Nike is a large and successful firm in the design of athletic shoes. It could easily decide to forward-integrate to manufacture the shoes it designs. Therefore, the firm has a credible threat over its current manufacturers. If Nike has no intention of actually entering the manufacturing arena, is its supply chain management team being ethical with the current manufacturers if the team mentions this credible threat numerous times in annual pricing negotiations? Why or why not? What aspects of Nike’s agreement with its manufacturing partners do you believe they emphasize in negotiations?
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