SCENARIO 8 -STRIKE.COM – GLOBAL SPORTSWEAR BRAND In 1996 Strike.com was a leading (imaginary) global brand specializing in sports equipment – clothing and footwear especially. It had its headquarters in Washington, D.C. in the United States. It used to make its own clothing and footwear from its own US-based factories but in the 1980s it ‘downsized’ and ‘outsourced’: shifting to buying in manufactured clothing and footwear from subcontractors and suppliers in Vietnam. Many of the young, unmarried, female workers for these suppliers had no trade union representation, earned less than one dollar a day and worked for 12-15 hours a day. This finished produce was then packaged, marketed and sold by Strike to a number of large retailers such as Marks and Spencer, Tesco, Sainsbury, Wal-Mart, Doshco etc. These stores sold the products at relatively high prices to Western European and North American consumers. Strike had an 8 figure advertising, marketing and promotions budget, using well-known sports stars and was highly profitable. In 2001, some of the workers in the Vietnam factories began to organize to form a union to press for better pay and conditions. They were successful and the workers achieved higher pay. Further strikes occurred in 2002 and 2003, resulting in further pay rises and improved conditions. However, by 2004, with the global economy slowing down, competition in the industry had increased and footware prices were softer. Strike expected to win the advertising contract for the next Olympics but lost out to its biggest rival. Its CEO decided that Strike should end its contracts with the Vietnamese firms. Strike negotiated lower cost deals with new non-unionized subcontractors in China, who worked in one of China’s Export Processing Zones. Strike’s profits for 2005-2006 increased by 30%. In 2006, a group of investigative reporters from the BBC Panorama programme, working with activists from Dignity International (an imaginary charitable organisation working on behalf of human rights and workplace issues), produced a well researched and highly critical report and prime-time TV programme on the way Strike.com was operating. Strike’s share price collapsed after the programme was shown. After an emergency AGM in early 2007, the CEO was dismissed by the shareholders (with a large ‘golden handshake’), and the Directors appointed a new CEO committed to making Strike into a “Leading Global Corporate Citizen”. In 2009, Strike and Dignity International formed a partnership. Strike would monitor the working conditions and pay of the firms supplying it clothing from South East Asia at cost of $30m to Strike. Dignity International produced an annual report detailing the progress Strike had made. REQUIRED:  Explain the likely reasons why Strike was highly profitable from 1996-2001.  What criticisms do you think the report and TV programme made of Strike? Why did the report and TV programme have such a dramatic impact in 2006-7.  What steps could the new CEO of Strike take to make Strike a “leading Global Corporate Citizen”? What do Strike and the NGO get out of the partnership? you have to answer the 3 question. shoul be presantation style i mean if is possible to do and power point slides. structure them and put special attention on q-3 as is my part. thanks
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