A Commodity Chain Analysis of a Pair of Shoes - Essay Example

A Commodity Chain Analysis of a Pair of Shoes Introduction The twenty first century has been characterized by scintillating shoe trends, which have become a vital element in an individual’s lifestyle. The manufacturing of shoes is not a simple procedure and thus requires the integration of products from many parts of the world. Therefore, the shoes that we wear are from many parts of the globe. Many companies including Nike and Adidas have made riches from the production of shoes, which are sold all over the world. In the contemporary world, the various steps of a commodity chain have been improved by significant changes in the factors of production, industrial linkages and distribution. Production and demand of shoes by consumers are the two main elements focused by companies in the industry. The production factors that include land, capital and labor influence the manufacturing of these commodities. Before globalization, many companies were unable to take advantage of cheaper investment and labor costs in other countries. Luckily, it has now become a norm for shoe companies to invest in other countries due to trade agreements and economic integration. Raw Materials and Production The materials utilized in making of shoes poses a threat to the environment as production is characterized by use of energy, chemical, greenhouse gas discharge, water and solid waste. In the past ten years, however, the company has strived at utilizing environmental friendly alternatives to various resources that are incorporated in the production of shoes, such as cotton, leather, polyester and rubber. This has significantly reduced environmental implications of the materials (Michie 268). The production of footwear is handled by contract factories situated in various countries notably in Asia due to the available raw materials and low production cost. The production of shoes is conducted in two stages as the primary level involves the extraction of raw materials vital in the production process. A pair of shoes incorporates various materials including rubber, leather, plastics, adhesives and conventional cotton. In the production process, some of the raw materials come from close proximity with the firm or from other countries. This is because the raw materials including cotton and rubber are often imported from counties oversees. Leather is a product of farm animals, as rawhide is purchased by companies from farmers and is eventually transformed into leather that is vital in the production of shoes (Michie 268). Many companies own facilities in Indonesia, Thailand and Netherlands where the production of leather is a norm. Generally, a single company may utilize 3500 raw hides in a single day of operation. This amount of hide is equivalent to a million cattle in a year. After the extraction of the materials, the resources are taken to the factories commonly known as the “sweatshops”. In the sweatshops, employees work on low wages and harsh conditions often characterized by little benefits. The independent contractors in Asian countries take advantage of the minimum wage regulations and weak union systems that fail to represent the rights of the employees. Generally, in a “Sweatshop”, a worker may take home Rmb $ 250-350, even though the minimum wage is set at Rmb$ 350. Moreover, these countries practice harsh labor control whereby workers are pushed to satisfy a day’s production quota, and failure to meet expectations leads to overtime without pay (Michie 269). Subcontracting of the production element of the commodity chain has led to higher profits for companies due to lower costs. Therefore, delegating this production phase to factories in developing countries like Vietnam and China is due to many factors such as cheap labor, capital, and environmental impact of the raw materials. Therefore, the factory utilizes numerous materials, which amount to about 16000 in a given year. This is because a pair of shoe may utilize approximately thirty materials. The materials include rubbers, nylon, polyester, synthetic leather. In the independent factories, the raw materials undergo a series of steps. First, the materials like plastics and leather are cut into various shapes, which depend on the size of the shoe. These pieces are then stitched together in a sewing machine and water adhesives are then applied to ensure durability. The next step involves putting the latex bed into the shoe and then the pulp foot form is placed inside. Lastly, the completed shoe is enveloped in a wax paper and exported inside a box (Shah 115). Marketing After production, marketing is a very influential element that ensures the purchase of commodities like footwear. In the marketing phase, the footwear has been endorsed by various personalities who have the capability of influencing many youths from various continents. The target market influenced this strategy as the company wanted to aim the youths. Therefore, through the recruitment of sports personalities including Christiano Ronaldo and David Bekham to feature in advertisements, the company has been able to relate individual success to its footwear product (Michie 268). Design The designing of the shoe took place in the mother company in the US, in the company’s research department at the headquarters. At the department, researchers and professionals performed tests in sensory, physiology and biomechanics to ensure customer satisfaction. The design of the shoe was therefore a different strep in the manufacturing process as it occurred in the initial stage before production began. In the design process, various factors are considered to ensure a quality product (Shah 116). These factors include gender, age and geography. This is due to the different needs of customers. For instance, an individual in a dessert region will have varying needs to someone in a developed region. Products of other companies also affect the design of a shoe. Moreover, the company has developed a strategy whereby the views of customers on the design of footwear including color and layout is highly considered by designers. This has proven beneficial as the strategy maintains brand loyalty, as the clients are involved in the designing process (Shah 117). Retail and Distribution Due to the cheap costs in manufacturing shoes in the Chinese industry, transport costs are relatively low. Therefore, the vital costs are those related to marketing and retailing process. In the transportation of the commodities, orders are placed in pallets whereby the shoes are amassed in a container to be exported globally. The container loads are then transported to port facilities via tracks. This process is usually a complex one as the destination of the shoe commodities are usually all over the globe and therefore a set of tasks are carried out at the port to ascertain which goods are bound in which market before the freights transport the shoes to their respective destination. The shoe company has various retail shops all over the world, mostly situated in America and United Kingdom. In the US, the retail shops have been situated in states including Texas, Detroit, California, New York, San Francisco and Chicago while stores in England are situated in cities like London, Liverpool and Manchester. The idea of retail shops was formulated as a means of offering a variety of shoes at the doorstep of consumers (Shah 117). Moreover, independent and private distributors and retail outlets also sell the products all over the globe. Conclusion In conclusion, it is evident that the production of shoes involves complex processes that are affected by numerous factors. These factors revolve around the issues pertaining to production. The shoe industry has been impacted by capital, labor and land and thus has seen many companies shift to developing countries where these factors are affordable to ensure profit maximization. From the designing process to the production of the footwear by low-wage employees in countries like China, to the marketing and retail process, the commodity chain has been influenced by numerous factors. In order for future products and the manufacturing process to be environmental friendly, investment in research and development projects is a vital aspect of the production process of shoes. Works Cited Michie, Jonathan. The Handbook of Globalisation. Cheltenham: Edward Elgar Pub, 2011. Print. Shah, Janat. Supply Chain Management: Text and Cases. Upper Saddle River, N.J: Pearson Education, 2009. Print. Read More