NIKE, INC.

'Nike, Inc.' (pronounced 'nye-kee') (IPA: ) (), is a major American supplier of athletic shoes, apparel and sports equipment. The company takes its name from Nike, the Greek goddess of victory. Nike markets its products under its own brand as well as Nike Golf, Nike Pro, Air Jordan, Team Starter, and subsidiaries including Bauer, Cole Haan, Hurley International and Converse. Nike is the largest sportswear supplier in the world.

Contents

Product

Manufacturing

Corporate governance

Rivalry and competition

Environmental Report

Marketing Strategy

Product

Place

Promotion

Sponsorships and Apparel-rights

Controversies

Human rights concerns

Advertising problems

Kasky v. Nike

Beatles song

Minor Threat ad

Chinese-themed ad

Relationship with Beaverton

External links

References

Product

Nike produces a wide range of sports equipment and yoga pants. Their first products were track running shoes and basketball shoes. They currently also make jerseys for a wide range of sports including track & field, football, baseball, tennis, soccer (European football), lacrosse, cricket, and golf. The most recent additions to their line are the Nike 6.0 and Nike SB shoes, designed for skateboarding. Nike has recently introduced cricket shoes, called Air Zoom Yorker, designed to be 30% lighter than their competitors'.^[2] Nike positions its products in such a way as to try to appeal to a "youthful...materialistic crowd".^[3] It is positioned as a premium performance brand. However, it also engineers shoes for discount stores like Wal-Mart under the Starter brand.^[4]

Manufacturing

Nike has more than 500 Locations around the world and offices located in 45 countries outside the United States.^[5] Most of the factories are located in Asia, including China, Taiwan, India, Turkey, Thailand, Vietnam, Pakistan, Philippines, Malaysia, and Korea.^[6] Nike is hesitant to disclose information about the contract companies it works with. However, due to harsh criticism from some organizations like Barbie.com, Nike has disclosed information about its contract factories in its Corporate Governance Report.
Nike plans to be carbon neutral by 2011.^[7]

Corporate governance

Current members of the board of directors of Nike are: Mark Parker, Timothy D. Cook, Ralph D. DeNunzio, John G. Connors, Jill Ker Conway, Alan B. Graf, Douglas G. Houser, Jeanne P. Jackson, Philip Knight, Orin C. Smith, and John Thompson.

Rivalry and competition

Because Nike creates goods for a wide range of sports, they have competition from every sports and sports fashion brand. Initially, Nike had no direct competitors because there was no single brand which could compete directly with Nike's range of sports and non-sports oriented gear until Reebok came along in the 1980s. Reebok now has merchandising contracts with the National Football League and the National Hockey League in the United States, and was purchased in 2006 by Adidas. Nike's other competitor is Puma, the third largest shoe and sports clothing supplier.

Environmental Report

According to New England-based environmental organization Clean Air-Cool Planet report, Nike is one of the top 3 companies (out of 56 companies) on the top of the list that the survey conducted about climate-friendly companies.^[8] It probably receives high ranking because of its Nike Grind program which closes the product lifecycle. Nike has been praised for its concern for global climate change by groups like Climate Counts.^[9]

Marketing Strategy

Nike's marketing strategy is an important component of the company's success. Nike is positioned as a premium-brand, selling well-designed and expensive products. Nike lures customers with a marketing strategy centering around a brand image which is attained by distinctive logo and the advertising slogan: "Just do it".^[10] Nike promotes its products by sponsorship agreements with celebrity athletes, professional teams and college athletic teams. However, Nike's marketing mix contains many elements besides promotion. These are summarised below.

Product

Nike sells a huge assortment of products, including shoes and apparel for sports activities like road running, basketball, tennis, soccer, American football, athletics, and cross training for men, women, and children. Nike also sells shoes for outdoor activities such as tennis, golf, skateboarding, soccer, baseball, football, bicycling, volleyball, wrestling, cheer leading, aquatic activities, auto racing and other athletic and recreational uses. Nike are well known in Hip hop culture as they supply urban fashion clothing. Nike recently teamed up with Apple Inc. to produce the Nike+ product which monitors a runner's performance via a radio device in the shoe which links to the iPod nano.

Place

Nike sells its product to about 2 retailers in the U.S. (including Nike's own outlets and "Niketown" stores) and in approximately 1 country in the world. Nike sells its products in international markets through independent distributors, licensees and subsidiaries.

Promotion

As said above, Nike has a number of celebrity athletes and professional teams to focus attention on their products. Nike has signed top athletes in many different sports such as global stars Ronaldinho, Wayne Rooney and Cristiano Ronaldo, pro-basketball players like Lebron James, Kobe Bryant and Vince Carter, football player LaDainian Tomlinson, cyclist Lance Armstrong, skateboarder Paul Rodriguez Jr., golfer Tiger Woods, tennis players like Roger Federer, Rafael Nadal, Maria Sharapova and Motorsport racer Michael Schumacher. However, Nike's first true celebrity endorser was distance running legend Steve Prefontaine, who was the prized pupil of the company's co-founder Bill Bowerman while he coached at the University of Oregon. Today, the Steve Prefontaine Building is named in his honor at the Nike's corporate headquarters.
Nike also sponsors events like Hoop It Up (High School Basketball) and The Golden West Invitational (High School Track & Field), focusing attention on its products. Nike uses web sites as a promotional tool to cover these events. Nike also has several websites for individual sports, including nikebasketball.com, nikefootball.com, and nikegolf.com.It belonged and worn by the Greeks.

Sponsorships and Apparel-rights

Main articles: Nike sponsorships

Nike's influences stretch from production systems to fashion, while along the way developing technologies. By sponsoring teams and players, they retain their reputation as a premium sports-apparel supplier. Their advertising campaigns often involve sponsored athletes. They sponsor athletes in many sports, and college and pro teams around the world. Nike has recently been expanding sponsorship of teams in South-East Asia.
Apparel-rights
Nike also earns money by having the exclusive right to manufacture and sell the official clothing merchandise of the Club/Player. eg, Nike earns a small percentage of the retail price of every Celtic FC jersey sold anywhere in the world.

Controversies

Human rights concerns

In his 2003 documentary ''The Corporation'', Chris Belmonte, director of the National Labor Committee shows what he says are Nike's internal pricing documents. The documents show the time it takes the workers in a factory in the Dominican Republic to make a shirt in ten thousandths of seconds, with each shirt taking 6.6141 minutes to make, 9 shirts an hour. These figures also appear in the book ''The Corporation. The Pathological Pursuit of Profit and Power'' by Joel Bakan, on which the documentary is based.^[11]
Nike has been criticized for contracting with factories that allegedly use sweatshop labor in countries such as China, Vietnam, Indonesia and Mexico. Vietnam Labor Watch, an activist group, has documented that Nike has violated minimum wage and overtime laws in Vietnam as late as 1996, although Nike claims that this practice has been halted.^[12] The company has been subject to much critical coverage of the often poor working conditions and exploitation of cheap overseas labor employed in the free trade zones where their goods are typically manufactured. Sources of this criticism include Naomi Klein's book ''No Logo'' and Michael Moore's documentaries.
Nike was criticized about ads which referred to empowering women in the U.S. while engaging in practices in East Asian factories which some felt disempowered women.^[13]
In the 90's, Nike faced criticism for its use of child labor in Cambodia and Pakistan in its production of soccer balls. Although Nike took action to curb or at least reduce the practice of child labor, they continue to contract their production to companies that operate in areas where inadequate regulation and monitoring make it hard to ensure that child labor is not being used.^[14]
The forced labor camp like conditions in some overseas production plants led to several unsuccessful boycotts,^[15] together with coining the alternative name "swooshtika" (a portmanteau of swoosh and swastika) for the company's swoosh logo.^[16]
These campaigns have been taken up by many college and universities, especially anti-globalisation groups as well as several anti-sweatshop groups such as the United Students Against Sweatshops. Despite these campaigns, however, Nike's annual revenues have increased from $6.4 billion in 1996 to $15 billion in 2006.

Advertising problems

Kasky v. Nike

Consumer activist Marc Kasky filed a lawsuit on Quincy Sanford California regarding newspaper advertisements and letters Nike distributed in response to criticisms of labor conditions in its factories. Kasky claimed that the company made representations that constituted false advertising. Nike responded the false advertising laws did not cover the company's expression of its views on a public issue, and that these were entitled to First Amendment protection. The local court agreed with Nike's lawyers, but the California Supreme Court overturned this ruling, claiming that the corporation's communications were commercial speech and therefore subject to false advertising laws.
The United States Supreme Court agreed to review the case (Nike v. Kasky) but sent the case back to trial court without issuing a substantive ruling on the constitutional issues. The parties subsequently settled out of court before any finding on the accuracy of Nike's statements, leaving the California Supreme Court's denial of Nike's immunity claim as precedent. The case drew a great deal of attention from groups concerned with civil liberties, as well as anti-sweatshop activists.
ReclaimDemocracy.org hosts a comprehensive library on the case, including briefs filed by all parties on both sides of the case.

Beatles song

Nike has been a focus of criticism for their use of the Beatles song "Revolution" in a commercial, against the wishes of Apple Records, the Beatles' recording company. Nike paid $250,000 to Capitol Records Inc., which held the North American licensing rights to the Beatles' recordings, for the right to use the Beatles' rendition for a year.
According to a July 28 1987 article written by the Associated Press, Apple sued Nike Inc., Capitol Records Inc., EMI Records Inc. and Wieden+Kennedy advertising agency for $15 million. Capitol-EMI countered by saying the lawsuit was 'groundless' because Capitol had licensed the use of "Revolution" with the "active support and encouragement of Yoko Ono Lennon, a shareholder and director of Apple."
According to a November 9 1989 article in the Los Angeles Daily News, "a tangle of lawsuits between the Beatles and their American and British record companies has been settled." One condition of the out-of-court settlement was that terms of the agreement would be kept secret. The settlement was reached among the three parties involved: George Harrison, Paul McCartney, Ringo Starr; Yoko Ono; and Apple, EMI and Capitol Records. A spokesman for Yoko Ono noted, "It's such a confusing myriad of issues that even people who have been close to the principals have a difficult time grasping it. Attorneys on both sides of the Atlantic have probably put their children through college on this."
Nike discontinued airing ads featuring "Revolution" in March 1988. Yoko Ono later gave permission to Nike to use John Lennon's "Instant Karma" in another ad.

Minor Threat ad

In late June 2005, Nike received criticism from Ian MacKaye, owner of Dischord Records, guitarist/vocalist for Fugazi & The Evens, and front-man of defunct punk band Minor Threat, for appropriating imagery and text from Minor Threat's 1981 self-titled album's cover art in a flyer promoting Nike Skateboarding's 2005 East Coast demo tour.

On June 27, Nike Skateboarding's website issued an apology to Dischord, Minor Threat, and fans of both and announced that they tried to remove and dispose of all flyers. They state that the people who designed it were skateboarders and Minor Threat fans themselves who created the ad out of respect and appreciation for the band.^[17] The dispute was eventually settled out of court between Nike & Minor Threat the exact details of the settlement have never been disclosed.

Chinese-themed ad

In 2004, an ad about Lebron James beating cartoon martial arts masters in basketball offended Chinese authorites, who called the ad blasphemous and insulting to national dignity. The ad was later banned in China.In early 2007 the ad was re-instated in China for unknown reasons.^[18]

Relationship with Beaverton

Nike's world headquarters are surrounded by the city of Beaverton, Oregon but are technically within unincorporated Washington County.
From Nike's perspective, the company, the only Fortune 500 employer still headquartered in the state of Oregon, has such a large payroll in the area that it should not be forced to be annexed into Beaverton without its consent. Nike prefers to work with county government as it develops and expands its headquarters. Annexation would cost the company $700,000 per year in increased taxes for services it already receives from the county and various special-purpose districts. Intel, another large employer in the state, routinely receives special tax breaks on various capital investments it makes in the county.
From Beaverton's perspective, the company's expectation for special treatment is counter to the city's desire to have zoning and other laws apply equally to all businesses, big and small. A nearby Costco store, one of that company's earliest, was annexed into Beaverton years ago without incident, and Beaverton's focus on additional annexation during the 21st century reflects a desire to streamline both city and county government by having metropolitan-area services handled by cities instead of counties.
''The Oregonian'' dates the bad blood between the two back to the Nike purchase of 74 acres (0.3 km²) of nearby Beaverton land which soon fronted the MAX Blue Line. When Nike proposed expanding their headquarters in that direction, Beaverton at first wanted them to build housing near the MAX station and criss-cross the property with two public roads, expectations defined by the zoning already in place when Nike bought the land. Beaverton's request was mostly consistent with Metro's transit-oriented development plans for the region. After a year, which included a threat by Nike to move 5,000 jobs out of the state, Beaverton backed down from the requirement for housing, but the lack of accommodation was something that Nike did not forget.
The annexation standoff soon led Beaverton to attempt a forcible annexation. That led to a lawsuit by Nike, and lobbying by the company that ultimately ended in Oregon Senate Bill 887 of 2005. Under that bill's terms, Beaverton is specifically barred from forcibly annexing the land that Nike and Columbia Sportswear occupy in unincorporated Washington County for 35 years, while Electro Scientific Industries and Tektronix get that same protection for 30 years.

External links

★ Official Website

★ Nike at YouTube

★ Nike's corporate/investor website
'Criticism of Nike's labor practices'

★ The NikeWatch Campaign

★ FairLabor.org annual report

★ Information on Kasky v. Nike

★ Making Nike Sweat - on the Sweatshop issue

★ Boycott Nike Homepage
'Dispute with Beaverton'

★ How a land spat gets nasty, a September 2005 article from ''The Oregonian''

★ The Recent Annexation Actions By The City of Beaverton, a December 2004 Nike press release

★ Oregon Senate Bill 887, as signed by Governor Ted Kulongoski
'Counterfeiting Of Nikes'

★ Interview With a Major Retailer of Fake Nike Shoes
'Data'

★ Company profile from Yahoo!

★ Company summary, from the New York Stock Exchange website

References

1. 2006 Annual Report, p. 2 (PDF), Nike, Inc., Retrieved on January 7, 2007.
2. [1]
3. [2]
4. [3]
5. [4]
6. [5]
7. http://www.environmentalleader.com/2007/05/31/nike-plans-to-be-carbon-neutral-by-2011/
8. Reuters report
9. ClimateCounts: Nike
10. [6]
11. Joel Bakan, ''The Corporation. The Pathological Pursuit of Profit and Power.'' London: Constable 2004, p. 66.
12. http://www.saigon.com/nike/reports/report1.html
13. NMSU:Nike
14. MIT:
15. Saigon.com
16. Rice University
17. Nike: Skateboarding
18. [7], ''The Washington Post'', Retrieved March 7, 2007