Question

1. Nike Inc. has contracts with over 800 manufacturing factories around the world that manufacture Nike’s products; whereas Intel Inc. runs over 200 company-owned facilities around the world. Explain the reasons for the difference in the strategy for global operation by the two companies.

Answer 1

Nike Inc. and Intel Inc. are both the world class companies with selling their products all over the world.and both are the dominating companies in tgeir respective industries.although both are leading companies their production process are different from each other only because they are belongs to the different industries.Nike Inc. is a global industry of sportswear and footwear on the other hand Intel Inc. is leading in computer processor industry.Intel is producing computer chips or cpu's which have used in various computers all over the world.

lets discuss about nike first.nike can produce his products by any manufacturing factories all over the world as nike can order them their initial amount which has to be produced and they are producing for nike but all the factories are not belongs to nike but tgey are with in contract with nike.as those factories can produce their own products simultaneously nike product.so those factories are partly independent to choose their technologies and cost,labour size optimal output etc.they can employ by their own.those employee are not belongs to nike rather than those factories.now if nike want to take over all those factories producing it's product then there is certain disadvantages like those factories are not producing their own product anymore.so it can't gain the profit from it anymore.so the costs are higher for nike's product also as those factories has a huge fixed cost and as production falls then average fixed costs per units increases so nike's production cost is higher.next for nike maintain all those factories are quite not easy as its maintaining cost are increases.

Intel is in a industry where patent will give you upperhand over your rivals.so it has to keep their production process secret.and producing processors need higher equipment and trained labours.so it is advantageous for intel runs over 200company owned facilities al over the world.as those companies make other chips for their own then there can be leak intel's technology to the rivals company.which make huge loss for intel as in this intel you can be superpower only if you are providing much more than your rival.and intel has a higher research and develpoment to improve their technologies.and this new technology need to be keep secret untill it bring to market.so to keep secret intel doesn't depend indendent factories like nike's.as they may not have those highly advanced technologies and the quality may not be maintained in that case.so intel has to produced it by it's own financed companies which is actually intel factories and workers are belongs to intel not to other.and they are bound by embargo not to dispose it to others.