NIKE, Inc.

By
Joe Ivey


Nike is without a doubt one of the worlds
top sports and fitness companies, and has a
legacy which dates back to 1962 when they
first arrived on the scene under the name of
Blue Ribbon Sports. Today Nike is known
for their top of the line sports apparel and
athletic shoes.
In the year 1962, Philip H. Knight reached out to an athletic shoe company in
Japan called the Onitsuka Tiger Co., because he strongly believed in the quality
in the running shoes that were manufactured there.

Knight set up a plan to gradually introduce some of the Onitsuka Tiger
Companys products to the United States.

In that same year Knight founded Blue Ribbon Sports (BRS), which pleased
his Japanese counterparts.

In 1963 BRS finally set the plan in motion by taking delivery of the Onitsuka
Tiger Companys athletic shoes (200 pairs), and pushed to sell them at a lot of
different track meets.


Continued
History of NIKE, Inc.
Knight was laboring by himself until the next year in 1964, when William
Bowerman, Knights old track coach, matched his investment with $500 and
became his partner.

In 1966, the two partners open up the companys first retail outlet, after
generating $20,000 in sales the previous year.

William Bowermans unique designs became a huge seller in 1967 as their
business spread from California to the East Coast, setting up distribution
headquarters in Massachusetts.

The following year in 1968, the company becomes incorporated when they
designed the Cortez shoe, which brought about much progress with bringing
about the first running shoe to have a cushioned mid-sole from the heel to the
toe.

Continued
In 1971 BRS expands its operations overseas, as they began to manufacture
products through financing from the Nissho Iwai Corporation, and independent
contractors.

In the same year BRS brought to the scene a product line called Nike, which
had a Swoosh logo representing Greek mythologys victory goddess. This was
the first recorded line of Nikes that were sold.

In 1972 the partnership between BRS and Onitsuka Tiger came to an end
through failure to come to an agreement over distribution, and BRS began to
push the Nike brand through the Olympic Trials in that same year.

In 1978 Blue Ribbon Sports changed its name to Nike, Inc., and the following
year introduced the Nike Air shoe along with a new clothing line.

Continued
In 1980 Nike goes public.

In 1981 Nike begins to focus on promoting their products over seas
in markets all across Europe, Asia, Japan, Africa, and Latin America.

In 1985 Nike furthered the success of the company by having Michael
Jordan to sign a contract to endorse one of its versions of the Nike Air
shoe and called this one the Air Jordan.

In 1988 the very popular slogan Just Do It was introduced to the
world.


Continued
In 1988 Cole Haan, maker of casual and dress shoes, is acquired.

In 1990 Nike, Inc. opened up NikeTown retail outlets which began in
Portland Oregon.

In 1994 Nike, Inc. acquires Canstar Sports Inc., the leading maker of
skates and hockey equipment in the world, later renamed Bauer Nike
Hockey Inc.

In 1993 Sporting News dubbed Philip H. Knight the most powerful
man in sports.


Financial Performance
&
Direct Competitor Comparison
NIKE Addidas PVT1 PVT2 Industry
Market
Cap:
37.32B 11.75B N/A N/A 263.39M
Qtrly. Rev.
Growth
7.70% 18.70% N/A N/A 5.00%
Revenue 19.01B 14.21B 1.64B 3.53B 272.87M
Gross
Margin
46.28% 47.27% N/A N/A 40.44%
Operating
Margin
13.01% 7.84% N/A N/A 1.01%
Net Income 1.91B 684.65M N/A 180.40M N/A
EPS 3.86 1.61 N/A N/A 0.85
NIKE, Inc.s Recent Success
According to the results of the fourth quarter, Nike Inc.s profit
jumped 53%, and is expected to continue doing well as future orders
pour in. Nike, Inc.s marketing campaign of the World Cup and the
sponsorship of 10 teams were the catalyst in forecasting a spike in
sales. For the month ending May 31, 2010 Nike, Inc. reported a profit
of $521.9 million which was greater than last years $341.4 million, and
a share of $1.06 a share which is more than the previous years 70
cents a share.

According to Morgan Stanley transaction data suggest Nikes U.S.
apparel sales jumped 13.5% during the quarter. There was reason to
believe that the jump in sales of apparel in the U.S. was because of the
events that took place during that quarter, which was the World Cup.
The World Cup sparked the demand of jerseys and other related
apparel surrounding the World Cup. There are many competitors
worldwide in the athletic apparel market and Nike controls 10%, and
35% of its share is in athletic shoes.





Critical Issues
There has been a campaign spearheaded by college students in
universities to burden Nike by forcing them to take action surrounding
the 1,800 workers who lost their jobs in Honduras because their
factories were closed by a couple of subcontractors. The campaign led
to Nike having to pay out $1.54 million to resolve the issue with the
1,800 workers.

A nationwide group by the name of United Students against
Sweatshops along with students in universities forced Nike to pay $2
million in severance, which was something the subcontractors
neglected to do. The $1.54 million had nothing to do with the $2
million in severance; it was for a worker relief fund. Thats a total of
$3.54 million, and that is not including the finance health coverage and
training that Nike agreed to provide the workers who lost their jobs.





NIKE, Inc. Still Kicking
Despite all of the controversy Nike had faced with college students in
several universities, it did not stop Nike from introducing the new uniforms
for 10 college football teams. Nike brings their innovative designs to the
following teams:

Ohio State
Alabama
Florida
Boise State
Miami
Oregon State
Pittsburgh
TCU
Virginia Tech
West Virginia


These 10 college football team uniforms are said to be 37% lighter.





Analysis
If Nike continue in their legacy of making
athletic shoes and apparel with the
innovative designs that we have all been
accustomed to seeing, along with excellent
marketing, then there shouldnt be a
problem remaining the number one sports
and fitness company in the world.





Recommendations
&
Projections
If I had to give any recommendations, I would tell the
people at Nike, Inc. to continue doing what they are doing
as far as coming up with new designs, quality sports
apparel and footwear, getting the right players to endorse
them, and run the same marketing campaign until it has
run its course, then switch it up.

I predict that Nike will maintain impressive numbers in
sales, quarterly growth, and net income through these
rough economic times, and will do even better as the
economy slowly recovers.





References
NIKE, Inc. (2010, September 18). Nike, inc.
Retrieved from
http://www.fundinguniverse.com/company-histories/NIKE-Inc-Company-History.html

Yahoo Finance. (2010, September 18). Nke competitors/nike, inc. common stock stock-
yahoo! finance.
Retrieved from
http://finance.yahoo.com/q/co?s=NKE

Kell, J. (2010). Corporate news: nike's quarterly profit jumps 53%. Wall Street Journal.
(Eastern edition). New York, N.Y.: Jun 24, 2010. pg. B.4, 411(00999660),
Retrieved from
http://proquest.umi.com/pqdweb?did=2065199041&sid=1&Fmt=3&clientId=18417&RQ
T=309&VName=PQD doi: 2065199041

Lahart, Evans, J., K. (2010). Ahead of the tape. Wall Street Journal. (Eastern edition). New
York, N.Y.: Jun 23, 2010. pg. C.1, 379(00999660),
Retrieved from
http://proquest.umi.com/pqdweb?did=2064598751&sid=2&Fmt=4&clientId=18417&RQ
T=309&VName=PQD doi: 2064598751







References Continued
Greenhouse, S. (2010). Pressured, nike to help workers in honduras; [business/financial
desk]. New York Times. (Late Edition (East Coast)). New York, N.Y.: Jul 27, 2010. pg. B.1,
886(03624331),
Retrieved from
http://proquest.umi.com/pqdweb?did=2092082941&sid=3&Fmt=3&clientId=18417&RQ
T=309&VName=PQD doi: 2092082941

McCarthy, M. (2010). Nike schools will be outfitted for tradition. USA TODAY. McLean,
Va.: Sep 1, 2010. pg. C.3, 253(07347456),
Retrieved from
http://proquest.umi.com/pqdweb?did=2126752681&sid=4&Fmt=3&clientId=18417&RQ
T=309&VName=PQD doi: 2126752681




The
End