“Play by the rules. But be ferocious.”
Starting The Business
Like Fred Smith and the origins of FedEx, Philip Knight’s first ideas of what would become Nike Inc. came to him while he was at
school. While working on his master’s at Stanford, Knight – an accomplished runner during his undergraduate days at the University
of Oregon – wrote an essay that outlined a plan to overcome the monopoly Adidas had on the running shoe market. He thought the way
to realize this was to employ cheap Japanese labour to make a shoe both better and cheaper.
The plan was put into action shortly after graduating in 1962. Knight went to Japan to meet with the executives of Onitsuka Tiger
Co., a manufacturer of imitation Adidas runners, claiming to be the head of a company called Blue Ribbon Sports (which did not
exist, except in his mind). Knight convinced Tiger to export their shoes to the States though Blue Ribbon and had them send samples
so his associates could inspect them.
Knight paid for the samples with money from his father. He sent a few pairs to Bill Bowerman, Knight’s track coach from his days at
the University of Oregon, who became interested in the venture. Knight and Bowerman became partners and put $500 each into the
purchase of 200 pairs of Tigers. Blue Ribbon Sports was formed, and Knight began going to high school track and field events
selling the shoes from the trunk of his car.
Sales were at $3 million dollars when Knight chose to dissolve the partnership with Tiger in the early 1970s. Blue Ribbon began
producing its own line and began selling its Nike line (named after the Greek goddess of victory) in 1972. These first Nike shoes
were adorned with the now-internationally recognizable swoosh logo – which Knight had commissioned for $35 – and had the
traction-improving “waffle soles”, conceived of by Bowerman while watching his wife using a waffle iron.
Building An Empire
Blue Ribbon’s success (renamed Nike in 1978) throughout the 1970s and into the ’80s can largely be attributed to Knight’s marketing
strategy. He thought it best not to push his Nike shoes though advertising, but rather to let expert athletes endorse his product.
Fortune smiled on Knight as his partner Bill Bowerman became the coach of the American Olympic team and many of the best performers
on the team decided to shod their feet with Nikes. Of course, when the runners performed well, the shoes they wore were
highlighted. Steve Prefontaine, a brash and unconventional American record-holder, became the first spokesperson for Nike shoes.
After the tennis player John McEnroe hurt his ankle, he began wearing a Nike three-quarter-top shoe, and sales of that particular
brand jumped from 10,000 pairs to over 1 million. As Knight had hoped, celebrity athlete’s endorsements brought success to the
company. Knight also capitalized on a jogging craze, and through clever marketing persuaded the consumer that they should only be
wearing the best the best …