Nike, Inc

(Group 7)

A Case Analysis
Presented to
The College of Business
Business Administration Department
Adventist University of the Philippines
Silang, Cavite

In Partial Fulfillment
Of the Requirements in
Organizational Development
(MB MACALALAD)

By
Muya, Jairus
Padayhag, Daniel
Paz, Shaina

Raz, Donna

I.
II.

Time Context
February 23, 2016
Background
Nike, Inc. is an American multinational corporation that is engaged in the design,
development, manufacturing and worldwide marketing and sales of footwear,
apparel, equipment, accessories and services. The company is headquartered
near Beaverton, Oregon, in the Portland metropolitan area. It is one of the world's
largest suppliers of athletic shoes and apparel and a major manufacturer of sports
equipment, with revenue in excess of US$24.1 billion in its fiscal year 2012 (ending
May 31, 2012). As of 2012, it employed more than 44,000 people worldwide. In 2014
the brand alone was valued at $19 billion, making it the most valuable brand among
sports businesses.
The company was founded on January 25, 1964, as Blue Ribbon Sports, by Bill
Bowerman and Phil Knight, and officially became Nike, Inc. on May 30, 1971. 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 Blazers, Air Force 1, Nike Dunk, Air Max, Foamposite, Nike
Skateboarding,

and

subsidiaries

including

Brand

Jordan, Hurley

International and Converse. Nike also owned Bauer Hockey (later renamed Nike
Bauer) between 1995 and 2008, and previously owned Cole Haan and Umbro. 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.

III.

Viewpoint
On December 28, 2004, Perez succeeded Phil Knight as CEO of Nike, Inc. and
served from December 2004 until his announcement on January 23, 2006 that he was
resigning from Nike due to disagreements with Knight over how to run the company.
Philip Hampson "Phil" Knight is an American business magnate and philanthropist. A
native of Oregon, he is the co-founder and chairman of Nike, Inc., and previously
served as CEO of the company.

IV.

Problem
1. Main Problem
-

Perez and Knight had disagreements on how to run the company.

2. Secondary Problem
3. Issues
- Numerous executives including Parker and Denson, the two Nike lifers
who competed for the CEO spot before Knight decided to go with Perez
had problems with Perez doing his job as the appointed CEO.
V.

Objectives
-

VI.

Facts of the Case

- Phil Knight made a bad decision on appointing Perez as his successor.

VII.

SWOT Analysis
A. Strengths- Nike is a very competitive organization. Phil Knight (Founder
and CEO) is often quoted as saying that Business is war without bullets.
Nike has a healthy dislike of is competitors. At the Atlanta Olympics, Reebok

went to the expense of sponsoring the games. Nike did not. However Nike
sponsored the top athletes and gained valuable coverage.
B. Weaknesses- The organization does have a diversified range of sports
products. However, the income of the business is still heavily dependent
upon its share of the footwear market. This may leave it vulnerable if for any
reason its market share erodes.
C. Opportunities- Product development offers Nike many opportunities. The
brand is fiercely defended by its owners whom truly believe that Nike is not
a fashion brand. However, like it or not, consumers that wear Nike product
do not always buy it to participate in sport. Some would argue that in youth
culture especially, Nike is a fashion brand. This creates its own opportunities,
since product could become unfashionable before it wears out i.e. consumers
need to replace shoes.
D. Threats- The market for sports shoes and garments is very competitive. The
model developed by Phil Knight in his Stamford Business School days (high
value branded product manufactured at a low cost) is now commonly used
and to an extent is no longer a basis for sustainable competitive advantage.
Competitors are developing alternative brands to take away Nikes market
share.