3.2 What changes have taken place in the FLOW of GOODS and CAPITAL?

3.2b- TNCs control a substantial part of the global economy and have created a GLOBAL SHIFT.

Today we study one TNC in the SECONDARY SECTOR to show how it operates in different parts of the world.

A secondary TNC

819 990 WORKERS GLOBALLY

612 FACTORIES

MANUFACTURES IN 46 COUNTRIES

History of Nike

http://www.nikebiz.com/crreport/content/workers-and-factories/3-11-0-interactive-map.php?cat=map

Use the link below to explore Nike’s global business

Malaysia

U. S. A

Mexico

Japan

China

ThailandVietnam

Indonesia

Taiwan

Head office located hereBy 1992 most factories had moved from here to Asia

Workers were attacked by riot police after protesting when workers were sacked for asking for higher wages in this North American country which has 20 factories

In the 1980’s factories were opened here because of cheap labour, some were even opened in its capital city: Bangkok

Employees work for 65 hours a week for US$65 in this Communist country

Cheap labour is the main reason why Nike set up factories in this country, which is to the south of North Korea

A DEVELOPED COUNTRY where in the 1960’s; training shoes were made as labour was cheap. Now finances operations in Taiwan and Korea.

An Asian country with the worlds largest population it also has the largest number of Nike factories (218 in total)

Poverty dominates workers lives (earn US$2 a day) in this country where Jakarta is the capital city

Workers forced to work overtime in this Asian country which borders with Indonesia and Thailand

Cheap labour is the main reason why Nike set up factories in this country which is an island off China.

South Korea

Task-

Match the country to the statement On a map, locate these countries, use a keyEnsure that the statements are linked to the map

Bangladesh (5)Egypt (3)Cambodia (5)Canada (5)Dominican Rep. (1)Ecuador (1)El Salvador (3)Guatemala (6)Netherlands (4)

ALL APPAREL (CLOTHING)

EQUIPMENT (SPORTS) shoes

Argentina (26)Australia (5)Brazil (56)China (218)India (23)Indonesia (41)Mexico (27) Taiwan (16)

Bosnia (1)Bulgaria (1)Israel (1)Italy (10)Japan (26)South KoreaMalaysia (1)Pakistan (4)Philippines (1)South Africa (1)

RESEARCH AND DEVELOPMENT

USA (1)

Honduras (7)Hong Kong (3)Malaysia (20)Macau (1)Moldova (4)Nicaragua (2)Pakistan (4)Paraguay (1)Peru (3)

Philippines (2)Poland (1)Portugal (1)South Africa (4)Spain (2)Sri Lanka (20)Turkey (8)UK (1)

Thailand (38)USA (67)Vietnam (71)

Turkey (3)UK (1)

Number of factories in ()

Add some of these nations to your map, use a key to indicate what that country does. Include the ones with most factories.

Describe the main location of Nike’s manufacturing.

revenues

revenues

2008

2011

Describe the differences between Nike revenues in 2008 and 2011 (2)

Using the website linked in earlier slides, explain how Nike operates as a global business. Consider the following questions in your answer.Where is the Headquarters located?Which regions are the main Nike consumers?Which regions are the main producers of Nike products?

What is a contract factory?Can Nike be blamed if wages or conditions are poor in these factories?

HOW NIKE OPERATES

WHY HAS NIKE SHIFTED ITS MANUFACTURING? (GLOBAL

SHIFT)Why does Nike manufacture most of its products in

Eastern Europe or South East Asia?

WHY HAS NIKE SHIFTED ITS MANUFACTURING? (GLOBAL

SHIFT)Why does Nike manufacture most of its products in

Eastern Europe or South East Asia?

Increases its profi ts as workers in South East Asian countries like Vietnam, are paid less than workers in the USA or UK would be.

Land to build factories is cheaper in countries like China, as they have subsidies (pay part of the cost) to encourage Nike to locate there and bring jobs.

Countries like China and India are becoming increasingly wealthy and thus as a result a large market to sell Nike products to is opening up, manufacturing and selling in same location reduces transport costs.