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Nike, Inc. NYSE: NKE (pronounced /ˈnaɪki/ in America but usually /naɪk/ in the UK) is a major manufacturer of athletic shoes, apparel, and sports equipment, marketing its products under its own brand as well as Air Jordan, Nike Golf, Team Starter (among others), and under brands from wholly owned subsidiaries including Bauer, Cole Haan, Converse, and Hurley International.

The company takes its name from the Greek goddess of victory, Nike.

Corporate Influence

Nike's influences stretch from its production systems (although sometimes criticized) to fashions in themselves while along the way developing new technologies (gimmick and functional alike). Their advertisement campaigns often incorporate innovative sporting ideology, which often involve sponsored sports stars.

A lot of their consumer influences are gained by their multimillion-dollar sponsorship deals with athletes, leagues and federations, as well as many of the world's football (soccer) clubs and national teams, including Brazil, Portugal and Manchester United to produce their kits.

Timeline

The 1960s

  • 1962
    • Phil Knight drafts a thesis paper at Stanford University in which he asserts that low-priced athletic shoes made in Japan could compete with more expensive footwear made in Germany. After earning his MBA, Knight travels to Japan, where he meets with executives from Onitsuka Tiger and persuades them to make Knight's company, Blue Ribbon Sports, the distributor of Tiger brand footwear for the western United States.
  • 1964
    • Knight sends samples of Tigerfootwear to legendary University of Oregon track coach Bill Bowerman, for whom Knight ran middle distances while an undergraduate. Bowerman suggests that he and Knight become partners, with Bowerman to provide endorsement clout as well as footwear design ideas. The two shake hands and each pledge $500 to start the new venture.
  • 1965
    • Jeff Johnson, a former track rival of Knight's, joins as the company's first full-time salesman. He sells shoes out of the back of his van to high schoolers at track meets.
  • 1966
    • Johnson opens the company's first retail outlet in Santa Monica, California. Knight and Bowerman convert their handshake agreement into a formal, written agreement.
  • 1967
    • Knight and Bowerman incorporate Blue Ribbon Sports, creating BRS, Inc.
  • 1969
    • With annual sales approaching $300,000, Knight resigns as a professor at Portland State University to devote himself full-time to BRS, Inc.

The 1970s

  • 1970
    • Bowerman experiments with rubber spikes, pouring a liquid rubber compound into his wife's waffle iron, which led to the creation of the 'waffle' sole.
  • 1971
    • Knight begins development of a new athletic footwear brand. A graphic design student at Portland State University named Carolyn Davidson is hired by Knight to design the new brand, which is referred to as a Swoosh.
    • Along with the new brand, BRS, Inc. needs a name for its new line of footwear. Dozens of suggestions, including Knight's favorite "Dimension Six," are rejected until Jeff Johnson dreams up the name Nike, the Greek goddess of victory.
  • 1972
    • The first Nike products, adorned with the Swoosh, are delivered to athletes competing in Eugene, Oregon for the US Olympic Track & Field trials.
  • 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
    • The Air Force 1 basketball shoe becomes the first Nike court shoe to make use of the Air technology.
  • 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 was 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 time that a song performed by the Beatles was used in a TV ad.
  • 1988
    • Nike introduces its "Just Do It" slogan.

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 km
      ) of land.
  • 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.
  • 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 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
    • 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.
  • 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.
  • 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 $12.3 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.
  • 2005
    • Nike reports annual revenue for fiscal year 2005 (ending May 31) of $13.7 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.
  • 2006
    • William Perez left Nike voluntarily on January 23, 2005. 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.

Factory worker conditions

Nike has been criticised by some for using sweatshop labor in countries like 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. This criticism is reflected in the novel Jennifer Government, in which an amoral Nike executive is the story's villain.

The forced labor camp like conditions in some overseas production plants led to several called-for boycotts , together with coining the alternative name "swooshtika" for the company's swoosh logo.

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.

These campaigns have been taken up by many college campuses, especially free trade groups as well as the United Students Against Sweatshops.

Advertisement controversies

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, but the California Supreme Court overturned this ruling, claiming that the documents were commercial speech and therefore subject to false advertising laws. The United States Supreme Court agreed to review the case but eventually chose not to rule. The parties subsequently settled out of court before any finding on the accuracy of Nike's statements.

Beatles song

Nike has been a focus of criticism for their use of the Beatles song "Revolution" in a commercial, against the wishes of Apple Records, the Beatles' recording company. Nike reportedly 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 memorable 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 underground punk rock culture, 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 27th, 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.

Relationship with Beaverton

Nike's world headquarters are surrounded by 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 Portland metropolitan area, 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 km) 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.

The above article is licensed under the GNU Free Documentation License. From Wikipedia, the free encyclopedia http://en.wikipedia.org/wiki/Nike_Inc. 1/23/06 Modified by Apparel Search.

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