Careers at Nike
Nike’s mission is to bring inspiration and innovation to every athlete in the world.
Nike is a producer of athletic footwear, apparel, equipment, accessories, and services. The company operates six reportable segments based on geography: North America, Western Europe, Central & Eastern Europe, Greater China, Japan, and Emerging Markets.
In 1962 Stanford Business School graduate Philip H. Knight was traveling through Japan when he took a liking to the athletic shoes he saw there. He contacted a Japanese shoe manufacturer, Onitsuka Tiger Co., and convinced it to import some of its products to the U.S. He believed that the running shoes could challenge the dominance of German-made counterparts in America. The businessman founded the company Blue Ribbon Sports (BRS) to oversee the distribution of the products.
In 1963 Knight received 200 pairs of Onitsuka’s Tiger athletic shoes. He kept them in his father’s basement and sold them at track meets in the neighborhood. His business became a partnership when his old track and field coach, William Bowerman, invested $500 in the venture. Bowerman had spent much time studying new designs for running shoes. When BRS began designing prototypes, he used his knowledge (along with insights from runners) to make enhancements.
BRS got off to a strong start, selling 1,300 pairs in 1964, and acquired its first retail space in 1966. Bowerman’s expertise paid off when a shoe he designed called the Cortez became a top seller in 1968. He continued developing innovative products, including a shoe with a nylon upper portion and a shoe that had a cushioned midsole through its entire length. By the end of the decade, Knight’s operation had expanded to 20 employees and many stores, with annual sales approaching $300,000.
In 1971, with financing from a trading firm, BRS began using independent contractors to manufacture a line of products. The company chose a swoosh symbol as its logo and gave it the name Nike, after the Greek goddess of victory. One year later, BRS separated from Onitsuka following a distribution disagreement. With a fresh start, it began marketing the new line at the 1972 Olympic trials as a shoe for serious athletes. It also created a promotional tagline, “There is no finish line.”
The new offering was a major success. In their first year, the products generated $1.96 million in revenues, enabling staff and store expansion to Canada (its first foreign market) and Australia. The next few years saw major milestones. BRS opened its first U.S. plant in New Hampshire. Its shoes were worn by numerous athletic stars at the 1976 Olympic trials. In 1978, it added a childrens’ line, and officially changed its name to Nike. The firm’s success enabled it to go public in 1980.
Benefits at Nike
Business model of Nike
Nike has a mass market business model, with no significant differentiation between customers. The company targets its offerings at any consumer who is interested in athletic footwear and apparel.
Nike offers four primary value propositions: accessibility, innovation, customization, and brand/status.
The company creates accessibility by offering a wide variety of options. It has acquired numerous footwear and apparel firms since its founding, including Converse and Hurley International. These actions have enabled it to expand its product lines, giving consumers more to choose from.
The company places a strong emphasis on innovation. It maintains the Nike Explore Team Sport Research Lab at its headquarters, a research facility focused on designing cutting-edge products. It also operates the Nike Advanced Product Creation Center, focused on technology incorporation.
The company enables customization through its service NikeID. It allows customers to personalize various aspects of their shoes, including sport style, traction, and colors. Socks can also be tailored.
The company has established a strong brand as a result of its success. It is the top seller of athletic footwear and apparel globally. It has partnered with several of the world’s leading athletes to promote its products, including Michael Jordan, Cristiano Ronaldo, and Tiger Woods. Lastly, the company has won many honors, including recognition as the “World’s Most Innovative Company“ by Fast Company (2013) and the “Most Admired Company in America“ for apparel three years in a row.
Nike’s main channel is physical retail stores, including its Nike-branded stores. It also acquires customers through its website and a combination of independent distributors and licensees worldwide. The company promotes its offering through its social media pages, online/print/TV advertising, brand events, and sponsorships of athletes and professional/college sports teams.
Nike’s customer relationship is primarily of a self-service nature. Customers use its products while having limited interaction with employees. The company’s website provides answers to frequently asked questions. That said, there is a personal assistance component in the form of phone, e-mail, and live chat support.
Nike’s business model entails designing and developing its products for customers.
Nike utilizes independent contractors for manufacturing purposes. The items are produced in 146 footwear factories located primarily in Vietnam, China, and India, as well as 408 apparel factories located mostly in China, Vietnam, Sri Lanka, Thailand, Indonesia, Malaysia, and Cambodia.
The company’s aforementioned Nike Explore Team Sport Research Lab maintains research partnerships with several leading universities and institutions in North America, Europe, and Asia. The alliances provide it with access to top athletes as well as cutting-edge science findings.
Nike’s main resources are its physical and human resources. Its Nike Explore Team Sport Research Lab, which creates innovations, has state-of-the-art research equipment. It also features over 40 researchers, many of whom have earned Master’s degrees and doctorates in various disciplines including biomedical engineering, biomechanics, kinesiology, mechanical engineering, physics, physiology, and systems science. The company maintains advisory boards and research committees consisting of athletes, trainers, coaches, orthopedists, podiatrists, equipment managers, and other experts who provide guidance in the product design and development process. Nike has five distribution centers in Memphis, TN as well as centers in California. Lastly, it places a high priority on its intellectual property, maintaining the third-largest design patent portfolio in the U.S.
Nike has a value-driven structure, aiming to provide a premium proposition through frequent enhancements to its products. Its biggest cost driver is cost of sales, a variable expense that primarily includes inventory and warehousing costs. Other major drivers are in the areas of overhead, sales/marketing, and administration, all fixed costs.
Nike has one revenue stream: sales of its athletic footwear, apparel, equipment, and accessories.
info: Philip earned a Bachelor’s degree at the University of Oregon and an MBA at Stanford Business School. He previously served as President of Nike, as a CPA at PricewaterhouseCoopers & Lybrand, and as a professor at Portland State University.
info: Mark earned a B.S in Political Science from Pennsylvania State University. He previously held numerous executive roles at Nike, including Vice President of Global Footwear, Vice President of Consumer Product Marketing, and Co-President of the Nike Brand.
info: Andy earned an MBA from UCLA and a J.D. and LL.M. in Taxation from the University of San Diego School of Law. He previously served as SVP of Strategy, Finance, and Investor Relations and as VP of Global Planning and Development at Nike.
info: Hilary earned a B.A. at Stanford University and a law degree from The University of Chicago Law School. She previously served as SVP, General Counsel and Corporate Affairs at Levi Strauss.
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