Phil Knight Managing Nike's Trasformation

Topics: Decision making, Management, Decision theory Pages: 4 (1254 words) Published: March 12, 2008
In 1983 Phil Knight decided to leave the company in Woodell's hands. That was because Knight had to work on a manufacturing project in China. In 1893 NIKE was a successful firm; they had 34% of the market share and their sales were growing constantly, from $14.1 million in 1976 to $867.2 million in 1983 (Exhibit 1, Phil Knight: CEO at NIKE). Woodell had been worked for NIKE since 1967 as the World Wide Marketing Director. He deeply knew the company culture and Knight line of conduct. He seemed to be the natural Knight's successor.

Question 1

When Knight left NIKE, the company had to face its first big transition; NIKE had to survive without its CEO and founder. In order to avoid confusion into the company, knight thought Woodell was the right person to run the company, however in less than one year NIKE had to face its biggest crisis. At the beginning Woodell thought to run the company as Knight had done since then, basically his policy was "to get done the things that needed to get done". However NIKE was not the perfect company it seemed; there were a number of problems. In his first half as CEO, Woodell decided to focus his attentions on some of the most significant problems: NIKE's brand softness, inventory issues, managing people. Another important issue that Woodell had to face was to decide how to deal with the new segment of aerobics. NIKE was not fast enough to compete with Reebok in this new sector: while NIKE was designing a new prototype of a aerobics shoe, Reebok was already offering to women models. Moreover NIKE's prototype was not even adequate to NIKE's quality standards. This was the first mistake Woodell made; he should either immediately enter the new segment, take time to design a high quality aerobic shoe, or just ignore this new segment. However, the biggest problems that Woodell had to face were the excessive inventory, between January and March 1983 NIKE over-built 2 million pairs per month, and his relationship with the company's...
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