Well, we all know that Nike is notorious for its ability to externalize their costs, thus maximizing their profits.
How much does a shoe from Nike actually cost to produce? Is that cost at all reflected in the final price? Could Nike feasibly produce their shoes in the West without experiencing losses?
Interesting questions... but do they merit an Extended Essay?
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2 comments:
Marco,
I don't know if you'd want to only on Nike, unless you know someone involved with their production in some way. Surely the final price does not reflect the actual cost of production, but remember, Nike is a profit seeking corporation, they maximize profits by minimizing costs. Clearly the could produce shoes in the west, but why would they? The cost would be much higher, thus their profits much lower, plus since shoe production is a labor intensive process, and the cost of labor is so high in the west, it would be uneconomical to produce in the west. It would be almost impossible to find the vast number of low skilled workers to work the assembly lines. Plus unemployment in the developing world would put huge demographic pressures on rich countries as immigrants flock to their borders to come work at Nike factories in the US and Europe!
Also keep in mind that the price you pay for a pair of Nikes is not meant to cover only the cost of production. Nike must also pay its athletes millions for product endorsement, its shareholders dividends to keep the financial capital flowing from sale of stock and bonds, and the profits are necessary to reinvest in R & D so Nike can continue to develop better products for its customers. Clearly the profit motive is a good thing. Now, if it comes at the expense of the lives and well-being of exploited workers in its factories, then clearly something should be done. Perhaps the World Bank, or the rich countries that consumer Nike's products should impose labor standards on Nike, to assure that it does not use child labor in its factories for example, or force workers to work in unsafe conditions. But to suggest that Nike should move its factories back to rich countries is unrealistic in this world.
So, in conclusion, I think you should find an industry you have an inside connection to. You can't compare Nike Airs with fine Italian leather lofers, those are very different markets, after all. Who do you know in an industry you could get firsthand information on?
Keep brainstorming!... Mr. W
Mr Welker, would it be enough to an Extended Essay to determine the amount of profit Nike makes? As in, percentage wise?
Naturally, I would have to explain the reasons why its possible.
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