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Nike, Inc.

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NIKE, Inc.
Company typePublic corporation
Industrysporting goods
Founded1972
HeadquartersWashington County, Oregon

Beaverton, Oregon

Key people
Phil Knight, chairman and co-founder
Mark Parker, CEO
Bill Bowerman, co-founder
ProductsAthletic shoes, apparel, sports equipment, accessories
Revenue $15.0 billion (FY 2006)[1]
6,651,000,000 United States dollar (2022) Edit this on Wikidata
6,046,000,000 United States dollar (2022) Edit this on Wikidata
Number of employees
26,700 (2006)
Websitehttp://www.nike.com/

Nike, Inc. (Pronounced: NIGH-KEY) (NYSE: NKE) is a major American manufacturer of athletic shoes, clothing/apparel, and sports equipment. The company takes its name from the Greek goddess of victory, Nike. Nike markets its products under its own brand as well as Air Jordan, Nike Golf and Team Starter (among others), as well as under brands of wholly owned subsidiaries including Bauer, Cole Haan, Converse, and Hurley International. Nike has been criticised for the working conditions and production methods in the overseas factories with which it contracts.

Corporate influence

Nike's influences stretch from its (sometimes criticized) production systems to fashions in themselves while along the way developing technologies (gimmick and functional alike). Their advertisement campaigns often incorporate new sporting ideology, which often involve sponsored athletes like Tiger Woods, Ronaldo and Michael Jordan.

Nike is also well known for its strong sponsorship agreements with athletes, leagues and federations, as well as many of the world's top football (soccer) clubs and national teams, including Manchester United, Arsenal, Juventus, FC Barcelona, Red Star Belgrade, Inter Milan, Borussia Dortmund, PSV Eindhoven, Valencia C.F., Atlético de Madrid, Celtic, FC Porto, Paris Saint-Germain, Boca Juniors, Corinthians, Brazil, Portugal, the Netherlands, Croatia, Mexico national football team and the United States men's, women's and Australia to produce their equipment. On December 23, 2005, Nike signed a 5-year contract (beginning January 1, 2006) with the India Cricket Team to become their official apparel supplier for $135.6 million. This is more money per-annum than Nike pays the Brazil football team ($16m), Manchester United ($16.8m) or Juventus ($22.2m). Nevertheless Nike does not have an India-specific website or any mention of cricket on Nike.com.

Timeline

The 1960s

  • 1964
    • Phil Knight partners with his former college track coach Bill Bowerman to form Blue Ribbon Sports, a US distributor for Japanese-made Tiger running shoes. iiin these great years for nike they also developed the nike air (a track shoe)a new inovation for it's time.

The 1970s

  • 1971
    • The mark now known as the Swoosh is created by graphic design artist Carolyn Davidson in June. Several weeks later, Jeff Johnson suggests the name "Nike" for the first shoes that will bear the Swoosh mark.
  • 1972
    • The first line of Nike footwear is introduced, including the so-called "Moon Shoe" that features a waffle sole, which is distributed to athletes competing in the US Olympic Track & Field Trials in Eugene, Ore.
  • 1972
    • Romanian tennis star Ilie Nastase becomes the first athlete to sign an endorsement contract with Blue Ribbon Sports to wear its Nike tennis shoes.
  • 1973
    • American record-holder Steve Prefontaine becomes the first major track athlete to wear Nike shoes.
  • 1974
    • The Waffle Trainer is introduced, quickly becoming the best-selling training shoe in the U.S.
  • 1977
    • Nike print ad with the tag "There is no finish line" is introduced.
  • 1978
    • Tennis 'bad boy' John McEnroe is signed by Nike to an endorsement contract.
  • 1979
    • Nike's Air technology patented by inventor M. Frank Rudy is introduced in the Tailwind running shoe. Gas-filled plastic membranes are inserted into the sole of running shoes to provide cushioning.

The 1980s

  • 1980
    • Nike completes an initial public offering of 2,377,000 shares of Class B common stock on December 2.
  • 1981
    • BRS, Inc. merges into Nike, Inc. on December 31, and the company officially becomes known as Nike, Inc.
  • 1982
    • Dan Wieden and Dave Kennedy start their own advertising agency, Wieden+Kennedy, taking with them the Nike account on April 1. In October, Nike airs its first national television ad during the New York Marathon.
  • 1982
  • 1984
    • Nike signs Michael Jordan to an endorsement contract. The first model of his signature shoe, the Air Jordan, originally is banned by the NBA, drawing a tremendous amount of publicity. The introduction of the Air Jordan shoe at retail in March 1985 is a key event in Nike's successful development.
  • 1986
    • Corporate revenues surpass $1 billion for the first time.
  • 1987
    • The Nike Air Max shoe is introduced, which uses a much larger Air cushioning unit, and for the first time is visible at the side of the midsole. This was the first of many generations of Air Max-branded technologies. A television ad featuring the Beatles' song "Revolution" was the first - and to date the only - time that a song performed by the Beatles was used in a TV ad.
  • 1988
    • Nike introduces its "Just Do It" slogan, created by Dan Wieden to unify a new ad campaign.
  • 1989
    • Nike begins its Bo Knows ad campaign to support the launch of its cross-training shoe, which becomes a part of the national culture for the next few years.

The 1990s

  • 1990
    • The first Niketown store opens in downtown Portland.
    • Nike opens its world headquarters in unincorporated Washington County, just west of Portland, on 74 acres (0.3 km²) of land.
  • 1991
    • Nike introduces the Air Max 180 with the biggest airsole for that time. Re-introduced 01/17/05
  • 1993
    • Nike introduces Reuse-A-Shoe, which collects athletic shoes, separates and grinds them up into Nike Grind, used in the making of athletic courts, tracks and fields.
  • 1994
    • Nike wins Advertiser of the Year at the Cannes Advertising Festival.
  • 1996
    • Nike signs Tiger Woods soon after he gives up his amateur golf status.
    • Nike causes controversy with its advertising campaign during the Summer Olympics in Atlanta which features the slogan, "You Don't Win Silver — You Lose Gold." Nike's use of this slogan draws harsh criticism from many sources, including - not surprisingly - several former Olympic silver and bronze medalists.
  • 1998
    • After pressure from lobbying groups Nike and other companies publicly disclose their worldwide factory locations, a first for the garment industry.
    • Phil Knight formally commits Nike to strict standards for manufacturing facilities used by Nike, including: minimum age; air quality; mandatory education programs; expansion of microloan program; factory monitoring; and enhanced transparency of Nike's corporate social responsibility practices.
  • 1999
    • Bill Bowerman, co-founder of Nike, dies on Dec. 24 at age 88.

The 2000s

  • 2000
    • Nike Shox cushioning/support system is introduced, initially worn by Vince Carter and others on the US Olympic basketball team.
  • 2002
    • Nike purchases Hurley International, another clothing company for an undisclosed amount.
    • NikeGO launches, a grassroots initiative to increase physical activity among youths aged 9-15.
    • Rap star Nelly releases a chart-topping song about Air Force Ones, a brand of Nike shoes.
    • Nike takes a second attempt to break into the skateboard market with Nike SB, sold only in skateboard shops.
File:ConverseLogo.png
  • 2003
    • Nike acquires once-bankrupt rival Converse for $305 million on July 9.
    • For the first time in the company's history, international sales exceed USA sales, as Nike continues to develop into a global company.
    • Nike is named "Advertiser of the Year" by the Cannes Advertising Festival, the first company to earn that honor twice (also 1994) in the festival's 50-year history.
    • Nike signs NBA phenom LeBron James with an unprecedented $87 million shoe contract.
  • 2004
    • Phil Knight steps down as CEO and President of Nike, but continues as chairman. Knight is replaced by William D. Perez as CEO of Nike, effective Dec. 28.
    • Nike creates the Exeter Brands Group, a wholly owned subsidiary for athletic footwear and apparel brands for lower price points. Brands include Starter, Team Starter, Asphalt, Shaq and Dunkman.
    • Annual revenues exceed $ 12.25 billion
    • In June, Chinese animator Zhu Zhiqianq, of Xiao Xiao fame, files a lawsuit against Nike for plagiarizing his cartoon stickmen in their commercials. Nike representatives deny the accusations, claiming that the stickman figure lacks originality, and is public domain. Zhu eventually wins the lawsuit, and Nike is ordered to pay $36,000 to the cartoonist. However, in June 2006, the ruling is overturned in Chinese court, and Zhu Zhiqianq is ordered to pay Nike's court costs.
  • 2005
    • Nike reports annual revenue for fiscal year 2005 (ending May 31) of $13.74 billion, a 12% increase over the previous fiscal year.
    • Nike comes under fire from independent music fans and apologizes for their use of an easily identifiable Minor Threat album cover slightly modified into a promotional tool for their line of skateboarding shoes.[1]
  • 2006
    • Nike enters the cricket market with a 5-year sponsorship of the Indian Cricket team for $135.6m, one of the world's biggest team-apparel sponsorship deals ever in any sport.
    • William Perez leaves Nike voluntarily on January 23, 2006. Perez said in the statement that he and Knight "weren't entirely aligned on some aspects of how to best lead the company's long-term growth. It became obvious to me that the long-term interests of the company would be best served by my resignation."
    • Mark Parker replaces Perez as CEO. Parker, joined Nike in 1979 and is considered the visionary behind the Nike Air franchise and many other innovations, Nike said, and one of the key executives leading the company's long-term strategic planning.
    • Nike Inc. filed a patent infringement lawsuit against Adidas-Salomon AG on February 16 2006, claiming its archrival makes shoes using elements of Nike's SHOX cushioning technology.
    • Nike have been threatened with legal action for using Hackney council's logo on a range of sportsware without permission. The council have requested financial compensation to spend on sports development for children in the borough. [2]
    • Nike reports annual revenue for fiscal year 2006 (ending May 31) of $15 billion.

Corporate social responsibility

In the documentary The Corporation Chris Belmonte, director of the National Labour Committee shows what he says are Nike's internal pricing documents. The documents show the time it takes the workers in a factory in the Dominican Republic to make a shirt in ten thousandths of seconds, with each shirt taking 6.6141 minutes to make, 9 shirts an hour.

Nike has been criticized for contracting with factories that allegedly use sweatshop labor in countries like China, Vietnam, Indonesia and Mexico. 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 of this criticism include Naomi Klein's book No Logo and Michael Moore's documentaries.

The forced labor camp like conditions in some overseas production plants led to several unsuccessful boycotts [3], together with coining the alternative name "swooshtika" (a portmanteau of swoosh and swastika) for the company's swoosh logo. [4]

Nike was criticized about ads which referred to empowering women in the U.S. while engaging in practices in East Asian factories which some felt disempowered women.[5]

These campaigns have been taken up by many college and university campuses, especially anti-globalisation groups as well as several anti-sweatshop groups such as the United Students Against Sweatshops.

Kasky v. Nike

Consumer activist Marc Kasky filed a lawsuit in California regarding newspaper advertisements and letters Nike distributed in response to criticisms of labor conditions in its factories. Kasky claimed that the company made representations that constituted false advertising. Nike responded the false advertising laws did not cover the company's expression of its views on a public issue, and that these were entitled to First Amendment protection. The local court agreed with Nike's lawyers, but the California Supreme Court overturned this ruling, claiming that the corporation's communications were commercial speech and therefore subject to false advertising laws.

The United States Supreme Court agreed to review the case (Nike v. Kasky) but sent the case back to trial court without issuing a substantive ruling on the constitutional issues. The parties subsequently settled out of court before any finding on the accuracy of Nike's statements, leaving the California Supreme Court's denial of Nike's immunity claim as precedent. The case drew a great deal of attention from groups concerned with corporate personhood, as well as anti-sweatshop activists. ReclaimDemocracy.org hosts a comprehensive library on the case, including briefs filed by all parties on both sides of the case.

Beatles song

Nike has been a focus of criticism for their use of the Beatles song "Revolution 1" in a commercial, against the wishes of Apple Records, the Beatles' recording company. Nike paid $250,000 to Capitol Records Inc., which held the North American licensing rights to the Beatles' recordings, for the right to use the Beatles' rendition for a year.

According to a July 28 1987 article written by the Associated Press, Apple sued Nike Inc., Capitol Records Inc., EMI Records Inc. and Wieden+Kennedy advertising agency for $15 million. Capitol-EMI countered by saying the lawsuit was 'groundless' because Capitol had licensed the use of "Revolution" with the "active support and encouragement of Yoko Ono Lennon, a shareholder and director of Apple."

According to a November 9 1989 article in the Los Angeles Daily News, "a tangle of lawsuits between the Beatles and their American and British record companies has been settled." One condition of the out-of-court settlement was that terms of the agreement would be kept secret. The settlement was reached among the three parties involved: George Harrison, Paul McCartney, Ringo Starr; Yoko Ono; and Apple, EMI and Capitol Records. A spokesman for Yoko Ono noted, "It's such a confusing myriad of issues that even people who have been close to the principals have a difficult time grasping it. Attorneys on both sides of the Atlantic have probably put their children through college on this."

Nike discontinued airing ads featuring "Revolution" in March 1988. Yoko Ono later gave permission to Nike to use John Lennon's "Instant Karma" in another ad.

Minor Threat ad

In late June 2005, Nike came under fire from independent music fans for their use of an easily identifiable Minor Threat album cover slightly modified into a promotional tool for their line of skateboarding shoes. With Minor Threat being emblematic of the punk subculture, and their former frontman Ian MacKaye (of Fugazi and Dischord Records) being an outspoken champion of true independent music and the DIY ethic, Nike's move to use this image struck many as a cynical attempt by a large, money hungry corporation to target an untapped demographic, undermining what Minor Threat stood for, and what Dischord continues to represent..
On June 27, Nike Skateboarding's website issued an apology to Dischord, Minor Threat, and anyone else who was offended by their act, and announced that all usage of the image would be removed claiming that the people who designed the ad were skateboarders and Minor Threat fans themselves who created the ad out of respect and appreciation for the band.

Xiao Xiao

In June 2004, Zhu Zhiqiang filed a lawsuit against Nike for plagiarizing Xiao Xiao stickmen in their commercials. Nike representatives denied the accusations, claiming that the stickman figure lacks originality, and is public domain. Zhu eventually won the lawsuit, and Nike was ordered to pay $36,000. However, on June 15, 2006, the Beijing High People’s Court overturned the lower court's verdict. The high court rejected the December ’04 ruling that found Nike had “copied his ‘Little Match Man’ illustration in one of its worldwide ad campaigns.” Judge Liu Hui ruled that the head of Nike’s “stickman wasn’t attached to the body, which was different from Zhu’s design and that the strokes used to draw the Nike figure’s arms and legs were different from Zhu’s also.” Zhu will now have to pay court fees of more than US$5,000 (AP, 6/16)[2] to Nike.

Relationship with Beaverton

Nike's world headquarters are surrounded by the city of Beaverton, Oregon but are technically within unincorporated Washington County. This technicality reflects a dispute that The Oregonian characterized as an increasingly personal disagreement between Phil Knight and Beaverton mayor Rob Drake.

From Nike's perspective, the company, the only Fortune 500 employer still headquartered in the state of Oregon, has such a large payroll in the area that it shouldn't be forced to be annexed into Beaverton without its consent. Nike prefers to work with county government as it develops and expands its headquarters. Annexation would cost the company $700,000 per year in increased taxes for services it already receives from the county and various special-purpose districts. Intel, another large employer in the state, routinely receives special tax breaks on various capital investments it makes in the county.

From Beaverton's perspective, the company's expectation for special treatment is counter to the city's desire to have zoning and other laws apply equally to all businesses, big and small. A nearby Costco store, one of that company's earliest, was annexed into Beaverton years ago without incident, and Beaverton's focus on additional annexation during the 21st century reflects a desire to streamline both city and county government by having metropolitan-area services handled by cities instead of counties.

The Oregonian dates the bad blood between the two back to the Nike purchase of 74 acres (0.3 km²) of nearby Beaverton land which soon fronted the MAX Blue Line. When Nike proposed expanding their headquarters in that direction, Beaverton at first wanted them to build housing near the MAX station and criss-cross the property with two public roads, expectations defined by the zoning already in place when Nike bought the land. Beaverton's request was mostly consistent with Metro's transit-oriented development plans for the region. After a year, which included a threat by Nike to move 5,000 jobs out of the state, Beaverton backed down from the requirement for housing, but the lack of accommodation was something that Nike did not forget.

The annexation standoff soon led Beaverton to attempt a forcible annexation. That led to a lawsuit by Nike, and lobbying by the company that ultimately ended in Oregon Senate Bill 887. Under that bill's terms, Beaverton is specifically barred from forcibly annexing the land that Nike and Columbia Sportswear occupy in unincorporated Washington County for 35 years, while Electro Scientific Industries and Tektronix get that same protection for 30 years.

Corporate governance

Current members of the board of directors of Nike are: John G. Connors, Jill Conway, Alan Graf, Douglas Houser, Jeanne Jackson, Phil Knight, Orin Smith, and John Thompson.

Rivalry and competition

Because Nike creates goods for a wide range of sports, they have competition from every sports and sports fashion brand there is. Nike has no direct competitors because there is no single brand which can compete directly with Nike's range of sports and non-sports oriented gear, except for Reebok. This has helped make the brand popular in all areas of sport and sports fashion around the world.

One of Nike's designers, Donwan Harrell, has left Nike to form the urban clothing company (in partnership) Akademiks.

Recently, Theirry Henry left Nike to sign for Reebok.

Trademarks

Main article: Swoosh

The legendary 'swoosh' symbol, a Nike trademark, was designed by a graphic artist student at Portland State University named Carolyn Davidson for $35. She did, however, later receive Nike stock and a golden 'swoosh' ring.

Criticism of Nike's labor practices

Dispute with Beaverton

Data

Notes

  1. ^ Company overview on nike.com
  2. ^ Nike loses "Stickman" case but decides to appeal..., Lawdit Solicitors
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