Nike in Asia and Indonesia

Survey Report

Nike in Asia and Indonesia

Apart from a brief but unsuccessful experiment with manufacturing in the u.s., Nike shoes are always made in Asia, initially in Japan, then South Korea and in Taiwan, and more recently in China and Southeast Asia.

Nike began production in South Korea and Taiwan in 1972, because attracted by the cheap labor there, and was soon joined by other companies including Adidas and Reebok.

But Nike went a step further. Instead of having its own factory, they contracted a local production in Korea and Taiwan.

As the company Nike boss Phil Knight said: "there is no definite value in making something of it. That value will be added by careful research, innovation and marketing "(Katz 1994). Nike products are now basically follows the idea of a designer and marketer of shoes. The industry was conducted by the Korea and Taiwan suppliers. Once again, other companies follow this model.

In the 1980s the Nike tried to make production in China, in partnership with State-owned companies, but it instead wreaked disaster. Nike rose to move its investments into Taiwan. Nike then took advantage of the labor cost is cheaper there.

In the late 1980s with the existence of labor unrest in South Korea,-an increase in the level of wages and loss of control of the workplace by authority of Korea-has made the country become less attractive to investors, both foreign and domestic, who began to search for another location is more enjoyable. Nike then moved their operations to the South of Thailand and Indonesia, in search of cheaper labor and no hassle. Wages in these two countries was mentioned as one of the cheap because only one-fourth the rate of wear is paid in South Korea. Some of Nike's Association based in Taiwan was also established in Southeast Asia.

Another reason for this shift is that, in 1988, both South Korea and Taiwan to lose special access to the u.s. market, which has long as they enjoy the status of "developing countries" under the General system of Preferences (GSP). Korea and Taiwan investors then moved to the factory in Thailand, Indonesia and China with the use of GSP privileges making poor countries.

Of the seven top supplier of Nike sports shoes in 1992, three Taiwan companies are producing their products in China, the other three operate in South Korea, and also in Indonesia, one is a company in Thailand.

Nike in Indonesia

Nike has been operating in Indonesia since 1988 and almost a third of the shoes that exists today is a product of it. In a press interview in December 1994, the Coordinator of the Nike company in Indonesia, Tony Band, said the company used in Indonesia totaled 11 contractors. Among them is former associate company Nike base in South Korea and Taiwan--who was also at the same time producing for other brands such as Reebok, Adidas and Puma.

The relationship between Nike and the contractor in Indonesia close enough. Every personnel Nike factories in Indonesia at every check the quality and workmanship that meets the stringent requirements of Nike.

Most of the factories producing for Nike is located in a newly developed area for light industry in Tangerang and Serang, West of Jakarta. At a factory belonging to Korea (and some belonging to Indonesia also) Management Summit held by the people of Korea. Middle-level managers and supervisors can also originate from Korea or Indonesia. But all production workers come from Indonesia, especially young women in the age group 16-22, the workers are usually derived from Java.

Sumber : http://www.nike.com/nikebiz/inveafstors/annual_report/ar_07/docs/10k.pdf

               http://id.wikipedia.org/wiki/Nike,_Inc.