Origins and history
Nike, originally known as Blue Ribbon Sports (BRS), was founded by University of Oregon track athlete Philip Knight and his coach Bill Bowerman in January 1964. The company initially operated as a distributor for Japanese shoe maker Onitsuka Tiger (now ASICS), making most sales at track meets out of Knight's automobile.[8]
According to Otis Davis, a student athlete whom Bowerman coached at the University of Oregon, who later went on to win two gold medals at the 1960 Summer Olympics, Bowerman made the first pair of Nike shoes for him, contradicting a claim that they were made for Phil Knight. Says 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 make them from the waffle iron, and they were mine."[9]
In 1964, in its first year in business, BRS sold 1,300 pairs of Japanese running shoes grossing $8,000. By 1965 the fledgling company had acquired a full-time employee, and sales had reached $20,000. In 1966, BRS opened its first retail store, located at 3107 Pico Boulevard inSanta Monica, California next to a beauty salon, so its employees no longer needed to sell inventory from the back of their cars. In 1967, due to rapidly increasing sales, BRS expanded retail and distribution operations on the East Coast, in Wellesley, Massachusetts.[10]
By 1971, the relationship between BRS and Onitsuka Tiger was nearing an end. BRS prepared to launch its own line of footwear, which would bear the Swoosh newly designed by Carolyn Davidson.[11] 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.[12]
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.[13]
Together, Nike and Wieden+Kennedy have created 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.[14]Walt Stack was featured in Nike's first "Just Do It" advertisement, which debuted on July 1, 1988.[15] Wieden credits the inspiration for the slogan to "Let's do it", the last words spoken by Gary Gilmore before he was executed.[16]
Throughout the 1980s, Nike expanded its product line to encompass many sports and regions throughout the world.[17] In 1990, Nike moved into its eight-building World Headquarters campus in Beaverton, Oregon.[18]
Acquisitions
Nike has acquired several apparel and footwear companies over the course of its history, some of which have since been sold. Its first acquisition was the upscale footwear company Cole Haan in 1988,[19] followed by the purchase of Bauer Hockey in 1994. In 2002, Nike bought surf apparel company Hurley International from founder Bob Hurley.[20] In 2003, Nike paid US$309 million to acquire Converse, makers of the Chuck Taylor All-Stars line of sneakers.[21] The company acquired Starter in 2004[22] and Umbro, known as the manufacturers of the England national football team's kit, in 2008.[23]
In order to refocus on its core business lines, Nike began divesting of some of its subsidiaries in the 2000s.[24] It sold Starter in 2007[22] and Bauer Hockey in 2008.[25] The company sold Umbro in 2012,[26] and Cole Haan in 2013.[27] As of 2013, Nike owns two key subsidiaries: Converse Inc. and Hurley International.[28][29]
Finance
Nike Inc. will buy back $8 billion of Nike's class B stock in 4 years after the current $5 billion buyback program is completed in second quarter of fiscal 2013. Up to September 2012, Nike Inc. has bought back $10 billion of stock.[30]
On December 19, 2013, Nike Inc's quarterly profit rose as a result of global orders for merchandise for delivery by April increased 13 percent. 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.[31]
Products
Nike produces a wide range of sports equipment. Their first products were track running shoes. They currently also make shoes, jerseys, shorts, cleats,[32] baselayers, etc. for a wide range of sports, including track and field, baseball, ice hockey, tennis, association football (soccer), lacrosse, basketball, and cricket. Nike Air Max is a line of shoes first released by Nike, Inc. in 1987. Additional product lines were introduced later, such as Air Huarache, which debuted in 1992. The most recent additions to their line are the Nike 6.0, Nike NYX, andNike SB shoes, designed for skateboarding. Nike has recently introduced cricket shoes called Air Zoom Yorker, designed to be 30% lighter than their competitors'.[33] In 2008, Nike introduced the Air Jordan XX3, a high-performance basketball shoe designed with the environment in mind.
Nike sells an assortment of products, including shoes and apparel for sports activities like association football,[34] basketball, running,combat sports, tennis, American football, athletics, golf, and cross training for men, women, and children. Nike also sells shoes for outdoor activities such as tennis, golf, skateboarding, association football, baseball, American football, cycling, volleyball, wrestling, cheerleading, aquatic activities, auto racing, and other athletic and recreational uses. Nike is well known and popular in youth culture, chav culture andhip hop culture for their supplying of urban fashion clothing. Nike recently 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 the iPod nano. While the product generates useful statistics, it has been criticized by researchers who were able to identify users' RFID devices from 60 feet (18 m) away using small, concealable intelligence motes in a wireless sensor network.[35][36]
In 2004, Nike launched the SPARQ Training Program/Division.[citation needed]
On July 15, 2009, the Nike+ Sports Band was released in stores. The product records distance run and calories expended, keeps time, and also gives runners new programs online they could try running.[clarification needed]
The 2010 Nike Pro Combat jersey collection were worn by teams from the following universities: Miami, Alabama, Boise State University, Florida, Ohio State, Oregon State University, Texas Christian University, Virginia Tech, West Virginia, and Pittsburgh. Teams will wear these jerseys in key matchups as well as any time the athletic department deems it necessary.[38]
Headquarters
Nike's world headquarters are surrounded by the city of Beaverton, but are within unincorporated Washington County. The city attempted to forcibly annex Nike's headquarters, which led to a lawsuit by Nike, and lobbying by the company that ultimately ended in Oregon Senate Bill 887 of 2005. Under that bill's terms, Beaverton is specifically barred from forcibly annexing the land that Nike and Columbia Sportswear occupy in Washington County for 35 years, while Electro Scientific Industries and Tektronix receive the same protection for 30 years.[39]
Controversy
Nike has contracted with more than 700 shops around the world and has offices located in 45 countries outside the United States.[40] Most of the factories are located in Asia, including Indonesia, China, Taiwan, India,[41] Thailand, Vietnam, Pakistan, Philippines, and Malaysia.[42] Nike is hesitant to disclose information about the contract companies it works with. However, due to harsh criticism from some organizations like CorpWatch, Nike has disclosed information about its contract factories in its Corporate Governance Report.
Sweatshops
Nike has been criticized for contracting with factories (known as Nike sweatshops) in countries such as China, Vietnam, Indonesia and Mexico. Vietnam Labor Watch, an activist group, has documented that factories contracted by Nike have violated minimum wage and overtime laws in Vietnam as late as 1996, although Nike claims that this practice has been stopped.[43] The company has been subject to much critical coverage of the often poor working conditions and exploitation of cheap overseas labor employed in the free trade zones where their goods are typically manufactured. Sources for this criticism include Naomi Klein's book No Logo and Michael Moore documentaries.
Campaigns have been taken up by many colleges and universities, especially anti-globalisation groups, as well as several anti-sweatshop groups such as the United Students Against Sweatshops.[44]
As of July 2011, Nike stated that two-thirds of its factories producing Converse products still do not meet the company's standards for worker treatment. A July 2011 Associated Press article stated that employees at the company's plants in Indonesia reported constant abuse from supervisors.[45]
Child labor allegations
During the 1990s, Nike faced criticism for the use of child labor in Cambodia and Pakistan in factories it contracted to manufacture soccer balls. Although Nike took action to curb or at least reduce the practice, they continue to contract their production to companies that operate in areas where inadequate regulation and monitoring make it hard to ensure that child labor is not being used.[46]
In 2001, a BBC documentary uncovered occurrences of child labor and poor working conditions in a Cambodian factory used by Nike.[47] The documentary focused on six girls, who all worked seven days a week, often 16 hours a day.
Strike in China factory
In April 2014, one of the biggest strikes in mainland China took place at the Yue Yuen Industrial Holdings Dongguan shoe factory, producing amongst others for Nike. Yue Yuen did underpay an employee by 250 yuan (40.82 US Dollars) per month. The average salary at Yue Yuen is 3000 yuan per month. The factory employs 70,000 people. This practice was in place for nearly 20 years.[48][49][50]
