Knight, Philip H. 1938–
Philip H. Knight
Chairman and chief executive officer, Nike
Born: February 24, 1938, in Portland, Oregon.
Education: University of Oregon, BBA, 1959; Stanford University, MBA, 1962.
Family: Married Penny (maiden name unknown), 1968; children: two.
Career: Blue Ribbon Sports, 1964–1972, chief executive officer; Portland State University, 1964–1969, assistant professor of business administration; Nike, 1972–, chairman and chief executive officer.
Awards: Most Powerful Man in Sports, Sporting News, 1992; Pioneer Award, University of Oregon, 1982; one of America's top managers, Business Weekly, 1997.
Address: Nike, 1 Bowman Drive, Beaverton, Oregon 97005-6453; http://www.nike.com.
■ In 1963 Philip H. Knight began selling track shoes out of the trunk of his car. Forty years later he presided over the largest and most visible athletic apparel company in the world. From 1964 to 1972 Knight and his former track coach, Bill Bowerman, distributed Japanese-made running shoes in America and gradually laid the foundation for the Nike empire. By the late 1980s, the Nike "swoosh" trademark had become ubiquitous, and Knight was well on his way toward managing a multibillion-dollar company.
BEGINNINGS OF NIKE
Three events shaped Knight's future as the leader of Nike. The first occurred in 1957 when he met Bowerman, his coach on the University of Oregon track team. Bowerman was a former Olympian whose passion for athletes and innovation would eventually inspire Knight to create a business dedicated to those two things. When Knight began his business selling shoes to track athletes, Bowerman became his partner. The
second event occurred when Knight was attending business school at Stanford University. In response to an assignment from Professor Frank Shallenberger, Knight devised a business and marketing plan for importing high-quality running shoes from Japan and selling them in the United States at a high profit margin. In a sense the vision of Nike was born in that class. The third event occurred in 1963 when Knight traveled to Japan and met with executives from the Onitsaka Company, which distributed Tiger running shoes. Knight talked himself into a distribution contract with the company, and when the executives asked which company he represented, Knight blurted out the first thing to come into his head: Blue Ribbon Sports. The trip initiated Knight's lifelong fascination with Japanese culture and presaged the globalization of Nike.
BLUE RIBBON SPORTS
In 1964 Knight and Bill Bowerman both invested $500 to start Blue Ribbon Sports, which would work together with the Onitsaka Company to develop and distribute running shoes for the North American market. As the company struggled to grow, Knight worked as a certified public accountant and taught at Portland State University. Over the next few years BRS retail stores opened in Santa Monica, California, and Eugene, Oregon, and the company began to assemble employees who would later take on key roles at Nike. In 1969 alone Knight sold $1 million worth of Tiger shoes. By the end of 1971 contract disagreements with Onitsaka prompted Knight and Bowerman to consider starting their own shoe company. Knight paid a former Portland State student to develop the swoosh design, and Jeff Johnson, a Blue Ribbon Sports employee, literally dreamed up the Nike name. The first model of shoe, the Cortez, debuted at the 1972 Olympic trials, and in that first year Nike had revenues of more than $3 million.
FOCUSING ON THE ATHLETE
Being an athlete himself, Knight wanted to shape his company around the needs of athletes. He also wanted to create products that the world's greatest athletes would want to use and be associated with. At first Knight reached out to Olympic track athletes, such as the long-distance runner Steve Prefontaine, who would influence other runners to try the shoes. In 1978 Nike approached the tennis star John McEnroe and signed him to an endorsement deal. This choice of spokesperson reflected Knight's vision that the great athlete was the ultimate free spirit. By 1980 Nike had captured one-half of the athletic shoe market and carried out its initial public offering on the New York Stock Exchange. The escalating wealth of the company allowed Nike to sign additional topflight athletes to endorsement contracts, including highly lucrative relationships with Michael Jordan and Tiger Woods.
As Nike's market share grew throughout the 1980s and 1990s, so did public criticism of the company's business strategies. Much of this criticism focused directly on Knight, whose enigmatic personality and casual appearance became a focus of the news media. At the 1992 Olympic games Michael Jordan and other National Basketball Association players with Nike endorsements refused to appear on television with the insignia of their official Reebok sweat suits showing. When Knight, in trying to defuse the controversy, failed to vigorously support the athletes, his relationship with some of them was strained. The greatest controversy Knight had to confront in the 1990s was growing criticism of how Nike contracted with "sweatshops" in Southeast Asia to produce its shoes. Although Knight eventually responded to Nike's critics with a program of reforms, he and Nike continued to be a prime focus of many antiglobalization groups.
Knight was vigilant to keep Nike at the top of the industry. In the late 1980s, when Reebok briefly supplanted Nike as the most profitable athletic shoe company, Knight streamlined the Nike campus in Beaverton, Oregon, and gave it a corporate atmosphere while maintaining the image of a company run by casually rebellious athletes. In the 1990s, despite criticism, Knight involved the company in environmental and community service activities. At the same time Nike branched out into hockey, golf, and soccer apparel, opened huge Niketown stores in shopping malls, and continued its dominance in the area of track-and-field apparel. As the result of this aggressive expansion, Nike had more than $10 billion in yearly sales before 1999.
Knight was said to be not fond of advertising. Yet slogans such as "Just do it" and images such as that of Michael Jordan soaring through the air cemented Nike's place in the industry. Nike advertisements portrayed great athletes as objects worthy of worship but also implied that everyone has greatness within themselves. The global power of these messages was such that in 2003 Nike's international sales exceeded its U.S. revenues for the first time in the company's history.
See also entry on NIKE, Inc. in International Directory of Company Histories.
sources for further information
Goldman, Robert, and Stephen Papson, Nike Culture: The Sign of the Swoosh, London: Sage, 1998.
Katz, Donald R., Just Do It: The Nike Spirit in the Corporate World, New York: Random House, 1994.
Saporito, Bill, "Can Nike Get Unstuck?" Time, March 30 1998, pp. 48–53.
—Michael T. Van Dyke