Sustainability report

Sustainability Report for Nike Company

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Table of Contents

Executive Summary……………………………………………………………………4

1.0 Introduction…………………………………………………………………………5

Overview of the Global Organization………………………………………………….5

Industry …………………………………………………………………………………..5

What do the Company Sell?....................................................................................6

Is the Company B2B or B2C…………………………………………………………..6

Brief History of Operations and Plans for the Future……………………………….6

A Brief Introduction to the Concept of Sustainability within the Industry…………7

2.0 Sustainability Profile: Corporate Headquarters………………………………..10

Factors Influencing Corporation to Adopt Sustainable Approaches to Business..10

Programs and policies Nike has Adopted…………………………………………….10

Future Sustainability Plans for Nike Company………………………………………10

2.0 Sustainability Profile 2: Country A, Japan…………………………………….12

Demographics and Government Structure of Japan………………………………..12

Factors Influencing Corporation to Adopt Sustainable Approaches to Business..12

Programs and policies Nike has Adopted…………………………………………….13

Future Sustainability Plans for Nike Company……………………………………….13

Sustainability Profile 3: Country B., China ……………………………………….12

Demographics and Government Structure of Chinese Market……………………..13

Factors Influencing Corporation to Adopt Sustainable Approaches to Business

Programs and policies Nike has Adopted…………………………………………….13

Future Sustainability Plans for Nike Company……………………………………….14

5.0 Comparison of Sustainability Efforts in Different Countries……………..13

Different ways the Company Conducts Sustainability in Different Countries….14

Similarities and Differences Impacting the Uptake of Sustainability in Different Countries……………………………………………………………………………..14

6.0 Summary and Conclusions……………………………………………….….15

7.0 References ……………………………………………………………………...16

Executive Summary

NIKE, Inc. is a corporation that produces footwear, equipment, apparel, and development of sports products worldwide. The overview of the sustainability plan in Nike Inc. is very refined. Nike Inc.'s has a sustainability plan that deliberates the limits and the abilities of the organization to successfully complete its operations. Nike Company falls under the athletic footwear industry which is a saturated and a challenging market under the retail industry. Nike Footwear Company sells a wide range of products ranging from different types of shoes, socks, bags, timepieces, sports balls, gloves, bats, digital devices, golf clubs, protective equipment, and other sportswear equipment. Sustainability in the footwear retail industry has moved forward in the last few years. Nike remains the world's second largest industrial polluters as a result of the oil and gases released during the production processes of the footwear apparels. As such, there is a need for the company to adopt sustainable approaches to production. This paper presents a comprehensive report on the sustainability plan for Nike Inc. in its headquarters and two other countries namely Japan and China.

1.0 Introduction

Nike Inc.'s has a sustainability plan that deliberates the limits and the abilities of the organization to successfully complete its operations. The sustainability plan is composed of the systems design which is applied to the connections between business operations and the groups and employees within the organization. In Nike Inc., the sustainability report highlights the needs to meet the demands of the customers as well as continue the business plan for an extended time without interfering with the environmental factors during its production.

Overview of the Global Organization

NIKE, Inc. is a corporation that produces footwear, equipment, apparel, and development of sports products worldwide. The company designs athletics, leisure and casual footwear for men, women, and children (Mahdi, 2015). The company was founded by two visionaries namely Phil Knight and Bill Bowerman who started out to reinvent the footwear for the athletics. Under its brand, Nike also sells children's products inspired by sports as well as different recreational and competitive activities including tennis, golf and walking by Hurley and Converse. The mission of the company is the strategy that drives the everyday business processes and expands the company's potential to market expansion. The company achieves this mission by developing a revolutionary sports innovations and developing sustainable products that make positive impacts on the communities.

Industry

Nike Company falls under the athletic footwear industry which is a saturated and a challenging market under the retail industry (NIKE, 2013). Retail is an essential business activity which provides the companies to sell products and offer services to the customers. The industry comprises of intense competition, price-conscious items, and fashion trends that slow down the expansion of the footwear industry. Different manufacturers are fighting the slow sales with new and innovative designs to boost sales by exploiting direct sales to customers. But the sales in the footwear industry are steadily increasing especially in the retail of running shoes, basketball shoes and cross-trainers shoes. As such, the companies in this industry with string brands are likely to expand to international markets as a result of growth and development.

What do the Company Sell?

Nike Footwear Company sells a wide range of products ranging from different types of shoes, socks, bags, timepieces, sports balls, gloves, bats, digital devices, golf clubs, protective equipment, and other sportswear equipment (Ranjan, 2016). Similarly, the company sells different plastic products to other suppliers and manufacturers. The company has different brand designs including Jordan designs, Converse designs, All-Star designs, Chuck Taylor designs One Star designs and Star Chevron designs among others.

Is the Company B2B or B2C

Nike Company is a B2B site which is intended to reduce the service load for the products available and sold at the company. The company consists of a start-of-the-art website that turns the attention of its customers using online marketing strategies.

Brief History of Operations and Plans for the Future

NIKE started by operating in six segments including West Europe, North America, Greater China, Eastern and Central Europe, Japan, and the developing markets. Almost all of the company's apparels were made by the manufacturers outside America mainly in China, Vietnam and Indonesia (NIKE, 2013). Today, the equipment products for Nike Company are made in the United States as well as abroad. Every geographic segment of Nike's brand works predominantly in the designs, marketing, and development of selling athletic footwear, apparel, and equipment. Today, the company sells its products through both wholesale and retail stores as well as its direct customer operations using the company's sales representatives worldwide. Nike also sells to hundreds of retail operators in more than 40 countries and having distribution centers outside the United States.

The future plans of operations for Nike include amplification of the sales through the retailers and the distribution centers all over the world. The company has already identified over fifty retail partners from whom it plans to conduct its business activities both online and traditionally (Mahdi, 2015). These retailers are believed to offer the best services to the target customers of the company as well as deliver the best practices to its present customers. The company has also developed a strategy called the house of retail whereby it will customize its retail concepts with a Nike Arena for balancing the products and installation displays to bring out the best workshop and presentations.

A Brief Introduction to the Concept of Sustainability within the Industry

Sustainability in the footwear retail industry has moved forward in the last few years. As the customers continue to be more and more aware of the environmental impact of the products they are using, different companies have also strived to follow the sustainable trends. Presently, the footwear retail industry experience increasing demands and difficulties from different stakeholders to manufacture sustainable products. Consumers are increasingly asking for eco-friendly products and this has led to the adaptation of sustainable processes of production in the footwear industry. Furthermore, financial donors always pay special attention to the sustainability performances of retail companies before they sponsor their business activities. This has led to the adoption of sustainable approaches to production processes.

Different organizations within the footwear industry have strived to be more sustainable in their business processes to meet the increasing demands for sustainable production and the changing needs of the main stakeholders (McDonagh, 2015). Companies within the footwear industry continuously develop sustainability programs that aim at reducing energy, chemical wastes being released from the manufacturing processes and greenhouse gases to improve the commitment of workforce and explore the opportunities for saving costs. These strategies include developing customer loyalty and reducing the dependence on the natural resources improved innovation and reputation of the industry between the stakeholders.

The sustainable companies within the footwear retail industries are increasingly monitoring and tracking their performance as they evaluate the energy release, material usage and the fuel generation in the production processes (Paine, 2013). These companies similarly track the metrics of sustainability and monitor the paybacks of these metrics. Finally, various businesses within the footwear retail industry are developing policies and procedures that promote sustainable practices within the organizations. They produce a corporate sustainability report annually to show their objectives and performance in terms of sustainability.

2.0 Sustainability Profile: Corporate Headquarters

The headquarters of Nike Corporation is in Beaverton in Washington County. Oregon is principal to the headquarters of Nile Inc. the headquarters is set 400 acres away from the Pacific Northwest landscape which is a short drive from Portland.

Factors Influencing Corporation to Adopt Sustainable Approaches to Business

Industry Challenges

Nike remains the world's second largest industrial polluters as a result of the oil and gases released during the production processes of the footwear apparels (Nike, 2012). The industry faces a lot of challenges in its supply chain as every step of the supply chain requires incredible consumption of energy which produces huge carbon footprints. The company accounts for 24 percent of chemical usage and 10 percent of international carbon emissions which is a great environmental concern. As such, Nike has an essential role in shaping its corporate social responsibility to alleviate the possible effects of climate change.

Corporate Social Responsibility

Nike has presently continued to face the problems of negative allegations concerning its factory and lab conditions (Dauvergne, 2012). This, in turn, influences the sustainability of the organization in terms of employee retention and customer satisfaction. Since then, the company has turned around and made great efforts towards improving the highest sourcing and manufacturing sustainability index scores.

Business Performance

Nike Company has shifted its supply chain to integrate sustainable business operations by reducing its environmental footprint and improving the innovation of its products (Martin, 2012). The business performance of the company has greatly called for the need for sustainable approaches to business that could maximize the profits. Additionally, the company strives at reducing its use of water in the footwear production unit.

Programs and policies Nike has Adopted

Nike headquarters has various policies and procedures placed forward to maintain sustainability in the business processes (Berger-Walliser, 2016). First, the restricted substances list policy highlights the standards for material use that will limit environmental and industrial pollution. The company also has a green and sustainable chemistry policy that helps to minimize the generation of harmful chemicals and foster sustainable innovation. The third policy is the nanotechnology material guidelines program that restricts the use of nanomaterial in the production of the footwear and other apparels. Finally, the animal skins policy is used in the brand products for Nike to affiliate the products which may have animal skin materials.

Future Sustainability Plans for Nike Company

Nike is instigating a sustainability plan which the company plans to apply by the year 2020 (NIKE, 2013). The company is taking stringent measures to mitigate the environmental impact and develop sustainability within its production process. First, the company conducts products scoring to determine whether the production process poses some environmental impact. Secondly, it also conducts a waste reduction process in its products design and manufacturing practices.

3.0 Sustainability Profile 2: Country A, Japan

Demographics and Government Structure of Japan

Nike Inc. in Japan is the largest player in the athletic footwear market. It accounts for s8 billion dollars of the country's sales in athletics footwear (McDonagh, 2015). The government structure in this country is well developed and enables foreign businesses from setting up organizations in the country. Nike focuses on the key demographics in the country which mainly comprises of the women. The company focuses on producing women footwear and tights. Women in their 20s and 30s are moving the athletic fashion trend with the increasing fitness programs. Nike also targets the young Japanese athletics to wear its products by sponsoring the local clubs, leagues and sports federations.

Five Factors that have Motivated Nike to adopt more Sustainable Approach to Business

First, Nike has product stewardship which is based on the innovations within the environment. The customers at Nike are increasingly demanding for eco-friendly products that drive the company to adopt more sustainable approaches to its operations (Nike, 2012). Secondly, the need for improved quality of products by the customers urges the company to green its supply chain. The company is adapting to more sustainable business approaches to eliminate the utilization of toxic chemicals from the business processes. Third, the company has a high standard of the supply chain which calls for the company to have sustainable approaches to business.

Fourth, Nike is responsive to the societal problems in Japan that call for the organization to produce sustainable products and eliminate environmental pollution (Paine, 2013). The company has assumed leadership tactics in different societies that lead to problems such as childhood obesity and pollution-related diseases. Finally, the expressive awakening of the multinational giant promoted the company to develop sustainable practices within its business processes. As such, the company has to identify its unsafe working conditions and focus on sustainable production of products.

Programs and policies Nike has adopted in this Country

Nike has adopted the Japanese Biome Leather sourcing policy that ensures the company ceases from utilizing leather that is produced from cattle raised in the Japanese biome (Berger-Walliser, 2016). This helps in minimizing deforestation through cattle ranching. Secondly, the conflicts mineral policy calls for the suppliers in Japan to reinforce the responsible sourcing of conflict minerals for the production of footwear apparels. Finally, the company uses a packaging restriction substances list program to restrict the packaging of the products to comply with the global legislation.

Future Sustainability Plans for Nike Company in this Country

Nike has two main measures to mitigate the environmental impact and provide more sustainable production of its businesses in Japan (Martin, 2012). First, the company restricts the use of chemicals and innovative materials that have harmful substances to protect the environment. Also, the company is partnering with other external entities to figure out the sustainability of the materials used in the production of the footwear. Apparel

Sustainability Profile 3: Country B., China

Demographics and Government Structure of Chinese Market

Greater China was the fastest region for Nike Inc to grow its business with a percentage of 9 percent (Brohi, 2016). The government of China has a growth per capita that is likely to rise in the future as the footwear industry in China has tremendous growth. The company is capturing the health and fitness trend in China and making profits of over five billion dollars annually. The market demographic for the Chinese market consists mostly of women and young athletes. These are the greatest demographic segments for the company as the demand for athletic wear increase among the women and the young athletes.

Five Factors that have Motivated Nike to adopt more Sustainable Approach to Business

First, the key timelines and innovation led to the development of sustainable approaches to business in the Chinese markets of Nike Corporation. Secondly, the company was experiencing some labor crises that collectively triggered the need to have a sustainable approach to business (Dauvergne, 2012). Third, the company has an urge to measure its exponential returns from the company's corporate social responsibility. This thus drives Nike to have a sustainable approach to managing its businesses. Fourth, the Chinese government had put some restriction on the use of some materials that were not environmentally friendly. The company then strived at having the most control in its product design to drive the improvement in the sustainability of materials. Finally, the need to have a green exchange program led to the adoption of sustainable approaches to business in China.

Programs and policies Nike has adopted in this Country

Nike Inc, China has an environmental health and safety policy that it uses to protect the lives and health of the people in the workplace as well as the society. Also, the company adopted the ZDHC wastewater policy that set out combined expectations on water use to maintain its quality for the footwear industry.

Future Sustainability Plans for Nike Company in this Country

Nike is taking some measures to alleviate the environmental impacts it may have on the country by maintaining the efficiency of energy through the Carbon and Energy use program. The company has a goal of tracking down 100 percent of its energy through the use of renewable resources. Nike also strives at gaining water efficiency by minimizing its use of ware by 17 percent per production unit.

5.0 Comparison of Sustainability Efforts in Different Countries

Different ways the Company Conducts Sustainability in Different Countries

Nike conducts sustainability practices in different ways in the two identified countries (Nike, 2012). For example, in its headquarters in the United States, the company is taking stringent measures to conducts products scoring that determine whether the production process poses some environmental impact. In Japan, the company restricts the use of chemicals and innovative materials that have harmful substances to protect the environment. In China, the company has a goal of tracking down 100 percent of its energy through the use of renewable resources.

Similarities and Differences Impacting the Uptake of Sustainability in Different Countries

On the similarity, Nike uses environmental health and safety policies in the three countries to uptake and adapt to sustainability in the three countries (Brohi, 2016). Another similarity is that the company uses regulations in the three countries to control the use of water and resources in the production process to maintain sustainability. On the difference, the environmental regulations placed forward in the company in Japan are far much different from the ones in China and the United States.

6.0 Summary and Conclusions

The overview of the sustainability plan in Nike Inc. is very refined. The sustainability plan is grounded on the company's projections for the future to ensure it stays profitable and sustainable. The strategy ensures that Nike gets a stable supply of the raw materials to use in the production of footwear. As outlined in this report, Nike has already started taking substantial approaches to minimize the environmental impact of its products in different countries. The company, however, needs to take additional steps to improve its entire supply chain towards sustainability.

References

Berger-Walliser, G., Shrivastava, P., & Sulkowski, A. (2016). Using proactive legal strategies for corporate environmental sustainability. Mich. J. Envtl. & Admin. L., 6, 1.

Brohi, H., Prithiani, J., Abbas, Z., Bhutto, A., & Chawla, S. (2016). Strategic Marketing Plan of Nike.

Dauvergne, P., & Lister, J. (2012). Big brand sustainability: Governance prospects and environmental limits. Global Environmental Change, 22(1), 36-45.

Mahdi, A., Abbas, M., Mazar, T. I., & George, S. A. (2015). A Comparative Analysis of Strategies and Business Models of Nike, Inc. and Adidas Group with special reference to Competitive Advantage in the context of a Dynamic and Competitive Environment. International Journal of Business Management and Economic Research, 6(3), 167-177.

Martin, R., Muuls, M., de Preux, L. B., & Wagner, U. J. (2012). Anatomy of a paradox: Management practices, organizational structure and energy efficiency. Journal of Environmental Economics and Management, 63(2), 208-223.

McDonagh, P., & Prothero, A. (2015). Unpacking Corporate Sustainability. In Waste Management and Sustainable Consumption (Vol. 166, No. 183, pp. 166-183). ROUTLEDGE in association with GSE Research.

NIKE, Inc., 2013. Annual Report- NIKE, Inc. - Investor Relations. Available at; http://investors.nikeinc.com/files/doc_financials/AnnualReports/2013/index.html/ [Accessed April 1, 2019] Nike, Inc. Fy10/11, 2012. Sustainable Business Performance Summary. Available at; www.nikeresponsibility.com/report/files/report/NIKE_SUSTAINABLE_BUSINESS_REPORT__FY10-11_FINAL.pdf/ [Accessed April 1, 2019]

Paine, L. S., Hsieh, N., & Adamsons, L. (2013). Governance and sustainability at Nike. Harvard Business School Publishing, 9-313, 146.

Ranjan, W. (2016). The Financial Performance Analysis of Nike Inc: with Special Reference Year 2015 Annual Report.