Nike’s Core Competency:The Risky Business of Fairy Tales
WITH ANNUAL REVENUES doubling during the last decade to over $25 billion and having a globally recognized brand, Nike is the undisputed leader in the athletic shoe and apparel industry. The number two adidas has some $15 billion in sales, while recent entrant Under Armour reports revenues of less than $1 billion. Nike is tremendously successful, holding
close to a 60 percent market share in running and nearly a 90 percent market share in basketball. The Beaverton, Oregon, company has come a long way from its humble beginnings. It was founded by University of Oregon track and field coach Bill Bowerman and middle-distance runner Phil Knight in 1964 originally as Blue Ribbon Sports. In 1971, the
company was renamed Nike (the “goddess of victory” in Greek mythology) and the now iconic “swoosh”
was designed by a Portland State University student. Coach Bowerman was a true innovator because he constantly sought ways to give his athletes a competitive edge. He experimented with many factors affecting running performance, from different track surfaces to rehydration drinks. Coach Bowerman’s biggest focus, however, was on providing a better running shoe for his athletes. While sitting at the breakfast table one Sunday morning and absentmindedly looking at his waffle iron, Coach Bowerman had an epiphany. He began pouring hot, liquid urethane into the waffle iron—ruining it in the process—but coming up with the now famous waffle-type sole that not only provided better traction but was also lighter than traditional running shoes.