Auditing Research Essay Example | Topics and Well Written Essays - 500 words

Auditing Research - Essay Example This shows that once the company initiates its international expansion, it will become an even greater threat. In cases when Under Armour, albeit a smaller company, becomes more prominent among the customer population, Nike will no longer remain the most desired company for sports garments and this hinders the main objective of Nike that is to improve as well as protect the position of Nike as the number one brand in US. Furthermore, Nike not only faces huge threat and competition from major sports brands but also faces threats from fake Nike goods. According to an article by BBC, almost 135,000 fake Nike running shoes have been seized by the U.S, making it clear that this is a huge problem. Nike has been selling goods in countries other than the US. Certain labor related accidents, in countries like Bangladesh where the Nike goods are sold, have led to protests regarding the safety rights and health of the employees. If Nike is forced to invest in the uplifting of health for these employees, it would act as a risk since it would enhance the costs of the company and a contraction in margins. This risk will continue to increase with time as Nike is raising their prices of sports goods. Another risk factor for Nike is the fact that since it generates sales outside US, it is inevitable for the company to face currency fluctuations. Since the dollar has been strengthening and will continue to strengthen, it will pose as a risk for Nike. The company is exposed to the international nature of trade. Since it sells and buys in different currencies, it faces instability in terms of margins and costs over time duration. This means that Nike Inc. might be selling at a loss. With these fluctuations, the income of the company will become varied and the cost for its manufactured goods in other countries will also be altered. This tends to obstruct the objective of Nike to manage and direct the international business of the company as it is developing. Also,