SECOND SHORT CASE REPORT
NIKE & ITS PROBLEMATIC SITUATION
Rise of Nike
Nike was founded over 30 years ago by Bill Bowerman, a former college track coach, and Phil Knight, an entrepreneur. At the beginning the two men were selling shoes out of the back of their cars at track meets. In 1987, Nike reached a turning point, and it increased its marketing budget from $8 million to $48 million. Most of this advertising budget was to pay celebrities, such as Michael Jordan, to endorse Nike Products. The shoes were marketed more unique and better than the rest of their competitors’ shoes. This caused rapid growth and its revenues hit $9.6 billion in 1998. Slight Decline
Although revenues were very high in 1998, sales began to fall. Inventory began to build up in stores and warehouses, and it became harder for Nike's designers to make shoes that were perceived as significantly better. This caused Phil Knight, who had been resigned, to take control of the company once again and lead the company to change its business strategies in some fundamental ways.
In the case, Nike stated that publicizing the qualities of its shoes through dramatic “guerrilla” marketing was one of its key functional strategies. Nike took a unique marketing strategy that raised the awareness, and eventually the value of the shoes by having famous and iconic sports superstars wearing its shoes. It is common for consumers to want to emulate their personal heroes, and Nike took advantage of that fact. Nike then advertised its products as premium products and was able to charge a premium price. Innovation
Nike started its first product line focusing on track and field. In a sport where seconds and even factions of a second matters, better equipment can be vital. Mr. Bowerman saw this advantaged and capitalized by inventing a shoe that would enhance traction and speed of the runners. Nike then took this same type of strategy...