Nike Athletic Apparel Company Term Paper

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Nike apparel company is a steadfast company in the minds of most athletic gear and apparel consumers and in the industry as a whole, with substantial earnings growth even in the last few years of recession it has still managed to record substantial growth. The company has even coined household phrases like "Just Do It" a mark of American influence over the global market. Much of this success has long been attributed to the solid nature of its upper management, namely its long time CEO and co-founder Phillip H. Knight. Nike recently made international news when it announced the retirement of Knight to the press, which in the business world can mean at least short-term trouble. The announcement was made with less than sixty days to pass before what would call a revolutionary change for the company. Though Knight will stay on as Chairman of the board, his intention is to completely give up the CEO position this month, in fact December 28, 2004.

"Nike has enjoyed tremendous success as we have grown to become a $12-billion global company. As I've said many times over the past three years, Nike's current management team, led by Brand Presidents Charlie Denson and Mark Parker, is the strongest it's ever been. With Bill, we will become even stronger. I am confident that as CEO of Nike, Inc., Bill will lead Nike's extraordinary team of people to create an even bigger and better global company," Mr. Knight said.* (Nike 2004, Press Release Nike News Website)

The announcement of the new CEO was made relatively quickly after Knights announcement of his intentions to step down and on the whole marks a revolutionary period in company history, especially given its position as an evolutionary company, rather than a revolutionary one. William D. Perez, has been appointed the new CEO and will take office, as has been said before late December this year. The rather rapid announcement and appointment during the highest retail sales period of the year, surrounding the Christmas holiday, may have been made to decrease the short-term effects of such a bold transition for the company, but has likely been in the planning for months if not years. The announcement was also made strategically at the end of a substantial market growth period, announced in summer 2004. (PR Newswire June 2004 "Nike Reports Record Financial Results: Full Year Earnings Per Share Reach $3.51; Full Year Revenues Exceed $12 Billion; Worldwide Futures Orders Increase 10.7%.") His substantial retail market leadership over the past 30 years makes him a solid choice for the company. (Nike 2004, Press Release Nike News Website) Hopefully for the sake of the company he will prove a successful transition leader and continue to grow a company, with solid historical performance.

A lot has happened at Nike in the 30 years since we entered the industry, most of it good, some of it downright embarrassing. But through it all, we remain totally focused on creating performance opportunities for everyone who would benefit, and offering empowering messages for everyone who would listen. We feel lucky to have a genuine, altruistic reason to be: the service of human potential. That's the great benefit of sports, and we're glad to be in the middle of it. (Nike 2004 Company Overview Website )

Nike has recently merged with or more specifically acquired several other companies, in the industry and has become an even larger global competitor in the market, Converse, Cole Haan, Bauer, and Freedom of Choice, most notably, yet has maintained an overall company philosophy with a higher purpose. Nike has also created several independent brands under the umbrella of Nike, that run as semi-independent labels. (Nike 2004 Company Overview Website )

What started with a handshake between two running geeks in sleepy Eugene, Oregon, is now the world's most competitive sports and fitness company. The World Headquarters is in Beaverton, Oregon. The Pacific Northwest is Nike's hometown, but like so many ambitious souls, we have expanded our horizons to every corner of the world. Nike employs around 23,000 people, and every one of them is significant to our mission of bringing inspiration and innovation to every athlete in the world. (Nike 2004 Company Overview Website )

The embarrassments along the way, spoken of by the company spokesman is alluding to the international scandal recently weathered by Nike in the wake of accusations of international labor abuses in developing nations, which Nike has done a great deal to recover from and in word and deed change. A recent company statement reflects the lasting effects of these accusations as it has now become a core philosophy at Nike to do good business and curtail exploitation of labor, by itself and its subsidiary companies.

As small as we feel, the Nike family is a fairly vast enterprise. We operate on six continents. Our suppliers, shippers, retailers and service providers employ close to 1 million people. The diversity inherent in such size is helping Nike evolve its role as a global company. We see a bigger picture today than when we started, one that includes building sustainable business with sound labor practices. We retain the zeal of youth yet act on our responsibilities as a global corporate citizen. (Nike 2004 Company Overview Website)

According to CEO, Knight at the time the reputation of Nike as a global bad guy was swift and substantial, and the intention to change seemed just as swift in the wks of international and national consumer maligning. Once Knight had observed the situation this is what he had to say, candidly about the results to the company, when the scandal aired.

"It has been said that Nike has single-handedly lowered the human rights standards for the sole purpose of maximizing profits," he said. "The Nike product has become synonymous with slave wages, forced overtime, and arbitrary abuse. I truly believe that the American consumer does not want to buy products made in abusive conditions." Go for it, Phil. (Dionne 7)

The scandal which broke in 1997 at the height of one of Nike's biggest selling boosts during the NBA playoffs in 1997, rocked the industry and made many manufacturers, especially of apparel, scramble for cover. (Haley) Nike was quick to respond with the intentions of not only saving face but changing the way they do business, and hopefully pressuring others to do the same.

Consumers and workers of the world, unite - Just do it! If you do, you can affect the behavior of manufacturing giants such as Nike, for whom image is everything. Nike Inc.'s announcement last month that it would raise the minimum age for its workers and impose American air quality standards on its plants overseas marks a breakthrough for American and international human rights campaigners who have argued that basic liberties shouldn't stop at the factory door. It turns out that public shaming and consumer pressure can have a mighty impact on mighty manufacturers. (Dionne 7)

Nike has shown progress in many areas, not limited to the diversity of its product line, which has evolved substantially over the last 10-15 years. The company began as a retailer and manufacturer of athletic shoes alone, and now provides a huge portion of the worlds, athletic apparel. Nike has only a few brand competitors in the market and frequently releases news-worthy product lines into the marketplace. They were one of the first to offer name recognition brands for individual sports stars, such as Michael Jordan, a trend which has yet to be equaled by any other company, regardless of signing sponsorship, the Jordan's name became inextricably associated with Nike, and even spun off its own Air Jordan label, proving it not to be a one hit wonder for the company. The most recent attention on female athlete has led to the recent signing of rising tennis star Serena Williams, who has made a 40 million dollar deal with Nike to represent them as sponsors and also design a line of apparel with them.(Brown 26)

Serena Williams aces Nike deal worth approximately $40 million. The five-year endorsement deal makes the tennis star one of the highest-paid female athletes in the world. Incentives and promotions, as well as a contract extension, could push her earnings over $50 million, Williams, who has won 23 singles championships and 11 doubles titles worldwide, will work closely with Nike's team of experts to design and create a tennis shoe and apparel. (Brown 26)

The recent trend for sponsorship and collective national pride for women athletes has been a part of the evolutionary stand of Nike as they have embraced the female athlete significantly, even though their initial work was almost exclusively based upon the machismo male athlete. The emphasis on new avenues and funding fro female sports was both bolstered and in a sense created by Nike, who began trans-gendered marketing concepts rather earlier than many other companies, even those who were more female oriented in nature, such as Adidas and New Balance. The adds and concepts…[continue]

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