NIKE
Introduction
Nike, (stylized as NIKE) is an American athletic footwear and apparel corporation
headquartered near Beaverton, Oregon, United States. It is the world's largest supplier of
athletic shoes and apparel and a major manufacturer of sports equipment, with revenue in
excess of US$46 billion in its fiscal year 2022. The company was founded on January 25,
1964, as "Blue Ribbon Sports", by Bill Bowerman and Phil Knight, and officially became
Nike, Inc. on May 30, 1971. The company takes its name from Nike, the Greek goddess of
victory. Nike markets its products under its own brand, as well as Nike Golf, Nike Pro, Nike+,
Nike Blazers, Air Force 1, Nike Dunk, Air Max, Foamposite, Nike Skateboarding, Nike CR7,
and subsidiaries including Air Jordan and Converse. In addition to manufacturing sportswear
and equipment, the company operates retail stores under the Niketown name. Nike
sponsors many high-profile athletes and sports teams around the world, with the highly
recognized trademarks of "Just Do It" and the Swoosh logo. As of 2024, it employed 83,700
people worldwide. In 2020, the brand alone was valued in excess of $32 billion, making it the
most valuable brand among sports businesses.
History
According to Otis Davis, a University of Oregon student-athlete coached by Bowerman and
Olympic gold medalist at the 1960 Summer Olympics, his coach made the first pair of Nike
shoes for him, contradicting a claim that they were made for Phil Knight. According to Davis,
"I told Tom Brokaw that I was the first. I don't care what all the billionaires say. Bill
Bowerman made the first pair of shoes for me. People don't believe me. In fact, I didn't like
the way they felt on my feet. There was no support and they were too tight. But I saw
Bowerman made them from the waffle iron, and they were mine".
In its first year in business, BRS sold 1,300 pairs of Japanese running shoes grossing
$8,000. By 1965, sales had reached $20,000. In 1966, BRS opened its first retail store at
3107 Pico Boulevard in Santa Monica, California. In 1967, due to increasing sales, BRS
expanded retail and distribution operations on the East Coast, in Wellesley, Massachusetts.
In 1971, Bowerman used his wife's waffle iron to experiment on rubber to create a new sole
for track shoes that would grip but be lightweight and increase the runner's speed. Oregon's
Hayward Field was transitioning to an artificial surface, and Bowerman wanted a sole which
could grip to grass or bark dust without the use of spikes. Bowerman was talking to his wife
about this puzzle over breakfast, when the waffle iron idea came into play. Bowerman's
design led to the introduction of the "Moon Shoe" in 1972, so named because the waffle
tread was said to resemble the footprints left by astronauts on the Moon. Further refinement
resulted in the "Waffle Trainer" in 1974, which helped fuel the explosive growth of Blue
Ribbon Sports/Nike. Tension between BRS and Onitsuka Tiger increased in 1971 as the
latter attempted a takeover of BRS by extending an ultimatum proposal that would give the
Japanese company 51 percent of BRS. In 1972, the relationship between BRS and Onitsuka
Tiger came to an end. BRS prepared to launch its own line of footwear. The previous year, it
was already able to place from two Japanese shoe manufacturers the company's first
independent order for 20,000, which included 6,000 that had the Nike logo.[23] Runner Jeff
Johnson was brought in to help market the new brand and was credited for coining the name
“Nike”. It would bear the Swoosh newly designed by Carolyn Davidson. The Swoosh was
first used by Nike on June 18, 1971, and was registered with the U.S. Patent and Trademark
Office on January 22, 1974.
In 1976, the company hired John Brown and Partners, based in Seattle, as its first
advertising agency. The following year, the agency created the first "brand ad" for Nike,
called "There is no finish line", in which no Nike product was shown. By 1980, Nike had
attained a 50% market share in the U.S. athletic shoe market, and the company went public
in December of that year.
Wieden+Kennedy, Nike's primary ad agency, has worked with Nike to create many print and
television advertisements, and Wieden+Kennedy remains Nike's primary ad agency. It was
agency co-founder Dan Wieden who coined the now-famous slogan "Just Do It" for a 1988
Nike ad campaign, which was chosen by Advertising Age as one of the top five ad slogans
of the 20th century and enshrined in the Smithsonian Institution. Walt Stack was featured in
Nike's first "Just Do It" advertisement, which debuted on July 1, 1988. Wieden credits the
inspiration for the slogan to "Let's do it", the last words spoken by Gary Gilmore before he
was executed.
Nike manufactured its first uniforms for a professional sports team in 1979 when its jersey for
the Portland Timbers of the North American Soccer League debuted. Throughout the 1980s,
Nike expanded its product line to encompass many sports and regions throughout the world.
In 1990, Nike moved into its eight-building World Headquarters campus in Beaverton,
Oregon. The first Nike retail store, dubbed Niketown, opened in downtown Portland in
November of that year. Phil Knight announced in mid-2015 that he would step down as
chairman of Nike in 2016. He officially stepped down from all duties with the company on
June 30, 2016. In a company public announcement on March 15, 2018, Nike CEO Mark
Parker said Trevor Edwards, a top Nike executive who was seen as a potential successor to
the chief executive, was relinquishing his position as Nike's brand president and would retire
in August. In October 2019, John Donahoe was announced as the next CEO, and
succeeded Parker on January 13, 2020. In November 2019, the company stopped selling
directly through Amazon, focusing more on direct relationships with customers. Nike has
acquired and sold several apparel and footwear companies over the course of its history. Its
first acquisition was the upscale footwear company Cole Haan in 1988, followed by the
purchase of Bauer Hockey in 1994. In 2002, Nike bought surf apparel company Hurley
International from founder Bob Hurley. In 2003, Nike paid US$309 million to acquire sneaker
company Converse. The company acquired Starter in 2004 and soccer uniform maker
Umbro in 2007.
In order to refocus its business lines, Nike began divesting itself of some of its subsidiaries in
the 2000s. It sold Starter in 2007 and Bauer Hockey in 2008. The company sold Umbro in
2012 and Cole Haan in 2013. As of 2020, Nike owns only one subsidiary: Converse Inc.
Nike acquired Zodiac, a consumer data analytics company, in March 2018. In August 2019,
the company acquired Celect, a Boston-based predictive analytics company. In December
2021, Nike purchased RTFKT Studios, a virtual shoe company that makes NFTs. In
February 2021, Nike acquired Datalogue, a New York based company focused on digital
sales and machine learning technology. Nike was made a member of the Dow Jones
Industrial Average in 2013, when it replaced Alcoa. On December 19, 2013, Nike's quarterly
profit rose due to a 13 percent increase in global orders for merchandise since April of that
year. Future orders of shoes or clothes for delivery between December and April, rose to
$10.4 billion. Nike shares (NKE) rose 0.6 percent to $78.75 in extended trading. In
November 2015, Nike announced it would initiate a $12 billion share buyback, as well as a
two-for-one stock split, with shares to begin trading at the decreased price on December 24.
The split will be the seventh in company history. In June 2018, Nike announced it would
initiate a $15 billion share buyback over four years, to begin in 2019 upon completion of the
previous buyback program. For the fiscal year 2018, Nike reported earnings of US$1.933
billion, with annual revenue of US$36.397 billion, an increase of 6.0% over the previous
fiscal cycle. Nike's shares traded at over $72 per share, and its market capitalization was
valued at over US$114.5 billion in October 2018. In February 2020, the company said that
roughly 75% of Nike stores in Greater China had closed due to the COVID-19 outbreak. In
March 2020, Nike reported a 5% drop in Chinese sales associated with stores' closure. It
was the first decrease in six years. At the same time, the company's online sales grew by
36% during Q1 of 2020. Also, the sales of personal training apps grew by 80% in China.
Structure
The company has achieved worldwide recognition while maintaining its internal hierarchy
and functional management structure.
Over the years, the organizational structure of Nike company has incorporated flexibility in
the wake of regional expansion. Today, it is present in 170 countries across the regional and
sub-regional divisions. Hence, every startup and business enthusiast aims to mimic its
organizational culture. Nike's organizational structure follows a matrix chart approach, which
divides authority horizontally and vertically. A matrix company structure is followed by many
big companies. It's not the traditional hierarchical structure. Employees can report to multiple
supervisors, normally one functional and one project manager. It's more efficient and
reduces management issues. The company follows a regionalized business strategy. It
focuses on meeting market-specific apparel, footwear, and equipment demand. Additionally,
it has helped Nike maximize transparency and promote bureaucracy among employees and
regional divisions. Let break down the Nike company organizational structure into executive
operations, regional divisions, and subsidiaries. The executive team at Nike is versatile. It
possesses experience across industries, including PR, technology, HR, and diversity. The
global decision-making team oversees all regional and worldwide operations. Here is a
breakdown of Nike's global executive authorities.
● President and CEO of Nike: John Donahoe supervises the company's global
business portfolio. He also handles the subsidiary's (Jordon, Converse) operations
worldwide.
● Global Marketing Operations: Dirk-Jan Va Hameren has run Nike's worldwide
marketing operations since 2018. He has led award-winning campaigns like “Dream
Crazy” and “Just Do It”.
● Global HR Operations: Monique Matheson is Nike's Executive Vice President and
Chief HR Officer. She oversees the company's core values, including talent
management, diversity, and inclusion.
● Global Design Operations: John Hoke is currently the Chief Design Officer at Nike.
He leads over 1000 designers, inspiring innovative apparel and footwear designs
annually.
● Nike Creative Operations: Thomas Clarke currently controls Nike's Innovation Team.
He assumes bringing innovation to the company's core businesses (footwear,
apparel, and equipment).
● Global Legal Operations: Ann Miller has been serving as the Chief Legal Officer at
Nike Inc. since 2007. She handles the company's legal and public affairs, social
community impact, and resilience matters.
● Global Financial Operations: Mathew Friend takes charge of the company's finances,
supply and demand, and procurement.
● Global Supply Chain/ Logistics Operations: Craig Williams leads the supply chain
and logistics operations across the four regional divisions at Nike.
Jorge Casimiro serves the Nike Foundation & VP's president and chief Public Policy &
Social Impact Officer. Nike's global structure is further broken down into geographic areas.
These regional divisions are semi-autonomous, meaning they can make local market
decisions. The global headquarters oversees the legal, marketing, financial, and accounting.
The organizational structure of Nike company reflects its different product lines and
worldwide presence. Here are the key characteristics that have helped Nike to cater to the
market dynamics.
1. Corporate Leadership
The Nike company's organizational structure starts from an executive leadership team at the
top. This team manages the company's strategic direction and oversees its global
operations.
2. Global Functions
Nike's Oregon headquarters manages global functions and supports all business segments,
including corporate, Nike Brand, and regional divisions. Some key functions are Global
Finance, Global Supply Chain, Global administration, Global Marketing, etc. A global chief
officer runs each functional unit.
3. Business Segments
Nike has divided its businesses into major segments. Each segment is responsible for
managing the manufacturing, distribution, marketing, etc. of relevant products. The
company's primary business segments include
Nike Brand designs, distributes, and markets Nike's footwear, apparel, and equipment.
Converse, a subsidiary of Nike, oversees the design and marketing of Converse footwear
and apparel.
Jordan, overseeing the global marketing, design, and distribution of Air Jordan athletic
footwear (mainly basketball).
4. Regional Market
As discussed above, Nike specializes in regional markets. Each regional office has a top
manager who overlooks the three management functions: apparel, footwear, and equipment.
Each function has several departments (Sales, HR, Marketing, R&D, etc.). This flexible
divisional structure has enabled Nike to meet market-specific consumer demands.
5. Brand Licensing
Though small, Nike has another global division for brand licensing. The company uses
licensing and operates with local businesses to distribute its products internationally. It
enables the products to reach local consumers, maximizing the benefits of other brands and
Nike's international operations.
