Nike is a large and successful firm in the design of athletic shoes. It could easily decide to forward-integrate and manufacture the shoes it designs. Thus, the firm has a credible threat over its current outsourced manufacturers. If Nike has no intention of actually entering the manufacturing arena, is it ethical for the Nike supply chain management to bring up this credible threat during annual pricing negotiations? What are some reasons Nike may want to consider such a vertical integration more seriously?

Understanding Business
12th Edition
ISBN:9781259929434
Author:William Nickels
Publisher:William Nickels
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
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Nike is a large and successful firm in the design of athletic shoes. It could easily decide to forward-integrate and manufacture the shoes it designs. Thus, the firm has a credible threat over its current outsourced manufacturers. If Nike has no intention of actually entering the manufacturing arena, is it ethical for the Nike supply chain management to bring up this credible threat during annual pricing negotiations? What are some reasons Nike may want to consider such a vertical integration more seriously?

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