“Follow the rules. But be fierce.”
starting the business
Like Fred Smith and the origins of FedEx, Philip Knight’s first ideas about what would become Nike Inc. came to him while he was at
school. While working on his master’s degree at Stanford, Knight, an accomplished runner during his undergraduate days at the University
of Oregon, wrote an essay outlining a plan to overcome Adidas’s monopoly on the running shoe market. thought the way
To realize this was to employ cheap Japanese labor to make a better, cheaper shoe.
The plan was put into motion shortly after graduating in 1962. Knight traveled to Japan to meet with Onitsuka Tiger executives.
Co., a manufacturer of imitation Adidas sneakers, claiming to be the director of a company called Blue Ribbon Sports (which
exist except in your mind). Knight convinced Tiger to export his shoes to the United States through Blue Ribbon and asked them to send samples.
so that their associates could inspect them.
Knight paid for the samples with money from his father. He sent some pairs to Bill Bowerman, Knight’s track coach in his days at
the University of Oregon, who became interested in the company. Knight and Bowerman became partners and put $500 each into the
purchase of 200 pairs of tigers. Blue Ribbon Sports was formed, and Knight began attending track events in high school.
selling the shoes from the trunk of his car.
Sales were $3 million when Knight decided to dissolve the partnership with Tiger in the early 1970s. Blue Ribbon began
producing his own line and began selling his Nike line (named after the Greek goddess of victory) in 1972. These early Nike shoes
they were adorned with the now internationally recognizable Swoosh logo, which Knight had commissioned for $35, and had the
Traction-enhancing “waffle soles” conceived by Bowerman while watching his wife use a waffle maker.
building an empire
The success of Blue Ribbon (renamed Nike in 1978) throughout the 1970s and into the 1980s can be largely attributed to Knight’s marketing.
strategy. He thought it best not to promote his Nike shoes through advertising, but rather let expert athletes endorse his product.
Fortune smiled on Knight when his partner Bill Bowerman became the head coach of the US Olympic team and many of the best
in the team he decided to put on his feet with Nikes. Of course, when runners performed well, the shoes they wore were
highlighted. Steve Prefontaine, a daring and unconventional American record holder, became the first spokesperson for Nike shoes.
After tennis player John McEnroe hurt his ankle, he started wearing a three-quarter length Nike shoe and the sales of that particular shoe
brand jumped from 10,000 pairs to more than 1 million. Just as Knight hoped, endorsements of famous athletes brought success to the
business. Knight also tapped into the running craze and, through clever marketing, persuaded the consumer that it should only be
wearing the best the best in the world.
The Air Jordans helped the company continue to thrive in the 1980s. In its first year, the shoe earned more than $100 million.
Knight achieved his initial goal of replacing Adidas as the world’s number one shoemaker in 1986. By then, total sales
had exceeded one billion dollars. However, by neglecting the growing interest in aerobic shoes, Nike would have to face some
difficulties.
Through trouble and controversy
Sales fell 18% between 1986 and 1987 due to high demand for Reebok’s modern and stylish aerobics shoes. gentleman had to
recognize that the technical achievements of Nike shoes would not satisfy those who put appearance before performance. Tea
Nike Air was Knight’s answer to Reebok. He revived sales and put Nike back in the number one spot in 1990.
The corporate monster that it had become, Nike was the subject of public outrage in 1990 when stories of teenagers being murdered for their
Nikes began to float around. It was believed that Nike was promoting her shoes too strongly.
That same year, Jesse Jackson attacked Nike for not having African-Americans on its board or among its vice presidents, even though
the fact that its customer base was largely black. Jackson’s Nike boycott lasted until he appointed a black board member.
There has also been controversy over whether Knight’s use of Asian factory workers as cheap labor is exploitative.
Despite all the bad press Nike has been given through these events, Nike shoes have continued to sell well. And in
1993, The Sporting News voted Knight “the most powerful man in sports”, although he was neither a player nor a manager. gentleman’s
mastery of marketing is to be praised and considered a major factor in their impressive successes.