|Photo: Nike Store, Atlantic City(USA)|Just Do IT. A phrase that transcends the linguistic boundaries across the globe and sparks emotions. The Iconic Swoosh logo which ensnared into your consciousness well before you knew it. Chances are, you have a pair of Nike Shoes in your closet right now. So, How did a mere shoe distributor become the most popular and biggest sports brand on the planet? The Wholistic View deconstructs the brand you know but the story you don't (8 min read).
The Idea
In the summer of 1962, a 24-year-old young man named Phil Knight graduated from Standford University. A former long-distance runner in his University days, Phil had written a postulate titled "Can Japanese Sports Shoes Do to German Sports Shoes What Japanese Cameras Did to German Cameras?".Phil had been in awe of how the Japanese Cameras have replaced the earlier dominant German Cameras and he was curious if the Japanese shoes would have the same effect on the existing German Players such as Puma or Adidas which were the market leaders at that time. The thought had consumed Phil to the extent that he became obsessed with bringing Japanese Shoes to the USA which were hardly available to the average American consumer. He decided to contact some Japanese shoe manufactures to import their goods to America but it didn't work because of his lack of experience.
The Land of the Rising Sun
In November 1962, Phil flew to Japan to reach out to some manufacturers with whom he could enter into the business. In the harboured City of Kobe, Phil struck upon a pair of Shoe in a store owned by a company called Onitsuka Tiger. The Quality and sober aesthetics of the shoes made him go gaga. Phil introduced himself as a Shoe Distributor and scheduled a meeting with the company's founder Kihachiro Onitsuka. Phil fabricated a company name Blue Ribbon Sports and offered to become Onitsuka's Distributor which the owner accepted and so Phil thus became the exclusive distributor of Onitsuka Tiger in the USA.
|Photo: Phil Knight|Medium.com|
Along Came Bill Bowerman
While Phil was still learning tricks of the trade, he started selling the Onitsuka shoes by driving to every running track in his car. He knew his strategy wasn't meant for larger operations. Thus, He went to his former coach, the legendary Bill Bowerman, who was one of the most recognizable sports coaches in the whole of the USA for help. Phil convinced him and he agreed to partner up because of his liking for the shoes. Phil and Bill both as partners got Blue Ribbon Sports(BRS) incorporated in 1964 with a Capital of $500 each. They Spent their entire capital on their first order. In 6 months, BRS sold out its entire inventory and made around $8000 in their first year of business.
Nike was Born
Phil didn't stop there and then. In fact, he hired sales representatives to boost sales which resulted in a positive as BRS doubled its revenue in the next year. While Phil was involved in the commercial side of the business, Bill focused solely on product development. He would constantly advise Onitsuka to make changes which he thought would improve the shoes. BRS' most popular product was the "Cortez" which became a defining product due to the 1968 Olympics in which it was prominently worn by the long-distance runners. Thanks to this marketing move, BRS sold worth $300,000 of "Cortez" in 1969. Soon, The "Cortez" went out of stock due to its soaring demand but Onitsuka kept replenishing the supplies at a protracted pace. Eventually, In 1971, BRS opted out of the contract with Onitsuka and as Bill Bowerman had put in all his efforts in perfecting the "Cortez" they thought it was time to venture on their own. They began working on the Brand and the word "Nike" was picked up which referred to the Greek Goddess of Victory. Phil at that time had no idea that the name would hold true to its meaning.
|Photo: Swoosh, Nike Logo|
Story of the Swoosh
Phil needed a logo to make the brand look striking and unique. Thus, he went to the nearby state university of Portland where he asked the first student he stumbled upon named Carolyn Davidson and asked her to create a logo. He went through several designs and finally settled upon the swoosh. For a meagre sum of $35 from the student, he brought in a design which is today valued at an astronomical $26 Billion.
Market Leader
With Production under his control, Phil engaged a line of sub-contractors from wherein he sourced the shoes exclusively. Unlike Previously, Nike had full control over the design and supply chain. Soon, the company started expanding its products range like launching its BasketBall shoe in 1982 named "Air Force One" which was the first to possess the the "AIR" technology which seemed to give its wearer a little extra bounce. The Brand steady grew its wings as the Revenue zoomed from $1.3 Million in 1971 to over $1 Billion in 1986. It started to manoeuvre onto other sports categories such as golf, American football etc. and finally became the Market Leader in 1989 overtaking its the german shoemaker Adidas. Finally, after 25 years of hustle, Phil achieved what he set out to do.
|Photo: Air Jordan X111 Retro, Jumpman Logo|
A Legend Named Jordan
In the Rings of the NBA, a name Michael Jordan started running around circles. After being selected as the third Overall Pick by the Charlotte Hornets in 1984 and he signed a deal with Nike for 5 years. Later that year, Nike launched its arguably the most famous shoe line "Air Jordan" named after Michael himself with the signature "Jumpman" logo. Priced at $65 they were by far the most expensive basketball shoes at that time. Jordan was fairly a rookie when he signed up for Nike and launching a shoe line in his name could have proved its Waterloo, but Jordan didn't disappoint. Air Jordan became a phenomenon as it rushed in a Sneaker Culture in the U.S. after these shoes became a part and parcel of Celebrity Rappers' outfits. Teenagers got so enamoured with the Air Jordans that they started sleeping over at the store gates waiting for the new pairs to come. In Fact, the shoe line became so iconic and popular that in 2016, it brought in revenues close to $3 Billion which accounted for roughly 10% of the total revenue of the company.
Fabled Marketing Campaigns
Though Nike was ascending to the summit, still it was looked upon only as a shoe company but with its some Brilliant and statement-making marketing campaigns, the company turned its image around and struck an emotional connect with its customers. In 1988, it launched an ad campaign which became the stuff of legends along with the identification mark of the company- The "Just Do It." campaign. The Phrase became so popular to the points of being universally known and lofted Nike to the symbol of the Pop Culture. The Company never shied away from standing up for what it believed which had sometimes proved detrimental in the short run but fruitful in the long run. Take, for example, the Colin Kapernick Ad, which created widespread furore but eventually elevated Nike's Brand Status. For those of you who don't know about Colin Kapernick, He is an Outcast NFL Quarterback who played for San Franciso 49ers and became infamous when he "took the knee" during the National Anthem before a Game Ceremony in 2016. He was protesting for Brutal Killings of African-Americans by the Police and other injustices against the community. The Protest had a wider significance as it seemed to be against President Trump's White Supremacy Policies. Colin's contract got suspended with immediate effect by the 49ers.On the Labor Day in 2018, Nike launched an Ad Campaign Featuring Colin Kaepernick's black and white photo in a black overlay with the text"Believe in something even if it costs you everything" and the ethereal slogan "Just Do It" beneath it. This garnered a backlash with #BoycottNike trending all over on social media because. Even some celebrities voiced their anger by burning Nike's shoes and socks. But, it remained ineffectual as the company's stock soared to new heights. A month later, Colin became Nike's $6 Billion Man because of the increase in market capitalisation of the company due to the buzz his ad generated.
|Photo: Colin Kapernick|Nike AD|
Smart Acquisitions
Nike may be the biggest apparel brand on the planet on its own but Nike Inc. runs far beyond the brand itself. Nike during its lifetime has made some smart and strategic acquisitions which made sure than the company remains in the game for long. It has acquired some well-known brands such as "Converse", "Umbro" and "Cole Haan" etc. which has helped to cater to wider consumer preferences.
|Photo: Nike Acquisitions|Slideshare|
Controversy's Child
Since its inception, Nike has been a mine of controversies. Its treatment of labour force in its factories irked many human rights agencies with protest peaking against the company during the 1992 Olympics in support of the sweatshop workers. Nike has attracted criticism from environmental activists too because of its refusal to minimise hazardous material in its production cycle. A Greenpeace study noted that such practice affects everything ranging from the waterways to the ultimate consumers as the chemicals not only pollute the environment but pose as a potential health risk for the consumers too who wear Nike's apparel. In 2017, the Paradise Papers, a set of confidential electronic documents relating to offshore investment, revealed that Nike is among the corporations that used offshore companies to avoid taxes. In early 2018, Nike Inc. got sued by its 2 female Ex-Employees against the culture of sexual harassment at the workplace by top male executives. Nike has been criticised for gender imbalance and pay disparity among its top officials. More recently, some of the top female athletes have spoken against Nike saying they were contracts were curtailed by Nike after they conceived children. Olympic Gold Medalist Allyson Felix in an Op-Ed with the New York Times made the shocking claim.
|Photo: A Nike Futuristic Store|
The Road Ahead
Due to the rapid changes in consumer preferences in the line of business it operates, Nike is always on its toes with product improvement and differentiation its top concerns. With E-Commerce now ruling the roost as the medium of sale, Nike faces several challenges to keep up with the current times. The advent of A Plethora of Local Brands has intensified the competition unlike anything seen before. Nike has always been at the forefront of wooing the youngsters which are its primary takers by roping in upcoming influencers. But with the penetration of digital technology in most of the remote places, the company will have to incur a large chunk of its advertising cost on digital platforms to remain visible. Nike's biggest challenge lies in altering its production process to reduce its carbon footprints. Genx nowadays resonates more with environmentally and socially responsible brands since this trend is the new cool. The Future sure looks challenging but my bet remains on Nike given its enormous financial power and social outreach.
Legacy
The Story of Nike has been one of growth and an absolute resolve of a person who believed in himself. Phil Knight has inspired a generation of Entrepreneurs because of his business acumen and unflinching attitude. His resolute has made Nike Brand the cult it is today. Almost all advertising professionals look up to Nike because of its legendary campaigns. The Impact of its "Just Do It." campaign cannot be encapsulated in a single editorial having raised Nike to a mythical status far beyond the reach of its competitors. Its disruptive products have defined generations and made Nike the legend of pop culture.
Nike looks to be the leader for the imminent future but will it be able to "Just Do It"? Only time will tell.
Disclaimer: The views solely belongs to the author and do not necessarily reflect the views of any organization with which he is associated with or will be associated with in future. The author, in any way whatsoever, cannot be responsible for your use of the information contained in or linked from this Blog.
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