The company was founded on January 25, 1964 as Blue Ribbon Sports by Bill Bowerman and Philip Knight, and officially became Nike, Inc. in 1978. The company takes its name from Nike the Greek goddess of victory. Nike markets its products under its own brand as well as Nike Golf, Nike Pro, Nike+, Air Jordan, Nike Skateboarding and subsidiaries including Cole Haan, Hurley International, Umbro and Converse. Nike also owned Bauer Hockey (later renamed Nike Bauer) between 1995 and 2008.^[3] In addition to manufacturing sportswear and equipment, the company operates retail stores under the Niketown name. Nike sponsors many high profile athletes and sports teams around the world, with the highly recognized trademarks of "Just do it" and the Swoosh logo.

Origins and history

Nike, originally known as Blue Ribbon Sports, was founded by University of Oregon track athlete Philip Knight and his coach Bill Bowerman in January 1964. The company initially operated as a distributor for Japanese shoe maker Onitsuka Tiger, making most sales at track meets out of Knight's automobile. ^[4]

The company's profits grew quickly, and in 1966, BRS opened its first retail store, located on Pico Boulevard in Santa Monica, California. By 1971, the relationship between BRS and Onitsuka Tiger was nearing an end. BRS prepared to launch its own line of footwear, which would bear the newly designed Swoosh.^[5]

The first shoe to carry this design that was sold to the public was a soccer shoe named "Nike", which was released in the summer of 1971. In February 1972, BRS introduced its first line of Nike shoes, with the name Nike derived from the Greek goddess of victory. In 1978, BRS, Inc. officially renamed itself to Nike, Inc. Beginning with Ilie Nastase, the first professional athlete to sign with BRS/Nike, the sponsorship of athletes became a key marketing tool for the rapidly growing company.

The company's first self-designed product was based on Bowerman's "waffle" design. After the University of Oregon resurfaced the track at Hayward Field, Bowerman began experimenting with different potential outsoles that would grip the new urethane track more effectively. His efforts were rewarded one Sunday morning when he poured liquid urethane into his wife's waffle iron. Bowerman developed and refined the so-called 'waffle' sole which would evolve into the now-iconic Waffle Trainer in 1974.

By 1980, Nike had reached a 50% market share in the United States athletic shoe market, and the company went public in December of that year. ^[6] Its growth was due largely to 'word-of-foot' advertising (to quote a Nike print ad from the late 1970s), rather than television ads. Nike's first national television commercials ran in October 1982 during the broadcast of the New York Marathon. The ads were created by Portland-based advertising agency Wieden+Kennedy, which had formed several months earlier in April 1982.

Together, Nike and Wieden+Kennedy have created many indelible print and television ads and the agency continues to be Nike's primary today. It was agency co-founder Dan Wieden who coined the now-famous slogan "Just Do It" for a 1988 Nike ad campaign, which was chosen by Advertising Age as one of the top five ad slogans of the 20th century, and the campaign has been enshrined in the Smithsonian Institution. ^[7] San Franciscan Walt Stack was featured in Nike's first "Just Do It" advertisement that debuted on July 1, 1988.^[8]

Throughout the 1980s, Nike expanded its product line to include many other sports and regions throughout the world.^[9]

Acquisitions

• As of November 2008, Nike, Inc. owns four key subsidiaries: Cole Haan, urley International, Converse Inc. and Umbro.
• Nike's first acquisition was the upscale footwear company Cole Haan in 1988.
• In February 2002, Nike bought surf apparel company Hurley International from founder Bob Hurley.^[10]
• In July 2003, Nike paid US$305 million to acquire Converse Inc., makers of the iconic Chuck Taylor All Stars.^[11]
• On March 3, 2008, Nike acquired sports apparel supplier Umbro, known as the manufacturers of the England national football team's kits, in a deal said to be worth £285 million (about US$600 million).^[12]
• Other subsidiaries previously owned and subsequently sold by Nike include Bauer Hockey and Starter.^[13]

Products

Nike sells an assortment of products, including shoes and apparel for sports activities like association football[15], basketball, running, combat sports, tennis, American football, athletics, golf and cross training for men, women, and children. Nike also sells shoes for outdoor activities such as tennis, golf, skateboarding, association football, baseball, American football, cycling, volleyball, wrestling, cheerleading, aquatic activities, auto racing and other athletic and recreational uses. Nike is well known and popular in youth culture, chav culture and hip hop culture as they supply urban fashion clothing. Nike recently teamed up with Apple Inc. to produce the Nike+ product which monitors a runner's performance via a radio device in the shoe which links to the iPod nano. While the product generates useful statistics, it has been criticized by researchers who were able to identify users' RFID devices from 60 feet (18 m) away using small, concealable intelligence motes in a wireless sensor network.^[16][17]

In 2004, they launched the SPARQ Training Program/Division. It is currently the premier training program in the U.S.^[18]

Some of Nike's newest shoes contain Flywire and Lunarlite Foam. These are materials used to reduce the weight of many types of shoes.^[19]

In the video game Gran Turismo 4 there is a car by Nike called the NikeOne 2022, designed by Phil Frank.

Headquarters

This distinction, according to The Oregonian, has been a source of contention between the city of Beaverton and Nike since the company purchased 74 acres (0.3 km²) of nearby Beaverton land that soon fronted the Jared Co-operation. When Nike proposed expanding their headquarters in that direction, Beaverton at first wanted them to build housing near the MAX light rail 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 of 2005. 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.^[20]

The world headquarters is situated on approximately 200 acres (0.81 km²) of land. The first phase of construction was completed in 1990, followed by expansions in 1992, 1999, 2001 and 2008. There are 17 buildings, together providing approximately 2,000,000 square feet (190,000 m²) of office space. Each building is named for a legendary coach or athlete who has had a long affiliation with Nike, including Tiger Woods, Lance Armstrong, Mia Hamm, Michael Jordan, Pete Sampras, Joan Benoit Samuelson, John McEnroe and several others.

Two of the buildings are child development centers, named for Joe Paterno and C. Vivian Stringer, that together provide daily child care for approximately 500 children of Nike employees. A man-made lake, fed by a natural spring, covers 6 acres (24,000 m²) and is adjacent to a protected wetland area that runs through the center of the campus. The dirt from the lake was deposited around the perimeter of the grounds to create a 14-foot (4.3 m) tall, sloping berm that helps create a campus-like feel. Approximately 5,000 employees are based at the world headquarters, with another 2,000-2,500 in additional buildings in office complexes nearby.^[21]

Manufacturing

Nike has contracted with more than 700 shops around the world and has offices located in 45 countries outside the United States.^[22] Most of the factories are located in Asia, including Indonesia, China, Taiwan, India, Thailand, Vietnam, Pakistan, Philippines,and Malaysia.^[23] Nike is hesitant to disclose information about the contract companies it works with. However, due to harsh criticism from some organizations like CorpWatch, Nike has disclosed information about its contract factories in its Corporate Governance Report.

Human rights concerns

Nike has been criticized for contracting with factories in countries such as China, Vietnam, Indonesia and Mexico. Vietnam Labour Watch, an activist group, has documented that factories contracted by Nike have violated minimum wage and overtime laws in Vietnam as late as 1996, although Nike claims that this practice has been halted.[24] 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.

Nike has been 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.^[25]

During the 1990s, Nike faced criticism for use of child labor in Cambodia and Pakistan in factories it contracted to manufacture soccer balls. Although Nike took action to curb or at least reduce the practice of child labor, they continue to contract their production to companies that operate in areas where inadequate regulation and monitoring make it hard to ensure that child labor is not being used.^[26]

In 2001 a BBC documentary uncovered occurrences of child labor and poor working conditions in a Cambodian factory used by Nike.^[27] In the documentary, six girls were focussed on, all of whom worked seven days a week, often 16 hours a day.

Campaigns have been taken up by many colleges and universities, especially anti-globalisation groups as well as several anti-sweatshop groups such as the United Students Against Sweatshops.^[28] Despite these campaigns, however, Nike's annual revenues have increased from $6.4 billion in 1996 to nearly $17 billion in 2007, according to the company's annual reports.

A July 2008 investigation by Australian Channel 7 News found a large number of cases involving forced labour in one of the biggest Nike apparel factories. The factory located in Malaysia was filmed by an undercover crew who found instances of squalid living conditions and forced labour. Nike have since stated that they will take corrective action to ensure the continued abuse does not occur.^[29]

Following Liu Xiang's withdrawal from the 2008 Olympics, Nike admitted seeking help from "relevant government departments" in the Chinese government to track down and identify an anonymous Internet poster.^[30]

Environmental record

The consistently growing textile industry often negatively impacts the environment. Because Nike is a large participant in this manufacturing, many of their processes negatively contribute to the environment. One way the expanding textile industry affects the environment is by increasing its water deficit, climate change, pollution, and fossil fuel and raw material consumption. In addition to this, today's electronic textile plants spend significant amounts of energy, while also producing a throw-away mindset due to trends founded upon fast fashion and cheap clothing.^[31] Although these combined effects can negatively alter the environment, Nike tries to counteract their influence with different projects. According to a New England-based environmental organisation Clean Air-Cool Planet, Nike ranks among the top 3 companies (out of 56) on a survey conducted about climate-friendly companies.^[32] Nike has also been praised for its Nike Grind programme (which closes the product lifecycle) by groups like Climate Counts.^[33] In addition to this, one campaign that Nike began for Earth Day 2008 was a commercial that featured Steve Nash wearing Nike's Trash Talk Shoe, a shoe that had been constructed in February 2008 from pieces of leather and synthetic leather waste that derived from the factory floor. The Trash Talk Shoe also featured a sole composed of ground-up rubber from a shoe recycling program. Nike claims this is the first performance basketball shoe that has been created from manufacturing waste, but it only produced 5,000 pairs for sale.^[34] Another project Nike has begun is called Nike's Reuse-A-Shoe program. This program, started in 1993, is Nike's longest-running program that benefits both the environment and the community by collecting old athletic shoes of any type in order to process and recycle them. The material that is created from the recycled shoes is then used to help create sports surfaces, such as basketball courts, running tracks, and playgrounds.^[35]

Marketing strategy