NIKE never sells you shoes. It is a very strange thing, right? Because we all know NIKE as a shoe brand. The question is that, If NIKE doesn’t sell shoes then what does it sell? Could anybody have thought, Only two guys can build a huge company from $500. In the early 1980s NIKE was the world’s no.1 athletic brand.
But during 1985, they saw a big downfall. Sales were in dip & profits were invisible. After some time, Reebok & Adidas took the place of NIKE. But then one person came, who changed NIKE’s Fortune. The question is, Who was that person? And what did he do for NIKE, That today NIKE is a billion-dollar company. And most important, What are the powerful business lessons.
That we can learn from this case study And implement in our business. This video is brought to you by “Vested”. Offering you the lowest INR to USD conversion charge While investing in US stocks. We talk about it later. This story starts in 1960, When two people “Phil Knight & Bill Bowerman”, Together starts a shoes trading company.
This partnership for a shoe company was very good. Because Phil did MBA in Finance. And during his college days, he was an athlete. And there on the other side, In Phil’s college, Bill was his college coach. So from start, He has good knowledge about running fields & shoes. Phil, A Japanese company named “Tiger” Who manufactures shoes,.
To sell their shoes in the US market they approached him. And luckily, They give Phill Exclusive contract of selling their shoes in US market. After this deal was final, Phil goes to Bill And starts a company named “Blue Ribbon sports” In the start, they imported shoes from japan, And store them in their storerooms.
And started selling them in their cars. Some years passed, After some years they opened their store. The business was successful but not scalable. Because Japanese people, The remaining shoes that left after fulfilling their own demand, They use to export that to the US. Because of this NIKE was not able to expand the business. Because their demand was not fulfilled.
And finally, that year arrived, In 1972, by raising money from a Japanese trading company, They both started the brand name “NIKE”. Everything was going nice, But there was one problem. The problem was that up to the late 1970s Running was a very popular sport. And all the collection NIKE had, Was only for the running shoes.
And until 1983 came, This market started getting saturated. The sales of NIKE stopped. Their profits were going down. And at that time a huge bomb was exploded. Reebok was the biggest competitor of NIKE at that time, They launched Aerobic shoes freestyle As soon as these shoes came, People started shifting from running to aerobic.
And the trend of these aerobic shoes, Changed everything for NIKE overnight. The NIKE which people used to worship, Today no one asked about them. And the sales of Reebok skyrocketed so much, Reebok became the world’s no.1 athletic brand. But then something happened with NIKE, Which made NIKE today the biggest athletic brand in the world. And this is the place when there was the entry of.
“Micheal Jordan”. Very few people know this, If Micheal Jordan was not there Then today wouldn’t have been that NIKE Which we know. As Micheal Jordan came the fortune of NIKE was changed. The question is, what did Micheal Jordan do? That helped NIKE to reach such a huge height today. So guys if you closely observe,.
Micheal Jordan is a very charismatic personality. But the bigger thing that was special in him was His speed and jumping ability. Which was strategically used by NIKE. By seeing Micheal jordans these two abilities, NIKE launched its Air series. Which was named “Air Jordan”. In 1984, a person named Peter Moore made Air Jordan shoes. That was given only to Micheal Jordan,.
To play in NBA matches. I know you must be thinking, What a fantastic move! After this move shoes must have been a huge hit, Well, this is not true. Surprisingly NBA rules say that Their shoes must match the colour of their jersey. Air Jordan’s were shining red. They looked very good. But unfortunately, NBA banned Air jordans.
But you know what, Nike was so smart that they used this incident in their favor. After this incident, NIKE made a commercial with Micheal Jordan. Saying that “NBA threw us out, But you don’t need NBA to wear Jordans.” And this commercial was a big hit. Because Air Jordan was very limited edition shoes. And now they were banned also.
So people wanted more of it. And finally in 1985 Air Jordan made available for the public, Then in just 3 days, all the shoes went out of stock. Now the success of Air Jordan can be found in this thing That is the launch of just 2 months Air Jordan crossed the sales of more than 70 million $. And by seeing NIKE signed a 10-year long-term contract with Michael Jordan.
Whenever he will promote he will just promote NIKE shoes. And after that in upcoming years NIKE did many such exclusive deals with athletes. Micheal Jordan, Tiger Woods, Lebron James And Ronaldo’s lifetime’s 1 billion dollar contract We all know about this. In the 2012 London Olympics, Adidas bought Olympics title sponsor rights in 150 Million $. Interestingly during the time of the London Olympics,.
NIKE without any spending money Without being the title sponsor Gained more publicity than Adidas. The question is How did NIKE all these things? So during 2012’s London Olympics NIKE was restricted by many rules & regulations of Olympics. So the 400 athletes who were performing in Olympics, Gave them their Volt series shoes to wear in Olympics. And not only this but apart from London in the UK.
The other 29 places which are famous by the name of London, On all those places they shot their ad campaigns. And you know what, Where Adidas was talking all the Olympians In all their ads. There NIKE took small kids & teenagers for their ads. Those ads had only one message. The message was greatness within you. And this ad campaign was such a big hit,.
In 2012, this ad campaign had 4.5 million views. I know there must be one question in your mind, In the start, I said NIKE never sells shoes. The question is, What does NIKE sell So see, NIKE sells you inspiration. If you have watched any ad of NIKE carefully, Then you must have noticed, NIKE never talks about their shoes in the ad. All they talk about is you.
How can you achieve greatness? How can you get inspired? In all their advertisements, all the athletes They never talk about shoes. They always convey you a message, How you can achieve greatness in life like the athletes? How can you get inspired by them? Because of this consciously you think that That NIKE is selling you inspiration.
But subconsciously they are selling you shoes. Now the question is why does this happen to us? So see as human beings we genuinely don’t care. How light are the shoes? From which material it is made? Or how good is the grip? You notice all this when you wear the shoes. But the truth is before buying shoes you buy a brand. Go to NIKE’s showroom. There are very high chances, Maybe you like one shoe,.
But you will definitely buy the second shoe and then go. There are very less chances that you go to the NIKE showroom And come out without buying anything. And this happens because Before selling shoes NIKE has sold you inspiration. And because of these strategies, NIKE is such a big brand. But I feel sad about just one thing. We as Indians, Why are we not a part of the growth of such great companies?.
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Now the most important, What are the powerful business lessons, That we can learn from this case study We can implement it in our business. First lesson, Your foundation defines the strength of your business. To build a foundation of any business, The most important role is the “Business structure” Like NIKE follows the matrix business structure.
In simple words, One employee is accountable for more than one manager. For example, you are a sales supervisor, So if there is any problem, Then you will inform the sales director And you will inform the footwear head also. This small thing Makes communication in the organization fast. Because of this, any issue is solved very quickly.
And the customer gets good service. In fact in 2008, NIKE changed its structure from product base to category best. Today Nike particularly serves in four sports categories. Running, Global Football, Basketball & Training. And in fact, NIKE’s store’s layouts are designed as Whether you buy shoes or not If you are in the store then you will definitely buy something. Second lesson,.
Learn to accept sometimes you are ahead, And sometimes you are behind. Business has no place for ego. I repeat Business has no place for ego. Having competitors is not a bad thing. But along with it, we must always accept that, Sometimes we will be ahead of the competition And Sometimes we will be behind them. When NIKE was defeated by Reebok,.
Then they accepted that, That they came late on latest trends. And they improvised. And after that today where is NIKE and where is Reebok. Third lesson. Learn to make a castle with every stone thrown at you. Life or Business People will always throw stones at you. Criticism is part of the process.
NIKE saw many tough times. They were banned in NBA. Or people started burning their shoes and making protests. Also, the Olympics sponsor was taken away from them. But despite all these things, NIKE found a possibility in every difficulty. And the profit earned by NIKE by all these incidents That much was never done by their normal operations. By the way, have you thought,.
How is Coca-Cola ruling the world just by selling sugar water? What is so special about coke? If you see the video on the right side, You will know it.