What comes to mind when you think about Nike? Multinational sportswear brand, Christiano Ronaldo or maybe LeBron James. Today, Nike owns 48% of the sports shoes market in the USA, and 96% of basketball players preferred Nike to other brands.
There is a distinguishable quality and feel towards the brand by its patrons, but things were not always like this. Ever wondered how it all started out?
Blue Ribbon Sports: 1964
Nike was initially founded as BlueRibbon Sports in 1964 by Phil Knight. After his postgraduate, Knight took a short trip to Japan where he managed to secure distribution rights in the USA for Onitsuka Tiger, a Japanese sports shoes brand.
He believed it was ideal due to the low production costs and cheap labour available in Japan.
Later on, Knight partnered up with his former coach and friend Bill Bowerman to found Nike.
Knight’s Strategy
Originally, Nike’s only job was the redistribution of the Tiger shoes in the USA. Later on, Knight decided that he wanted to launch his own shoe designs, which came in the form of cleated shoes for football and soccer.
What genius was Nike cooking up in its headquarters back then?
1. Brilliant Marketing strategy: “Just Do It!”
Nike’s somehow managed to market an unknown Japanese design into a multi-million business back in the 70s.
Once the original Nike design was launched, they partnered up with several Olympic sports legends of the time to endorse their brand.
One of their long-lasting successes is Michael Jordan, whose Air Jordans created a huge stir. Nike was able to sell shoes that were produced for very cheap prices at over $200 a pair!
Adidas had a revenue of a mere $27 billion and spent $3.6 billion on marketing, whereas Nike had a revenue of $39.1 billion, of which $3.75 billion were spent on marketing alone in 2019.
Topping that, Nike’s slogan “Just Do It!” engraved itself in so many people’s hearts.
Nike’s intention was to try to connect with people who found themselves in a difficult position and not being able to do something.
The slogan aimed at alleviating such people’s doubts and urging them to just do it, saying that they could do it.
2. Acquisition Time: Taking over other brands under the Nike shoe
One of their best business strategies: “If you can’t be them, join ’em.” But this is different.
In Nike’s case, they went around buying up their competitors!
Nike has so many affiliate brands under its wing (or rather shoe), that they virtually had no competition other than mega brands like Adidas and Under Armour.
The acquisitions went something like this:
a. Nike bought out Converse in 2003 for $305 million.
b. Acquired Starter for just $43 million in 2004.
c. Umbro was acquired for $630 million in 2007.
Nike also bought out some other brands like Hurley and Cole Haan to reduce competition back in the 90s, but eventually sold off Umbro and Cole Haan to focus more on its own brand.
3. They were at least 7 steps ahead of their competition.
Nike stays not one, not two, but seven steps ahead of their competition! Back when going online was not in everyone’s books, Nike decided to launch its website in 1996.
How did this help?
Not really much at the time, but it did boost sales 15 years later.
Nike had 4x sales compared to Adidas when the digital boom took over in the 2010s. although Foot Locker and Adidas did have their own websites, they had been launched super late. Adidas launched its website in 2006, 7 years later than Nike.
Nike also was one of the first to bring their presence on social media. Their targeted Facebook ads and devoted following helped them grow their brand presence and sales.
Nike built itself by playing onto its strengths and showing the world why they needed it.
One of Nike’s biggest victories was when 44 gold medals were won by athletes wearing Nike in the 2016 Rio Olympics for the USA.
Athletes who wore Nike won a total of 79 medals, a far cry from the 17 medals that Under Armour athletes won and the 9 medals that Adidas athletes won.
Nike was founded by an MBA graduate and a college coach who had a brilliant idea. They turned that idea into reality and today the simple Swoosh icon holds so much meaning for the world.