, and prestige. What started with foreign enchantment with Levi jeans after World War II led eventually to an international youth market craving and willing to pay high prices for other prestigious U.S. products such as Nike sneakers.
Nike was started by a former track coach and one of his runners in the 1970s. After making only a few thousand dollars in its first year, and surviving on Small Business Administration loans for a while, it grew to be the largest sports apparel company in the world, with more than $3 billion in earnings for the last quarter of 2002 alone (www.nike.com).
Starting their exports with only the modification of sizes of their sports footwear based on differing demographics in various international markets, Nike soon began the much more difficult step of setting up foreign manufacturing, distribution, and employment strategies. The proof of their success in mastering this transition from simple exportation is that they now have a supply chain using more than 660,000 contracted workers in 900 factories in over 50 countries around the world.
Most of the problems associated with terrorism or kidnapping involving American companies abroad have to do with the ugly aspects of how we have achieved our high standard of material culture at the
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