Nike was founded in 1964 with a $1,000 investment by Phil Knight and Bill Bowerman, the company's expansion required an advantage compared to existing sports players such as Adidas and Reebok founder therefore began to seek to achieve higher quality at a lower price than existing national brands. They began by entering into agreements with Japanese factories when the cost of products was low compared to those in the United States. However, after several years and due to the oil crisis in Japan, prices began to rise, forcing the company to look for other locations. They started going to other Asian countries like Korea, Taiwan, China, India, Indonesia and Vietnam and they still exist in some of these countries till date. Nike had followed a very clear and direct strategy, they focused only on development, design, marketing and sales, and outsourced the production of their products to several manufacturers. At first glance, this seems like a very creative way to run the business and focus on its specialties. It is also known as outsourcing or offshoring model for such a large organization where controlling all areas is quite difficult. Although this decision has some benefits, it still led to some very crucial and negative circumstances for Nike (I think this would happen to any branded product or service, as the spotlight is often shone on them). Say no to plagiarism. Get a custom essay on “Why Violent Video Games Should Not Be Banned”?Get the original essay The first major problem Nike faced was low wages in Indonesia in the early 1990s. Nike manufactured its products in six factories in Indonesia, some of these factories paid very low wages (below the legal minimum which was around 1 dollar). Worse still, the factory itself had obtained authorization from the authorities to grant such low wages at high expenses. This was made public through non-governmental organizations (NGOs) after four years of inspection by Jeff Ballinger (the founder of Press for Change). If we consider the development of Nike's shares, we see a clear impact on the decline in sales in the early 1990s. Initially, Nike began to defend that it was only the designer and distributor of the product , but it seems that this did not remove him from the light of the incidents. Then, in the mid-1990s, Nike began instructing its Indonesian supplier to maintain the minimum wage and stop going to the government for an exemption. Nike went even further, raising wages to between $30 and $37 when the government announced in 1999 that the minimum wage was $26. The second problem that Nike faced is in Pakistan, due to child labor in Pakistan, Sialkot. This region produces more than 70% of the world's high-quality soccer balls and Nike also produces its soccer balls in this region. In 1996, Life magazine published an article on child labor in Pakistan with some photos, including one of a 12-year-old sewing a Nike soccer ball. This article and the photo of the 12 year old made the situation even worse for Nike (on top of the previous one). Criticism followed by several NGOs, consumer groups and unions to boycott Nike against such behavior. To overcome this problem, Nike insisted that if any of its subcontractors employed children for their.