Nike (856 words) Essay

In 1958 the beginning of NIKE
Inc. came about when Coach Bill Bowermen and business student Phil Knight, both
from the University of Oregon, felt the need for a better athletic shoe. Through
Bowermen’s athletic experience and Knight’s business background they
designed and tried to sell their model of the perfect running shoe. None of the
major companies trusted the engineering or demand for the new sneaker and
therefore would not manufacture the item. In 1964 Bowerman and Knight used their
own money to start Blue Ribbon Sports company. They convinced Onitsoda Tiger to
manufacture their sneakers, which they sold from their cars at track meets. Four
years later Blue Ribbon Sports was changed to, the now famous, NIKE, which was
named for the Greek Goddess of victory. In that same year, the NIKE
“swoosh” logo was designed by Carolyn Davidson, for which she was then
paid only $35. The time came when the owners decided that NIKE could survive on
its own. NIKE separated itself from Onitsoka Tiger in 1972. It was in this year
that NIKE convinced Olympic marathon runners to wear NIKE sneakers for their
Olympic event. Later, NIKE was able to brag that their sneakers won four of the
top seven places in this event. The following year, NIKE designed the waffle
sole sneaker which was worn by elite runners around the world. The 1980’s led
to a new era of NIKE sneakers. The popularity of running was declining rapidly
and, therefore, NIKE expanded into a new domain. With endorsements by Michael
Jordan and other professional athletes, new lines of sneakers, such as Air
Jordan’s and the Cross Trainer, became available in the market. One of the
most influential advertising schemes for NIKE Inc. was the “Just Do
It” campaign which took effect in 1988. In the turn of the next decade,
NIKE began to expand to more than just sneakers. In 1992, the first two NIKE
concept shops were created, including Niketown. In the mid ?90’s, NIKE
gained permission to print their logos on NFL uniforms, in addition to soccer
and golf becoming another money market. NIKE is now international with seven
Niketowns in the US, plus one in the UK, Germany, and Japan. Products/Services
NIKE Inc. produces a wide variety of sporting footwear and apparel. The company
places a large emphasis on the quality and innovative design of their products.

As of 1993, the top-selling products were shoes manufactured for Basketball,
Fitness, running, and children. However, the company also markets products for
tennis, golf, soccer, baseball, football, cycling, volleyball, wrestling,
cheerleading, aquatic activities and outdoor athletic and recreational use. In
addition Company often markets footwear, apparel and accessories in
“collections” of similar design or for specific purpose. Athletic
shoes are not NIKE’s sale investment. NIKE Inc. also sells several products
under different names. They sell a line of casual footwear and apparel under the
names of “i.e.” and Cole Haan. In 1993, the company acquired Sports
Specialties, Inc. which markets head wear. Nike also sells plastic products to
other manufactures through its wholly-owned subsidiary, Tetra Plastics, Inc.

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Message to Stock Holders NIKE believes that each sport requires different
athletic equipment, especially shoes. Although NIKE expects to come out on top
of the market, the Company expects a few hard tasks necessary to overcome in the
upcoming year. The economic atmosphere in Western Europe is the worst in
NIKE’s 13 years. They are establishing their first real “futures”
program like the one currently in the US. It is designed to improve the long
term profitability of the company and of cooperating retailers. The Company is
very excited about reaching their $1 billion point abroad. Domestically, total
revenues grew over $4 billion over the past six years. The Company has two main
goals for next year. First, they want to get the whole international division
positioned so it can resume faster growth once the underlying economies improve.

Second, they need to keep growth, albeit single-digit growth, increasing for the
NIKE brand in the US. They believe that there is a lot of upside potential in
both the US and abroad and the management understands that it is their
responsibility to reach this potential. They are committed to making
improvements in both their products and policies, and maximizing growth.

Financial Condition For the sixth consecutive year, NIKE Inc. set new records in
revenues and net income in fiscal 1993. “Consolidated revenues rose $526
million to $3.9 billion, an increase of 15% over the industry record $3.4
billion also set by NIKE in 1992 and an increase of 31% over the 1991
record.” During the six year period, revenues have increased 348%.

International revenues now represent 36% of consolidated revenues, growing 24%
over 1992 and 63% over 1991. The revenues have increased 495% during this six
year period. Consolidated net income increased 11% over 1992 and 27% over 1991
in this period. The Company surpassed the $2 billion level in total assets for
the first time during the fiscal year 1993. The $1 billion mark was achieved in
1990 and during the six year period referred to above, total assets have
increased 917%. Stock as an Investment In my opinion, NIKE would be a good
investment. NIKE Inc., is internationally known and is a stable company always
on the up rise. As with all companies, objectives cannot be obtained smoothly.

There will be some ups and downs, but the upside growth potential in the common
stock is very probable.


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