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Early Career: 2. Philip Hampson "Phil" Knight (Born February 24, 1938) Is An American Business Magnate

Philip Knight co-founded Nike and served as its CEO. He discovered Tiger brand running shoes while traveling in Japan and partnered with his former track coach Bill Bowerman to form Blue Ribbon Sports, which later became Nike. Under Knight's leadership, Nike grew to become a hugely successful global brand known for its innovative shoes, iconic partnerships with athletes, and powerful marketing. However, Nike has also faced criticism over labor issues and lawsuits alleging gender discrimination.

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119 views3 pages

Early Career: 2. Philip Hampson "Phil" Knight (Born February 24, 1938) Is An American Business Magnate

Philip Knight co-founded Nike and served as its CEO. He discovered Tiger brand running shoes while traveling in Japan and partnered with his former track coach Bill Bowerman to form Blue Ribbon Sports, which later became Nike. Under Knight's leadership, Nike grew to become a hugely successful global brand known for its innovative shoes, iconic partnerships with athletes, and powerful marketing. However, Nike has also faced criticism over labor issues and lawsuits alleging gender discrimination.

Uploaded by

Samuel Debebe
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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2. Philip Hampson “Phil” Knight (born February 24, 1938) is an American business magnate.

A native of Oregon, he is the co-founder of Nike, Inc., and previously served as the chairman
and chief executive officer of Nike.[2] In 2014, Forbes named Knight the 43rd richest person in
the world, with an estimated net worth of US$22.3 billion.[3] He is also the owner of the stop
motion film production company Laika.

A graduate of the University of Oregon and Stanford Graduate School of Business (Stanford
GSB), he has donated hundreds of millions of dollars to both schools; Knight gave the largest
donation in history at the time to Stanford’s business school in 2006. A native Oregonian, he ran
track under coach Bill Bowerman at the University of Oregon, with whom he would co-found
Nike.

Early career

Before the Blue Ribbon Sports business that would later become Nike flourished, Knight was a
Certified Public Accountant (CPA), firstly with Price Waterhouse, and then Coopers & Lybrand.
Knight then became an assistant professor of business administration atPortland State University
(PSU).[9]

Nike

Immediately after graduating from the University of Oregon, Knight enlisted in the Army and
served one year on active duty and seven years in the Army Reserve.[4] After the year of active
duty, he enrolled at Stanford Graduate School of Business.[4] In Frank Shallenberger’s Small
Business class, Knight developed a love affair with something besides sports — he discovered he
was an entrepreneur. Knight recalls in a Stanford Magazine article:[4] “That class was an ‘aha!’
moment … Shallenberger defined the type of person who was an entrepreneur–and I realized he
was talking to me. I remember after saying to myself: ‘This is really what I would like to do.’ ”
In this class, Knight needed to create a business plan. His paper, “Can Japanese Sports Shoes Do
to German Sports Shoes What Japanese Cameras Did to German Cameras?,” essentially was the
premise to his foray into selling running shoes. He graduated with a master’s degree in business
administration from the school in 1962.[4]

Knight set out on a trip around the world after graduation, during which he made a stop in Kobe,
Japan, in November 1962. It was there he discovered the Tiger-brand running shoes,
manufactured in Kobe by the Onitsuka Co. So impressed was he with the quality and low cost,
Knight made a cold call on Mr. Onitsuka, who agreed to meet with him. By the end of the
meeting, Knight had secured Tiger distribution rights for the western United States.[10]

The first Tiger samples would take more than a year to be shipped to Knight, during which time
he found a job as an accountant in Portland. When Knight finally received the shoe samples, he
mailed two pairs to Bowerman at UO, hoping to gain both a sale and an influential endorsement.
To Knight’s surprise, Bowerman not only ordered the Tiger shoes, but also offered to become a
partner with Knight and provide product design ideas. The two men agreed to a partnership by
handshake on January 25, 1964, the birth date of Blue Ribbon Sports, the company name that
would later be transformed into Nike.[11]

Nike’s Strengths – Internal Strategic Factors


1. Strong Brand Awareness – Nike is one of the most recognizable brands in the world as
its name alone is memorable, easy to pronounce, and very unique. Its swoosh symbol is
easily recognized by everyone. Nike has captured approx. 31% of the global athletic
footwear market.
2. Huge Customer base – Nike has millions of customer from around the world who
loyally follow Nike’s trends, participate in Nike events, and even provide customer
feedback. Due to its huge customer base, Nike’s market cap has grown to $115.19 billion
as of 2018.
3. Aimed For Sustainability – Nike’s CEO Mark Parker has addressed that they will
continue to acknowledge the environmental issues in the communities. The CEO ensures
that Nike will help to contribute in finding a solution against these environmental issues.
4. Iconic Relationships – Nike’s long-term partnership with Michael Jordan has proved to
be beneficial in terms of sales for the company. Their collaboration resulted in “Air
Jordan 1 Shoes”. Additionally, Nike teamed up with the famous basketball player to
help design the “Air Jordan 1 Shoes”.
5. Side Brands – Nike’s ability to maintain and enhance its side brands has enabled it to
enjoy unparalleled success for decades.
6. Low Manufacturing Cost – Most of Nike’s footwear is manufactured in foreign
countries. In the year 2018, Vietnam produced 47%, China produced 26%, and Indonesia
produced 21% of total Nike’s footwear. Other operations are in Argentina, Brazil, India,
Italy, and Mexico.
7. In-house Professionals – Nike has a team of professionals that design its shoes and other
athletic accessories. Nike believes that their business has flourished due to the thorough
research that is conducted for each product.
8. Superior Marketing Capabilities – Nike has excellent marketing campaigns. The brand
heavily relies on digital marketing. In the year 2016 and 2017, Nike spent $3.2 and $3.3
billion respectively. The brand has successfully utilized social media and marketing
campaigns to target more customers.

Nike’s Weaknesses – Internal Strategic Factors


1. Poor Labor Conditions in Foreign Countries – In the last 20 years, Nike has been
consistently targeted regarding their poor labor conditions. These issues include child
labor, low wages, and horrific working conditions that were deemed “unsafe”.
2. Retailers Have a Stronger Hold – Nike’s retail sector makes Nike weak due to its
sensitivity against pricing. About 60-70 % of Nike’s stocks are sold directly to retailers.
With retailers serving as their core customers, Nike does not put up a fight against their
pricing structures whatsoever.
3. Pending Debts – Although Nike’s income statements prove to be prosperous, a quick
glance at their balance sheet could paint a different picture. Nike is still facing financial
threats. Currently, they have a total debt of $3.49 billion.
4. Dependency on US Market – Even after having established itself globally, Nike still
relies on the U.S Market in terms of sales and revenue. In the year 2018, about 42% of
Nike’s sales came from the U.S, while the rest of 58% came globally. Despite its fame,
Nike depends on the U.S for substantial sales and growth.
5. Lawsuits: Four former female Nike employees filed a class-action lawsuit against the
company in August 2018. According to these women, Nike has a toxic company culture
for women. The women filed their case against the sportswear company claiming that the
company violated the Equal Pay Act. The women said the company engaged in
systematic gender pay bias where men were paid more than women for the same amount
of work.

3. Having navigated the expansion stage of the business lifecycle successfully, your company should
now be seeing stable profits year-on-year. While some companies continue to grow the top line
at a decent pace, others struggle to enjoy those same high growth rates.

It could be said that entrepreneurs here are faced with two choices: push for further expansion, or
exit the business. If you decide to expand further, you will need to ask yourself the same
questions you did at the expansion stage: Can the business sustain further growth? Are there
enough opportunities out there for expansion? Is your business financially stable enough to cover
an unsuccessful attempt at expansion?

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