Nike History and Competitive Advantage: A Case Study

Nike, Incorporated, formerly known as Blue Ribbon Sports was founded in Beaverton, Oregon on January 25th, 1964 by Bill Bowerman (a track-and-field coach at the University of Oregon), and his former student Phil Knight.  Since the company’s launch, the brand has expanded enough to become one of the world’s most popular retailers of athletic clothing, footwear, and accessories.

Introduction

The brand’s first retail outlet opened in 1966 and a few years later the Nike brand shoe was launched in 1972. Although originally named Blue Ribbon Sports, the company was renamed Nike, Inc., (a name created by Jeff Johnson who served as the first employee of the company) in 1971 and went public a few years later. Fast forward to the end of the 21st century and Nike had made its mark (pun intended) with retail outlets and distributors in more than 170 countries. The brand’s logo—a curved check mark called the “swoosh”—was and is still recognized throughout the world.

Growth and Acquisitions

In the late 1980s, Nike steadily began expanding its business and worked hard to diversify  its product line through numerous acquisitions. Some of which include the acquisition between the shoe company Cole Haan (1988; sold in 2012), another is the acquisition with Converse, Inc. (2003), as well as the sports-equipment producer Canstar Sports, Inc. (1994; later called Bauer and sold in 2008). As for athletic apparel and equipment, Nike’s acquired the company Umbro (2008; sold in 2012). In 1996 the company created Nike ACG (“all-conditions gear”). This line was actually inspired by hikers who climbed K-2 in Nike LDV sneakers. As times began to change and consumers became more demanding of products that would accommodate them in their pursuit of extreme sports (such as snowboarding and mountain biking), Nike decided to take advantage of these desires. It was around this time that Nike also began selling sports-technology accessories which includes portable heart-rate monitors as well as high-altitude wrist compasses.

Endorsements

Part of Nike’s success is owed to endorsements by athletes. Nike’s first professional athlete endorser was Romanian tennis player Ilie Năstase. The first track endorser was distance runner Steve Prefontaine who just so happened to be the prized pupil of the company’s co-founder, Bill Bowerman, while he coached at the University of Oregon.

Today, some notable celebrity endorsers include Michael Jordan and Tiger Woods. 

Product Evolution

Nike’s very first product was track running shoes. Nike Air Max is a line of shoes that was first released by Nike, Inc. in 1987. Years later, additional product lines were introduced, such as Air Huarache, which made its debut in 1992. The most recent additions to their line are the Nike 6.0, Nike NYX, and Nike SB shoes, designed for skateboarding. 

Nike has also introduced cricket shoes called Air Zoom Yorker, which was designed to be 30% lighter than other cricket shoes. In 2008, Nike also introduced the Air Jordan XX3 which is a high-performance basketball shoe designed with the environment in mind.

Nike’s product offerings are very broad. Nike sells shoes, jerseys, shorts, cleats, baselayers or thermals, and the list goes on. They offer these products to accommodate sports activities such as association football, track and field, combat sports, basketball, tennis, American football, athletics, cross training, golf, and ice hockey.  Nike also sells shoes for specific activities including skateboarding, wrestling, baseball, lacrosse, cycling, volleyball, cheerleading, cricket, aquatic activities, auto racing, and as well as other sports which can be considered more recreational. 

Nike Timeline

1964 – Phil Knight and Bill Bowerman found Blue Ribbon Sports.

1971 – Cutting ties with Onitsuka Tiger (now Asics), Blue Ribbon Sports becomes Nike Inc., the swoosh logo was created by Portland State University student Carolyn Davis for $35

1972 – Romanian tennis player Ilie Nastase becomes the first athlete to sign an endorsement with Nike.

1979 – Nike introduces patented “Air” technology with new Tailwind shoe.

1984 – Nike signs Michael Jordan, then launching the Air Jordan series.

1987 – Nike drops ad for new Air Max shoes set to The Beatles’ “Revolution,” making it the first ad to use the band’s music.

1988 – First “Just Do It” campaign launches with an ad featuring 80-year-old running icon Walter Stack running across the Golden Gate Bridge.

1989 – “Bo Knows” ad campaign drops featuring baseball and football star Bo Jackson.

1990 – First Niketown store opens in Portland, Oregon.

1996 – Nike signs Tiger Woods.

1999 – Nike co-founder Bill Bowerman dies at 88.

2002 – Nike acquires surf-apparel company Hurley.

2003 – Nike signs Lebron James and Kobe Bryant.

2004 – Nike acquires Converse for $309 million.

2004 – Phil Knight steps down as CEO and president of Nike, but retains chairman role as William D. Perez becomes the company’s new CEO.

2008 – Nike signs Derek Jeter.

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2012 – Nike becomes official supplier for NFL apparel.

2015 – Nike becomes official supplier for NBA apparel.

2018 – Nike unveils ad campaign featuring athlete and political activist Colin Kaepernick, garnering a mix of public approval and backlash. 

2018 – Nike wins Best CEO 2018 as well as Best Company Compensation2018 and Best CEOs for Diversity 2018.

2019 – Nike wins Best Company Perks & Benefits and Best Company Compensation. 

Nike’s Organizational Culture

Nike has done a great job of prioritizing creativity and innovation as part of their organizational culture, this has allowed them to provide products that suit current consumer preferences. The brand has and is known for their sports shoes, apparel and equipment. The culture at Nike has been molded by creating and maintaining a company that is diverse, talented, and inclusive.

  1. Diverse
  2. Talented
  3. Inclusive

Diverse.

Diversity is a key factor that makes up Nike’s organizational culture. Having a diverse and dynamic workforce has helped promote Nike’s creativity, competitive advantage, and brand image. The company encourages diversity through their HR programs. For example, Nike has the Speak Up! program, which facilitates the sharing of ideas among workers. This feature works to the company’s benefit because it allows the company to maximize their development cycles and allows everyone’s voice to be heard. 

Talented.

When it comes to Nike, talent and innovation go hand-in-hand. The company works hard to emphasize human resource support for product development as well as internal services in the corporation. Similarly, Nike uses training programs to maintain employee talent along with various coaching and mentoring programs. These approaches are used to strategize the development of leaders within the organization and in turn, tie into Nike’s global growth. Nike’s corporate culture continues to work hard in sustaining talent and producing some of the world’s most popular athletic shoes, equipment and apparel.

Inclusive.

Nike Inc. prioritizes inclusiveness in its organizational culture. By emphasizing inclusiveness, Nike is minimizing barriers that would impact employee performance. Nike’s inclusiveness strategy serves as a tool for prime performance, talent development and diversity. One way the brand successfully implements inclusivity is through their team-based approach to management. With that said, Nike offers a variety of programs, for example, Bias to Breakthrough (which is a program that works to remove creativity barriers) and another example is NCourage which is a set of employee networks used to enhance cultural awareness and promote community building). By working hard to promote inclusiveness in the company culture, the brand can continue to provide athletic shoes, apparel to the people that so desire it.

Nike Fun Facts

The Name.

Nike’s name has been derived from the Greek legend of the same name, depicted as the personification of victory. Nike was seen as a companion to Zeus (a woman with wings) and is also known as the elder God in Greek legend.

Nike is a major employer.

Nike employs more than 70,000 people worldwide, from sales and marketing to manufacturing and design.

It was an overnight success.

 In just their first few years of trading, the brand and company witnessed an incredible amount of corporate growth. They did so well in their first year’s trading, that Nike was able to claim around $8,000 in revenue.

Nike UK.

Although the brand’s home is in Oregon, its biggest store worldwide is actually in London. In this store, visitors can explore 42,000 square feet of space as they navigate up to three floors of apparel and sportswear. 

Technological Innovation

Nike is one of the first sportswear and apparel companies to close the gap between clothes and technology!  In particular, the company has a patent for a shoe which has a communication device embedded. This came about when Nike teamed up with Apple Inc. to produce the Nike+ product that monitors a runner’s performance via a radio device in the shoe that links to Apple devices. 

Going Green

Nike is known to be a huge recycler. The brand has been glorified for their initiative to  take old shoes and re-use them to create children’s playgrounds.  With that being said, next time you consider getting rid of an old pair of Nikes, send it back to the manufacturer.

All-Inclusive

Nike is famous for its openness and acceptance towards the people who wear its apparel. One of their famous mottos is ‘if you have a body, you’re an athlete’. Nike simply chooses not to discriminate and thrives purely on the sale of sportswear and apparel to athletes and athletic people. 

Stores

As of May 2021, Nike has operated a total of 1,048 retail stores throughout the entire world, a slight decline from 1,096 in 2020.

Parent Company

The Nike company owns a handful of other sportswear and apparel brands. For example, they are the parent company of Converse, a popular leisurewear line known for their iconic sneakers sometimes referred to as chucks. The brand also owns Hurley, under their Nike Surfing line.

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Nike History and Competitive Advantage: A Case Study In this case study we're looking at Nike's history and legacy to understand the competitive advantage it brings to market.
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