How Phil Knight created a $33 Billion Sportswear Empire?

Nike is now the world’s largest sportswear brand with nearly $45 billion in revenue in 2021. The Nike brand overall is valued at $33 Billion! It is a top 50 brand in the world in terms of market capitalization. The swoosh logo, and the ‘Just do it' tagline are instantly recognizable. It is a brand that does not shy away from making a stand on world issues. Nike has created many emotional, inspiring, and viral commercials that have boosted its sales and influenced mainstream culture. Its endorsements of world champions Michael Jordan, Tiger Woods and Serena Williams were bold deals that have greatly paid off.

But just 58 years ago, this was not the case. Nike was founded only in 1964. Compare this with Puma, founded in 1948; Adidas founded in 1949 and Reebok, founded in 1958. It were these brands that were dominating the North American sportswear market before the advent of Nike. Let's look at how the new kid on the block 'Nike' dethroned these brands and became the most iconic and valuable sportswear brand of the modern era.

Phil Knight was born in 1938 in Portland, USA. Knight attended the University of Oregon and became a part of the Oregon track team. Here he met Bill Bowerman, who coached the team. Later, Knight studied for his MBA at the Stanford University. The first incarnation of ‘Nike’ was drafted up during a class assignment. Until this point, German sportswear companies dominated the US Sportswear market. But, Phil envisioned Japanese products being able to replace that just like they did with the Camera industry.

To put this plan in action, Phil Knight travelled to Japan, met the Executives of Onitsuka, and managed to secure a distribution deal with them. The idea was to buy at a lower price point from the Japanese brand and sell it at a higher price point in the US. Phil reached out to his former coach Bill Bowerman and the 2 of them started the business initially known as ‘Blue Ribbon Sports’ in 1964. The company made revenues of $8,000 and $20,000 in their 1st 2 years of business. In 1966 they expanded from Oregon to California and then in 1967 into Massachusetts. By 1971, the relationship between Blue Ribbon and Onitsuka Tiger came to an end.

In that same year Blue Ribbon wanted to evolve from being a shoe trading company to a shoe manufacturing company. Nike, the name of the Greek Goddess of victory, was recommended by Jeff Johnson, a marketing executive. The swoosh logo was designed by Carolyn Davidson.

We all know that Nike has created some of the most memorable ads of all time. They did this by partnering with Advertising agencies such as John Brown and Partners and then Wieden + Kennedy. Dan Wieden co-founder of Wieden Kennedy came up with the slogan ‘Just Do it’.

By 1980, 50% of the US Athletic shoe market share belonged to Nike. In the 1980s, Nike expanded beyond the Running market into other major sports, and they also began tapping other regions beyond North America.

Phil Knight recognized the value of celebrity. He realized that superstar athletes held as much attention, if not more, as Rockstar musicians. So he began recruiting athletes who showed a lot of promise to become Nike Athletes. One such athlete was Michael Jordan. Jordan was just a rookie when the Nike deal was made. It was a massive bet from Nike’s part – but one which eventually transformed into a $3 Billion Air Jordan brand which is still one of the most iconic brands of all time. The Air Jordans helped establish the sneakerhead culture globally, and athletic shoes and apparel became part of mainstream fashion.

At this time, the Hip Hop revolution too was sweeping through North America. Nike was able to capture this market too. Staying ahead and capitalizing on trends has been a trade mark of Nike. Despite many challenges the company faced, from backlash received for its controversial advertising to accusations of running sweatshops in South East Asia, Nike has remained resilient and has been moving steadily towards hitting $50 Billion annual revenue quite soon.