Rise To Success: Nike

Economic Genius or Selfish Robber Barons?

Background

• I began this research project to try to understand how a corporation evolves from a local business into a worldwide corporate giant.

• Why do some companies fail within a year, and others shoot to the top of their respected market?

Why Nike?

• I chose to take an in depth look at Nike to understand their unprecedented rate of achievement.

• More intriguing than Nike’s rise to success, was their ability to reacquire their position atop of the sports apparel world, even after they lost their dominance in said market.

History of Nike• Nike was created by Bill Bowerman, the University of Oregon

track coach during the 1950’s, and a University of Oregon Distance runner, named Phil Knight.

• Knight was a distributor for Onitsuka Shoe Co. (Asics). Bowerman liked the shoes so much he became Knight’s business partner. Knight sold the shoes out of the trunk of his car, and Bowerman would use the shoes to run experiments on.

• With the help of Jeff Johnson (A former runner) Nike set up their first retail store, under the name of Blue Ribbon Sports. Blue Ribbon sports would become Nike in 1971, around this time Nike was creating their own shoes separate from the Onitsuka tiger model they distributed.

History (Cont.)• Nike innovated the running shoe by implementing a “Waffle” traction

pattern.• Nike chose a young runner named Steve Prefontaine to endorse their

product.• Prefontaine passed away at the age of 24, already holding 7 American track

and field records. • Nike entered the 1980’s on a roll with the creation of Nike Air technology.

Although in the mid 80’s competitors overtook Nike in the athletic apparel market.

• Nike, dangerously close to failure, signed an NBA rookie Michael Jordan, thus invigorating the company and setting them back on the track to success.

• In the 1990’s Nike truly became a World corporation as they began sponsoring Elite athletes from all over the world.

Nike Today

• Today Nike is based in Portland, Oregon• They are the leader in sports apparel and

athletic footwear.• So how have they achieved so much success?

Economics and Nike

• A major factor of a corporations success is economic growth. Economic growth plays a large role in a company that sells luxuries such as Nike

• Economic growth is the measurement of the economic success of a country. Economic growth is similar to a nations GDP.

• Nike most likely was able to succeed due to a prosperous United States’ economy

U.S. GDP and Nike

• Due to the possibility of a connection between the U.S. economy and the success of Nike, I tried to find a connection between the U.S. GDP and the success of Nike during the companies early years.

• In the early 1970’s the U.S. was still prospering from the economic golden age that took place in the U.S. during the 1950’s and 1960’s.

• In the later 70’s the U.S. economy would falter but Nike would still succeed.

U.S. Economy in the 1970’s

• Despite a mediocre econommic status entering the 1970’s, must of the decade was spent in a recession for the U.S.

• This recession was caused by a variet of reasons such as: The conclusion of the Vietnam war, a worldwid oil crisis, and inflation in the U.S.

• Despite the poor economy, a young Nike corporation thrived in the unfortunate conditions. Their success can be attributed to a variety of reasons, with the main being their ingenious Marketing policies.

Early Nike Marketing Techniques• Fortunately for Nike, a “Fitness Revolution” was taking

place in the U.S. around the same time that Nike began mass producing athletic apparel.

• Nike would take advantage of this “Fitness revolution” by creating a sense of mythology with exercise and athletics.

• Athletes were built up to be “Gods” and these “Gods” wore Nike apparrel. Why not Outfit yourself in the garment of the Gods?

• Nike appealed to many in the late 1970’s and early 1980’s because Nike could provide them with natural beauty. Beauty through exercise.

Early Advertising • In Nike’s early advertisements, they appealed to religious and spiritual ideas, by

appealing to religion they could create the idea that talented athletes are “Gods”.

In this Ad, Nike creates a sense of mystery by surrounding the dark silhouette of a God like runner in smoke. The lack of

In this ad, Nike portrays a young Michael Jordan as a supieror being, soaring overa city skyline. What apperrel is he wearing? None other than the brand new Air Jordan1, with Nike Air technology. Nike is attempting to convince the consumer that the bestAthletes in the world wear Nike, why shouldn’t you?

• Many believe this Nike Ad to be one of their best.• One reason for it’s brilliance is the uniqueness of the photograph. No one had

ever seen a shoe like the one photographed above. • By creating the first Air Max Shoe, Nike wanted to change the running shoe

forever,• The slogan “Nike-Air is not a shoe” intrigued viewers of the Ad, In later Ads, Nike

would follow their initial statement of “Nike AIR is not a shoe, with the response “It is a revolution”

• The “JUST DO IT.” Slogan is often associated with the Nike corporation as a whole.

• It is simple, yet inspiring, and accusatory at the same time. • Nike is pretty much saying to stop making excuses and do

whatever you need to do to live a more successful life. • The “JUST DO IT” slogan has become more than a catch

phrase, it has become a way of life.

Innovation

• Nike would not be able to achieve success if it were not for the numerous innovations they introduced into the world of athletic apparel.

• Nike reinvented the track shoe, the running shoe, the basketball shoe, and many other clothing items associated with athletic apparel.

The Waffle Sole• The waffle sole was one of Nike’s first innovations.• Bill Bowerman created the sole, using an everyday waffle iron

made for use in the kitchen.• Bowerman made the shoe to help provide an advantage for

the athletes at the University of Oregon. • The waffle sole would be used on the “Moon Shoe”, the

Waffle trainer, and many track shoes.

Nike Air• Nike air was an advanced new cushioning system invented by M.

Frank Rudy in 1979.• It was first implemented on the tailwind running shoe.• Nike Air is essentially pressurized gas encapsulated in a

polyurethane casing. • Nike has heavily patented the revolutionary cushioning system and

it has been implemented in some of their most popular shoes, including the first air Jordan.

• Nike has further improved the Air Cushioning system with the creation of Zoom Air.

• Zoom Air is a cushioning system that consists of thousands of synthetic fibers encapsulated in a plastic capsule.