“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 in
college. While working on his master’s degree at Stanford, Knight, an accomplished broker during his undergraduate days at the University
of Oregon – wrote an essay outlining a plan to overcome Adidas’ monopoly on the running shoe market. Thought the way
to realize this was to employ cheap Japanese labor to make a better and cheaper shoe.
The plan was put into action shortly after graduating in 1962. Knight went to Japan to meet with Onitsuka Tiger executives.
Co., a maker of knockoff Adidas sneakers, claiming to be the director of a company called Blue Ribbon Sports (which doesn’t
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 his father’s money. He sent a few pairs to Bill Bowerman, Knight’s athletic coach from his days in
the University of Oregon, which 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 and field events in high school
selling shoes from the trunk of your car.
Sales were $ 3 million when Knight decided to dissolve the Tiger partnership in the early 1970s. Blue Ribbon started
producing his own line and began selling his Nike line (named for the Greek goddess of victory) in 1972. These first Nike shoes
were adorned with the now internationally recognizable swoosh logo, which Knight had commissioned for $ 35, and featured the
Traction-enhancing “waffle soles” conceived by Bowerman as he watches his wife use a waffle iron.
Building an Empire
The success of the 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 to let expert athletes endorse his product.
Fortune smiled at Knight as his partner Bill Bowerman became the coach of the American Olympic team and many of the best performers.
in the team he decided to put his feet on with Nike. Of course, when runners performed well, the shoes they wore were
highlighted. Steve Prefontaine, a brash and unconventional American record holder, became the first spokesperson for Nike shoes.
After tennis player John McEnroe injured his ankle, he began wearing a three-quarter Nike shoe and the sales of that
brand jumped from 10,000 pairs to more than 1 million. As Knight expected, the endorsement of famous athletes brought success to the
business. Knight also took advantage of the jogging craze and through clever marketing convinced the consumer that they should only be
wearing the best, the best in the world.
The Air Jordans helped the company continue to prosper in the 1980s. In its first year, the shoe made more than $ 100 million.
Knight achieved its initial goal of replacing Adidas as the world’s number one shoe manufacturer in 1986. By then, total sales
it had exceeded a billion dollars. However, by neglecting the growing interest in aerobics shoes, Nike would have to face some
Through problems and controversies
Sales fell 18% between 1986 and 1987 as Reebok’s sleek, modern aerobics shoes came into high demand. Knight had to
Recognize that the technical achievements of Nike shoes would not satisfy those who put appearance over performance. Tea
Nike Air was Knight’s answer to Reebok. It revived sales and put Nike back at number one in 1990.
The corporate monster it had become, Nike was the subject of public outrage in 1990 when stories of teenagers killed by its
Nikes began to float. Nike was believed to be promoting its shoes too strongly.
That same year, Jesse Jackson attacked Nike for not having African-Americans on its board or among its vice presidents, despite
the fact that their customer base was largely black. Jackson’s boycott of Nike lasted until a black board member was appointed.
There has also been controversy over whether Knight’s use of Asian factory workers as cheap labor is exploitative.
Through all the bad press that has been imposed on Nike through these events, Nike shoes have continued to sell well. And in
In 1993, The Sporting News voted Knight “the most powerful man in sports,” even though he was neither a player nor a coach. Knight
Marketing proficiency is to be commended and considered a major factor in your impressive successes.