X) Nike

In the 1960s when jogging first became popular, Nike's co-founder Bill Bowerman identified the potential of this form of exercise. He co-authored a book, with a cardiologist, on jogging. The book became a bestseller and helped to create the market for the company's future products.

Teaming up with one of his athletes, Phil Knight, he started experimenting with home-made shoe designs. By 1970, they had created a new lightweight sole that offered athletes unprecedented cushioning and bounce. The product was called The Waffle Trainer and went on to become the bestselling trainer shoe in USA

A series of high profile sportspersons, such as tennis players Jimmy Connors and John McEnroe, and Steve Prefontaine (athletics) wore Nike's footwear. Then in 1979, Nike developed its air cushioning system with a little plastic window on the side of the shoe and sales boomed. In 1984, Carl Lewis won 4 gold medals while wearing Nike's shoes and 58 Nike-sponsored athletes collected 68 medals.

In 1987, sales slumped as a rival, Reebok, successfully developed a soft shoe that cashed in on the women's aerobics boom. Luckily, Nike predicted another trend, ie Nike used Michael Jordan as its inspiration for a new shoe called "Air Jordans" that became a highly sought-after fashion statement by urban males. The product became even more popular when the first model was banned for being too colourful by the NBA!!!!!!

By the end of the 1980s, Nike appeared to have an unbeatable recipe for success by developing attractive

"...high-tech products, endorsement from athletes across a wide range of disciplines, an instantly recognisable brand and a memorable slogan: Just Do It..."

Emily Ross et al, 2004

In 1996, Nike signed an unknown Tiger Woods. The following year, Tiger started winning major tournaments and Nike's share of the US sneaker market reached around 50%. On the other hand

"...as the brand......Nike was no longer young and fresh......its strategy of market domination had succeeded so well that Nike was now firmly mainstream - which began to turn-off young buyers. In 1998 Nike had its midlife crisis. The sneaker market was fragmenting. Soft, bulbous shoes designed for skateboarding and classics, such as Puma's and Adidas's revamped 1970's styles, were now fashionable alternatives to Nike's high-tech athletic look. New Balance, with a wider range of sizes and fittings, was stealing hardcore runners who didn't care what the shoes looked like as long as they were comfortable..."

Emily Ross et al, 2004

Furthermore, Nike's image was being tarnished by allegations of using cheap labour in developing countries. This was making them a target of the anti-globalisation campaigners. This, plus the Asian economy downturn and its unsuccessful sponsorship of Brazil in the 1998 soccer World Cup, resulted in profit falling by 50%

Nike needed to counter its negative associations (too mainstream, use of cheap labour, etc.) It changed its slogan from "Just Do It" to "I Can". Phil Knight apologised for the loss of direction and failings in the Third World, etc and Nike started to reinvent itself by

- launching a Yoga shoe

- establishing Nike Goddess brand

- developing a chain of stores designed more like up-market fashion outlets than sports shoe stores

- launching a range of skateboarding shoes available from limited specialised skateboarding shops

- announcing new sponsorship deals with elite athletes, such as Lance Armstrong

 

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