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Nike Inc. Case Study

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Nike Inc. Case Study

Nike, Inc’s dominance in sports apparel commenced as Phil Knight achieved his MBA at Stanford in the late 1960’s. During a term-long project, he was forced to devise a small business and a plan for its marketing. While doing so, Knight discovered Japan’s high quality yet low priced manufacturing and became determined to begin his own industry that featured superb running shoes for an affordable cost.

Once traveling to Japan & persuading Tiger Shoes, to allow Knight’s company, Blue Ribbon Sports, to distribute its product in the United States, Phil Knight was able to establish his business and later, partnered with Bill Bowermann. Knight and Bowermann, along with their first salesman, Jeff Johnson, took Blue Ribbon from a mediocre distributor, whose business focused on selling Tigers, also known as Adidas knock-offs (Phil Knight: The Force Behind Nike), to track stars from car trunks, into a rising million dollar company.

Upon its success in sales in 1971, the company devised the name “Nike” and trademarked the “swoosh” logo (Nike History & Timeline). However, it took until 1981 for Blue Ribbon Sports to officially merge into Nike, Inc. By that time, Nike’s sales totaled in $270 million dollars and its profits continued to rise every year thereafter. Nike Inc’s rise to dominance as the world’s top industry for athletic shoes and apparel can be attributed to three major factors: excellent marketing tactics, inexpensive production, and its founder, Phil Knight’s ability to combine both into a successful, economical formula.

Once Nike became an established industry in sports apparel after its distribution of Japan’s Tiger Shoes, the company branched out into manufacturing its own shoes. Following Knight’s discovery of Japan’s high-quality yet low-priced production, Nike, Inc centered its manufacturing in countries including Indonesia and Mexico. It has been disputed that Nike produced its apparel in actual sweatshops, where their workers made very small wages and were subject to long hours and an uncomfortable environment (Nike, Inc Wikipedia). Knight’s nine-figure empire became subject to several lawsuits and nation-wide criticism for its exploitation of cheap-labor. However, Nike’s overseas cheap labor allowed the industry to profit a significant amount of more money comparing to what could have been Nike’s profits if produced

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