Nike prepares for life after Phil Knight
Nike founder Phil Knight announced this week that he’ll be stepping down from his position as chairman of the company’s board. Knight, 77, says he would like current CEO Mark Parker to take his place.
Knight founded the company in 1964 with Bill Bowerman, his running coach from the University of Oregon. Each man put in $500; Nike recently reported that its annual revenue rose 10 percent to $30.6 billion.
Over the past half-century, Nike has outrun many formerly globe-dominating sportswear companies like Adidas. Paul Swangard at the Warsaw Center for Sports Marketing at the University of Oregon says Phil Knight has baked his personal business ethos into the company he’s passing on: “the idea of always pursuing innovation, and always pursuing that extra edge that would provide an athlete the ability to perform at his or her best.”
Nike’s sophisticated global supply chain helps — with high-priced designers and marketing types working primarily in the U.S., and low-cost contract-shoe-making workers overseas, mostly in Asia.
Patrick Rishe, director of the Sports Business Program at Washington University in St. Louis, says he doesn’t believe Nike has outpaced its main rivals, companies like Adidas and Reebok, in innovation and technology. Rather, the company has kept ahead with its marketing.
“Look at the Michael Jordan and Tiger Woods effects,” Rishe says. “That makes it very difficult for other competitors. Nike has that first-mover advantage.”
Rishe says the company has kept up that advantage by continuing to sign top athletes, like LeBron James and Rory McIlroy.
Women’s marketing expert Mary Lou Quinlan says Nike’s competitors are being smart, too.
“Under Armour is the one I’d be worried about if I were Nike,” Quinlan says, “because they seem to have struck that strong-woman place with their unique choice of celebrities, like Misty Copeland, the new principal dancer of the American Ballet Theatre.”
On the other hand, Quinlan says Nike still remains at the forefront of marketing athletic styles to women.
“Even if we’re wearing it to run to the office, yoga pants are pants, and sneakers are fashion.”
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.
