12E.6.1 Men's Club Nike's
Color image of the cover of a Men's Club magazine showing a man wearing sweats and Nike's. Rights: Attribution-NonCommercial-NoDerivatives 4.0 International
Nike began in 1964 when Phil Knight and his former track coach from the University of Oregon started a company called Blue Ribbon Sports. As a graduate student at Stanford University in the early 1960s, Knight wrote a paper that argued a company could benefit economically from employing people overseas who worked for low wages. At first, Blue Ribbon Sports sold a Japanese brand of sneakers in the United States, but in 1971 Knight and his partner decided to establish their own line of shoes and rename the company Nike. Globalization (the development of an increasingly integrated global economy) enabled Nike to capture markets well beyond the United States. The brand did so well that in 1980 Nike’s sales caught up to Adidas, then the world leader in sports footwear and apparel sales. What does this magazine from Japan suggest about how the new popularity of Nike shoes may have affected Japanese shoe companies?
By the early 1980s, Nike had closed down its few US factories after securing contracts with factories in Korea and Taiwan, where workers could be paid less than in the United States. As these countries’ economies developed, Nike moved its factories to less-developed countries such as Indonesia, China, and Vietnam. Before long, there was an extensive network of factories in Southeast Asia that relied upon guaranteed orders from Nike. As Nike declared at the turn of the century, “Our business model in 1964 is essentially the same as our model today: We grow by investing our money in design, development, marketing and sales and then contract with other companies to manufacture our products.” Nike was an early player in the global economy, outsourcing its manufacturing to create a product with global appeal and marketing that product in the interconnected global trade network. Students may investigate what sort of trade agreements make this type of business model profitable.
Men's Club Monthly